Patent Application for Jokes

April 1, 2017

101USSN 2006/0259,306 titled “Business method protecting jokes” has 25 claims and lists Timothy Roberts as the inventor.

Section 35 U.S.C. 101 is the part of US Patent Law that considers patentable subject matter. The Law states:

“Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.”

Over time, the US Supreme Court has interpreted this statement to determine practical borders of what can and cannot be patented have changed.

For Example, in Diamond v. Chakrabarty, 447 U.S. 303 (1980), the Supreme Court Ruled that microbes for breaking down crude oil were patentable.

Chief Justice Warren E. Burger who wrote the decision, and had the support of the majority of the Supreme Court, including Justices Stewart, Blackmun, Rehnquist, and Stevens, wrote:

We have cautioned that courts “should not read into the patent laws limitations and conditions which the legislature has not expressed.” United States v. Dubilier Condenser Corp, 289 U.S. 178 (1933).

Regarding the scope of the original legislation, he wrote:

In choosing such expansive terms as “manufacture” and “composition of matter” modified by the comprehensive “any”, Congress plainly contemplated that the patent laws would be given wide scope.

Plagiarizing Ecclesiastes 1:9, Burger found that Congress had intended patentable subject matter to “include anything under the sun that is made by man,” he concluded:

Judged in this light, respondent’s micro-organism plainly qualifies as patentable subject matter. His claim is … to a non-naturally occurring manufacture or composition of matter—a product of human ingenuity.

In State Street Bank and Trust Company v. Signature Financial Group, Inc., 149 F.3d 1368 (Fed. Cir. 1998), the principle was established that any “useful, concrete, and tangible result” was patentable, opening the door to business method patents.

Since then, the pendulum has swung back and in 2008, in In re Bilski, the Federal Circuit decided to reconsider State Street en banc and jettisoned the “useful-concrete-tangible result” (UCTR) test stated in State Street, but it did not explicitly overrule State Street in its entirety. The court said that the UCTR test “is insufficient to determine whether a claim is patent-eligible under § 101,” and “is inadequate,” and it reaffirmed that “the machine-or-transformation test outlined by the Supreme Court is the proper test to apply” instead. As to State Street, the court said, “those portions of our opinions in State Street, relying on a ‘useful, concrete and tangible result’ analysis should not longer be relied on.

However, the Federal Circuit’s majority opinion did not hold that business methods are categorically patent ineligible.

The Supreme Court affirmed the judgment of patent ineligibility in Bilski v. Kappos. It did not endorse the use of the machine-or-transformation test as the sole test, but said it was only a “useful clue” to making the determination.

The Court’s majority also declined to hold business methods categorically patent ineligible. Four Justices, however—Justice Stevens, concurring, joined by Justices Breyer, Ginsburg, and Sotomayor—would have held all business methods patent ineligible, on the basis of the historical background of the patent clause of the Constitution. In a separate concurring opinion by Justice Breyer, he listed points on which the Court unanimously agreed. One point was that the State Street Bank case was not a correct statement of the law.

The Supreme Court’s subsequent decisions in Mayo v. Prometheus and Alice v. CLS Bank further expanded on Bilski and substantially obliterated State Street. These decisions established a two-step inquiry in which, first, the court is to look to whether the claimed invention is directed to an abstract idea or natural principle; if it is, a second step follows in which the court must determine whether the claimed invention implements the abstract idea inventively or instead in a merely routine or conventional manner. Unless the implementation or application of the abstract idea embodies an “inventive concept,” the claimed invention is patent ineligible. (These concepts are explained further in the articles on the Mayo and Alice cases.) Under this test the State Street patent would be invalid.

Alice specifically holds that a generic computer implementation of an abstract idea is patent ineligible. In Alice, the Supreme Court held that a software-related invention on an existing business procedure could not be saved from patent ineligibility and be made patent eligible simply by saying, “Do it with a computer.” Instead, it would be necessary to implement the procedure in an inventive manner. This decision appears to have overruled State Street as called for in the eBay dissent.

