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Subject: FW: APLF - U.S. Method Claims Being Rejected for Failure to Tie Technological Art or Environment
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FYI below for a news item prepared by one of my colleagues.  The USPTO has =
recently been adding what appears to be a "technical character" requirement=
 to method patent examination.  Whether the policy will withstand a legal c=
hallenge is uncertain.  --Bill Heinze
  _____=20=20

If you cannot view the graphics in this newsletter, please visit
http://www.aplf.org/mailer-private/issue159.html for the Web-based version.



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Issue 159 | February 13, 2004	    <http://www.aplf.org/mailer/spacer.gif> 	=
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U.S. Method Claims Being Rejected for Failure to Tie Technological Art or E=
nvironment	    <http://www.aplf.org/mailer/spacer.gif>=20=09
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   <http://www.aplf.org/mailer/21_r12_c1.gif>=20=09
In addition to the requisite "useful, concrete and tangible result," having=
 "clear world value," method claims in the U.S. that are not "tied to a tec=
hnological art or environment" may be subject to a =A7101 non-statutory sub=
ject matter rejection based on the U.S.  <http://www.uspto.gov/web/menu/pbm=
ethod/> Patent and Trademark Office's current interpretation of Ex parte Bo=
wman, 61 U.S.P.Q. 1669 (BPAI 2001). This latest direction in U.S. patent ex=
amination policy appears to parallel the " technical character <http://www.=
wipo.org/sme/en/e_commerce/computer_software.htm> " approach of the Europea=
n <http://www.european-patent-office.org/news/pressrel/2000_08_18_e.htm> , =
U.K. <http://www.patent.gov.uk/news/software.htm> , and Japanese <http://ww=
w.jpo.go.jp/tetuzuki_e/t_tokkyo_e/tt1211-055.htm>  Patent Offices.

In this unpublished and non-precedential opinion, the appealed claims were =
directed to a method of evaluating an intangible asset of interest:=20


A method of evaluating an intangible asset of interest, comprising the step=
s of:=20

establishing first and second variables related to the value of said intang=
ible asset of interest;=20

establishing a series of performance criteria statements probative of the v=
alue of said first and second variables;=20

scoring each of the said performance criteria statements;=20

summing scores to generate first and second total scores based upon the ext=
ent to which individual statements accurately describe said intangible asse=
t of interest;=20

transforming physical media into a chart having a first axis relating to sa=
id first variable and a second axis relating to said second variable;=20

physically plotting a point on said chart, said point being located at coor=
dinates corresponding to said first and second total scores respectively, a=
nd,=20

using said chart in making at least one decision regarding the value of sai=
d intangible asset of interest.

The Examiner asserted that the claimed invention did not fall within the te=
chnological arts because no form of technology was disclosed or claimed. Th=
e Appellant argued that, under the USPTO's Examination Guidelines for Compu=
ter-Related  <http://www.uspto.gov/web/offices/com/hearings/software/analys=
is/computer.html> Inventions creating a chart and plotting a point is "phys=
ical and has clear real world value." In particular, the claimed process re=
sulted in a physical transformation outside of a computer for which a pract=
ical application in the technological arts is either disclosed in the speci=
fication or would have been known to a skilled artisan.

In an opinion written by Administrative Patent Judge Smith, the Board agree=
d with the Examiner, noting that "Appellant has carefully avoided tying the=
 disclosed and claimed invention to any technological art or environment." =
The Board reasoned that the invention was directed merely to a human making=
 mental computation and manually plotting results on paper and thus is noth=
ing more than an abstract idea which is not tied to any technological art o=
r environment. According to the Board, an abstract idea does not become a t=
echnological art merely by the recitation of "transforming physical media i=
nto a chart" and "physically plotting a point on said chart."

