We talk to new and small business owners all the time about intellectual property in the earliest phases of business development. In a “first-to-file” world, the patent portion of that discussion usually boils down to:
1) Figure out what you are doing that might be inventive, and
2) File a provisional patent application as soon as you possibly can.
Invariably, some of those small business owners started out as software developers, and are now offering software products and services. Almost every one of them believes that software is not patent eligible and many believe that software patents are only a tool for multi-national corporations to squeeze them out of the market.
It is true that Microsoft, Google, Apple, Samsung, and IBM have large software centered patent portfolios . . . because they each employ huge numbers of computer engineers whose job is to solve problems in inventive ways. Patents are the natural result. But just as their patent portfolios can pose an obstacle to a small business, the small business owner’s targeted patent portfolio might be the only leverage the small business owner has over the big players, or maybe even the only avenue to monetization. That cannot happen if the small business owner rejects the very concepts of software patents.
Software is such an important part of the economy, and so central to innovation in the modern world, patent practitioners have pursued every avenue to keep software patents alive and viable. At the same time the United States Supreme Court has been increasingly weary of giving patent protection to inventions that aren’t embodied in a physical thing.
The contemporary avenue for protecting software is to define it as a set of steps for achieving a desired outcome; or as a computer or computer system, programmed via software, to execute the set of steps. That avenue has become subject to the “Abstract Idea” analysis of § 101 of U.S. patent law. In an attempt to streamline the process of rejecting marginal software based inventions, the Supreme Court defined well known steps executed by conventional hardware (which should be rejected under § 102 or § 103), or inventive steps that are only vaguely or generally defined (which should be rejected under § 112) as “abstract ideas” so that they can be rejected under § 101; I think solely because 101 is a lower number than 102, 103, and 112.
Now, finally, we have some concrete guidance from the U.S. Court of Appeals for the Federal Circuit (traditionally the most prolific and thoughtful court on patent questions). In a memorandum following two subject matter eligibility decisions, McRO, Inc. dba Planet Blue v. Bandai Namco Games America Inc., 120 USPQ2d 1091 (Fed. Cir. 2016) and BASCOM Global Internet Services v. AT&TMobility LLC, 827 F .3d 1341 (Fed. Cir. 2016), the USPTO has issued a few guidelines to help the examiners (and us) determine if software is patent eligible. In conjunction with the USPTO Subject Matter Eligibility Worksheet, we should be able to give small software business owners a reasonable framework for analyzing their inventive concepts.
First, the examiner is supposed to reduce the invention to a simplified description. Some examiners prefer an overly simplified description, so the small business owner should consider casting his invention in technical terms that defy reductionism.
If, on its face, the simplified description falls into a statutory category (such as a computer or a computer executed process), the examiner will still consider the invention non-statutory if the steps being performed are well known and the only new material is that the steps are executed by a machine; even if the steps are fairly complex. The small business owner should consider whether the invention includes steps that are previously unknown, or at least unknown within whatever context the small business owner is operating. The relationship of components can be critical; for example do steps occur in a particular order that is previously unknown, or are certain steps performed locally while others are performed remotely.
If the previously unknown steps are only described in vague or general terms, the examiner will still call it an abstract idea. The small business owner should be able to describe the previously unknown steps in precise terms, including acceptable ranges of inputs, acceptable ranges of outputs, and the algorithms being implemented.
Finally, the examiner will consider the purpose of the invention. Prior to McRO, the conventional wisdom was that processes that amounted to just crunching numbers, without some interaction with the physical world, would not be patent eligible. Software used in a physical production process is probably still the closest thing we have to a “safe harbor” in this domain; but now, software that improves the functioning of the computer (for example, a data structure that solves a persistent data storage problem) or that solves a persistent problem in another technical field can be considered patent eligible. The important consideration in these cases is to define the problem that is being solved and including a description of the invention specifically directed to solving that problem.
So, as a small software business owner, you should seriously consider patent protection for your prospective product or service at the earliest possible time, before launch or public disclosure, if:
• Your software is used in a physical production process;
• Your software produces an output that has an impact in the real world; or
• Your software improves the internal functioning of the computer or computer system in some way;
And
• Your software executes a combination of steps that would not be obvious, even if your software utilizes standard libraries;
• You can describe whatever features make the combination not obvious in a definitive way with clear boundaries; and
• You can describe the technical problem you’re solving and tailor the invention to solve it.