Best Practices for Software Applications post-Alice

Strategies which give software patent applicants time and flexibility to counteract the effects of the US Supreme Court’s Alice decision become more valuable with each passing day. As I pointed out in a previous blog post, this is because:

• The United States Patent and Trademark Office (USPTO) continues to issue clarifying guidelines for applicants to deal with the impact of the Alice decision; and
• The courts, namely the United States Court of Appeals for the Federal Circuit (USCAFC), continue to bring down judgments which further clarify Alice. 

The recent McRO vs Bandai and BASCOM vs AT&T USCAFC decisions and accompanying USPTO November 2016 memorandum; and USPTO December 2016 Subject Matter Eligibility Examples demonstrate this continuing clarification. In a previous blog post, I also discussed lessons which could be drawn from the USCAFC Enfish vs Microsoft decision. Putting together those lessons and the recent clarifications, a set of best practices for software patent applications is emerging, as I will explain below.

In its November 2016 memorandum, the USPTO stated the following notable points with regard to McRO vs Bandai:

• Examiners should consider the claim as a whole and not try to overgeneralize or simplify it into gist or core principles
• An improvement in computer-related technology may also be claimed as a set of “rules” that allow computer performance of a function not previously performable by a computer. Indications of improvement include
• Teaching in the specification about how the claimed invention improves a computer or other technology; and
• Claiming a particular solution to a problem or a particular way to achieve a desired outcome defined by the claimed invention as opposed to claiming the idea of a solution or an outcome.

With regard to BASCOM vs AT&T, the USPTO stated the following in both its November 2016 memorandum and December 2016 Subject Matter Eligibility Examples:

• Examiners should consider additional elements both in combination and individually when determining whether a claim as a whole is patent eligible. This is because the claim as a whole may pertain to a non-conventional and non-generic arrangement of known conventional elements.
• The limitations in the claims confine the invention to a specific practical application of the abstract idea.

In the December 2016 Subject Matter Eligibility Examples, the USPTO provided two further examples relating to automated teller machine (ATM) technology, and technology to track inventory. In both cases, the USPTO gave examples of claims directed to each of the technologies which were patent eligible, because these claims relate to specific implementations; and the combination of elements in the claims relate to the performance of functions in a non-conventional and non-generic way.

Based on the continuing clarifications and Enfish vs Microsoft, a set of best practices for software applications post-Alice can be drawn up:

1.  Describe the underlying hardware where the software resides using non-generic terms. Software does not exist in a vacuum. Also using non-generic terms makes it more difficult for the examiner to state that the additional elements either individually or in combination are generic components. Furthermore, the examiner is less likely to find that the claims are directed to an abstract idea, if the claims are tied to the underlying hardware.
2. State clearly within the specification how the invention at hand improves the operation of the underlying hardware over the prior art. For example, in McRO vs Bandai, the USCAFC relied on the specification’s explanation of how the claimed rules enabled automation of specific tasks that previously could not be automated.
3. Direct the claim towards a particular solution to a problem or a particular way to achieve a desired outcome defined by the claimed invention.
4. Use claim language that allows the applicant to make prosecution arguments to tie in with the language of the USPTO guidelines relating to the above decisions.
5. Tie the claim language to the hardware using more “technical” language rather than generic terms.

Additionally, it may also be worthwhile to propose a narrower independent claim where the words “enhance” or “improve” are used. While these may seem unnecessarily narrowing to some, sometimes trading off breadth for an issued patent is useful. As I pointed out in my last blog post “Take It or Keep Going”, advantages include:

• Easier to convince investors for fundraising,
• Easier to market products connected to the application, and
• Less resources needed to continue prosecution of the application.

Take it or Keep Going?

Occasionally during patent prosecution, a patent examiner will indicate to an applicant that while they are not willing to grant an independent claim, they are willing to grant a narrower dependent claim. The applicant then has two choices: take the narrower dependent claim or continue in prosecution.

Taking the narrower dependent claim gives the applicant a valid granted patent. The applicant can now market products covered by the granted patent, as patented. The applicant can inform potential investors of the granted patent. The downside is that once the patent is granted, it may be very difficult if not impossible to change the scope of the claims. In effect the applicant has to “live with it.”

Continuing prosecution exposes the applicant to the risk of increased spending without much more to show for it. However there is a chance that the applicant may get claims of broader scope than the narrower claim.

As with many things in business, the answer to this question depends on many factors. These factors include:

• Motivation for obtaining the patent,
• Resource factors,
• Competitive factors,
• Examiner attitude, and
• Jurisdiction.