Inventor’ Andrew Knight has several United States published patent applications for the storylines of movie plots. So far his portfolio includes four patent applications that variously published in November and December of last year. They are all entitled “Process of relaying a story having a unique plot”. The main claim of United States Patent Application Number US2005/0282140 reads as follows:

“A process of relaying a story having a timeline and a unique plot involving characters, comprising: indicating that a first character experiences de-ja-vu to mask an actual event.

United States Patent Application Number US2005/0272013 claims:

“A process of relaying a story having a timeline and a unique plot involving characters, comprising: indicating that a first character voluntarily enters a virtual reality; indicating a belief by said first character that said first character is not in virtual reality; and indicating that an interaction in virtual reality between said first character and a second character, while said first character has said belief, causes said first character to labor for, at most, a compensation substantially lower than a market value of said first character’s labor.”

So is USSN 2006/0259,306 titled “Business Method Protecting Jokes” patentable? Well it depends on the constitution of the Supreme Court and on guidelines provided by President Trump who seems determined to reverse the American Invents Act championed by O’bama.


Method and System for Producing a Document

October 6, 2015

yearbook

Israel Patent Application number IL 215110 titled “Method and System for Producing a Document” relates to Rami Dotan and Tal Petel relates to a method of producing a “yearbook”.

The claimed invention was originally rejected as relating to an administrative methodology rather than to a technical method. Furthermore, the claimed invention was rejected as known, in light of WO 2006063327 “Method of creating a yearbook”.

In response to the first office action, the first inventor scheduled a meeting with the Examiner who explained the rejection in more detail.

The Applicant responded to the Examiner’s summary of that meeting, that there is a technical problem in the market in that the graphic designer does not know the students and so it is difficult to correctly link photographs with text.

On 7 August 2013, The Examiner issued a further Office Action detailing why the claimed invention did not relate to patentable subject matter under Section 3 of the Law and added some additional objections.

On 17 November 2013 The Applicant responded with a narrower claim set that allegedly overcame the objections.
In a final rejection dated 26 June 2014, the Examiner again refused the application and the Applicant requested a further Interview.

On 5 November 2014, the Applicant, his “representative for the purposes of the Interview” (apparently Patent Attorney Chaim Brandstatter) and the Examiner met, and versions 4 and 4 1/2 of the claims were discussed. Based on the similarity of the cited art WO 2006063327 “Method of creating a yearbook” and the claimed invention, the Examiner was persuaded to withdraw his section 3 (patentable subject matter) rejection and to focus on the issue of novelty and inventive step (non obviousness).

Furthermore, the parties accepted that the differences between the cited art and the claimed invention were features known to persons of the art.

Following the meeting of 6 November 2015, the Applicant submitted a further version (version 5).

Despite the Examiner considering the claimed invention to be obvious in light of WO 2006063327 together with two elements well known in the art, the Examiner did a further search and discovered USSN 2002/0055955 “Method of Annotating an Image” that allegedly taught these two features. Consequently, the Examiner refused the application under section 5.

The Applicant appealed this decision:

The Applicant felt that the 5th version of claims, submitted after 5 November 2014 was not addressed. The Examiner countered that the elements in version 5 were not supported. The Applicant considered that this went against the conclusion of the meeting, Examiner guidelines and Section 23 of the Law.

According to the guidelines, after issuance of a final rejection, the Applicant can either correct the outstanding issues or request an interview. In this instance, the Applicant attempted to do both, and following the interview, submitted a further claim-set. Thus the Examiner was within his rights to reject the Application following the interview, despite the further amendment submitted.

Neither the Law nor the Regulations provide a maximum number of Office Actions, but the Deputy Commissioner, Ms Jacqueline Bracha considers it unacceptable to understand that the examination allows infinite iterations and the Examiner cannot issue a final rejection.

That said, the case was considered borderline and the Deputy Commissioner was prepared to rule on the merits of the claimed invention, i.e. to look at the final version of the claims.

