Wednesday, July 16, 2014

Alice Alice …

At the end of its session, the Supreme Court released its opinion about the final patent related case of the year:  Alice Corporation Pty. Ltd. v. CLS Bank International et. al.

The facts of the case are fairly straight forward. 

CLS Bank facilitates currency exchange transactions.  Specifically, CLS Bank acts as an intermediary for currency exchange contracts.  The purpose of this intermediation is to protect against settlement risk, or the risk that a party will pay out the currency they sold, but will not receive the currency it bought.  In short it is the risk that one of the partners will take the money and run.   The idea of the intermediary is that both parties provide their currency to a third party who holds the currency in escrow until the both parties complete their transactions.

This is not a new idea.  In fact, the Supreme Court opinion references a text written in 1896 that describes the concept in detail. 

Alice Corporation received patent 5970479 that patented the concept of a computer program that automated the job of an intermediary.  The patent protected the following algorithm: 

1) Receive contract information input from a first party;

2) Received contract information input from a second party;

3) Link the two inputted contracts together; and then,

4) Close and settle the contracts.

Once Alice Corporation got this patent, they went to town with patents 6912510, 7149720, and 7725375 to bolster this protection from every imaginable angle.

The Supreme Court ruled that the Alice patents were invalid.  The court could have taken the simple route and ruled that applying a generic computer algorithm to a well know procedure is too obvious to get a patent.  Instead they ruled that Alice was ineligible for a patent because it was an abstract idea. 

This ruling goes straight to the heart of what can be patented.  For years, the rule has been that to get a patent the invention must be a process, machine, manufacture, or composition of matter.  The exceptions to this rule are that laws of nature, natural phenomenon and abstract ideas cannot be patented.  While inventions can be based on newly discovered laws of nature, natural phenomenon and abstract ideas, to qualify for a patent they typically have to be applied to or turned into a process, machine, manufacture, or composition of matter.  

The grey area here has been business method and software patents.  In previous decisions, the Supreme Court has ruled that business method and software could, in the right circumstances, be patentable.  With this ruling, the Supreme Court has simply said that in the wrong circumstances business methods and software will not be patentable.  Unfortunately, they left it to the lower courts to figure out what the appropriate circumstances will be. 

 Below is a summary of selected patents that have been recently issued in textile related classification codes:

Stab resistant knit fabric having ballistic resistance made with layered modified knit structure and soft body armor construction containing the same:  A dual layer knit construction for use in body armor.  Patent 8671462.  Inventors:  Garcia and Kolmes.  Assignee:  Kolmes.

Protective glove:  A glove used by motorcycle riders designed with reinforcements to protect hands in the event of an accident.  Patent 8671463.  Inventor:  Hawkes.  Assignee:  Planet Knox Limited.

Temperature regulating garment:  A warm-up jacket designed to be worn over scrubs in a hospital operating room by people not scrubbed in.  The jacket has panels that allow temperature regulation for the wearer.  Patent:  8671464.  Inventor:  Silverberg.  Not Assigned.

Shading composition:  A whitening agent for use in laundry that reduced residual accumulation of the agent on cottons when used applied to cotton blends.  Patent 8673024.  Inventor:  Batchelor,  Assignee:  Conopco Inc.

Production of and drying of copolymer fibers:  A continuous process method for drying (reducing water) the copolymerization of para-phenylenediamine, 5(6)-amino-2-(p-aminophenyl)benzimidazole; and terephthaloyl dichloride.  The process is less damaging to the fiber than existing technology.  Patent:  8671524.  Inventors:  Allen and Newton.  Assignee:  E I Du Pont De Nemours And Company.

Shoe cover A shoe cover having a covering sized to receive a shoe and a sole coupled to the covering. In one example embodiment, the covering is made of an elastic material and the sole includes a serrated edge for expanding a perimeter portion of the sole.  Patent:  8671588.  Hampton.  Assignee:  Freakwear, LLC

Shoe sole having forwardly and rearwardly facing protrusions:  A shoe sole designed with opposing protrusions intended to increase foot stability for the wearer.  Patent 8671589.  Inventor: Bond and Keating.  Assignee:  K-Swiss Inc.

Shoe stability layer apparatus and method:  A footpad mounted into a shoe on top of the sole.  The footpad is fitted with anchors that mount into the sole to improve stability for the wearer.  Patent: 8671590.  Inventor:  Rasmussen and Taylor.  Assignee:  Nelwood Corporation.

Massaging footwear:  A footwear article that has an insert pad filled with loose particulate material which is configured within the pad to provide the feeling of walking on a sandy beach and with the same massage affect to the foot as walking on a sandy beach. The pad is particularly configured to prevent the loose particulate material inside of it from flowing to the sides of the pad and destroying the massaging affect.  Patent:  8671591.  Inventor:  Brown.  Assignee:  Brownmed Inc.

Jim Carson is a principal of RB Consulting, Inc. and a registered patent agent.  He has over 30 years of experience across multiple industries including the biotechnology, textile, computer, telecommunications, and energy sectors.  RB Consulting, Inc. specializes in providing management, prototyping, and regulatory services to small and start-up businesses.  He can be reached via email at or by phone at (803) 792-2183.

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