The impact of each of these factors on answering this question are detailed below:

Motivation for obtaining the patent

What is the motivation of the applicant in pursuing the patent? This should be the first question asked. If the motivation is to, for example, facilitate marketing of the product or convince investors, then it may be advantageous to accept the narrower claim instead of delaying it in prosecution. If however the aim is to get the broadest protection possible, then the applicant should consider continuing prosecution.

Resource factors

In addition to money, continuing prosecution will consume an applicant’s time and energy. The applicant should consider whether there are enough resources to continue prosecuting the patent. On the other hand, obtaining a granted patent may open the door to an increased flow of resources. Having a granted patent may facilitate investment or partnership which may lead to increased resources available to the applicant.

Competitive factors

Sometimes, the narrower claim may cover a feature that is either commonly used or improves the functioning of a product owned by the applicant. If so, then taking the narrower claim may be attractive to the applicant. It then makes it difficult for a competitor to design around the feature without significantly reducing any associated value proposition of a competing product.

Having a patent may also be valuable for marketing. Patents are useful to, for example, a company pursuing a product differentiation strategy. The company can, for example, market itself as innovative or cutting edge.

Examiner attitude

An important indicator of the success of continuing in prosecution is the attitude of the examiner to the claimed invention. If the examiner seems to be intransigent on the independent claim or minor modifications to the independent claim, but is willing to grant the dependent claim, then it may be best to take the dependent claim.

One way to gauge examiner attitude is by requesting a telephone or face-to-face interview with the examiner to discuss the independent claim. This will enable the applicant to get a “read” on examiner attitude.

Jurisdiction

The answer to the question also depends on the jurisdiction. For example, the United States (US) allows applicants to file continuation and continuation in part applications. Therefore, an applicant can take a narrower claim, then file a continuation application and try to get claims of broader scope. Other jurisdictions may not have the same rules in place, so it may be worthwhile to continue prosecuting the application.

Also, the relationships between jurisdictions may be important. For example, assume that an applicant has two applications from the same family in the US and jurisdiction X. Assume that jurisdiction X is of lower priority strategically to the applicant compared to the US. Then the examiner in jurisdiction X poses the above choice to the applicant.

If there is a patent prosecution highway (PPH) agreement between jurisdiction X and the US, it may be in the applicant’s interest to take the narrower claim in jurisdiction X. This enables the applicant to accelerate grant of the application in the US using the PPH agreement. Once the US application is granted and before the patent is issued, the applicant can then file a continuation or a continuation part application in the US to try to get claims of broader scope.

Patenting when you have a trade secret to protect

A patent allows the holder to have a monopoly for 20 years over the invention claimed within the patent. In exchange, the patent holder must publicly disclose the claimed invention, including the best mode to practice the invention. 

However, some companies and inventors will have trade secrets about the practice and implementation of their invention. For example, the recipe for Coca Cola is a trade secret, as is the recipe for Kentucky Fried Chicken. Colloquially, these trade secrets are referred to as the “secret sauce”. If these secrets are revealed, then the company/inventor(s) will lose their competitive advantage in the marketplace. 

So the question is: How does a company/inventor(s) protect its valuable intellectual property (IP) without giving away the secret sauce?

Firstly, the company/inventor(s) should examine their IP to see whether any of it can be disclosed in a patent. The central question to be asked in such an examination: Can the IP be described with enough detail so as to enable the company/inventor(s) to obtain a patent, but with insufficient detail to still retain competitive advantage? If not then the company/inventor(s) should not be filing a patent.

If it is possible, then what should be done? Three possible courses of action when describing the IP are: 

1. Generalize: The company/inventor(s) should be able to generalize the invention without giving specifics. For example, in the case of a software invention the company/inventor(s) can describe functional blocks or modules which take in inputs and process those inputs to produce outputs, instead of actual lines of code.
2. Disguise: The company/inventor(s) should look to disguise the specific practice being adopted. For example, if the company/inventor(s) use process A in an actual implementation, then the company/inventor(s) should disclose as many alternative implementations or embodiments as possible to process A. This makes it difficult for a competitor to determine which implementation is being actually used. 
3. Conceal: If the company/inventor(s) has adopted certain processes, then the specific parameters of those processes should be concealed in the patent disclosure. For example, if a process calls for the repetition of one step 10 times, the company/inventor(s) should disclose repetition of the step for a number of times.

Intelligent patent practice can help improve the value of an invention tremendously, while preserving or even enhancing competitive advantage. Determining whether IP can be protected through patents, and then adopting the steps such as described above can go a long way towards achieving these goals.