Since software can be copied in the case of downloadable executables, here’s a guide on how to get strong software patents.
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Software Eats the World
In 2011, Marc Andreessen presciently predicted that Software Is Eating the World. He cites examples such as Amazon, Linkedin, and Shutterfly, whose early patents, an attorney at our law firm patented for.
Mr. Andreessen also saw how software is consuming a large portion of the value chain for industries that are primarily based in the physical world. Software runs today’s cars and controls safety features. It also guides drivers to their destinations, connects them to satellite, mobile and GPS networks, and even manages the engine. He predicted the arrival of Tesla by noting that the software shift to hybrid and electric vehicles will accelerate — fully computer-controlled electric cars will be the future along with software-powered driverless vehicles.
Software.org has released a report that shows the US software industry contributes 15.8 million jobs and $933B to America’s economy. It is also growing faster than overall GDP. The industry employs 3.3 million people and supports 12.5 jobs indirectly. The industry added $1.9 trillion in total U.S. value-added GDP in 2020, which is a 17.1% increase over two years. In contrast, the total U.S. GDP over that same period grew by only 2%.
Risks of Cloning by Users or Competitors
Because software can be copied in the case of downloadable executables, or the concept can be easily reproduced, protection of software takes on special significance. More recently, the arrival of Software as a Service (SaaS) has become the dominant model for software distribution in which a cloud provider hosts and makes applications available to users via the internet. SaaS is one category of cloud computing. It’s also called infrastructure as a Service ( IaaS) or platform as a Service ( PaaS). SaaS applications are used by a variety of IT professionals, business users, and individuals. SaaS applications can be used for personal entertainment such as Netflix or advanced IT tools. SaaS products, unlike IaaS or PaaS are often marketed to both B2B as well as B2C users.
The recent arrival of software services has reduced the risk of code copying. However, that still leaves the risk of concept copying. Recently, the founders of Phhhoto filed an antitrust lawsuit against Facebook’s parent company, Meta. The suit accuses Facebook of cloning and then crushing the app. Phhhoto noted that Facebook “strung Phhhoto along” with the promise of a partnership that never materialized. The lawsuit claims that Mark Zuckerberg downloaded and used a photo app that Facebook later cloned and crushed. Since there was no patent protection, the suit had to rely on antitrust as the legal basis. However, antitrust is a weaker claim than a patent claim where Phhhoto could have pointed to specific infringement claims. In the patent domain, the patent provides the ability for Phhhoto to exclude Facebook (and others) from making, using, selling, offering for sale, or importing the claimed invention.
As well-known to founders, Phhhoto should have patented its software but they did not and this mistake can be fatal. Patents could have been used to protect the product and the go-to-market plan to create the following benefits: a clearly defined and protected plan and direction for all stakeholders; reduced time to market for products and services without fear of copying; and increased chances of a successful product or service launch of a patented or patent-pending product.
Background On Software Patenting
The process of preparing, filing, and defending the application against rejections is called patent prosecution. The US has two governing bodies that impact patent prosecution: the U.S. Patent and Trademark Office (USPTO) that issues procedural practice guidelines governing how it examines the applications, and the courts that review issued USPTO patents (from trial through the Federal Circuit and ultimately the US Supreme Court).
With respect to software and biotech patents, the Federal Circuit and the USPTO differ in their analyses of Section 101 subject matter eligibility. This is especially true when it comes to whether software meets their definition of an “abstract Idea”. The Supreme Court decision in Alice v. CLS Bank has shaped our modern concept of “abstract ideas”. When it comes down to assessing subject matter eligibility, the Federal Circuit and PTO both use the Alice doctrine of “abstract ideas” to assess software patent eligibility. Alice states that, to be patent eligible, patent applications with “abstract ideas” need to have “something more” than routine, conventional and well-understood subject matter. What is “something more” is a raging topic of debate at present.
The USPTO published Guidelines in 2019 that defined what “something more” as basically a practical application to an abstract idea. A practical application can be shown by demonstrating a technical improvement. In 2019 the PTO published its Revised Step 2A as a two-prong inquiry:
• Prong One: Evaluate whether the claim recites a judicial exception (an abstract idea enumerated in the 2019 PEG, a law of nature, or a natural phenomenon).
– If no exception is recited, the claim is eligible. This concludes the eligibility analysis.
– If claim recites an exception, go to Prong Two.
• Prong Two: Evaluate whether the claim recites additional elements that integrate the exception into a practical application of the exception.
– If the recited exception is integrated into a practical application, then the claim is eligible. This concludes the eligibility analysis.
– If the exception is not integrated into a practical application, then the claim is “directed to” the exception. Go to Step 2B for further analysis.
According to the USPTO, a technical improvement is an improvement in a machine’s functioning or operation such as the functioning of MR imaging or a catheter navigation system. But, simply improving the fitting of a golf club (i.e., improving user friendliness), is not enough to improve a machine. A machine is not improved by improving its lifecycle workflow. The PTO also evaluates whether the claimed structure or method can be integrated with a special purpose machine. The claim cannot be performed solely by mental processes. In other words, integration with a special-purpose machine occurs when the claimed function cannot only be achieved by mental processes.