The claimed invention is:

1. A method for producing a document (30, 32, 36) comprising photographs (38) of persons (16A, 16B, 16C) and texts (42) associated with said photographs (38), said method comprising the steps of:
Manually capturing a single photograph or a single group (A, B, C) of photographs for each of said persons (16A, 16B, 16C), by a photographer (24), and loading the photographs while recording the singularity to a first table (58) of a database (52) being a part of a site (22) on the internet (14);
Manually providing by an organization in which said persons (16A, 16B, 16C) are members, a second table (26) to said database (52), said second table (26) comprising one text (42) for each of said persons (16A, 16B, 16C);
Manually matching, by persons familiar with said persons (16A, 16B, 16C) each of said texts (42) of said second table (26) with one of said photographs of said first table (58);
Upon said manual matching, programmably hiding that text (42) and the photograph matched thereto and any photograph grouped thereto, thereby avoiding failures;
and
Manually printing, by a graphic artist (20) accessing said database (52), each of said matched photographs (38) adjacent to the text (42) matched thereto,
thereby tracing a failure once a text of said second table (26) cannot be matched with a photograph.

Claims 2-10 are dependent method claims and claim 11 is for a corresponding system.

The claimed invention is similar to the first citation, with two features taught in the second citation.
Since the Applicant does not provide an alternative method of implementation to that given in the prior art, the claimed invention is either not enabled or lacks inventiveness.

Section 12 requires enabling disclosure. Where a method of achieving the claimed invention is not provided, one can conclude that either it is not possible or that it uses known elements and is thus obvious. Either way, in this instance, the Application does not provide enabling disclosure and is thus not allowed.

In conclusion, the Application was rejected.

COMMENT

In Australia, the patent corresponding to WO 2006063327 did issue back in 2005. I am not sure though, that it would still be considered directed to patentable subject matter as such computer facilitated inventions are rather difficult to obtain.
From the number of dubious publications with titles such as Directory of World’s Leading Patent Experts that I am invited to appear in subject to paying exorbitant fees, it does seem that there are patent attorneys who missed out on their high school yearbooks and are willing to pay to see their mug-shot and biography in a directory that no one reads.


Can evidence submitted in an adversarial civil legal proceeding be kept confidential from the opposing party?

June 14, 2015

trade secretevidence

Israel Patent Number 132540 “System and Method for Direct Monetary Transfer Using Magnetic Cards” to Yehuda and Yigal Tsabari issued and then lapsed due to failure to pay the renewals.

Back on 24 July 2014 the Israel Patent Office agreed to the patent being reinstated. Generally, third parties who are utilizing the patented technology in good faith relying on the fact that the patent was abandoned are granted a non-transferable license that allows them to continue their business activities.  Nevertheless, the Israel Patent Office Decision to allow a patent to be reinstated is published for opposition purposes, giving third parties three months to oppose the lapsed patent being reinstated.

In the case of IL 132540, on 23 November 2014, Going Dutch LTD filed an opposition to the reinstatement. They claimed that the patent had not lapses unintentionally, but that Tsabari had knowingly abandoned the patent and that this was evident from the way Tsabari tried to enforce his patent.

Tsabari responded to these charges but requested that part of his response be kept confidential by the Patent Office and not made available to the opposer, claiming that the information constituted a Trade Secret. The documents to be kept secret included a document describing an enabling system, a draft contract with a credit card organization, a proposal for developing a system based on the patent, a contract with an investor and a letter from the investor, canceling the contract.

The patentee argued that these documents were confidential and for the parties themselves, and that their publication could compromise the patentee’s ability to compete in the relevant market. They were submitted as evidence that the invention had not been abandoned, but beyond that, their contents were not relevant to the issue in question, and so their contents should remain restricted.

The Opposer noted that the patentee had not provided sufficient evidence to prove that the documents in question were fairly described as trade secrets. This was particularly the case due to the fact that the documents apparently related to a failed business transaction from ten years previously. Furthermore, the patentee was not a side in the agreements in question and therefore could not claim that any trade secrets were his secrets.  Substantially, any documents used to support a legal claim should be available for public inspection. In addition, the opposer noted that the documents should have been supplied together with an affidavit and their dates and the parties thereof and the editor thereof should be identified.

 

Ruling

Section 23 of the Trade Related Torts Act 1999 give the courts (including the Patent Office) authority to prevent the publication of evidence considered as including trade-secrets and to allow only restricted access.

