AmberBlog

As followers of IP would attest, IP law develops in two ways, firstly via new legislation, and secondly through new (or revised) interpretations of existing laws, applied during patent law cases that can end up the highest courts in the land - and hence become influential on lower courts who are required to apply these new interpretation whenever applicable.

Both processes are ongoing, with new patent legislation before the US Senate aimed at dealing with so-called patent trolls, and with the recently announced US Federal Circuit decision in CLS Bank v. Alice Corp making patent professionals think again about software patents.

Each of the cases that lead to revised interpretations are based on real court cases, and often in relation to questions of validity of patents  that challenge the existing understanding of the limits of patentable subject matter.

So what are the types of patent that can change patent law? Do they deserve their exulted status?

There are many candidate for such patents, but patents for five of the most relevant cases that are still impacting on modern patent law are reviewed below. In each review we will concentrate on the patents and not the legal aspects of the case - these have often been well covered by legal scholars.

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1) Diamond v. Chakrabarty (1980) concerned the question of whether a newly developed bacterium capable of breaking down crude oil could be patented by General Electric, the employer of Chakrabarty. The examiner rejected the patent on the grounds that he understood at the time that living things could not be patented. However the US Supreme Court allowed the patent, ruling that patentable subject matter to 'include anything under the sun that is made by man'. This definition has since been used to justify the patenting of a wide variety of inventions, including business methods and software.

The patent in question is US 4,259,444, filed in 1972. When reviewed in AmberScope as shown below, it can be seen that while this patent had a huge impact in patent law, it only had a mild impact on the patent literature. The '444 patent has an AmberScore value of 0.19, or 19% of the average for US granted patents (admittedly filed in the last 20 years). This may reflect its zero backward citations, and just 21 forward citation in over 40 years.

Another interesting test of relative quality is to compare the AmberScore value of the patent being reviewed to the AmberScore values of its directly connected neighbors (forward and backward citations). The median AmberScore value for the patents the '444 patent is directly connected to is 0.61 - and in fact, this patent sits in the bottom 20% of these patents when rated by AmberScore value.

So for this patent, its impact on the patent literature has been smaller than its influence on patent law.

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2) State Street Bank v. Signature Financial Group (1998) concerned a case where the US Federal Circuit held that a patent in relation to setting a share price to minimise tax was patentable as it "it produces a useful, concrete and tangible result" - . In doing so, the Federal Circuit essentially confirmed the patentability of business patents, a decision that is thought to have been overturned by the Supreme Court ruling on the validity of the next patent on this list. 

But returning to State Street, the patent in question was U.S. Patent 5,193,056, filed in 1993. In contrast to the Chakrabarty patent, the Signature Financial Group owned patent has had a strong impact on the patent literature, with an AmberScore value of 6.7. This includes contributions from 277 forward citations. Similarly, an AmberScore value of 6.7 compares well to a median score for 3.3 for its directly connected patents, and sits in the top 25% of these patents.

The intensity of the connection to the Signature patent is shown in the image below, which shows a crowded patent network.

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3) Bilski vs Kappos  (2010). State Street may have opened up the door for business method patents, but Bilski is thought to have started the process of closing this door. First filed in 2002, Bilski claimed a method of hedging risks in commodities trading via a fixed bill system. Rejected by the USPTO, Bilski was litigated all of the way up the US Supreme Court, who rejected the patent in 2010 because the claimed invention did not "transform any article to a different state or thing". While legal obligations were transformed by this invention, they "cannot meet the test because they are not physical objects or substances, and they are not representative of physical objects or substances." 

The patent application in question was US20040122764. Besides being unsuccessful in attracting patent protection, the Bilski patent was also unsuccessful in attracting citation connections. The image below shows this the Bilski patent, with an AmberScore value of just 0.01, or 1% of the average AmberScore value for granted US patents less than 20 years old. All of the connected patents have higher AmberScore values, but with a low median value of 0.42.

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 4) Mayo v. Prometheus (2012). The next major narrowing of patentable subject matter came in 2012 with Mayo v. Prometheus. This case concerned an invention for a feedback loop that adjusted the dosage of a drug depending the measured response of a body to the drug. The US Supreme Court ultimately rejected the patent, on the grounds that it was an unpatentable "natural law" and not “genuine applications of those laws ....rather ... drafting efforts designed to monopolize the correlations."

There were two patents in question, namely  US 6,355,623 (AmberScore value 1.1, 3 forward citations, 2 backward citations) and US 6,680,302 (AmberScore value 1.3, 1 forward citation, 5 backward citations). The AmberScore map for the higher scoring 302 patent is shown below (besides the directly connected patent, this map shows potentially relevant indirectly connected patents.