In fact, Appellant cited the discussion in  <http://www.ll.georgetown.edu/f=
ederal/judicial/fed/opinions/97opinions/97-1327.html> State Street Bank & T=
rust Co. v. Signature Fin. Group, Inc., 149 F.3d 1368, 47 USPQ2d 1596 (Fed.=
 Cir. 1998)(holding that asset allocation algorithms provide a "useful, con=
crete, and tangible result") relying on In re Alappat <http://digital-law-o=
nline.info/cases/31PQ2D1545.htm> , 33 F.3d 1526 (Fed. Cir. 1994) and Arrhyt=
hmia Research Tech. Inc. v. Corazonix  <http://digital-law-online.info/case=
s/22PQ2D1033.htm> Corp., 958 F.2d 1053 (Fed. Cir. 1992)(holding that transf=
ormation of heartbeat signals corresponds to a useful, concrete or tangible=
 thing). However, in a concurring opinion citing  <http://digital-law-onlin=
e.info/cases/31PQ2D1754.htm> In re Warmerdam, 33 F.3d 1354, (Fed. Cir. 1994=
)(data structure representing object merely a manipulation of abstract idea=
s), Administrative Patent Judge Dixon distinguished those cases and  <http:=
//www.ll.georgetown.edu/federal/judicial/fed/opinions/98opinions/98-1338.ht=
ml> AT&T Corp. v. Excel Communications Inc., 172 F.3d 1352 (Fed. Cir. 1999)=
(adding billing data to telephone record is useful, non-abstract result) as=
 each disclosing an invention well-grounded in an area of the technological=
 arts. Judge Dixon noted that the specification was silent as to any media =
beyond a graphical representation, which could be "as broad as a stick in t=
he sand." Judge Dixon further stated that the claimed invention did not inv=
olve the traditional sciences and hence there can be no advancement of the =
"useful arts" consistent with Congressional power under the Constitution.

For a copy of the decision and/or more information on USPTO examination pol=
icies for business method patents, contact the author of this issue of " AP=
LF Patent Law Updates <http://www.aplf.org/news/mailer.shtml> ," Tim  <http=
://www.tkhr.com/attorney.cfm?aid=3D71> Wall ( WallT@tkhr.com), at Thomas, K=
ayden, Horstemeyer  <http://www.tkhr.com> & Risley LLP in Atlanta, Georgia =
USA.

The information contained in this email is provided for informational purpo=
ses only and does not represent legal advice. Neither the APLF nor the auth=
or intends to create an attorney client relationship by providing this info=
rmation to you through this message.