In recent Supreme Court Decision 2376/12 Rami Levi [a discount supermarket chain] vs. Moshe Dahan, July 8, 2013, Judge Amit ruled that there was a connection between the relevance of a document to a proceeding and the extent it could be kept confidential.

Essentially, where a document is relevant to a proceeding but one side claims a trade secret, the court has to weigh up the opposing rights of the parties and also to be aware of the potential damage to further entities not party to the a proceedings.

As a general rule, in civil proceedings, documents are available to all and confidentiality is the exception – See 7598/14 Theopholus Johnopholus (Theopholus III), the Greek Orthodox Patriarch of Jerusalem vs. Hymnota LTD., albeit the precedent relating to religious confidentiality and not to trade confidentiality.

Firstly, therefore, the court has to assess the relevance of the documents in question, which is a function of the arguments between the parties. In this instance, the argument relates to the restoration of a patent under Section 61 of the Patent Law 1967:

Any person may oppose a patent being restored within three months of the publication of the restoration notice on the grounds that the Commissioner [or deputy in this case] did not have grounds to order the publication of the request [i.e. to oppose the decision to reinstate].

Consequently, the discussion regarding reinstatement should focus on the three grounds for reinstatement:

  • failure to pay the fees resulted from reasonable circumstances
  • the patentee did not intend the patent to lapse
  • the patentee requested reinstatement as soon he realized that the fee was not paid.

The opposer considers that the patentee’s behaviour over the years was unprofessional, surprising and irresponsible. In other words, the patentee either wanted the patent to lapse or at least was unconcerned about his rights.

In response to these claims, the patentee described his attempts to commercialize the invention and submitted the documents about which he requested a secrecy order. The documents in question date to the period 2007 and 2008 and are thus of little relevance to the opposition proceeding.

Due to their lack of relevance to reinstatement, it seems that the right for confidentiality outweighs the right of access. They were prepared for the patentee or for exclusive licensee and were not published after they were not successful. There is no reason why these documents should enter the public record. Based on the statement of cases, the documents are not relevant and should not be published.

As to the lack of an affidavit, i.e. a signed statement testifying to that claimed, in Patent IL 118045 AstraZenca AB from 16 Jan 2005, there was a ruling to the effect that a statement should have been submitted.  However, in the Rami Levy case the Supreme Court ruled that the affidavit requesting secrecy was sufficient and there is no need for an additional affidavit accompanying the submissions. In the present case, the documentation as supplied is sufficient since the content is clearly sensitive, rendering superfluous the need for an affidavit supporting this contention.

Furthermore, the Patentee decided to submit these appendices to his statement of case and not to later submit in the evidence stage as he could have done, relying on Section 93 of the Patent Regulations 1968. Consequently, at this stage of the proceedings, the patentee does not have automatic rights to view the documents.

Thus in the meantime, the documents shall remain confidential. Should the Opposer consider these documents relevantat a later date, he is entitled to request their publication. At this time, no costs are awarded.

Opposition to reinstatement of IL 132540 “System and Method for Direct Monetary Transfer Using Magnetic Cards” to Tsabari, opposed by Going Dutch LTD., interim ruling by Jacqueline Bracha, 7 May 2015.

Comment

I am a little confused here.  The adversarial system requires that evidence brought in a legal proceeding be available to opposing parties to examine and challenge the validity thereof.

In this instance, the Opposer is using his legal right to oppose a patent being reinstated on the grounds that the patent was willfully abandoned. The Patentee has countered that there was no willful abandonment and has substantiated this claim with various evidence that allegedly shows this to be the case. In the circumstances, the evidentiary documents are considered by the patentee to be pertinent. If the patentee does not want the opposer to see the documents, he should retract them and base his case on other evidence.

That said, the 2008 documents are irrelevant as the patent only went abandoned on 24 October 2013, presumably retroactively on 24 April 2014, when the six month grace period past.

This patent was ‘abandoned’ for less than three months. The issue is when Tsabari realized that the patent had gone abandoned and when he tried to have it reinstated. Reinstatement is thus unlikely to be difficult, and one suspects that the patentee would be better served if he had chosen to use professional counsel for the reinstatement.

money plany

I had a look at the patent in question. It is a variation of the hoary old wedding present patent for directly transferring money from a credit card to the celebrants at a wedding. This is what a call a hardy perennial as approximately once a year some inventor comes in with this great idea he’s had.

