Software Patents and Business Methods Patents, Are They Patentable?

Are software and business methods patentable? If you have been Googling the topic recently, you may have heard that the US Supreme Court and the Federal Circuit have heard a series of different cases during the past few years regarding it. Before I get into the history below, the short answer is still generally yes for software patents, with exceptions, but probably not for pure business methods, with exceptions of course!

Some of the earliest cases in the 70’s held that abstract ideas are not patentable, thus computer software which is composed of algorithms/mathematical concepts were held not to be patentable. This was an initial strike against software patents! Later in the 80’s the Supreme Court ruled on Diamond v. Diehr. The patent in question related to an invention for a method to determine how rubber is heated so it can be best “cured.” The invention was tied to a computer that calculated heating times of the rubber. The claims included a computer program claim and method claims. The Supreme Court held that the invention was not simply a mathematical algorithm, but was a valid process and
therefore patentable.

Throughout the years however, other cases came out that conflicted with Diehr. It wasn’t until the 90’s, in the seminal Supreme Court case of State Street Bank v. Signature Financial Group, which seemed to clarify the patentability of software patents. This patent related to a method of running mutual funds. Again, the issue revolved around the patentability of a mere mathematical algorithm or business method. The Supreme Court held the patent as valid and thus allowing a business method to be patentable subject matter. A key point was that the software must yield a “useful, concrete and tangible result”. So for many the feeling was that the patent claims needed to be drafted such that the software or processes were tied to a computer or processor to achieve a useful, concrete and tangible result to be patentable.

Fast forward to 2008, the Federal Circuit ruled on the In re Bilski matter which garnered a lot of media attention as to the patentability of business methods and computer software. The main claim at issue in the Bilski patent was for a method of hedging risk in the field of commodities trading. The claim was considered to be a pure business method because it dealt with simply a mental process (information that is analyzed and acted upon). The Court walked away with a new test requiring that a process is patentable if "(1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing." This new machine-or-transformation test really called into question pure method claims, and software method claims as well.

Then in late 2009 the Bilski matter was pushed to the Supreme Court to decide if the machine-or-transformation test is a proper test to determine patentability of business methods. The Supreme Court will rule on the case sometime in mid 2010. Upholding of Bilski will likely require all business method patent claims to be tied to a machine and require processes to either transform an article or be timed to a machine. More will follow after the Bilski decision later this year!

Copyright Infringement Harry Potter Style

A 36 page children’s book from a now-deceased and totally obscure British author may have lead to Harry Potter. Last week, the Associated Press reported that J.K. Rowling and her publisher are being sued for copyright infringement.

The estate of Adrian Jacobs, who died penniless in 1997, alleges that Rowling’s fourth book, “Harry Potter and the Goblet of Fire,” was lifted from “The Adventures of Willy the Wizard,” written by Jacobs in 1987. The trustee of Jacobs’ estate, Paul Allen, is suing for over $500 million pounds.

According to Rowling: “The claims that are made are not only unfounded but absurd, and I am disappointed that I, and my UK publisher Bloomsbury, are put in a position to have to defend ourselves.” Unfortunately for Jacobs’ estate, it will be hard to prove that Rowling did in fact plagiarize. Mere ideas are hard to copyright, and from the sound of it, that’s all Jacobs had. Wizard and magic lore is hardly unique intellectual property. Copyrights are given for the execution of a work.
Apparently, Allen’s attorney, Max Markson, has a different view. He was quoted saying he thinks it’s a billion-dollar case

Trademark Oppositions Cancellations Get Accelerated Case Resolution

If you know about trademark oppositions and cancellations before the Trademark Trial and Appeal Board (TTAB), then here is a new procedure that may be right for you. The TTAB has recently introducted Accelerated Case Resolution (ACR).

ACR is streamed line procedure used during an existing opposition and cancellation. It works like this: In the preliminary stages of a TTAB proceeding, the parties agree that only a small amount of evidence or testimony will be used, and that the overall record is not extensive. ACR is then requested from the TTAB. Generally, notice should be given to the TTAB during the required settlement and discovery conference of a proceeding which is held within 30 days of the close of pleadings. Disclosure and discovery schedules are tailored to fit ACR, and evidence and briefs are provided to the TTAB for review. A decision from the TTAB will be made within 50days of submittal. This is an incredibly short amount of time considering that some of may oppositions/cancellations have lasted more than 3 years.