APLF =B7 PO Box 7418 =B7 Washington, DC =B7 20044-7418


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below for a news item prepared by one of my colleagues.&nbsp; The USPTO has=
=20
recently been&nbsp;adding what appears to be a "technical character" requir=
ement=20
to method patent examination.&nbsp; Whether the policy will withstand a leg=
al=20
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          <TD class=3Dmailerissue align=3Dright colSpan=3D2 rowSpan=3D2>Iss=
ue 159 |=20
            <SPAN class=3Dmailerdate>February 13, 2004</SPAN></TD>
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er.gif"=20
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        <TR>
          <TD class=3Dmailertitle align=3Dright colSpan=3D4>U.S. Method Cla=
ims Being=20
            Rejected for Failure to Tie Technological Art or Environment</T=
D>
          <TD><IMG height=3D34 alt=3D" " src=3D"spacer.gif" width=3D1 borde=
r=3D0=20
            NOSEND=3D"1"></TD></TR>
        <TR>
          <TD colSpan=3D2><IMG height=3D21 alt=3D" " src=3D"19_r11_c2.gif" =
width=3D62=20
            border=3D0 NOSEND=3D"1"></TD>
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h=3D1=20
            border=3D0 NOSEND=3D"1"></TD>
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r=3D0=20
            NOSEND=3D"1"></TD></TR>
        <TR>
          <TD vAlign=3Dtop colSpan=3D2 rowSpan=3D2><IMG height=3D104 alt=3D=
" "=20
            src=3D"21_r12_c1.gif" width=3D52 border=3D0 NOSEND=3D"1"></TD>
          <TD class=3Dmailerbody vAlign=3Dtop align=3Dleft colSpan=3D8 rowS=
pan=3D2>
            <P>In addition to the requisite "useful, concrete and tangible=
=20
            result," having "clear world value," method claims in the U.S. =
that=20
            are not "tied to a technological art or environment" may be sub=
ject=20
            to a =A7101 non-statutory subject matter rejection based on the=
 <A=20
            href=3D"http://www.uspto.gov/web/menu/pbmethod/" target=3D_blan=
k>U.S.=20
            Patent and Trademark Office's</A> current interpretation of <EM=
>Ex=20
            parte Bowman</EM>, 61 U.S.P.Q. 1669 (BPAI 2001). This latest=20
            direction in U.S. patent examination policy appears to parallel=
 the=20
            "<A=20
            href=3D"http://www.wipo.org/sme/en/e_commerce/computer_software=
.htm"=20
            target=3D_blank>technical character</A>" approach of the <A=20
            href=3D"http://www.european-patent-office.org/news/pressrel/200=
0_08_18_e.htm"=20
            target=3D_blank>European</A>, <A=20
            href=3D"http://www.patent.gov.uk/news/software.htm"=20
            target=3D_blank>U.K.</A>, and <A=20
            href=3D"http://www.jpo.go.jp/tetuzuki_e/t_tokkyo_e/tt1211-055.h=
tm"=20
            target=3D_blank>Japanese</A> Patent Offices.</P>
            <P>In this unpublished and non-precedential opinion, the appeal=
ed=20
            claims were directed to a method of evaluating an intangible as=
set=20
            of interest:=20
            <BLOCKQUOTE>A method of evaluating an intangible asset of=20
              interest, comprising the steps of:=20
              <BLOCKQUOTE>establishing first and second variables related t=
o=20
                the value of said intangible asset of interest;=20
                <BR><BR>establishing a series of performance criteria state=
ments=20
                probative of the value of said first and second variables;=
=20
                <BR><BR>scoring each of the said performance criteria=20
                statements; <BR><BR>summing scores to generate first and se=
cond=20
                total scores based upon the extent to which individual=20
                statements accurately describe said intangible asset of=20
                interest; <BR><BR>transforming physical media into a chart=
=20
                having a first axis relating to said first variable and a s=
econd=20
                axis relating to said second variable; <BR><BR>physically=
=20
                plotting a point on said chart, said point being located at=
=20
                coordinates corresponding to said first and second total sc=
ores=20
                respectively, and, <BR><BR>using said chart in making at le=
ast=20
                one decision regarding the value of said intangible asset o=
f=20
                interest.</BLOCKQUOTE></BLOCKQUOTE>
            <P></P>
            <P>The Examiner asserted that the claimed invention did not fal=
l=20
            within the technological arts because no form of technology was=
=20
            disclosed or claimed. The Appellant argued that, under the USPT=
O's=20
            <A=20
            href=3D"http://www.uspto.gov/web/offices/com/hearings/software/=
