Patent Allowance and Business Methods

Mark Nowotarski, Mike Bowman, and I wrote a guest article on IP Watchdog that was posted today. The article, "Increasing Patent Allowance Rates by Selectively Targeting a More Technological Patent Class" deals with how the class assigned to your patent can drive patent allowance. You can read the article by clicking here.

Thanks to Gene Quinn of IP Watchdog for having us in his online magazine.

Music and the Business Methods Conundrum

One of the important topics of debate in Business Methods patents circles is where these patents fit along the information technology continuum. At it's heart is the "What does it do?" vs. "What do you do with it?" nexus. This is what a semiconductor does, this is what a disk drive does, this is what memory does; this is what you do with it - use it to process on-line banking transactions, to create customer loyalty programs, to place sensors on fish and track them so anglers don't have to work so hard. "What does it do?" and "What do you do with it?" have become essential questions in the information age quest to define the boundaries of patentability.

The Gutenberg printing press with it movable metal type and Johannes Gutenberg's creation of oil-based colored and black inks brought books and the knowledge they contained to a far broader audience than before. Depending on your perspective, this may be the earliest entry in the information technology continuum. Gutenberg focused on the printed word.

Ottaviano Petrucci is believed to be one of the first to print music using the Gutenberg movable type process. He used the movable type in a multiple-impression process where one run was for the staves - the five parallel lines, another for the words or decorative elements, and the final for the notes. There is some dispute on whether Petrucci's approach was a double impression or multiple impression process. According to the Center for Intellectual Property & Information Law Petrucci received a twenty year patent for the double impression process. This was one of the earliest records of patents for inventions and improvement in music printing. You can read the translation of the patent grant here.

According to Joanna Kostylo and the University of Cambridge, three years lapsed between Petrucci's petition for a patent and publication of the first work under the patent "Harmonice Muscices Odecaton A." Start ups take note; the time to get a patent and get your product to market is never short.

Even the Renaissance had its patent issues. Petrucci's early activity in the printed music market drew competitors. Andrea Antico was granted a patent to print music using a woodcut method focused on printing keyboard music. Petrucci received a new exclusive right to print organ music. The two printers were competitors. According to Ms. Kostylo, the pope withdrew Petrucci's organ patent because he failed to produce music for keyboards under his patent. The two inventors battled it out in the market place for printed music.

This brings us back to business methods. Did Petrucci get a patent for a business method; using the Gutenburg movable type invention to create printed sheet music? Was sheet music one of the early example of the "What Does It Do" vs. "What Do You Do With It" nexus?

The links to the Petrucci patents above are great if you want to have a look at some very early patents.

Six Degrees of Software & Software Patents

The Six Degrees of Software is the Six Degrees of Kevin Bacon for nerds. It works like this - pick something that you do and see how far you can go before you run into something that uses software. The answer is, NOT FAR. And software is getting closer all the time.

Consider the toaster...heating element with a timer. Pretty simple. What about a heating element with a timer and an LED display connected to the wall outlet connected to the digital electric meter connected to your house connected to the grid which is connected to the electric company....

Consider the car wash...

The barber seems to be low tech until you make your appointment on line.

So, software patents are always an interesting and often heated topic of conversation. Pick your topic and then consider who owns the patents:

• Convergence of the open source software world and patents
• What's controlling your surgery - the surgeorn or the Da Vinci Robot or the software?
• Business Methods patents - software as the brick and mortar of the new millenium or Still Life with Flow Chart?
• How will anyone ever figure out what the essential patents are so the Smart Grid can be built?
• Who owns the patents for electronic health records?

If you want to have some fun, Google (now a verb) Microsoft Burning the Ships. Burning the Ships is the story of Microsoft's efforts to play nice where its patents and the open source world collide. It's interesting that the patent attorney blogs find it a compelling tome while the software guys are incredulous about the new and friendly Microsoft.

In our quest to advance the discourse on software patents, business methods (software patents by another name), and open source we call your attention to an interesting blog written by Florian Mueller that focuses on Free and Open Source Software (FOSS) and patents. Mr. Mueller's blog is not for the faint of heart - it's packed with information but if you want some interesting insight into the complexity of the issues. Check it out and then go back and consider the six degrees of software in your professional and personal life.

Business Methods Updates

Our Business Methods colleagues are at it again. They are providing insight into the recent changes to the e-shopping business methods patent class schedules published by USPTO. Mike Bowman is walking through the changes to help us all understand how things are evolving.

I'll be adding their posts here soon but in the meantime you can check them out at Business Methods Modus Operandi, our blog focused exclusively on business methods patents.

Business Methods Patent Stats Fall 2010

Business Methods Patents represent the new frontier in intellectual property. These are the digital inventions of the new millennium. Business Methods remain a nascent part of the US and international patent universe that continue to grow in number and importance. Our Business Methods analysts took a look at the status quo in Class 705 to provide insight on this important domain.