The median AmberScore values for the directly connected patents was 0.3, with the the '302 patent having a higher AmberScore value than any of these patents, including the '623 patent.

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5) CLS Bank v. Alice Corp (2013). The last patent is a recent Federal Circuit en banc ruling that may be appealed to the Supreme Court, but already has thought to have wide ranging implications. CLS Bank concerns an application for four patents, which including claims for a business method of reducing counter-party risk during trading using a third party - and claims for the application of this business method using a computer.  While the different judges on the panel gave slightly different opinions, the dominant opinion can be simplified to 

• The business method claims were abstract ideas and therefor not patentable
• And more controversially, incorporating the use of a computer into a similar claim was 'insignificant post-solution activity' because 'Abstract methods do not become patent-eligible machines by being clothed in computer language'.

The four patents in question were:

• US 5,970,479 filed in 1993, (AmberScore value of 23, 234 forward citations, 30 backward citations)
• US 6,912,510, filed in 2000 (AmberScore value of 6.7, 28 forward citations, 61 backward citations)
• US 7,149,720, filed in 2002 (AmberScore value of 5.3,  2 forward citations, 63 backward citations)
• US 7,725,375, filed 2005 (AmberScore value of 5.6, 13 forward citations, 92 backward citations)

So all patents have respectable AmberScore values. This is demonstrated in the very crowded patent network for the first listed of these patents, shown below. The median AmberScore value of the directly connected patents is 1.73, and the AmberScore value of the '470 patent was enough to put this into the top 10% of this crowded patent landscape.

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When comparing these patents, three of these patents had comparatively low AmberScore values, showing in this limited sample a non-existent relationship between high AmberScore values (and forward citation count) and litigation. Does this mean that such measures are a poor predictor of important patents, since litigated patents are more likely to be important than non-litigated patents?

Not at all. Without doubt, litigated patents are important to their owners, but patent owners are not always a truly objective judge of the value of a patent. More to the point, for the validity of a patent to be litigated up to superior courts requires an opponent with a belief that the validity of the patent is arguable, and be prepared to spend a significant amount of money to test this argument. It also requires courts that are willing to hear these cases, that is willing to accept that there is an argument to be heard. 

Imagine, in contrast a hypothetical high quality patent that an opponent reviews and finds no substantial grounds to oppose. They would be more likely to settle a dispute in relation to this patent than risk the cost, bad publicity, embarrassment, and court ordered damages that could result from what would be likely to be a unsuccessful attempt to invalidate the patent.

For this reason, Ambercite, unlike some other analysts, does not include litigation history when assessing patent quality - because many of the best patents may never be litigated.

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PS - A future candidate for the list of patents that may change patent law?

I have already commented twice on the 'using a scanner to email documents' patent, a patent that is still causing problems to small business owners in the US. An earlier post pointed out how relatively weak this patent was according to an AmberScore analysis. Patents such as this have appeared to catalyze new legislation aimed at so called 'patent trolls' - if this legislation is passed, this particular patent is sure to be mentioned as a reason.

The patent network for this patent is shown here - and confirms that this is a low (predicted) value patent. An AmberScore value of 0.03 places this patent dead last last among its directly connected patents.

As the quantity and value of patent filings, acquisition and litigation increases rapidly, there has been an big increase in the number of specialists offering services around the analysis of patents, including Ambercite. Both the clients and service providers use a number of terms in relation to these services, such as patent landscaping, mapping, searching or portfolio analytics/analysis  - and sometimes inconsistently. 

So what do these different terms mean, in our view?

1) Patent searching is exactly that, searching for patents that meet specific criteria and something that should be very familiar to most readers.  Patent searches are often divided into novelty searches (has a given technology been disclosed in the patent literature?) and Freedom to Operate (FTO, can I make or sell a specific product or service?) searches, which aim to understand if a given technology will infringe valid patents 

Patent searching is often by done by patent attorneys  and examiners, inventors, and companies monitoring their competitor's activities. The outputs of patent searches are often lists of relevant or potentially relevant patents.

2) Portfolio assessment (or portfolio analytics) is the process of ranking patents in a portfolio in an objective manner. This can be of particular interest to IP managers or owners who want an independent opinion on the relative quality of their patents. Alternatively they might want an independent opinion on their competitors patents, and how these compare to their patents. Parties looking to acquire patent portfolios might also be interested in portfolio analytics.