The pro of ACR is that it can shorten a TTAB proceeding, and therefore the cost as well. So what type of case would be good for ACR? One example would be oppositions/cancellations where priority is not at issue and the parties are not relying on extensive testimony and documentary evidence. Many people are aware of summary judgment, and often want to go that route to expedite a case, and avoid a costly and lengthy trial. But summary judgment only works if there are no material facts in dispute (ie: no disagreements on evidence). With ACR, the TTAB will review any material facts in dispute, and issue a decision.

Probably the biggest issue with ACR is that the parties must stipulate that the Board can resolve any issues of material fact in lieu of trial.

Legalzoom Complaint, Again

In its nine years or so of business, Los Angeles-based Legalzoom.com has earned praise, awards, quite a bit of money, and most recently…a 5-million dollar class-action petition.

In 2008, a Missouri man, Todd Janson, used Legalzoom to prepare a Last Will and Testament. Perhaps dissatisfied with the service, Janson filed a petition against Legalzoom in the District court of Cole County, Missouri titled Todd Janson on Behalf of Himself and all other Missourians similarly Situated v. Legalzoom, Inc. In January 2009, a class-action petition was filed, which included Todd Janson and C&J Remodeling (and any other Missourians who had used Legalzoom since 2004). C& J had used Legalzoom to create Articles of Organization for their business. Todd Janson, et al. are seeking $5 million in damages from Legalzoom.

The plaintiffs argue that Legalzoom is not authorized to practice law in the state of Missouri. Legalzoom has responded with a pleading to take the case to the federal level, on the grounds that: (1) there are more than 100 people involved, (2) defendants and plaintiffs are from different states, and (3) according to Legalzoom’s calculations, the amount of money sought by the plaintiffs would be well over $5 million, when all Missouri Legalzoom users since 2004 are accounted for.

The outcome of this dispute may not be realized for some time, but the case has interesting implications for service-based online businesses. Poor service may be the real complaint Janson and his associates have, not the unauthorized practice of law. Certain statutes may need to be re-examined as technology continues to change the way business operates.

Legalzoom.com has an A+ rating with the BBB.

Orange County Trademark Lawyers New Office in Irvine

We our proud to announce the opening of our second location in Orange County in Irvine California. Our attorneys will extend the same trademark, patent, copyright, business and other Intellectual Property services at this location.

Chinese Trademarks Are More Important Than You Think

As a Los Angeles patent and trademark attorney, many of my clients ask about the possibility of getting their invention stolen when manufacturering in China. Sorry to scare you, but now you have something else to worry about. Recently, companies manufacturing in China have come across some costly and time-consuming trademark predicaments. It seems that certain players in the Chinese market are using the Chinese trademark system to swindle unsuspecting American companies.

These hucksters sell trademarks back to companies, manipulating the Chinese legal and trademark system. It works something like this: An American company decides to manufacture their product in China, and instructs the manufacturer to affix the American trademark. This company however fails to file a Chinese trademark application. A Chinese trademark trafficker then quickly registers a trademark (a duplicate version of the American trademark) with the Chinese trademark office. Then, with production already going on, this trademark trafficker appears on the scene. In order to either manufacture the product or export it after manufacture, the swindler must be paid off. Additionally, if the American company wants to switch manufacturers in China, someone must be paid.

Lately, Chinese trademark and patent laws have become a hot topic in the international business arena. It is important to know what you are getting yourself into if you are thinking of outsourcing or contracting there. Registering a Chinese trademark is crucial before any steps are taken towards manufacturing or production.

Aerosmith Trademark Battle Near

A trademark battle for the ownership of the Aerosmith name could be on the horizon. For nearly a year now, rumors have been circulating about Steven Tyler splitting from Aerosmith. Now, it appears that he might be kicked out. However, Skip Miller, Tyler’s attorney, is threatening to sue the remaining members of the band for trademark infringement if Tyler gets the boot. According to the USPTO, Aerosmith is a registered trademark of Rag Doll Merchandising, Inc.