As of September 28, 2010, USPTO had issued 51,558 patents that are classified as business methods. The table below provides the breakdown of where these patents are classified.

Area	Count
Planning and Innovation	4,412
Marketing, Selling, Evangelizing	9,198
Exchanging Money for Stuff	19,315
Watching the Store	8,650
The Protection Racket	9,871
None of the Above	112
Total	51,558

Here's a quick look at how we define the major areas where USPTO groups business methods patents. For more detailed insight see our earlier Business Methods Monday posts.

The Patent Office defines Business Methods Patents as those patents classified under Class 705 - Data Processing: Financial, Business Practice, Management or Cost/Price Determination. The high level definition put forward by USPTO is:

Machines and methods for performing data processing or calculation operations in the:

• Practice, administration or management of an enterprise, or
• Processing of financial data, or
• Determination of the charge for goods and services.

PTO defines four classes as business methods patents but includes a fifth in class 705 which has do with business cryptography and digital security. We use our own group titles to describe what is going on in the Business Methods Arena. They conform to the USPTO groupings but are a little easier to understand.

Planning and Innovation - Determining who your customers are and the products and services they want or need. USPTO describes this as Operations Research and Market Analysis.

Marketing, Selling, Evangelizing -- These patents are about informing customers that you exist, showing them your products and services and encouraging and providing incentives for them to make purchases. This covers advertisement management catalog systems, incentive programs and redemption of coupons.

Exchanging Money for Stuff -- This group of business methods patents covers all aspects of exchanging money and credit before, during, and after a business transaction. This includes what you would expect - credit and loan processing, point of sale systems, billing, funds transfer, banking, clearing houses, tax processing and investment planning. (Investment planning seems a little out of place.)

Minding the Store - Here you'll find the patents that deal with tracking resources, money and products. USPTO places patents having to do with human resource management, scheduling, accounting, and inventory monitoring in this group.

A Protection Racket -- The fifth and final group has to do with encryption and digital security. USPTO groups business cryptography here. When USPTO presents does their business methods presentations this group is not called out specifically as business methods patents but since it resides in Class 705 you need to view it as part of the business methods picture.

Business Methods Monday - USPTO Update

News from last week's USPTO's Business Methods Partnership Meeting:

Only the patents classified in Class 705 are considered business methods patents.

The allowance rate for applications classified in Class 705 is 23% or put another way 77% are rejected or abandoned.

80% of the patents in this class are tied to a computer.

Pendency to First Office Action is 31.7 months - over 2.5 years.

Pendency to Issue/Abandonment is 46.7 months - almost 4 years.

Through July 2010 there are 312 Examiners focused on business methods patents. Through July 2,100 patents have been granted.

In 2009 there were 1,725 patents granted with an Examiner Corps of 328 examiners.

(Patents up...Examiners down...)

They expect the pace for business methods patent filings to increase both as a result of the resolution of the Bilski case by the Supreme Court and an improving economy.

Are You Ready for Some Football?

The South Carolina Gamecocks are 3-0. A very nice start. Drew Brees and the Saints won their opener but it was filled with tense moments. The Redskins beat the Cowboys, just barely, and Rex Ryan’s mother is upset with him because of his colorful choice of language. And, fantasy football season is in full swing.

Fantasy Football is basically a Computerized Statistical Football Game – A method and apparatus for playing football on a computer system based upon actual football performances by a database of football players. The computer football game is played by a league of individuals, each of whom can individually, or in groups, own a franchise. Franchises select their players in an initial draft. The starting players are then selected by individual franchise owners. Wins and losses for the computer football games occur by calculating a total of each individual player’s points who make up the team. The calculation of points is done automatically either manually or using actual weekly performance by individual NFL players as the basis for determining points.

So reads the abstract of US Patent 4,918,603 filed in August 1, 1988 and granted April 17, 1990. A pretty quick turnaround by the Patent Office.

This patent is cited as being the seminal work in patenting of fantasy sports inventions. The patent is classified as an amusement device – a simulated athletic event including a simulated projectile (I’m guessing that would be the football) that includes a means for processing electronic data. Is this a game or is it a business method? Is it a game that is a business method?

One of the inventors, Patrick Hughes, who had been playing fantasy football with his friends, patented his version of the game, secured a license with the NFL Players Association and NFL properties and proceeded to find a corporate sponsor, Miller Brewing Company. With Miller’s backing the game was soon being played in 6,300 sports bars around the country.

The inventors went on to extend their fantasy sports empire to basketball where they received an endorsement from Cal Ripkin, Jr. and basketball where Grant Hill became part of their celebrity deal. Fox Sports even had a version branded as Terry Bradshaw Fantasy Football.

The ‘603 patent has three claims – one independent and two dependent. Here are all three claims:

What is claimed is:

1. A computer for playing football based upon actual football games, comprising:

means for setting up individual football franchises;

means for drafting actual football players into said franchises;

means for selecting starting player rosters from said actual football players;

means for trading said actual football players;

means for scoring performances of said actual football players based upon actual game scores such that franchises automatically calculate a composite win or loss score from a total of said individual actual football players' scores;

said players' scores are for quarterbacks, running backs and pass receivers in a first group and kickers in a second group; and

wherein said players in said first and second groups receive bonus points.

