Legal Blog

White Paper: Basic Considerations in Software Patenting

In the United States, so-called “software patents” are among the more difficult to prosecute, in particular, due to the level of scrutiny examiners apply to software-related claims when determining subject matter eligibility. This white paper lists out some basic concepts to consider before devoting resources to applying for a patent covering a software-based invention in the United States.

Software Cannot be Patented in the United States

When I refer to software, I mean source code and object code; i.e., a set of instructions written in a specific language by a human being containing instructions that may be implemented by a computer.

The four categories of patentable subject matter in the United States are machines, articles of manufacture, compositions of matter and processes. Software itself falls into none of these categories and therefore does not constitute patentable subject matter. However, software instructions, when executed by a computer (machine), may carry out a process that is patentable, so one way to evaluate your technology is to focus on that process. Other hardware (machines) may also be arranged in a novel way to embody a system architecture that is potentially patentable when coupled with the process. Software patent claims will often include systems and methods, which alone or together may represent patentable subject matter.

Defining Your Invention

Software is important in these types of inventions because, without it, the process of interest cannot be implemented. Implementation may be enhanced over existing solutions when the software is used within the framework of an improved system architecture. These concepts should be considered together.

Some common questions to ask are:

  • What triggers the processing of the software instructions by a computer?
  • Does the invention employ a user interface that is friendlier and more efficient than what is currently available?
  • How are others achieving the same functionality, with or without software, or with different system architectures?

Be prepared to answer these questions in an illustrative way when evaluating your invention. Most software patents will include similar types of graphics, namely system component drawings, block diagrams showing functions carried out within each component, flow charts representing how the software instructions are executed, and depictions of user interfaces. In the last case, design patents claiming rights in graphical user interfaces – the so-called “GUI patents” – have become more popular in the wake of a $533 million verdict Apple was awarded when Samsung was found to have infringed design patents covering the layout of icons on the iPhone®.

Subject Matter Guidance

Subject matter eligibility guidance remains lacking in the industry. The USPTO has issued guidance in recent years that appeared helpful when it was released but has been found to lack authority by the Federal Circuit. Nevertheless, the requirements that any invention be new, useful and non-obvious to be patentable remain intact. Therefore, if you are using hardware or implementing processes that are known, you should consider whether your invention as a whole meets these criteria and represents a patentable improvement over the state of the art.

At the outset, software is often used to carry out functions that could be carried out by humans, albeit much less efficiently. A common example is performing mathematical calculations, which is considered an abstract idea and not patentable at the outset. However, if your invention does not implement “well-understood, routine, conventional activity,” you may have something. Examples of such inventions include improving computer functionality, driving a machine that is integral to carrying out a process and transforming an article into something else.

In the parlance of the USPTO guidance, if you have an abstract idea that your software-based invention “is integrated into a practical application that … imposes a meaningful limit on” it, you may have patentable subject matter. Mathematical concepts and methods of organizing human activity, including fundamental economic practices and mental processes implemented by computers, tend to draw the most scrutiny.

Federal Circuit Precedent

In March 2021, when considering the most recent guidance from the USPTO in connection with an argument raised on appeal in cxLoyalty, Inc. v. Maritz Holdings Inc., the Federal Circuit held that USPTO guidance lacks any authority. While courts will consider USPTO guidance, it is not binding, which means you can’t rely on it when evaluating your invention for patentability. Unfortunately, no alternatives to this guidance, which was released in 2019, have been offered.

Business Questions

Software is among the most rapidly developing of all the technologies. As such, software product life cycles may be very short, with new versions and updates being released frequently. In the United States, a patent typically takes 2.5 – 3 years to be granted, and thus if your invention is truly centered on the uniqueness of the software, its value may have come and gone by the time you receive a patent.

Inventions that involve patentable systems or system components and patentable processes or process improvements that will embody a commercial product as the software evolves have the best chance of deriving benefits for your business when protected by patent rights. Therefore, it is important to understand how long the life cycle of your product offering will be when you determine whether your business spends time and money to have a patent that protects your market share. As patent attorneys, we often file continuation and divisional patent applications to cover improvements over core technologies that may represent patentable improvements, but of course, that costs money and takes time. These are economic factors to consider when evaluating your software-based invention.

Conclusion

Software cannot be patented in the United States, but software-based inventions that embody new, useful and nonobvious systems and processes may be. Obtaining one or more patents can be time-consuming and costly, so evaluating the time and cost associated with patent prosecution is important in view of your product life cycles. Therefore, it is always best to consult with a registered patent attorney on strategy before taking the plunge.

ABOUT SCOTT LLOYD

slloyd@offitkurman.com | 301.575.0357

Scott Lloyd is a registered patent attorney who specializes in intellectual property counseling and commercialization work. He has served as a technology commercialization specialist and advisor to companies in a diverse array of markets, including biotechnology, pharmaceuticals, medical devices, food and beverage, specialty chemicals, technology, and engineering. In addition, Mr. Lloyd spent ten years as in-house general counsel to small and mid-sized companies, where he managed corporate matters and resolved commercial disputes in addition to intellectual property strategy, and now serves in the same capacity for entrepreneurial clients. He serves as counsel to small and mid-sized business owners seeking to implement growth strategies and succession plans.

While in house, Mr. Lloyd has also contributed to the successful formation of international affiliates of domestic businesses as well as a $400,000,000 business acquisition.

 

 

 

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