RECENT IMPACTS OF AI ON SOFTWARE PATENTS

IN THE UNITED STATES

J i m D u r k i n , S r. S a l e s E n g i n e e r, I P. c o mA u g u s t 2 0 1 9

N o t e : P l e a s e c o n s u l t w i t h a n a t t o r n e y f o r l e g a l a d v i c e .

AGENDA• Making your Ideas Protectable and Writing Effective Invention

Disclosures

• Artificial Intelligence & Patentable Subject Matter

• Capturing Industry Trends using AI with InnovationQ Plus®

• The Value of your Patent: Impacts of Post-Grant Patent Challenges

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AI DRIVES INNOVATION

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• According to WIPO, between 2013-2016: • Mentions of deep learning in patent filings grew 175%• Mentions of neural networks grew 46%• Top areas include computer vision (49%), natural language processing (14%)

and speech recognition (13%)

WRITING AN EFFECTIVE

INVENTION DISCLOSURE• Patents in software, particularly in the area of AI, are prone to

potential rejections as abstract ideas, or for lack of adequate

disclosure.

• When inventing, some best practices to help ensure high quality

patent applications include:

• Describes the specific algorithms you’ve invented to

accomplish desired outcomes, not just the outcomes.

• Ensure that someone reading your disclosure will not have to

perform undue experimentation to practice your invention.

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PRACTICAL APPLICATIONS OF AI

Consider practical applications and implementations of your ideas

when describing your algorithms, in addition to the pure mathematics:

• For example, time dilatation is a principle of physics. This cannot

itself be patented.

• However, one practical application is using time dilatation to

synchronize the clock of a GPS satellite. This is an example of a

practical application and therefore patentable subject matter.

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USING AI TO SNAPSHOT A TECHNOLOGY

AREA

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• By leveraging a combination of AI and traditional search methodologies, it is simple to drill-down and obtain a rapid technology snapshot.

• Let’s look at an example in the area of photography:

RELEVANT RESEARCH

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• Using AI, the most relevant technologies may be quickly identified by entities

• Graphics are colored by relevance

• Information may be correlated between patent assignees and S&P Global Market Intelligence

SEMANTIC MAPPING FOR TREND ANALYSIS

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FINDING THE TRENDS

• Following the citation and semantic trends on this patent, we can

see recent investment in the areas of using AI to enhance self-

portraits.

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• Let’s look at this patent discovered in the top 10 results of Disney:

SOFTWARE PATENTS –

SUBJECT MATTER ELIGIBILITY• 35 U.S.C. 101 states:

Whoever invents or discovers any new and useful process,

machine, manufacture, or composition of matter, or any new

and useful improvement thereof, may obtain a patent therefor,

subject to the conditions and requirements of this title.

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ORIGINS OF SOFTWARE PATENTS

• One of the first U.S. patent cases involving computers was

Gottschalk v. Benson, 409 U.S. 63 (1972).

• It held: It is conceded that one may not patent an idea. But, in

practical effect, that would be the result if the formula for converting

BCD numerals to pure binary numerals were patented in this case.

• The mathematical formula involved here has no substantial practical

application except in connection with a digital computer, which

means that, if the judgment below is affirmed, the patent would

wholly preempt the mathematical formula and, in practical

effect, would be a patent of the algorithm itself.

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SOFTWARE INVENTIONS:

RESTRICTIONS ON PATENTING

ABSTRACT IDEAS • Alice Corp. v. CLS Bank International, 573 U.S. 208, 134 S. Ct. 2347

(2014) prevents the patenting of an abstract idea.

• In this case, the patent claims involved a method of exchanging

financial obligations between two parties using a third-party

intermediary to mitigate settlement risk, and were held to be an

abstract idea.

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CATEGORIES OF SOFTWARE

INVENTIONS• Commonly used terms in software inventions claims include:

• Method

• System

• Non-transitory computer-readable medium

• Cannot patent:

• Abstract ideas (Alice)

• Software per se

• Signal per se (transitory mediums)

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EXAMPLE: MCRO, INC. DBA PLANET

BLUE V. BANDAI NAMCO GAMES

AMERICA INC.Claim 1: A method for automatically animating lip

synchronization and facial expression of three-dimensional

characters comprising:

• obtaining a first set of rules that define output morph weight set stream as a function of phoneme sequence and time of said phoneme sequence;

• obtaining a timed data file of phonemes having a plurality of sub- sequences;

• generating an intermediate stream of output morph weight sets and a plurality of transition parameters between two adjacent morph weight sets by evaluating said plurality of sub-sequences against said first set of rules;

• generating a final stream of output morph weight sets at a desired frame rate from said intermediate stream of output morph weight sets and said plurality of transition parameters; and

• applying said final stream of output morph weight sets to a sequence of animated characters to produce lip synchronization and facial expression control of said animated characters.

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RESULT: PATENTABLE

• “By incorporating the specific features of the rules as claim

limitations, claim 1 is limited to a specific process for automatically

animating characters using particular information and techniques

and does not preempt approaches that use rules of a different

structure or different techniques.” McRO, Inc. dba Planet Blue v.