2. The apparatus according to claim 1, wherein said bonus points for said first and seconds groups are based upon complex or difficult plays.

3. The apparatus according to claim 2, wherein said complex and difficult plays include extra points for a quarterback who receives or runs for said touchdown, extra points for said running back for throwing or receiving a touchdown pass, and extra points for said pass receive for passing the ball or running for a touchdown.

Here are some links to some of the inventor’s other sports fantasy patents.

7614944 – Systems and methods for providing multi-level fantasy sports contests…

7,001,279 - Systems and methods for providing multiple user support for shared user equipment in a fantasy sports contest application.

7,548,242 - Systems and methods for integrating graphic animation technologies in fantasy sports contest applications.

Business Methods Monday Jargon Alert - "Asynchronous distribution of stage-based information"

"Asynchronous distribution of stage-based information"

Patent Application 2006/0288266, "Asynchronous distribution of stage-based information in printed format" was filed on November 30, 2005. Its companion, Patent Application 2007/0005384, "Method of Managing Circulation of Items in Printed Format", was filed on November 21, 2005. A third patent application 2006/0284962, Inventory management or distribution of items in printed format is part of the same group. They all evolved from the same provisional patent application 60/691,071 filed June 16, 2005.

Consider a publisher who has a series of magazines, books, other hard copy information. Synchronous publication means all of the subscribers get the exact same magazine with the exact same content at the same time. Everyone gets the same issue of Sports Illustrated on the same day with the same content. The inventors refer to this as perfect synchronicity in the companion patent application, Method for Managing Circulation of Items in Printed Format. (Were the inventors Police fans?) Rather than having the magazines distributed according to the predetermined perfectly synchronous method of traditional publications, the inventors claim a method of asynchronous distribution of stage based information.

Claim 1 reads:

1. A method for distributing information, the method comprising:

defining a plurality of sequential stages of a process, each stage being independent of a particular point in a continuum of time, the stages being related to one another in a sequence of time;

preparing to print a plurality of editions for a publication in physical print media form, each edition including information content customized for a range of stages, each range including multiple ones of the plurality of sequential stages, each edition being distinct relative to the others of the plurality of editions;

printing multiple copies of each edition;

receiving, from each of a plurality of individuals, respective personal information relating to each individual, the personal information including information for determining which of the plurality of sequential stages applies to the individual relative to a date;

for a particular date, identifying a corresponding stage of the plurality of sequential stages that applies to at least one of the plurality of individuals; and

sending to the at least one of the plurality of individuals at least a respective one of the plurality of editions, said respective one of the plurality of editions including information content customized for a respective range of stages, the respective range of stages including the respective corresponding stage identified as applying to the respective individual for the particular date.

Here is where a little context adds to the clarity of the invention. The Assignee is BabyCenter, LLC. With BabyCenter in mind, asynchronous distribution of stage based information starts to make sense.

Having a baby involves a series of sequential stages.

Having a baby is independent of a particular point in time, instead each woman is somewhere in her own particular stage of the baby making process which is occurring at a particular time for her.

Sending out a baby publications works best when you can send a woman material that customized to her particular stage in the baby making process.

This means that the publisher will have a plurality of publications appropriate for each stage of the process. This is known as having many versions of a publication appropriate to a particular state in a process to the non-patent geeks among us.

The publisher will use personal information about the individual to determine which publication to distribute and when to do it. The publication date and the particular issue being distributed is asychronous.

Rather than sending everyone the August 1 edition of Baby Making Gazette at the same time each of the subscribers will get their own customized copy of Baby Making Gazette based on where they are in the process. (Stage based information.)

Very clever. But is it novel enough to be patentable?

Business Methods Monday - The Patents Behind the News

A recent article in the business journal section of our local newspaper (remember those?) discussed how businesses are using social media to stay in touch with and advertise to their customers. Many businesses are now using outlets such as Twitter, Facebook, Myspace and various blogging options, in addition to more traditional marketing means such as web pages for the business, banner ads, newspaper ads, fliers, etc.

Like most articles of this kind, information on the patents underlying these innovative practices is lacking. I decided to use Cog IP to do a little investigation of patents in class 705 that might support this interaction between a business and its customers.

I started by using Cog IP to perform a concept search on the entire text of the article. The search returned many business methods patents classified in class 705. I reviewed these patents and selected 16 that represented electronic marketing, covering a range of topics including targeted advertising, wireless advertising, intelligent agents, and shopping assistance using handheld devices. Extracting the abstract, claims, and summary of the invention of each of these and inserting it back into the concept search along with the original article, a new, more highly refined search result set was obtained. Sixty-five (65) patents in the business methods class were obtained.

Let's take a look at a few of these.

