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09.15.2011 | Legal Update

Federal Circuit Invalidates Software Patent Claims in Post-Bilski Decision
In the recent decision of CyberSource Corp. v. Retail Decisions, Inc., the Federal Circuit held two software method claims to be invalid because they are drawn to an unpatentable mental process. CyberSource’s claimed invention relates to a method for detecting fraud in a credit card transaction by utilizing Internet Protocol (IP) information. The court held that the method claims do not meet the requirements of the machine-or-transformation test and, furthermore, recite an un-patentable mental process that could be performed in a human mind. The court arrived at this conclusion despite one of the independent claims being directed to a computer readable medium, which has previously been relied upon by some practitioners as a way to meet the statutory requirements of § 101.

For further discussion of this case, click here. 

USPTO Expands First Action Interview Program to All Technology Areas
The United States Patent and Trademark Office (USPTO) recently announced that it is expanding the First Action Interview Pilot Program to include all utility applications in all technology areas. As under the previous program, which was limited by technology area and filing date, an applicant is entitled to a first action interview, upon request, prior to the first Office Action on the merits. The new pilot program is scheduled to run through May 16, 2012.

For further discussion of this program, including how to utilize it, click here.

Federal Circuit Significantly Tightens the Standard for Proving Inequitable Conduct and USPTO Responds
As our readers likely know, an en banc panel of the Federal Circuit substantially raised the bar for proving inequitable conduct in patent cases in its recent decision in Therasense, Inc. v. Becton, Dickinson and Co., Nova Biomedical Corp. and Bayer Healthcare LLC. The court raised the bar both with respect to the intent and the materiality prongs of an inequitable conduct analysis. In light of this decision, the USPTO recently proposed rule changes that would place the duty of disclosure materiality standard in-line with the “but-for materiality” standard endorsed by Therasense.

For a brief summary of this case and its anticipated effects, click here.

Supreme Court Affirms Strong Presumption of Patent Validity
On June 9, 2011, the U.S. Supreme Court issued its much anticipated decision in Microsoft v. i4i. At issue was whether patents would continue to enjoy a strong presumption of validity during litigation. More specifically, whether the clear and convincing evidence standard necessary to invalidate a patent would be overturned. Microsoft had challenged that standard; arguing that a lower standard of “preponderance of the evidence” should be sufficient. The Supreme Court unanimously rejected Microsoft’s argument and affirmed the Federal Circuit’s long-standing strong presumption of proof. As a result, the clear and convincing evidence standard remains, even for prior art not considered by the Patent Office. However, the Supreme Court did note that when new prior art is asserted by a defendant, the jury should be given instruction on that point and also instructed to consider that fact when determining whether an invalidity defense has been proven by clear and convincing evidence.

European Patent Convention Rule Changes
Recent European Patent Convention (EPC) rule changes were recently passed to streamline European patent prosecution. These changes, including accelerated prosecution, voluntary amendments, divisional application, search, and examination, may immediately affect European patent prosecution strategy. Applicants with pending European applications should particularly be aware that the timing for filing various papers, such as divisional applications, has changed, and that in some instances, the issuance of various European Patent Office communications that previously did not require a reply now have a requirement for response.

For a summary of EPC changes and tips on addressing them, click here.

Federal Circuit Changes Patent Infringement Analysis in a Contempt Hearing
In a recent en banc decision, TiVo Inc. v. EchoStar Corp., the Federal Circuit unanimously overruled its previous two-step test, the KSM test, regarding patent infringement in a contempt hearing, which first requires a threshold inquiry of the appropriateness of a contempt hearing before a district court can adjudge whether a redesigned product continues to infringe. The court held that the KSM inquiry “confuses the merits of contempt with the propriety of initiating contempt proceedings,” and replaced that test by allowing broad discretion to the district court to determine the propriety of a contempt proceeding based on the facts presented.

For further discussion of this case, click here.

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