KRATZ, QUINTOS & HANSON, LLP

IP Newsletter

IP NEWSLETTER VOL. II, ISSUE NO. 3

BUSINESS METHOD PATENTS CURRENTLY BEING RECONSIDERED BY THE C.A.F.C.: EN BANC HEARING TO TAKE PLACE ON MAY 8, 2008

By: William G. Kratz, Jr. & Darren R. Crew

 

As you may know, in July 1998, the Court of Appeals for the Federal Circuit (C.A.F.C.), in the case of State Street Bank and Trust Co. v. Signature Financial Group, Inc. suggested that almost any unobvious  software-related invention is patentable if the claims are properly drawn. The patent involved in the State Street Bank case, U.S. Patent No. 5,193,056, is generally directed to a data processing system for implementing an investment structure dealing with the administration and accounting of mutual stock funds. The court held that the transformation of data in a software-related patent (e.g., in the State Street Bank case, which represented “discrete dollar amounts, by a machine through a series of mathematical calculations into a final share price”) constitutes: (a) a “practical application of a mathematical algorithm, formula, or calculation,” but (b) nevertheless, produces “a useful, concrete and tangible result.”

 

The Washington, D.C. newspaper Legal Times recently reported that critics of the State Street Bank case say that this case has the effect of overburdening the U.S. PTO in that:

 

[a]pplications for business method patents have increased by an average of 1,000 a year since 2005, according to the Patent Office. In 2007, the office received 11,378 application filings and issued 1,330 business method patents.

 

The Legal Times also reported however that [s]upporters say business method patents protect U.S. innovation, especially on the Internet, where ideas are poached almost inevitably.”–click here to read more