Patent 7013290 "Personalized interactive digital catalog profiling" "provides a universal interactive and enhanced digital catalog server system for products, services and information." The system allows users "to anonymously and instantly catalog any item they view in a store or trade show, off a Web site or television program, or from a periodical or brochure . . . meaning they can personally acquire and manage relevant catalog information for later use and sharing." Information can be cataloged using smart phones, portable PCs, personal digital assistants (PDA), Internet-enabled set-top devices (ITV), card readers and scanners, standard landline telephones, portable scanners, and Internet-enabled game consoles. Users access these catalogs through a web-based interface for managing, profiling, sharing with peers, or for use in a web service. The system maintains the anonymity of users.

A business may want to provide expert information on its products or services to customers. Enter patent 6223165 "Method and apparatus to connect consumer to expert." This patent provides "a method of (or apparatus for) facilitating the delivery of advice to consumers using a server unit which can store and display the names and characteristics of experts and then rapidly assist in connecting the expert and consumer for real-time communication. The server can also have the ability to receive keywords from the consumer, match those keywords to one or more experts, and tell the consumer how to contact an expert." The system also provides for identification of compensation rates for each expert (claim 1), the expert's certification (claim 5), and a quality score provided by previous consumers (claim 7). The inventor was also awarded other patents related to this one (6523010, 6549889, 6546372, 6801899).

An early method of providing "Intelligent agents for electronic commerce" was patented in 6119101 which relates to gathering and analyzing market transaction data and using software agents to represent and to assist the activities of consumers and providers within a virtual marketplace. In this invention, "[c]onsumer personal agents conceal the identity of the consumer and are capable of creating decision agents . . . that shop for products and assist consumers in comparing and ranking products. Provider personal agents are capable of creating demand agents . . . that quantify demand and target specific consumers without learning the identity of the consumers. Based on data generated by the activities of the decision agents and on preference data maintained by consumer personal agents, provider personal agents can quantify current, historical, and future demand, simulate demand, and target specific consumers for advertising and other messages. Provider personal agents can cooperate with consumer personal agents to collect data about reasons for sales and lost sales and to offer consideration payments to consumers. Consumer personal agents can automatically reject unsolicited messages that do not satisfy the consumer's preferences."

This exercise points to the ability of latent semantic analysis (the driver of the concept search in Cog IP) to evaluate information and generate related results that can lead the analyst to a deeper understanding of a particular topic, field of research, or intelligence assessment (be it related to health, business, national security, or criminal justice, for example). Using an efficient toolset tailored to the problem at hand greatly reduces the time involved, and significantly increases the likelihood of finding the needle in the proverbial haystack.

Business Methods Monday - Overly Broad Is Not a Good Thing

Business Method Monday - So, you think you have a Patent…Part 2.

Recently, a reader of the “Business Method Monday” Blog series posed a series of questions, one of which was, "why so many of the Patent Applications that are classified as business processes in Class 705 are rejected relative to other classes in the USPTO Classification system?" Arleen pointed out that at least a part of the issue is that most of the 705 art is generally a concept, which in most patent applications is referred to in the claims as a "method", versus being a “machine” or other physical object. Based on what Mike and I have observed, the process of describing what is unique about a “method” appears more difficult and as a result, is very poorly done by many applicants…or whoever was responsible for defining the unique aspects of the “method” on behalf of said applicant. In passing…if the "method" is a program that accomplishes the business “method” claimed, which is the case with most business methods in Class 705, then there are usually further claims covering the "system" or "apparatus" features that are unique and used to execute the “method” you have claimed.

There are some other significant factors for this high rejection rate that Mike and I have observed…

• Overly Broad Language -- This one is all too common. There are a host of businesses, legal counsel and to a lesser extent inventors, that seem to belong the "use overly broad language school of application development. This faulty logic and advice seems to be directed at the belief that one should be vague about what it is that you are trying to patent and the claims are likewise vague by default...or the equally faulty logic that you should be a broad as possible about what you are claiming. In most cases, this approach results in claims and descriptions that are are rejected for not being specific enough. They fall short of clearly defining what is indeed unique about their "method". While there may be some detail regarding the invention mentioned elsewhere in the Abstract, Description, Figures and the reference to prior art that gives a hint of what might be unique, when that detail is not present in the claims it is usually a fatal mistake. A patent is issued based on what you have claimed that is indeed unique and it will be defended based on said claims.

• What Did I Invent? -- In some patent applications it is pretty apparent that the author, who we assume and hope was not the inventor, doesn't understand what the invention is. The other option is that the author did not have the skills to clearly define in words what the invention is. In some cases, there was indication of the inventor's intent from the disclosed detail in the Abstract, Description, or Figures, but it was not claimed.

• Been There Done That -- Then there are the patent applications that fall into the "already been done" category. These application should never have been pursued to start with, as a thorough prior art search would likely have found the prior art that invalidated the claimed subject matter. But then if you are an inventor and don't know how to do a good prior art search this can happen.

