Examples of Patents/OAs Drafted by Dallin Call of Dallin Call IP Law

 

Below are a few examples of patents or USPTO Office Actions drafted by Dallin Call of Dallin Call IP Law. Although these are only excerpts from the documents themselves, they provide examples of the quality and capabilities of our firm. 

Boom Payments v. Stripe: 35 USC §101 Lessons

 

On January 13, 2021, the Court of Appeals for the Federal Circuit (CAFC) decided a non-precedential case, Boom Payments, Inc. v. Stripe, Inc. Despite being a non-precedential case, there are a few 35 USC §101 lessons that can be gleaned from the case.

The background is such that Boom Payments owned three patents: U.S. Patents 8,429,084 ("'084 patent”), 9,235,857 ("'857 patent”), and 10,346,840 ("'840 patent”). Boom believed Stripe and Shopify, Inc. (hereinafter "Stripe") to be infringing on the patents and asserted their rights. Generally, the patents are directed towards an e-Commerce solution that allows a purchaser to submit payment information to the online hosting service (e.g., Craigslist) without the transaction being finalized until the purchaser has a chance to examine and accept the goods as satisfactory. In order to finalize the transaction, the purchaser's device generates a unique identifier, which can be transferred to the seller to redeem the identifier for payment.

During its Alice Two-Step Analysis, the district court determined that the patents were directed to computerized escrow (i.e., an abstract idea), and then dismissed Boom's lawsuit under a Rule 12(b)(6) motion. There are problems with dismissing one or more patents that have been challenged under §101 using Rule 12(b)(6) motions (e.g., as discussed in this Patently-O article), which are only briefly be discussed below.

One problem with the case that I would like to discuss in more detail is illustrated by the dicta provided by the CAFC in reaching its determination of invalidity. During the appeal to the CAFC, Boom argued that the claims were not directed to an abstract idea but were directed to a technological improvement of systems for making computerized payments. Alternatively, Stripe argued that the representative claims were routine or conventional and did not include an inventive step. The CAFC agreed with Stripe and in dicta said, "But use of an identification code known only to the buyer and the third party to verify a transaction could be performed just as readily without the use of computers and cannot be said to be a 'technological' solution that improves the functioning of a computer system." This portion of the dicta provided by the CAFC is significant because when processes are able to be performed without the use of computers, then under the Alice Two-Step Analysis, it is a fairly good indicator that the proposed process/invention may be an abstract idea rather than a practical application of an inventive concept. (See, e.g., MPEP §2106.04(a)(2)(III)).

Taking a closer look at the representative claim used by the CAFC and the district court, we can see that the CAFC's reasoning as exemplified by the portion of the dicta above is likely incorrect. For example, the representative claim from the '840 patent is as follows:

1. An Internet-based computer system for confirming that a proposed sale transaction has been consummated, said Internet-based computer system including a payment processor system comprising at least one computer device programmed to:

receive a buyer’s payment information and store said payment information; prior to a sale of an at least one item associated with an online store of a seller to said buyer, receive, at said payment processor system, a request transmitted from a buyer computer device for said buyer to be able to purchase at least one item offered for sale by said online store;

in response to said request, generate a transaction-specific buyer acceptance identifier comprising a combination of human-readable characters;

provide said transaction-specific buyer acceptance identifier to said buyer computer device;

store in computer-accessible memory associated with said payment processor system a record comprising a relationship between said transaction-specific buyer acceptance identifier, a buyer-specific identifier, and a seller-specific identifier;

receive from a seller computer device an identifier of the transaction, an identifier of the buyer, and an identifier of the seller;

compare the identifier of the transaction with the transaction-specific buyer acceptance identifier;

compare the identifier of the buyer with the buyer-specific identifier;

compare the identifier of the seller with the seller-specific identifier; and

if said identifier of the transaction corresponds to the transaction-specific identifier, said identifier of the buyer corresponds to the buyer-specific identifier, and said identifier of the seller corresponds to the seller-specific identifier, charge an account associated with the buyer for an amount associated with the request to purchase at least one item offered for sale by said online store.

Admittedly, most of these steps could likely be performed without the use of a computer. However, as emphasized in bold and underlining, there is a step that includes creating a "...record comprising a relationship...." Relying on claim construction principles, one would have to look to the intrinsic record to determine the meaning of this step and the term "relationship".

In at least one embodiment, the specification describes the relationship as one between a random hash string, to identify the transaction, and both the buyer's cell phone and the seller's cell phone. This type of relationship cannot be done by pen and paper without the use of a computer.