On the other hand, the courts have stated that they are not bound by PTO Guidelines. The courts prefer to focus on whether there has been an improvement in the patent analyzed. For example, in Berkheimer v. HP, the Federal Circuit’s definition of “improvement” is that there is more than what is routine, well-understood and conventional. This is closer to the Alice framework where the applicant must show that the claimed function is novel or unconventional.
In sum, the court’s Section 101 analysis is closer to the easily understood, routine, and conventional test of Alice while the PTO concentrates more on the practical application of technical improvements. When drafting an application, it is important to consider both these points to get the strongest possible software patents.
The first step is to do a patent search. Patents give the inventors the right to develop, utilize and market the idea. Society gains when new technology is introduced to the market. The benefits may be direct since it can teach people to do previously impossible things, or indirectly, through the economic opportunities (business growth and job opportunities) that innovation provides. The invention has to pass the novelty test, and patent searches are the first step in obtaining your patent. You can do a google patent search or do a USPTO search. The google search will show you new competitive solutions in your space, while the PTO search will show you patented and patent-pending concepts that you should be aware of before applying. Once you know what the present art is, you can describe your invention and focus on what is new and novel so you can distinguish the art you found.
What is needed in a Software Patent Application
A typical patent application (specification) has Drawings and a detailed description text. The drawings typically include flowcharts, user interface (UI) screenshots, and any other supporting drawings. For example, if this is an IOT device, you may want to include the hardware drawings. The detailed description text expands and explains in more details the operation of the invention. It includes:
- a background section
- a summary section
- a brief description of the drawings
- a detailed description explaining the operation, connection between parts, how the invention works, and advantages of the system.
- The specification may also include the following other sections, though these are generally not required:
- a cross-reference to related applications
- a statement of government support
After the patent application has been submitted, the product that is that is covered by the patent application could be described as patent-pending. Patents in the United States are granted by the US trademark and patent office. When the patent office is satisfied with your application, you’ll be able do a patent number look-up to find the patent that was issued.
Is there an Inexpensive Way to Get Patent Protection?
A provisional patent application (PPA) is a quick and easy way to obtain patent protection for your invention. It can be filed within a few days, allowing you to beat an impending public disclosure date. Unlike an official patent, a provisional patent will take as long as 22 months to issue, which is a significant time span for a product.
One disadvantage of a PPA is that it cannot be reviewed prior to filing a non-provisional application. While a non-provisional application costs less than a full utility patent, it is less expensive than a full-blown utility patent. Additionally, it may increase the cost of the patent application process, especially if multiple provisional applications are filed. A provisional patent is often rejected, but there are ways to make it more effective.
The PPA is usually filed in a rush. Inventors often leave out important components or details of their inventions. However, the lack of these components can lead to patent infringement. Moreover, provisional applications are relatively cheap, but they must be followed up with a full non-provisional application within 12 months.
The PPA doesn’t confer any utility rights or other patent rights. It only protects your rights for a year. Within one year, the PPA must be converted into a utility application. Let’s say your invention is “in use” or “on-sale” in the United States. You file the PPA, but you don’t convert it to a utility patent application within twelve months. You could lose your right to any patent you have in that situation.
If your invention is still in its early development stage, you may want to consider filing a provisional patent application. A provisional application is a great way to protect your invention and will not impact the validity of a later patent. In addition, it is easier to file several provisional patent applications, making it easier to keep track of them and avoid costly mistakes. The USPTO has a detailed list of fees, so it is important to carefully examine all of your options.
The PPA is also easier to prepare and requires fewer legal resources than a full patent application. A provisional application is not substantively reviewed by a PTO examiner and is only checked to meet minimal filing requirements. There is no prior art search required. The process is relatively fast and easy, so you can get started without wasting too much time or money. In addition, a provisional can be filed as soon as 12 months after you initially apply, which gives you plenty of time to evaluate your invention and decide whether it is worth filing. Small entrepreneurs can benefit from this type of application.
A provisional patent will give you an extra year of protection for your invention. Generally, you will need to submit a full patent application within 21 years, but a provisional can be used until you file a nonprovisional patent application. A provisional does not require any attorney fees, and it will save you time and money. It will lay the foundation for a full patent application, so you can begin developing your product immediately.
PPAs allow you to protect your rights and to consider whether to file regular utility applications. If your invention is valuable and you are willing to invest low, a PPA will allow you to get a permanent, regular patent for one year. When you make a utility patent application, the PPA will act as a placeholder. This allows you to claim priority over any earlier filing date. If you include a detailed description of your invention in your PPA, you may be able to get maximum protection.
Value of software Patents
Patents convert knowledge of the inventor into an asset that can be sold, which opens up new opportunities for job creation through joint ventures and licensing.
Investors involved in the commercialization and development of technology will find small-scale businesses that have patent protection more appealing.
Patenting can lead to innovative ideas and inventions. The information you create may be protected by patents.
Patents are a way to prevent untrustworthy third parties from making money from the invention’s efforts.
Commercially successful patent-protected technology revenues can be used to finance technological research and development (R&D) and increase the chance of better technology in the coming years.
You can use the intellectual property rights of your company to convince lenders and investors that your product has real commercial potential. A single patent could open the door for many financing opportunities. You can use patents and other IP assets as collateral or security to secure financing. You can also show investors your patent assets to boost the value of your company. Forbes and others have pointed out that each patent could increase the value of your company by as much as $500,000 to $1 Million.