There are some very competent Examiners at the USPTO. Given the volume of work the Examiners are required to process odd are if the claims don't clearly define what is unique about your invention even if it is reinforced by the Abstract, Description, Figures and the references to prior art on which the claimed art builds, then the patent application is going to be rejected.

In my previous life with one of the largest holders of patents in the US, we used to just love the vague and broad patents...from our competitors that is. You would hear the phrase from our legal counsel team, "you could drive a truck through this"...and we could and did. The conversation with the patent holders who thought they had this or that covered with their vague or broad patent claims would go basically something like this..."Oh, I'm sorry. So you meant to say that…but you didn't."...and that was pretty much the gist of the conversation.

This needs to stressed and understood by businesses, legal counsel and the inventors involved in applying for a patent…

• Define what is unique about your invention with reference to all prior art it is based on, where that is applicable, and then building on this prior art, clearly state all the unique aspects of your invention in the claims.

• Where applicable, state all the possible applications of the art and the possible means of execution that you feel you want to protect. After all, you are filing for a patent to protect your invention, which means there is absolutely NO reason to be vague.

• You cover "broad" by applying for additional patent applications, specifically covering each possible applications of the art and means of execution. Frequently that leads to addition patent applications and patents covering these applications and means of execution of your invention.

Post by Sean Henderson

Collaborative Work or Is It? - Business Method MondayFor this post, I'll investigate two examples of art that USPTO has reclassified into 705/300, Co

For this post, I'll investigate two examples of art that USPTO has reclassified into 705/300, Collaborative creation of a product or a service. This is one of the new subclasses Sean touched on in his March 29, 2010 post.

As a refresher, art classified in 705/300 must be ". . . drawn to a computerized arrangement for initial conceptual development, through cooperation between plural parties, (e.g., brainstorming, idea development, etc.), of a commodity or of work that can be performed for another."

As of the day that I'm writing this (April 30), USPTO has not placed any issued patents into this class (in all likelihood because they are still reclassifying the patents that will eventually end up there), as shown by running a search in the USPTO Full Text and Image Database (search criterion CCL/705/300; alternatively, click on the 'P' icon adjacent to 705/300 in the Manual of Classification). Forty-one (41) applications have been placed here (using the 'P' icon link).

Application 20100094761, "Method for User Driven Product Design and Marketing", is for collaborative product development using ad-hoc user groups. Claim 1 provides for ". . . selecting a product theme as a request for proposals to a plurality of individuals enabling said individuals to edit some, all, or none of said submissions and submit the resulting product as a new product submission . . ." This is a good example of the art defined by the definition summarized above. Dependent claim 3 additionally emphasizes collaboration in product theme selection ". . . to be conducted in any manner by some plurality of individuals including an unrelated third party, authors of said request for proposals, and the plurality of individuals responding to the request for proposals."

Application 20070239464, "Networked System and Method for Formulating, Processing and Managing Challenges and Solutions", provides for formulating, processing and managing challenges and solutions, and has been classified by USPTO as 705/300, with no cross-reference classifications. This application appears to be a good example of conflicts in the new 705/300-348 portion of the business methods schedule with subclasses higher in the schedule. Both Sean & I alluded to these conflicts in our recently completed 5-part series.

Claim 1 of this application allows a user ". . . to select whether to create a new challenge or work with an existing challenge that has previously been stored . . ." So far, so good -- this appears to be captured by the 705/300 definition. However, reading further in the claim, a series of interface prompts are provided to the user, one of those prompts being " . . . a resources required prompt . . .", and another being ". . . a potential available resources prompt . . ." The claim concludes by ". . . receiving user input in response to the prompts . . . " The resources referred to are defined in paragraph 28 of the Summary of the Invention as ". . . human resources, equipments, laboratory, computer processing, storage capacity, or other resources likely to be required to address the challenge." These resources, and their allocation as defined in claim 1, are clearly captured by 705/8 Allocating resources or scheduling for an administrative function, which is defined as ". . . the distribution of resources or for scheduling in a business or commercial environment." Thus, this application should have been placed by USPTO in 705/8, with a cross-reference to 705/300.

Conflicts within schedules subject to reclassification projects will continue until the USPTO takes a more comprehensive approach to reviewing entire class schedules with a goal of eliminating internal conflicts, and ensures adequate and accurate communication among all the parties involved (project managers, examiners and classification staff across all the affected General Art Units, contracting officers, and contractors). Inventors and assignees assume the risk that their inventions will not be examined against the proper art.

Today's post is by Mike Bowman.

Business Methods Monday - Digital Rights

Business Methods Monday: Part 5, Class 705 Schedule Changes, Classification Order 1892

This installment to “Business Methods Monday” is part 5 of a 5 part series covering changes to Class 705 under Classification Order 1892. As noted previously, this revised Schedule was inserted by the USPTO between Subclass 705/45 and 705/400, with the exception of Digital Rights Management, 705/901-912, which is for cross-reference Discretionary classification listings only and under discussed here. This section of the Schedule is included below for reference. As a reminder, anything classified in Class 705 must involve apparatus or method applied to data processing operations applied to some type of business processes.