Not knowing how much weight the CAFC placed on this factor, one cannot be sure how much error was actually committed. However, since this point does not seem to have been raised by Boom, one takeaway from this case is that in §101 cases, always emphasize functionality within a claim that cannot be performed using pen and paper. This helps to show that your invention is not merely a mental process and strengthens an argument (if made) that it is an improvement to a computer system.

Another takeaway can be gleaned from a second portion of the CAFC's dicta, where the Court said that the claims in this case were similar to those in Alice, which attempted to claim exchanging financial obligations between two parties using a third-party intermediary to mitigate settlement risk. The takeaway is this, if you're claiming a financial transaction that is in any way similar to the transaction found in Alice, then you'll have to work hard to differentiate your claims from those found in Alice.

The final takeaway is instead of only arguing substantively, one should also argue legal procedure. For example, Stripe attacked the substance of the claims under §101, saying that the claims included ineligible subject matter because the subject matter is merely routine and conventional, and Boom only argued in return that the claims were not routine and were not conventional. Boom should have also argued that the use of a Rule 12(b)(6) motion should be improper in a case where a federal agency (the USPTO) has already determined the patent claims to be valid, meaning that they already passed §101 scrutiny at least once. Therefore, Rule 12(b)(6), which preemptively dismisses the case before factual arguments are heard, should be improper.

"Lofty batting"... Numerical Precision Not Required under §112

 

Statutory requirements for claim definiteness are found in 35 U.S.C. § 112(b), which states, "The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the inventor or joint inventor regards as the invention." Not long ago, the Court of Appeals for the Federal Circuit (CAFC) decided Guangdong Alison Hi-Tech Co., v. Int'l Trade Comm'n, offering a reminder that mathematical precision is not required to satisfy the definiteness requirement of 35 U.S.C. § 112.

The invention at issue is an aerogel insulation, claimed in U.S. Pat. No. 7,078,359 as comprising "lofty . . . batting". These terms were argued as indefinite by a foreign manufacturer, Alison Hi-Tech Co. The International Trade Commission (ITC) decided the claims at issue are definite, despite the use of "lofty . . . batting", and the CAFC affirmed that decision.

The current judicial standard for definiteness under 35 U.S.C. § 112 is found in Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120, 2124 (2014). Nautilus states that patent applications are only indefinite if the specification fails to inform, with reasonable certainty, those skilled in the art about the scope of the invention.

The specification of the '359 patent includes multiple examples of commercial products that qualify or further develop the meaning of "lofty . . . batting", including products like Nomex, Kevlar, Spectra, Kynol, Primaloft, Holofil, Thinsulate Lite Loft, and Quartzel. The specification includes a portion that distinguishes the prior art fibrous mats from a lofty batting by describing the minimal open space, higher density, and lack of resilience found in prior art mats as compared to lofty batting. The specification describes the orientation of fibers within lofty batting as being oriented in directions along all three axes, but with only enough fibers along the z-axis to provide resiliency and simultaneously maintain beneficial insulating properties. The specification includes seven examples and test results of aerogel composites manufactured in accordance with the claimed invention. Furthermore, when further scrutinized at the ITC, the claim terms "loft" and "batting" were each found in technical dictionaries to have meanings consistent with their contextual use in the '359 patent.

Alison argued that the specification provides no objective boundary between "some resilience" in the loft batting, which would infringe, and "little [to no] resilience", which would not infringe. Addressing this argument, the CAFC reminds Alison that numerical precision is not required of terms of degree. Furthermore, a person of skill does not need a mathematical formula or definition to determine when a material has negligible resilience.

The takeaway in this case is that taking time to flesh out the specification and ensure claim terms are fully and adequately described pays off down the road. Additionally, although inventors may question the use of terms of degree in claim language, practitioners should remember they are the expert when it comes to claim drafting--and these terms can be highly beneficial if fully supported by the specification.

Chamberlain v. Techtronic: Obviousness in §101 (Alice) Clothing

 

35 U.S.C. § 101 states, "Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title."

Recently, the interpretation of this statute has been a highly debated subject. (See, e.g., Congress’ Section 101 Fix Would Create a 112(f) Problem, Legislative Changes to Eligibility, and also As Stakeholders Await New 101 Bill, Responses to Tillis Underscore Need for Movement). Despite the debates, a framework does exist for determining when an innovation encompasses patent eligible subject matter. The Patent Office summarizes this framework in a flowchart available in MPEP § 2106(III). Nevertheless, courts are not required to follow these guidelines. Thus, without a legislative reformatting of 35 U.S.C. § 101, these guidelines may be abused, ignored, or sidestepped. For example, courts might effectively invalidate patents under a simplified 'wolf in sheep's clothing' subject matter analysis, while sidestepping key portions of the framework or a full-scale obviousness analysis.