analysis/computer.html"=20
            target=3D_blank>Examination Guidelines for Computer-Related=20
            Inventions</A> creating a chart and plotting a point is "physic=
al=20
            and has clear real world value." In particular, the claimed pro=
cess=20
            resulted in a physical transformation outside of a computer for=
=20
            which a practical application in the technological arts is eith=
er=20
            disclosed in the specification or would have been known to a sk=
illed=20
            artisan.</P>
            <P>In an opinion written by Administrative Patent Judge Smith, =
the=20
            Board agreed with the Examiner, noting that "Appellant has care=
fully=20
            avoided tying the disclosed and claimed invention to any=20
            technological art or environment." The Board reasoned that the=
=20
            invention was directed merely to a human making mental computat=
ion=20
            and manually plotting results on paper and thus is nothing more=
 than=20
            an abstract idea which is not tied to any technological art or=
=20
            environment. According to the Board, an abstract idea does not=
=20
            become a technological art merely by the recitation of "transfo=
rming=20
            physical media into a chart" and "physically plotting a point o=
n=20
            said chart."</P>
            <P>In fact, Appellant cited the discussion in <A=20
            href=3D"http://www.ll.georgetown.edu/federal/judicial/fed/opini=
ons/97opinions/97-1327.html"=20
            target=3D_blank><EM>State Street Bank &amp; Trust Co. v. Signat=
ure=20
            Fin. Group, Inc.</EM></A>, 149 F.3d 1368, 47 USPQ2d 1596 (Fed. =
Cir.=20
            1998)(holding that asset allocation algorithms provide a "usefu=
l,=20
            concrete, and tangible result") <EM>relying on <A=20
            href=3D"http://digital-law-online.info/cases/31PQ2D1545.htm"=20
            target=3D_blank>In re Alappat</A></EM>, 33 F.3d 1526 (Fed. Cir.=
 1994)=20
            and <EM><A=20
            href=3D"http://digital-law-online.info/cases/22PQ2D1033.htm"=20
            target=3D_blank>Arrhythmia Research Tech. Inc. v. Corazonix=20
            Corp.</A></EM>, 958 F.2d 1053 (Fed. Cir. 1992)(holding that=20
            transformation of heartbeat signals corresponds to a useful,=20
            concrete or tangible thing). However, in a concurring opinion c=
iting=20
            <A href=3D"http://digital-law-online.info/cases/31PQ2D1754.htm"=
=20
            target=3D_blank><EM>In re Warmerdam</EM></A>, 33 F.3d 1354, (Fe=
d. Cir.=20
            1994)(data structure representing object merely a manipulation =
of=20
            abstract ideas), Administrative Patent Judge Dixon distinguishe=
d=20
            those cases and <A=20
            href=3D"http://www.ll.georgetown.edu/federal/judicial/fed/opini=
ons/98opinions/98-1338.html"=20
            target=3D_blank><EM>AT&amp;T Corp. v. Excel Communications=20
            Inc.</EM></A>, 172 F.3d 1352 (Fed. Cir. 1999)(adding billing da=
ta to=20
            telephone record is useful, non-abstract result) as each disclo=
sing=20
            an invention well-grounded in an area of the technological arts=
.=20
            Judge Dixon noted that the specification was silent as to any m=
edia=20
            beyond a graphical representation, which could be "as broad as =
a=20
            stick in the sand." Judge Dixon further stated that the claimed=
=20
            invention did not involve the traditional sciences and hence th=
ere=20
            can be no advancement of the "useful arts" consistent with=20
            Congressional power under the Constitution.</P>
            <P>For a copy of the decision and/or more information on USPTO=
=20
            examination policies for business method patents, contact the a=
uthor=20
            of this issue of "<A href=3D"http://www.aplf.org/news/mailer.sh=
tml"=20
            target=3D_blank>APLF Patent Law Updates</A>," <A=20
            href=3D"http://www.tkhr.com/attorney.cfm?aid=3D71" target=3D_bl=
ank>Tim=20
            Wall</A> (<A href=3D"mailto:WallT@tkhr.com">WallT@tkhr.com</A>)=
, at <A=20
            href=3D"http://www.tkhr.com" target=3D_blank>Thomas, Kayden, Ho=
rstemeyer=20
            &amp; Risley LLP</A> in Atlanta, Georgia USA.</P>
            <P class=3Dmailersmall>The information contained in this email =
is=20
            provided for informational purposes only and does not represent=
=20
            legal advice. Neither the APLF nor the author intends to create=
 an=20
            attorney client relationship by providing this information to y=
ou=20
            through this message.</P>
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