Ironically the patent appears to be eminently voidable due to both lack of novelty and obviousness in light of the prior art and also on the substantive grounds that it is a software implemented business method and the fact that it is hardware implemented is insufficient to change this characteristic.


An Israeli Approach to Author’s Rights

January 30, 2014

price control

On February 6, 2014 the Law for the Protection of Literature and Authors in Israel (Temporary Provision), 5773-2013 will come into effect.

This Act is expected to revolutionize the Israeli book market by introducing new regulatory requirements with respect to publishing, distribution, sales and profit allocation across the book supply chain.

The act is a protectionist measure to protect authors from market forces in a dysfunctional market dominated be a cartel of two main chains of bookshops that control over 80% of the Israel market.

Protecting authors from having their work discounted will, of course, increase costs of books. The Law is interesting in that it is an attempt to address a perceived problem. The period over which the Law will affect book prices is 18 months.

What is refreshing about this law is that it aims to regulate the first 18 months of sales. I think that this sort of time span is relevant. This contracts strongly with Copyright, which, in Israel, is called, more accurately, ‘Creator’s Rights’. Copyright lasts life of author + 50, 70 or 95 years. This is an area where reform is needed since if there is still an interest in a work 10 or 20 years later, the author will invariably have been financially compensated.

Main Provisions of the new act

Under the Authors Act, book prices will be ‘protected’ for 18 months from the date of first publication. During the Protection Period publishers must set a retail price for each book, which must be marked on the book. The retail price for printed books may be different from that of e-books. The publisher may not change the retail price during the Protection Period.

During the Protection Period, bookstores may not sell books at a different price from the retail price set by the publishers. Not only regular discounts are illegal, but also special offers of the type common by Israel bookstores, such as “buy one get one free” and promotions such as “four for 100 Shekels” are not allowed.

The ‘no discounts’ and ‘no bundling’ has some exceptions:

  • A discount of up to 20% of the retail price may be granted during the annual Hebrew Book Week. A discount of no more than 10% of the retail price may be granted by an online bookstore, and a discount of no more than 20% of the retail price is allowed for a single entity not allowed to return the books.
  • During the Protection Period a publisher must pay an author no less than 8% of the retail price for each of the 6,000 first copies sold, and 10% of the retail price for each copy sold over 6,000 copies. However, for his/her first book, an author will only be entitled to minimum payments equal to 80% of these percentages. During the seven years following the Protection Period, a publisher will pay an author no less than 16% of the actual payment received by the publisher for the books sold.
  • Once a year, publishers and bookstores will enter into a written agreement setting the discount at which the books will be sold by the publisher to the stores during the relevant year. Bookstores are prohibited from requesting, and publishers are prohibited from granting, any further discounts beyond the margins set in the annual agreement.

The Authors Act will be in force for a trial period of three years at the end of which its impact will be assessed and the Act will be re-examined.

The Authors Act contains other provisions, such as a prohibition on remunerating salespersons for recommending a specific book or a specific author; allocation of shelf space and display space between books published by different publishers, oversight, enforcement and sanctions.

COMMENTS

The goals of the Authors Act, as stated in Section 1 of the Act are:

“to ensure Israeli authors proper pay for their creations, to promote literature in Israel, to preserve cultural diversity in publication and distribution of books… to provide readers an opportunity to choose among a wide range of books according to their wishes and tastes and enable competition between publishers and bookstores with respect to quantity, variety and the quality of books offered to the consumer.”

In the notes accompanying the proposal we learn that

“Books and literature are regarded as products of a definitive cultural value that many countries in the western world recognize the need to preserve. These countries rejected the approach pursuant to which a book is a commodity that should be subject to free market conditions. In the State of Israel there exists a unique situation in which the conduct of the book market is dictated by a cartel composed of two chains of bookstores that controls 80% of the market. One of these chains is controlled by a book publishing company. This situation causes serious harm to the principle of free competition… a serious failure in the book market was caused…”

The main aim of this legislation is to help authors, making it possible for them to profit from their creative output. It has been argued that without this additional protection, there will not be sufficient incentive for them to write.