The outputs of portfolio analytics tend to be table of patent numbers, with details of each patent given including indicators show the objective assessment of each patent listed.

3) Patent landscaping (also known as patent mapping, or patent technology mapping) generally refers to the process of analysing a group of patents in a specific area of technology. The purpose of patent landscaping is generally to identify key trends in the data, such as clusters of activity within this set of patents, dominant owners, dominant source of technology (such as leading countries), leading inventors, leading patent classes, age profiles etc.

Patent landscaping tends to have particular attraction to larger companies trying to understand their relative competitive position in their technologies, the activities of their competitors and to identify key patents to acquire, license or design around. Other clients can include researchers and universities.

The outputs of patent landscaping can be reports, graphs, and in some cases maps showing the leading aspects of the technology.

These different processes are compared in the table below, which also shows the Ambercite products developed for each of these processes (and which are further described below).

How Ambercite can help with each of the above

Amberscope - patent searching

AmberScope has been developed by Ambercite to assist with patent searching. The challenge with all patent searching is to reduce the over 80 million patents to a manageable number. Traditionally this is done by filtering the patents using a combination of keywords and patent codes. In practice these keyword and patent codes can be inconsistently applied, and so AmberScope uses patent citation connections as an alternative means of finding patents similar to a starting patent. As a bonus, besides lists of relevant patents AmberScope also presents results in an intuitive graphical format.

An output from an AmberScope search is shown below. Further examples of AmberScope searches are found here.

AmberScore  - portfolio analytics

Many important patents tends to have many and deep forward and backward citations - and these cited patents in turn are connected to other important patents. AmberScore is Ambercite's formula for predicting the influence of a patent based on its citation connections.

AmberScore values can be easily obtained for any patent by looking up this patent in AmberScope. A portfolio review product is under development, and should be available soon. An example of an AmberScore value is shown in the image below (this particular patent, the key patent for the multi-billion dollar omeprazole drug, has an AmberScore value of 16, or 16 times the average AmberScore value for granted US patents).

Network Patent Analysis - Patent landscaping 

Ambercite's patent landscaping product is Network Patent Analysis (NPA), which unlike many other landscaping technology, both groups patents with similar patents and ranks them as well, based on their patent citation connections. 

The image below shows an output from an NPA study. The blue patents belonged to a client company, and the red patents to their competitors. Just like in AmberScope, larger patents are more important. Further examples of NPA projects are found here.

In any earlier and very popular blog, I compare the total number of patents filed for a range of selected countries, and show how these numbers change if they are corrected for the size and population of the economy.

This blog also separated the data into blue segments patents locally (for applicants of each country), and red segments 'foreign' patents, or patents filed in other jurisdictions. But this data was not as easy to compare as it could be.

So I have replotted this data, showing only foreign patents for these selected countries. Note that patents are allocated to countries based on the first listed countries of the applicant.

So Japan led this statistic (in 2011 at least), just ahead of the US. Germany is a clear 3rd place, while France edges out South Korea for 4th position. Switzerland edges out the UK for 6th position (out of these countries).

Perhaps most surprising in the relative position of China. In 2012 China became the top overall filer of patents - but if we look at foreign patents for the 2011 data, China is behind the Netherlands and only just ahead of Canada and Sweden. This helps to put China's recent patent filing performance (most patents overall in 2012) in some context.

Back in March 2011 Ambercite and its partner Griffith Hack published a widely viewed patent landscape report of the smartphone patent wars, including a patent landscape map, part of which is reproduced below.

This report covered a broad range of areas, including a patent analysis on a Motorola (since acquired by Google) patent being asserted against Apple, US6246862 Sensor controlled user interface for portable communication device, invented by Grivas et al ('Grivas') . But at the time, we did not have our AmberScope search engine available for patent searching.

The patent itself concerns a function that should be familiar to many users of touchscreen based smartphones, namely how the touchscreen switches off when the phone is brought close to your body, such as when it is held up to your ear when making a phone call. In this way, body parts such as your ear are prevented from accidently hitting any of the virtual buttons normally found on a touchscreen during a call, and perhaps ending the call. Next time you are using a touchscreen phone to make a call, note how the screen blanks out when brought very close to your head - this is this function in action.

This function is obviously very important for touchscreen phones, and so the patent could have been a key Google patent in the smartphone patent wars.