In Chamberlain Group, Inc., v. Techtronic Industries Co., No. 2018-2103 (Fed. Cir. Aug. 21, 2019), the Federal Circuit does just this, and makes an obviousness decision under the guise of the subject matter eligibility framework. The claimed invention in the case is for a moveable barrier, such as a garage door, fitted with a wireless transmitter for communicating an operational status and unique identifier to an operator. The premise of the § 101 portion of the decision is that the subject matter of the patent is ineligible for protection because "...communicating information wirelessly, without more, is an abstract idea." (Chamberlin Group, Inc., No. 2018-2103 at 6). I think Alexander Graham Bell and Samuel F.B. Morse are turning in their graves.

For example, while not exactly scholarly support, Wikipedia says that wireless communication is "...the transfer of information or power between two or more points that are not connected by an electrical conductor." If you add in the electrical conductor, what you get is a type of communication that is nearly identical to the patentable communication created and occurring in The Telephone Cases (Dolbear v. American Bell Telephone Company, 126 U.S. 1 (1888)) and in O'Reilly v. Morse, 56 U.S. 62 (1854). The Federal Circuit's determination that wireless communication is an abstract idea appears to be wholly unsupported, and the subject matter is likely more closely related to transmitting symbols or vocal sounds telegraphically.

To be fair, the decision that wireless communication is an abstract idea may be an attempt by the Federal Circuit to pay homage to In re Nuijten, 500 F.3d 1346, 1357 (2007), which held that a transitory, propogating signal is patent ineligible subject matter. However, it is significant to note that the subject matter claimed in In re Nuijten was directed to a "signal". Wireless communication, especially when integrated with the practical application of communicating an operational status of a garage door, encompasses more than merely a transitory signal. Furthermore, whether or not claim elements are tangible or intangible is supposed to be immaterial to subject matter eligibility determinations. (See, e.g., Alice Corp. Pty. Ltd. v. CLS Bank Intern., 134 S. Ct. 2347, 2358-59 (2014), and also, ENFISH, LLC v. Microsoft Corp., 822 F.3d 1327, 1339 (Fed. Cir. 2016)). Hence, the subject matter of this case was not ineligible subject matter, however obvious it may have been.

The Federal Circuit more clearly indicates that this decision should have been decided under an obviousness analysis when it states, "The specification admits the act of transmitting data wirelessly is 'well understood in the art,' and no other changes to the generically claimed moveable barrier operator are recited in the asserted claims or described in the specification." (Chamberlin Group, Inc., No. 2018-2103 at 7). In other words, the Federal Circuit is saying that nothing new is presented in the specification, and therefore the subject matter is ineligible. The better conclusion for this line of reasoning is that the specification includes nothing new in the art, so the invention is obvious. The problem with the Federal Circuit's conclusion is that innovators wanting to further improve wireless communication will have a much more difficult time achieving that goal if the entire technical field is preempted as ineligible subject matter.

Not only does the Federal Circuit abuse the § 101 framework in order to sidestep an obviousness analysis, it ignores a key aspect of the second step of that framework. The second step of the "Alice two-step" is determining whether an inventive concept is present in the claims. (See, Step 2B and pathway (C) in the flowchart in MPEP § 2106(III)). In considering the alleged ordered combination in its Step 2B analysis, the Federal Circuit states that one of the proper inquiries is "whether all of the steps 'as an ordered combination add[] nothing to the laws of nature that is not already present when the steps are considered separately.'" (Chamberlin Group, Inc., No. 2018-2103 at 9-10). The Federal Circuit fails to say whether or not its inquiry looked at the steps of the alleged ordered combination "as a whole". Looking at the steps as a whole as opposed to looking at the steps separately is critical because even known process steps may be arranged in a unique way to represent patentable subject matter. (See, Rapid Litigation Management Ltd. v. CellzDirect, 827 F.3d 1042, 1051 (Fed. Cir. 2016), stating in dicta, "That each of the claims' individual steps (freezing, thawing, and separating) were known independently in the art does not make the claim unpatentable.").

In order to prevent courts from further abusing, ignoring, or sidestepping the 35 U.S.C. § 101 framework for determining patentable subject matter, legislative reform is necessary. Current proposed amendments to § 101 include removing the word "new" from the text of the statute. This may help prevent courts from substituting an in-depth obviousness analysis with the gate-keeping function of the § 101 inquiry.

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