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The Ruttler Mills Blog

New Limitations on ‘Business Method’ Patents

Jim Ruttler, Patent Attorney

Posted Thursday, September 20, 2007 by Jim Ruttler

Ever since the State Street Bank Federal Circuit decision of 1994, the law regarding ‘business method’ patents has been in considerable disarray. It is well settled that abstract ideas, truths, principles, and motives are not patentable subject matter. Instead, patentability is limited to new or improved machines, compositions of matter, and processes. The court in State Street Bank, however, held that a method for managing financial services was patentable because it was a process and that patentability does not depend upon whether the process does business. This decision blurred the distinction between unpatentable ideas and patentable processes and introduced significant uncertainty.

Following the State Street Bank decision, inventor Comiskey filed a patent application for a method of conducting mandatory arbitration. However, the Federal Circuit affirmed a series of patent office rejections and held that standalone business methods are no longer patentable unless they are tied to a machine or composition of matter.

View the Comiskey Decision

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Differences Between Business Names and Trademarks

Jim Ruttler, Patent Attorney

Posted Wednesday, September 19, 2007 by Jim Ruttler

A trademark is any name, phrase, logo, or other device that is used to identify the source of a good or service and distinguish that good or service from others in the marketplace. With goods, trademarks must be displayed on the good itself or associated product packaging. With services, trademarks must be displayed within advertisements for the services such as on brochures, signs, or displays. Common trademarks include Nike, the Starbuck’s logo, and Perrier’s bottle shape. A business name is the name of the legal entity under which a business is conducted. A business name is not a trademark unless it is used as a source identifier for a good or service as discussed above. Further, a given business entity can own a number of different trademarks for various goods and services.

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Proposed Patent Act

Jim Ruttler, Patent Attorney

Posted Tuesday, September 11, 2007 by Jim Ruttler

The House of Representatives has passed revisions to the current Patent Act and it is now being considered by the Senate. The revisions are sweeping and they include a first-to-file system, third party art submissions, post grant proceedings, and required search reports.

Currently, the U.S. is on a first-to-invent system whereby a patent is generally awarded to the first inventor to conceive of an idea regardless of who files first. The first-to-file change means that a patent will be awarded to the first inventor to file regardless of who invented first. The first-to-file system will introduce more certainty, but it will require prompt and expeditious filing of ideas.

Regarding third party submissions, current examination of patent applications is completely sealed off from third parties. Thus, even if a third party knows that a pending patent application is meritless there is nothing that can be done to intervene until after the patent issues. Third party art submssions permit any third party to notify the patent office of other patents, patent applications, or publications that may help the examiner in determing whether a patent should be granted. Third party submissions will assist the examiners with determining patentability, but competitors could abuse the process by filing excessive art submissions.

Presently, the only remedy to invalidate a patent at the patent office is through re-examination proceedings, which are complicated and expensive. The post grant proceedings are an alternative to re-examination proceedings and permit a third party to oppose a patent within one year of issuance. Unless the post grant proceedings are significantly easier and less expensive than current re-examination proceedings, they will probably not add much value.

Prior art searches and search reports are not currently required in new patent applications. However, under the proposed Patent Act the Patent Office may require search reports for everyone but micro-entities, which generally include independent inventors and small businesses. Placing a burden on large businesses to help the Patent Office determine patentability will probably improve patent application examination efficiency.

View the Proposed Patent Act

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New Patent Rules

Jim Ruttler, Patent Attorney

Posted Sunday, September 9, 2007 by Jim Ruttler

New patent rules pertaining to claims and continuation practice will go into effect on November 1, 2007 and are retroactive to all applications that have yet to receive a first office action on the merits. The new rules are an attempt by the patent office to reduce patent application backlog and improve overall efficiency of the patent process by permitting examiners to focus more on new applications.

The claims are the section of the patent application that set forth the ownership rights of the invention. The standard non-provisional filing fee permits up to 3 independent claims and 20 total independent and dependent claims to be filed without additional charge. However, an applicant can exceed this baseline number of claims without limit by paying additional fees. In some cases, applications include thousands of claims making it more difficult for prompt examination of the application. The new rules therefore limit the number of claims that can be filed in an application to 5 independent claims and 25 total claims. Although additional claims are allowed when an examination support document is filed prior to the first office action, the costs associated with preparing the examination support document are significant.

Continuation practice refers to the practice of filing continuation, continuation-in-part, and divisional applications and requests for continued examination during the examination process. A request for continued examination requires the examiner to review an application for patentability again after a final rejection is issued. A continuation application is an additional non-provisional application for an invention already contained in a previous non-provisional application. A continuation-in-part application is similar to a continuation application, but it also contains new subject matter. A divisional application is a non-provisional application having claims directed towards an invention that was restricted out from a previous non-provisional application. Current continuation practice has no limitation on the number of these applications and requests that may be filed thereby making it more difficult to attend to entirely new applications. Therefore, the new patent rules limit the number of continuation and continuation-in-part applications to 2 and the number of requests for continued examination to 1 per family of applications. Although additional continuation practice is possible upon a showing of necessity, it will presumably be difficult for applicants to meet this standard.

View the new rules

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