In its ruling published 22 April 2013, the United States International Trade Commission has found in relation to this dispute that claim 1 of Grivas:

1. A portable communication device comprising:

 a processing section to control operation of the portable communication device in response to an input signal;

 a user interface comprising a touch sensitive input device coupled to the processing section, the touch sensitive input device actuatable to generate the input signal; and

 a sensor coupled to the user interface, the sensor to disable communication of the input signal to the processing section when the portable communication device is positioned in close proximity to a user, thereby, preventing inadvertent actuation of the touch sensitive input device.

was infringed by Apple - but that this claim was obvious in view of Motorola owned US6052464 Telephone set having a microphone for receiving or an earpiece for generating an acoustic signal via a keypad (first inventor Harris, hereafter 'Harris'), both in combination with ordinary general skill and combination with US Patent No. US5894298 Display apparatus to Hoeksma.

Harris discloses: 

In the case of the earpiece 18 being ported through the keypad 20, the controller 88 disables the plurality of key input signals responsive to one of: the ear cup 78 being positioned proximate to the person's ear 84 or the person's head 86 responsive to a signal from the proximity sensor 92,

Which raises the question - if AmberScope was available at the time of the dispute, could it have been used to find the Harris patent?

The answer is yes, via a simple two step process shown below:

1) Enter US6246862 into AmberScope, and use the Next button to systematically review the patents in this network, working from the highest ranked (automatically computed AmberScore) patent to the lowest, reviewing these patents for documents that are particularly relevant to the claimed invention. As we identify relevant patents, we manually assign a relevancy score of 0 (green) to 4 (red) and then explore the neighborhood of these patents.

In 10th highest ranked position, with an AmberScore of 2.5,we find US5729604  Safety switch for communication device filed by Nortel, which discloses in its abstract:

A communication device such as a portable wireless terminal for a telephone system having a proximity sensor to automatically switch the receiving transducer from receiver mode to loudspeaker mode. The proximity sensor is positioned in the handset such that the associated circuitry switches the transducer from loudspeaker mode to receiver mode in response to the handset being brought into proximity with the user's ear.

The relevance to the Grivas patent is quite obvious, although this does not disclose disabling the keypad via the proximity sensor.

2) Since the Nortel patent is clearly relevant, we make this the focus, and again start reviewing its connected patents in order of AmberScore value using the Next button.

And in 10th position we find US6052464, the Harris patent. Which as a matter of interest has the US patent codes 379/433, in contrast to the 455/566 and 455/95 US patent codes for the Grivas patent (and which further confirms the risks of searching patents using patent codes alone).

This is yet another example of how quick and simple seaching patent networks using powerful search engines such as AmberScope can be a very effective means of finding prior art.  

It would be the one of the big three filers, right - say US, Japan, or China?

Possibly. According to data sourced from WIPO in their publication "World Intellectual Property Indicators - 2012 Edition" (and its accompanying tables), the three top filers are indeed these countries, if in fact in the order Japan, China and then US. South Korea and Germany make up the next wave, followed by France, the UK, Switzerland and the Netherlands.

Note that this table is based on 2011 data, and that 'foreign patent applications' refer to patents filed by companies resident in each country in jurisdictions outside of the country.

But to some extent, this is obvious - rich and well populated countries file more patents. And this is why WIPO, and other analysts have tried to correct for the size of the economy and population. This is straight-forward to do:

• Patent filing data is available from WIPO. While there is a variety of figures given in this table, I have elected to use the 'Applications by Office - Resident' as the figure for 'Local patent applications' in the two charts given in this blog. I have calculated 'Foreign patent applications' by subtracting this first figure from a column given in the same table for "Equivalent Patent Applications', which shows the total local and foreign applications for each country. The origin of a patent is calculated by WIPO based on the listed nationality of the first named applicant.
• Gross Domestic Product (Purchasing Power Parity) for 2011 is available from the World Bank.
• Population data for 2011 is also available from the World Bank.

 And the results? If you correct for the size of the economy or the size of the population, which are the most innovative countries?

So, the top three most innovative countries, in terms of patent filings corrected for GDP or population, are South Korea, Japan and Switzerland. There was also a strong showing from the Scandinavian countries in this survey, along with Germany, Israel and the Netherlands (and there are possibly other strong countries I missed in this selection of countries).

Perhaps more surprisingly, is that the US is only mid-ranked in this survey. Similarly my home country Australia is not ranked as highly as Australian's might wish.

This data also makes clear which countries tend to have their patent filing strategies predominately locally focussed (China, South Korea, and to a lesser extent Japan) and which countries are more foreign focussed (all of the European countries although this may be distorted by the European patent system, Israel, Canada, Singapore and Australia). Again the US is about midway in this comparison. 

Do you agree with this comparison? I would be interested in feedback on this.