According to Joe Perry, guitarist for Aerosmith, a combination Tyler’s lack of communication, injuries, and addiction to painkillers have plagued the band for some time now. Under the direction of their current manager, Aerosmith began approaching other possible singers, such as Billy Idol and Chris Cornell. But, according to Billboard magazine, when Miller found out about these actions, he sent a letter to the band, asking them to “immediately cease and desist from engaging in acts and conduct to the harm and detriment of your own client, Aerosmith, and our client who is one of its members." Miller then threatened legal action should the band decide to officially replace Tyler. If this happens, a heated and lengthy battle could erupt over this valuable trademark.

Aerosmith’s shareholders will meet on February 9, to discuss plans for the future of Aerosmith and Steven Tyler

Jersey Shore Trademark for "The Situation" May Turn Into a Priority Dispute

“The Situation,” a phrase made popular by the MTV reality show “Jersey Shore,” is under review for a trademark. “The Situation” is a nickname that Michael Sorrentino, the show’s ripped leading man, has given to his abdominal muscles. Contrary to rumors going around that he is attempting to trademark his abs, we have not found any such trademark application with USPTO. Rather, there are two pending applications for the mark, both in Class 25 for clothing and related accessories.

However, the story gets a little more interesting. The two applications are owned by different companies. One by Vadio Limited Liability Corporation from New Jersey, and the other by Naughty Limited, a Las Vegas firm that we have heard is operated by Michael’s older brother. We also believe that Vadio may be owned by a New Jersey man named Matthew Hunter.

The priority of right to the name should be interesting because Vadio did file the trademark application prior to Naughty Limited. However, the applications were filed differently intent to use (1B) vs. use based (1A), so it may be an interesting fight.

Another of the show’s stars, Jenni Farley, has already launched her own “JWoww” clothing line.

Apple's Ipad Runs Into Fujitsu's Trademark Application

With all the buzz last week over Apple’s new iPad, a significant detail may have been overlooked. Apparently, Fujitsu has been manufacturing and selling their own Fujitsu “iPad” for more than 8 years. The Fujitsu device isn’t an Apple knockoff, but rather a different kind of pad, a Windows point-of-sale tool for retailers. But it’s also called the iPad, and Fujitsu actually applied for a trademark in 2003. Initially Fujitsu's application was abandoned in view of an existing application for "ipad" from a company called Mag-Tek! The original iPad, it seems, was a kind of pin-entry pad made by a company called Mag-Tek. Ok, Mag-Tek’s pinpad is the original hand-held electronic screen device with a registered trademark of iPad. However, due to the nature of trademark law, there are also iPad trademarks for electric motors and bra pads.

Eventually, however, Fujitsu just last year, was able to revive the "ipad" application and received what is called a Notice of Publication. During this time, an opposer can file what is called an opposition proceeding with the Trademark Trial and Appeals Board ("TTAB"). And guess who did? Yes, Apple has filed extensions of time to oppose the Fujitsu pending trademark application for "ipad" (the last extension request was filed on 12/23/2009). Interestingly, as of the date of this blog entry, and as far as we have researched, Apple has not applied for any trademark application with the United States Patent and Trademark Office ("USPTO")for "ipad."

As a general rule, senior user's of a trademark have priority over all subsequent users. Apple will likely have to establish who was the first to use the "ipad" mark. If the past is any indication of how this dispute will go, Apple's prior trademark battles have been successful. According to a press release from February, 2007, Apple and Cisco (which both had legitimate claims to the iPhone trademark) agreed to dual trademark ownership rights.

Link to embed for the Apple February 2007 press release:
http://www.apple.com/pr/library/2007/02/21iphone.html

Trademark Dispute USC vs. USC

The University of Southern California recently emerged victorious in an off-the-field battle with the University of South Carolina. The trademark dispute was over the use of the interlocking “SC” logo, used by both schools. A federal appeals court ruled that Southern California still has the legal ownership of the trademark logo. The two schools have locked horns over the logo since 2002, when South Carolina attempted to federally register their logo. Southern California already had a registered trademark on the interlocking letters, and asserted that the logos were too similar. The Trademark Trial and Appeal Board (TTAB) agreed, and South Carolina made a counterclaim, which it also lost.

Since that time, South Carolina has been trying to appeal the ruling. On January 19 it lost yet another round. Although the school can take legal action against certain unauthorized reproduction of the logo, trademark registration would grant them indisputable protection. The fact that they have been actively seeking a trademark for over 8 years demonstrates the importance of this legal safeguard.