For the complete Schedule and Definitions for 300 through 348, use this link to get to the Classification Order. http://www.uspto.gov/patents/resources/classification/orders/1892.pdf. As the USPTO has now updated their website Classification Main Menu, you can access the complete Class 705 Schedule and Definitions, which includes the 300 through 348 arrays from the Classification Order by use of this link. http://www.uspto.gov/web/patents/classification/uspc705/sched705.htm.

901 DIGITAL RIGHTS MANAGEMENT

902 . Licensing digital content

903 .. Adding plural layer of rights or limitations by other than the original producer

904 . Usage protection of distributed files

905 .. Hardware usage protection

906 .. Requiring a supplemental attachment or input (e.g., dongle, etc.) to open

907 ... Specific computer ID (e.g., serial number, configuration, etc.)

908 .. Software or content usage protection

909 .. Usage charge determination

910 ... Including third party for collecting or distributing payment (e.g., clearing house, etc.)

911 . Copy protection or prevention

912 .. Having origin or program ID

First, from the “Handbook of Classification”, a Discretionary classification is considered “secondary classifications based on non-inventive, but otherwise valuable, information are discretionary”. This is generally based on detail that is not directly claimed, but is disclosed in the Abstract, Description, Figures, etc., though I have seen cases where Discretionary classification is wisely applied for methodology, claim or otherwise, that one versed in the art knows is being employed and the listing will therefore be of value for future search purposes.

901 “DIGITAL RIGHTS MANAGEMENT” is defined as “Subject matter drawn to a system of information technology components (hardware and software) and services designed to distribute and control the rights to intellectual property created or reproduced in digital form for distribution online or via other digital media, in conjunction with corresponding law, policy, and business models.” Everything below this is finer detail applied to the distribution, protection of rights and methodology associated with revenue from the distribution. I am only going to hit the high points for this as the Definitions are pretty clear regarding content.

902 “Licensing digital content”, 904 “Usage protection of distributed files” covers various methodologies used to ensure that a user has been granted usage rights or means limiting access to specific users or devices by means of a required license key. Examples of this would be a license key for use of software, a key assigned to a server that is unique to a remote user allowing use of specific software or data when the user or the user’s device provided the key. In the case of the latter, this could be a key assigned to a removable device, see 906, which allows access to licensed software by the system the removable device is plugged into. In any of these cases, this could be for a determined time period. 909 and 910 provide for means for calculation charges for the data or software usage and means for distribution of the funds collected, here by a third party on behalf of the to the data or software owner. In 911” Copy protection or prevention”, this is means for limiting the number of times data can be copied.

As noted by both Mike and myself, there are serious Classification Order 1892 conflicts with subject matter higher in the 705 Schedule, most notably with 705/7 and 705/8. The USPTO “Handbook of Classification” specifies that a Claim is classified in the first occurring Subclass that accepts the Claimed subject matter at least in part or in whole. As noted previously, the conflicts with both 705/7 and 705/8 were pointed out during the Classification Order 1892 project to the USPTO, and again in relationship to another 705 Classification Order project, which as yet, has not been published.

For the record, the USPTO Examiners consider subject matter that belongs in 705/7 to be evaluation of business operations, i.e., research or analysis, which is applied to management, planning, organizing, directing, decision making or controlling of an enterprise. 705/8 subject matter is considered any of those operations of 705/7 that are further applied to business resource planning, scheduling, allocation, distribute or routing. Resources of a business are any asset or commodity used by or made by a business, such as staff including contracted staff, business capital and intellectual property such as patents, trademarks, and trade secrets, then hard assets, such as computers, servers, printers, office supplies, manufacturing tooling, inventory goods, inventory or product distribution systems, transportation assets, and finally, the manufactured products or services of a business. As noted in an earlier Blog, the above is based on direct conversations with various Class 705 Examiners regarding what they consider 705/7 and 705/8 subject matter, which is backed up by USPTO Patents and Applications classification in 705/7 and 705/8. The conflicts noted with both 705/7 and 705/8 were pointed out during the Classification Order 1892 project to the USPTO, and later still, in relationship to another 705 Classification Order project, which as noted, has not been published.

For the most of the subject matter Mike and I have discuss in the 300 through 348 arrays, the Primary or Original classification will stop somewhere in the 705/7 array. If there is subject matter that additionally claims detail in the 300 through 348 arrays, the applicable Subclass can only be listed as a Discretionary classification listing, assuming one does not ignore the USPTO’s own “Handbook of Classification” rules.

What needs to happen to fix the conflicts we have noted?

Well, at some point in time, the USPTO needs to restructure the entire Class 705 Schedule as a whole. According to the “Handbook of Classification”, the requirement is that; “subclasses are arranged from top-to-bottom in order of decreasing complexity and comprehensiveness”. That is not presently the case with the Class 705 Schedule as it exists. As the USPTO is operating in the red just like the rest of the US government, it is anyone’s guess as to when this may happen, if ever.

