What CEOs Need to Do to Protect Software Based Inventions

Recent cases law and so called reforms to the U.S. patent system have made it more difficult for businesses to protect their software by way of patents. Case law in this area is very murky. In order to understand it, a good rule of thumb is to see if your software provides a technical solution to a technical problem. This is indeed the standard use in the European Patent Office.

Recent Acts and Case Law

One of the most prominent pieces of legislation in this arena is called the America Invents Act. The purpose of this act was to reform the patient system. One of the consequences of the AIA was that it became more difficult to sue multiple defendants within one lawsuit. A 2014 decision from the Supreme Court in the Alice Corp. v. CLS Bank International case shows how the courts have come down in recent years about software issues. Patents in that case were found to be invalid due to the fact that claims were tied to an abstract idea and implementing them on a computer platform was not determined to be enough to transform those ideas into patentable subject matter.

Software patents have remained controversial even in 2016. An October ruling from the U.S. Court of Appeals reveals that three patents asserted against multiple anti-virus companies were effectively invalid because they did not officially name a patentable invention for protection.

Recent case law in the United States suggest that an invention that provides a technical solution to a technical problem has a good chance of not only being granted a patent but the USPTO, but also withstanding scrutiny in court. This is a test that has long been used by the European Patent Office. At a high level this means that for a software invention to be patentable, the software should cause computations to happen more quickly through the use of novel or improved algorithms or rules. This might also include the inventive software causing a computer itself to operate more efficiently based on novel or improved algorithms or rules. This could mean better memory management or reduced CPU usage or similar features. In addition, if the invention contemplates inventive hardware then the patent application should definitely cover that. Furthermore, if the invention contemplates the use of new rules, specific for use in computing environment then that has a better chance of being deemed patent eligible. Modern society relies quite heavily on computer technology. It goes without saying that without software, a computer cannot properly operate. Hardware and software work together in collaboration for today’s information society. It is no wonder that protecting the intellectual property of any software is critical for all businesses not just the software industry. The protection of intellectual property of computer software has been highly debated across the international and national level. A draft directive on the patentability of a computer implemented inventions in the European Union has already been evaluated in order to simplify and systematize the interpretation of different country patentability requirements for inventions associated with computer software, including any business methods that are conducted over the computer. There are many different views across relative stakeholders in Europe and the same holds true in the United States. One of the most important concepts to remember in this process is to question what you wish to protect from your competitors if you move forward with intellectual property protection for a piece of software. Software could be incorporated on an apparatus or within a computer. When such software is distributed and reproduced on media, however, this is separate from the hardware. Software can provide multiple functions including monitoring communication network systems, regulating room temperature or controlling a machine. It can even be used to process social, financial or economic data in order to identify the highest possible return on an investment or to verify a new scientific theory. Not all types of software related innovation, however, are eligible to enjoy patent protection. There are several different core tenants involved in this. An invention has to meet multiple criteria in order to apply. These include:

  • The invention must include patentable subject matter
  • The invention must be capable of industrial applications
  • The software must be new
  • The software must involve inventive steps or be non-obvious
  • The software must have the disclosure of the invention in the patent application and this must meet substantive and formal standards

Particular attention should also be given to any requirements associated with inventive steps and patentable subject matter. When a patent is granted for an invention, this must be described as a solution to a technical problem. While there is currently no international definition of an invention and every national law might have separate answers for this question, in many countries inventions are required to have a solution using the laws of nature or a technical character. For examples, methods of doing business, mathematical methods and economic theories are not in and of themselves patentable inventions under this explanation. In order to have a patent, the invention must not be so obvious to a person skilled in the art having regard to that prior art. It is not enough to simply claim that the invention is new.

As is illustrated above, the issues associated with intellectual property as it relates to software are extremely complex and require the insight of an experienced intellectual property attorney. A New Jersey intellectual property attorney should be the first person you identify to help you with a complex case. Do not wait to get the help you need.



The Importance of Inducting Freedom to Operate Opinions to Avoid Claims of Patent Infringement

As a CEO, a risk that everyone should be aware of when embarking on making a product is to ensure that the product is not likely to infringe an existing patent. This can be a complicated process without the help of an experienced intellectual property attorney. The value of going through this process, however, is essential because being hit with a patent infringement lawsuit a lead to costly expenses in terms of defending it and paying out possible damages or a settlement award in the event that you are not successful. A freedom to operate opinion can be beneficial in this way.

Defining Freedom to Operate

Freedom to operate, frequently abbreviated as FTO, refers to determining whether or not a specific action, like commercializing a product or testing a product, could be done without infringing on someone else’s existing IP rights. Engaging in this process is important for developments in multiple different industries.

Intellectual property rights are associated with different jurisdictions, which means that a freedom to operate analysis must always include particular regions or countries in which you intend to operate. If you want to commercialize a new variety of something in your own country, for example, you might have to complete the freedom to operate process to ensure there are no existing patents, trademarks or other intellectual property rights that cover the process used to covering the item itself or the way in which you wish to market within your country. However, you might not have the same freedom to operate if you choose to export this product to another country where other IP rights or patents may exist protecting someone else. A freedom to operate helps in identifying patents that your product may infringe.

If such patents are identified through this process, you can try to design it around the patent or enter into licensing negotiations or even attempt to acquire it. On the other hand, if you feel that the patent is too broad and should never have been granted, you can commission an invalidity search to determine if there is prior art that renders such a patent invalid. If such a search yields good art, you can institute proceedings at the PTAB to try and invalidate the patent.

Ensure that the Patent is Not Available

This is akin to a first strike against the potential lawsuits. In the event that you identify a patent application or patent within the database during your search that seems to be connected to the material or process for which you want to obtain freedom to operate, you can’t immediately conclude based on this that there is no FTO because there are multiple reasons that the matter claimed inside the patent could be appropriate to use. These include:

  • Patents are a limited monopoly and may have expired.
  • The patent might not have been awarded in some of the countries where the applications were made.
  • Patents may not have been applied for in numerous countries.
  • The acclaimed matter can only be protected where a patent has been filed and approved.
  • Patents that were issued may not still be enforced if the patentee has not made any regular payments that are due to the government.
  • Certain countries have exemptions for particular actions. For example, Germany is working on a research exemption and New Zealand also has exemptions for certain clinical trials.

If you request an attorney to submit an FTO opinion, this may initiate his or her process of finding IP rights, expiry dates, issue jurisdictions and other key information. Most frequently claimed materials in a specific patent could be rendered invalid because of the prior art exemption. If there are actual intellectual property rights tied to someone else that could be infringed by an action you intend to take, you may be eligible to negotiate for a license in this particular situation. An FTO can also serve as a patent landscape report to inform a CEO about patents in the field of endeavor. This can inform future product development efforts of the product itself and patenting efforts as well because a CEO will now be aware of the white spaces in the industry that are ripe for product innovation and patenting.

As you can see, there are numerous different benefits to retaining an intellectual property attorney who has extensive experience in putting together freedom to operate opinions. Consulting with a knowledgeable lawyer early on in the process gives you the best possible chance for obtaining clarity and understanding what to expect going forward.