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Removal of Technological Arts Requirement on Business Method Patents - Dennis Crouch Explains
Wednesday, October 19 2005 @ 05:47 PM EDT

You know how I always write that software is math, so allowing software patents is like patenting 2+2=4, and then telling the world they can't use 2+2 any more?

Well, they've about done it now. I read on Patently-O about a new ruling from the US Patent Board of Appeals that I simply couldn't believe. Here's what I read:

Patent Board Eliminates "Technological Arts" Requirement For Business Method Patents

Ex parte Lundgren, Appeal No. 2003-2088 (BPAI 2005).

In a landmark decision, the Board of Patent Appeals and Interferences has issued a precedential opinion eliminating the Patent Office procedure of rejecting patents under 35 U.S.C. § 101 as outside of the “technological arts.” . . .

This decision will once again expand the role of business method patents by freeing them from being tied to a computer or other electronic device. At the same time, this decision widens the gap between the US and many other countries who are still debating patentability of software.

It is unclear at this point whether the PTO solicitor will ask the Federal Circuit to review this case. . . .

Lundgren had claimed a “method of compensating a manager” that involved several steps of calculating a proper compensation based on performance criteria and then transferring payment to the manager. The examiner rejected the claims arguing that they were “outside the technical arts, namely an economic theory expressed as a mathematical algorithm without the disclosure or suggestion of a computer, automated means, apparatus of any kind, the invention as claimed is found non-statutory.”

There is more on Patently-O, including more information on Dr. Carl Lundgren, the brainiac who wanted a patent on a method of paying a manager. Sigh. Can't you do that with just a pen and paper? Next they'll say we can patent our brain waves. That is, after all, where all those marketable ideas spring from, so what is to stop us from patenting the method our brain uses to come up with ideas? Whoever gets that patent will then own all ideas, nobody else can have any without paying him, and patent law will have reached Patent Nirvana.

Naturally, I wrote to Dennis Crouch, the lawyer who writes Patently-O, immediately, because although I read the decision he provided on his site and what he wrote, I either couldn't believe it or felt I didn't understand it. Dennis is a patent attorney at McDonnell, Boehnen, Hulbert & Berghoff, LLP.

Well, as it happens, I did understand it. You can now patent 2 + 2 = 4. Kidding, but it's close. Read on for what Dennis wrote to explain the decision to us. One thing I specifically asked him to explain is, now what? How can this be overturned? And is there anything anyone can do?


Removal of Technological Arts Requirement May Create New Flood in Business Method Patent Applications
~ by Dennis Crouch

The 1998 case of State Street Bank opened the flood gates on business method patents in the US. However, the vast majority of business method patent applications that were filed have not resulted in issued patents because of delays at the patent office and a new multilayer approval process. In addition many 'true' business methods have been still considered unpatentable by the patent office unless the claim to be patented explicitly recited that the method in question operates through a computer or other "technological" means. This requirement has become known as the 'technological arts' requirement and has effectively limited business method patents to those directed to electronic commerce and data processing. Thus, novel methods of compensating an employee, negotiating a deal, or structuring a corporation have been barred unless they recite that the method in question operates through a computer.

Carl Lundgren, an inventor and professional predictor, has been fighting with the Patent Office for years over his application involving a method for compensating a business manager by utilizing a set of objective performance measures. The Office initially rejected Lundgren's application because it did not meet the technological arts requirement. However, on appeal, Lundgren was able to convince a majority of the members of the PTO's administrative review board, the BPAI, to remove the technological arts requirement and overturn the Examiner's rejection.

This decision eliminates the technological arts requirement and, as a consequence, frees business method patent applicants from being tied to a computer or other electronic device.

Two avenues for change:

1) The PTO may be able to appeal this to the Court of Appeals for the Federal Circuit. Your readers may want to contact the USPTO Director or Solicitor.

2) Congress is currently considering patent reform.

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