Bandai Namco Games America Inc., 120 USPQ2d 1091 (Fed. Cir.

2016)

• Also, note that the specific rules claimed are different than

manual lip synchronization by a human being.

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USPTO 2019 REVISED PATENT SUBJECT

MATTER ELIGIBILITY GUIDANCE

• 1) Is the invention in a statutory category?

• 2A) Is the claim, as a whole, directed towards a judicial exception, including law of nature, a natural phenomenon, or an abstract idea?

• 2B) If so, does the claim recite additional elements that amount to significantly more than the exception?

• Only where a claim recites a judicial exception and fails to integrate to a practical application is the analysis required to continue to step 2B.

• Existing USPTO guidance as modified in April 2018 is used to analyze Step 2B (e.g., does the claim merely recite well-understood, routine, conventional activity).

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ENHANCING PATENT QUALITY

• Policies have been established to enable high quality patents other

than restricting patentable subject matter, such as:

• Properly addressing functional claiming, when a patent claim

defines an outcome without reciting the structure for doing it in

the claim

• Instituting a new framework for inter partes review (IPR)

proceedings in the America Invents Act (AIA)

• Addressing written description and/or enablement requirements

under 112(a), and indefiniteness under 112(b). Preventing

undue experimentation to practice the invention

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LEAHY–SMITH AMERICA INVENTS ACT (AIA)

• Moved the U.S. to a first-inventor-to-file system from first-to-invent

• Harmonized with international patent law

• Changed definition of prior art

• Established new inter partes review (IPR) procedure whereby a

trial is conducted in the U.S. Patent & Trademark Office

(USPTO) in order to review the patentability of one or more

claims for novelty and obviousness. See 35 U.S.C. §311 - §319.

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IPR STATISTICS AND IMPACT

• 80% of IPR cases are for defending entities already involved in

patent litigation.

• According to USPTO from 9/16/12 to 5/31/19 IPR final decisions

have the following statistics:

• No claims patentable, 19%

• Some claims patentable, 18%

• All claims patentable, 63%

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CONCLUSION

• Keeping in mind the types of details you’ll need to effectively avoid

rejections for lack of written description, enablement, or as abstract

ideas, will help improve the quality of your inventions.

• Always keep in mind when filing patents particularly related to AI:

• Disclosing specific algorithms to perform recited functions

• Creating practical applications of your ideas

• Preventing undue experimentation to make or use your

inventions

• Moving beyond abstract ideas

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22

QUESTIONS

J im Du rk i n , I P. com

Augus t 2019

APPENDIX: CITATIONS & RESEARCH

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1. The USPTO 2019 Revised Patent Subject Matter Eligibility (”PEG”) Guidelines:

• https://www.govinfo.gov/content/pkg/FR-2019-01-07/pdf/2018-28282.pdf

• https://www.uspto.gov/sites/default/files/documents/mpepchart_for_2019peg_20190107.pdf

2. USPTO Manual of Patent Examining Procedure (MPEP) Sections 2106, 2121(II), 2181

3. Pending Congressional Legislation to Reform Section 101 of the Patent Act:

• https://www.tillis.senate.gov/2019/5/sens-tillis-and-coons-and-reps-collins-johnson-and-stivers-

release-draft-bill-text-to-reform-section-101-of-the-patent-act

4. Memorandum and Cases Related to Patentable Subject Matter.

• https://www.uspto.gov/patent/laws-and-regulations/examination-policy/subject-matter-eligibility

• Aristocrat Techs. Austl. PTY Ltd. v. Int’l Game Tech., 521 F.3d 1328 (Fed. Cir. 2008)

• McRO, Inc. dba Planet Blue v. Bandai Namco Games America Inc., 120 USPQ2d 1091 (Fed.

Cir. 2016)

• BASCOM Global Internet Services v. AT&T Mobility LLC, 827 F .3d 1341 (Fed. Cir. 2016)

• Amgen v. Sanofi, 872 F.3d 1367 (Fed. Cir. 2017)

• Berkheimer v. HP Inc., 881F.3d1360 (Fed. Cir. 2018)

• Finjan Inc. v. Blue Coat Systems, Inc., 879 F.3d 1299 (Fed. Cir. 2018)

5. https://www.wipo.int/tech_trends/en/artificial_intelligence/story.html

6. https://www.uspto.gov/sites/default/files/documents/trial_statistics_20190531.pdf

APPENDIX: CITATIONS & RESEARCH

CONTINUED

7. Sherry Knowles and Anthony Prosser, Unconstitutional Application

of 35 U.S.C. § 101 by the U.S. Supreme Court,18 J. MARSHALL

REV. INTELL. PROP. L. 144 (2018) comparing Le Roy v. Tatham,

55 U.S. 156 (1853) with Funk Brothers Seed Co. v. Kalo Inoculant

Co., 333 U.S. 127 (1948).

8. U.S. Constitution Intellectual Property Clause, Article I, Section 8,

Clause 8

9. Gottschalk v. Benson, 409 U.S. 63 (1972)

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