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Tuesday July 16, 2019


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NY Convergence ORIGINAL

NYTECH.org Examines Software and Financial Patents

By Lauren Keyson

In 2009, out of a total of 295,219 patents granted, only a small number were for software, databases and financial methods.  This is because patenting software or a business process is open to more variables than a new invention for a machine or physical manufacturing process.   At last week’s New York Technology Council panel on technology patents, speakers tried to ascertain why these types of inventions have come under question since the advent of the computer, and why obtaining a patent for them is so costly, complicated and uncertain. Their reasoning was that that in general, it’s not totally clear what the exact difference is between a concrete idea and an abstract idea.

The NYTECH panelists used last summer’s court case of Bilski versus Kappos to try to explain what is meant by these concepts. Bilski had sought a patent for a method of hedging in the energy market against the risk of price changes, but lost because his claims were deemed to be directed to an abstract concept. But even though, in their final decision, they declared that fundamental principles and laws of nature are things that are “unpatentable,” they left open for interpretation the definition of an abstract concept.  In the end, the Bilski verdict simply meant that inventors need to weigh their options carefully before applying for a patent.

“Consider your decision on whether to patent your processes,” said Charles Meyer a veteran of the Research in Motion (Blackberry) patent dispute. “I come from the camp that anything is patentable if you put enough money behind it, but what you might just get at the end of the day is something that won’t hold up in court. Bilski is a great example that no one really understands where patent law should head or the basics of patent decisions.”

The NYTECH panelists’ advice for entrepreneurs looking to get a patent:  Be cautious, because at this point there is no definite list of subject matter in which the patent office considers to be abstract, and courts have not said one way or another if what they have is defining list. It is certain though that an inventor can’t get a patent for something as simple as an economics principle, which can be learned in high school. But it’s also still unknown for an inventor that has a software program that executes some type of business method that is more complex than just basic hedging economics principle. The answer may come over the course of the next few years as courts digest and interpret Bilski. Hopefully they can give entrepreneurs a deeper understanding of what they believe the Supreme Court meant.

“I definitely recommend if you have an idea, that you should contact a good patent attorney who can go over the U.S. Patent Office guidelines with you and see what the limits are for what can be patented,” advised David Bomzer, a patent attorney in Day Pitney’s intellectual property department. “Weigh your risks. It may be that certain risks just aren’t worth taking.  For example, it can be easily determined that you are dealing with something that is more rudimentary than anything else.  In that case it would be very unlikely you will get a patent for it. That is versus something that is more specific and narrowly tailored for practical application, is meaningfully tied to a machine, or provides a meaningful transformation that will likely get through the patent office. All this is done on a subject matter by subject matter basis, and unfortunately, there really is no bright line for determining if you have a great idea or whether or not to go for it. “