A piecemeal process is fine, the best case being starting with the proper top-to-bottom order of decreasing complexity and comprehensiveness in the Schedule to begin with. If that is hopefully the case, and even if it is not, procedurally you must understand the entire existing Class Schedule and each of the existing Subclass Definitions for allowed subject matter, either higher or lower in the Class that is not a part of the specific Classification Order project. If conflicts exist with any existing Subclass Definitions, the Classification Order Subclass and Definition under consideration must be revised, so that the conflict does not exist, and barring that, the considered subject matter is just flat out not allowed under the Classification Order. While undesirable for obvious reasons, if there are multiple Classification Order projects are underway within the same Class, then everyone on each of these projects must be in communication with one another and in complete agreement that there are no Subclass subject matter conflicts relative to each of the in-process Classification Order projects relative to any proposed Subclasses and Definitions and existing Subclass Definitions. Procedurally, when multiple Classification Order projects are in-process for a Class, the individual USPTO project managers for each project are responsible for oversight adherence to procedures, QA processes and required communication.

While the internal business procedures do actually exist in the USPTO for Classification Orders, Class Schedule structure, and classification based on claimed subject matter, there is also evidence of that there is no consistent adherence to, or enforcement of these internal business procedures, which is based in the condition of various Classes and further based on actual Patents and Patent Applications classifications Mike and I have reviewed and reclassified in this and other Classification Order projects. Documents appear to be placed wherever one seems to want them to be placed, subject matter not withstanding. The issues of database integrity and search-ability are obvious; documents that should be searched in the Patent Application review process are not where the claimed subject matter collection of prior art actually resides in the various Class Schedules. I have seen multiple cases where the Examiner never searched the Subclass arrays where the clearly claimed subject matter exist, and that is based on review of the Examiner’s published search history data. Aside from the latter calling into serious question the validity of the issued Patent, which was also misclassified, it compounds the problem for the next Examiner’s doing future examination reviews and searches.

Mike and I hope that those following this Blog series come away with a better understanding of Class 705 in general. Some of what has been presented should provoke some very serious thought for anyone involved in the process of applying for a Patent Application, and most particularly for those of you who hold an issued Patent or are involved in representing clients who hold an issued Patent.

Business Methods Monday - Documents, Communications, and Ratings

This week, I'll discuss new business methods subclasses 705/342 through 348, that deal with business documentation, employee and customer communications, business or product ratings, and business modeling inventions. All of the subclasses we are discussing in this series require, as a fundamental element of the claimed disclosure, a "computerized arrangement".

You can view this section of the schedule in the USPTO Manual of Classification. This portion of the schedule is shown here:

342 . Business documentation

343 .. Service or product manual or catalogue

344 .. Publishing content to a subscriber of a service

345 . Employee communication administration

346 . Customer communication at a business location (e.g., providing

product or service information, consulting, etc.)

347 . Business establishment or product rating or recommendation

348 . Business modeling

Business Documentation and its two indented subclasses are found at 705/342--344. Business Documentation (705/342), per se, requires a computerized arrangement involving "....management of business documents or business document generation as a business function . . ." which must include a ". . . means for distribution, processing or the usage of the business data in a business environment." This latter requirement is re-emphasized in a clarifying note. Indented below Business documentation is subclass 705/343, Service or product manual or catalogue. This subclass covers disclosures that provide ". . . generation of documents used to describe the use or the features of a business service or product with a means for distribution or usage in a business environment." These documents are considered to be both hard copy and electronic. Also indented below Business documentation is subclass 705/344, Publishing content to a subscriber of a service. In this subclass, subject matter must be for ". . . generating, managing or brokering of on-line or hard copy documents, with means for distribution, access or usage by the clients of the business." This includes disclosures where documents may be published in response to a predetermined schedule, or as a result of

triggering events, according to the accompanying note. To be classified in any of these three subclasses, the invention must include a means for distribution or usage in a business environment.

Employee Communication Administration is now classified at 705/345. USPTO considers administering employee communication to be ". . . directing business activity information or instructions to agents of a business via the Intranet, Internet, World Wide Web, including wireless communications to business personnel"; agents are considered employees per an accompanying note. Also, ". . . communications to remote agents of the business, such as field service, sales, delivery or other personnel" are included here.

Customer Communication, subclass 705/346, is for Customer Communication at a business location (e.g., providing product or service information, consulting, etc.). Inventive content classified here is ". . . for communications directed to client in a place of business by means of a wired or a wireless network." See or search notes direct some disclosures to other class 705 subclasses: 705/7 for analytical content, 705/14.1 for a coupon or other incentive, 705/14.4 for advertising, 705/16 for effecting a transaction and determining the amount of a sale, or 705/26 for aspects related to electronic shopping.

Business Establishment or Product Rating or Recommendation is now included in subclass 705/347. To be classified here, art must include ". . . ranking or collecting reviews regarding business entities or the products or the services of business entities." Two important see or search notes direct disclosures including analysis of business processes or operations research to 705/7, or disclosures including on-line browsing or purchase of a product or service to 705/26.

Business Modeling is found at 705/348. This art is considered to be ". . . simulation of a business operation or a function; or a document." A see or search note directs inventions ". . including analysis of business processes or operations research" to 705/7. It will be interesting to see how this plays out. How can simulations "of a business operation or a function; or a document" be performed without analysis? It would seem that any art intended to be classified here would stop at 705/7 or its indented subclasses according to the rules of classification. Time will tell.

In next week's final installment of this series, Sean will take a look at digital rights management, which USPTO has added as a new cross-reference art collection at the bottom of the class 705 schedule.

Business Methods Monday is the work of Mike Bowman and Sean Henderson. Mr. Bowman and Mr. Henderson have probably read more business methods patents than anyone having reclassified them into the new class structure for USPTO.

Business Method Monday -- Products, Social Networking, Cap & Trade and Wayfinding

This week, I'll discuss new business methods subclasses 705/317 through 325, which deal with inventions in the areas of business or product certification, social networking, human resources, destination assistance within a business, and personal security. You can view this section of the schedule in Classification Order 1892. These schedule changes have not yet migrated to the online Manual of Classification on USPTO's web page. This portion of the schedule is shown here:

317 . Business or product certification or verification

318 .. Product, service, or business identity fraud

319 . Social networking

320 . Human resources

321 .. Employment or hiring

322 .. Benefits package

323 . Destination assistance within a business structure or complex

324 .. Building evacuation

325 . Personal security, identity, or safety

Business or product certification or verification. This new subclass, "705/317, covers inventions ". . . for documentation, data collection, processing or monitoring to ensure the veracity or factuality of the status of an entity's qualifications, either required or claimed by that entity in execution of a business requirement or legal process." A clarifying note brings in a very broad range of content:

* land use by an entity

* carbon credits, emissions, abatement

* product compliance

* clinical trials

* trade agreements

* licensing

* degree verification

* government test

* regulatory compliance

* continuing education requirements

* safety compliance

* documentation of legal proceedings, such as courtroom transcripts.

Other notes (termed "See or Search" notes) under this definition direct inventions ". . . including analysis of business processes or operations research" to subclass 705/7, or to subclass 705/311 ". . . for the management of the work performed by a lawyer for a client." Sean discussed this latter subclass last week.

Indented below 705/317 is 705/318, for Product, service, or business identity fraud. This subclass is ". . . for the analysis or detection of (1) illegitimate use of a product or service, misrepresentation of the authenticity of products or services, (2) approved sources of products or services, or (3) the coding or marking of product with data used for authentication." The use of the word "analysis" in this definition appears to conflict with the search note in the parent subclass which directs claimed disclosures of business process analysis to 705/7. Additional notes direct claimed disclosures for subsets of fraud prevention or detection elsewhere in the class 705 schedule.

Social networking has now been broken out as subclass 705/319. Claimed disclosures that manage ". . . interaction between individuals or entities who are connected by one or more common relations or interests" are to be classified here.

Human resources (705/320) is defined as ". . . keeping of records (e.g., benefits, etc.) of the departments or employees of an organization, or hiring of employees", with employee performance review or evaluation directed to 705/7 in a see or search note.

Indented below human resources are two subclasses. The first is 705/321 for Employment or hiring, which requires ". . . engaging the services of a person or persons for wages or other payment either directly or through a third party." The second is 705/322 for Benefits package, defined as the ". . . maintenance, regulation, or the monitoring of non-monetary employment compensation provided to employees by an organization (e.g., health insurance, leave, retirement, etc.)." Detailed aspects of health (or other) insurance, such as co-pay determination, is directed to 705/2 (Health care management (e.g., record management, ICDA billing)), while managing retirement fund portfolios is directed to 705/36 (Portfolio selection,

planning or analysis).

Destination assistance within a business structure or complex, subclass 705/323, requires ". . . a computerized arrangement for providing direction information at a business location or the creation of direction plan for a business location." Indented under this subclass is 705/324, Building evacuation, ". . . for the removal of people from a structure for protective purposes." A note incorporates subject matter which creates a removal plan for a location.

Personal security, identity, or safety is new subclass 705/325, the last area we'll cover this week. Claimed disclosures ". . . (1) ensuring the legal or uninterrupted enjoyment by a person of their life, their body, their health, or their reputation (e.g., TSA airport screening, public venue admission screening, etc., in order to bar an individual who may cause harm to another, etc.), (2) for the detection of illicit use of personal information, such as analysis or detection means for determining that a person or business entity is who they say they are, or (3) for protective measures or protocol to prevent injury" are captured here. Notes direct certain fraud detection methods elsewhere in the class 705 schedule.

Next week, Sean will discuss new class 705 subclasses covering business processes related to to education, fundraising, and shipping processes.