I dispute this. I don’t think that the size of the market has any effect on quality literature. I don’t think that a law of this nature is required to make authoring books sustainable. I note that Iceland has a population of 300,000 of which 10% are authors. The profitability of writing has little effect on the amount of books written and less effect still on the quality of the literature and its cultural contribution.

If the problem is that two chains dominate the market, then perhaps the chains should be split up? If a publisher controls one chain, then it seems difficult to follow the argument that the chains are in a too strong negotiating position with respect to publishers.

Nowadays anyone can self-publish, and with two chains controlling the market, presumably the authors and publishing houses can choose to work with one chain only and can create contracts regarding discounting, so it is difficult to see how this law provides leverage hitherto unavailable.

Any protectionist measures that help authors will invitably be at the expense of the consumers, i.e. the reading public.

It is, of course true that the people who bundle books in the “buy one get one free” or “4 for 100” promotions are not literature experts and their decisions on such promotions derive mostly from business considerations. It is, however, not true that such promotions force high-quality literary works out of the public eye.

People may be encouraged to buy certain books by price, but quality literature will never sell at the rate of trashy romances.

It has been argued that if the large chain bookstores are not allowed to give discounts and new books will be sold for a fixed price, independent bookstores will have a better chance of competing with large bookstores. This argument can be extended to other areas. Perhaps fixed prices across industries is a good thing. Adam Smith and Milton Freedman would disagree, but perhaps Carl Marx would approve.

It is expected that book prices will increase and, as a result, book sales will decrease. This may adversely affect the variety of books available and it may become more difficult for new authors to get published.


Competing Marks for קניה טובה (Good Buy)

November 7, 2013

The Hebrew phrase “Kniya Tova” קניה טובה means Good Buy. It is more or less synonymous with the Yiddish phrase מצאיה  – metzioh.

Kniya Tova B’Internet LTD. filed a request for TM 245939  for the words קניה טובה (kniya tova), for concentrating and offering deals over the Internet (class 35). The application was filed on 15 April 2012.

On 14 June 2012, and prior to TM 245939  being examined, a graphic trademark TM 24729 was filed by Kniya Tova l’Starchan LTD. This mark is shown below:

kniya tova

On 25 July 2012, the trademark department at the Israel Patent and Trademark Office started a competing marks proceeding, and gave the parties an opportunity to present evidence. On 28 February 2013, a hearing was heard at which the parties were cross-examined on their statements. Since Kniya Tova B’Internet LTD. were using their mark on the Internet (on the ZAP website), the question arose as to how the mark was displayed, and in a preliminary ruling of 16 May 2013, the parties were given a further opportunity to submit evidence.

Background

Kniya Tova B’Internet LTD. has been in existence since 2006, but started trading in 2004 as Kavei Tikshoret b’Israel (Israel Telecommunication Lines). Kniya Tova B’Internet LTD. uses the mark as part of the phrase Kniya Tova b’Israel (Good buy in Israel) coming out of a megaphone held by a woman.

kniya tova l'israel

Kniya Tova l’Starchan LTD. started trading via telesales over the phone in 2009, and in 2011 started selling over the Internet from their website www.knia-tova.com (I still prefer my transliteration of kniya qith a Y, so am keeping it).

Claims of each side

Kniya Tova B’Internet LTD. claim that they’ve accumulated a lot of good will and market recognition in the years since 2004. Over the years 2004 to 2010, they have invested NIS 100,000 in advertising and in the years 2008-2012, enjoyed thousands of visits and purchases. In September 2009, the popular internet site Mako rated them one of the top 5 sales sites. The phrase Kniya Tova (in Hebrew) is widely used as a Google search term. They have a facebook presence, a turnover of millions of shekels a year. Kniya Tova B’Internet LTD. alleged that Kniya Tova l’Starchan LTD. originally started trading on the phone using the phrase Kniya Tova to free-ride on Kniya Tova B’Internet LTD.‘s reputation. Indeed, Kniya Tova B’Internet LTD. produced a large number of complaints directed to them that grumbled at service provided by Kniya Tova l’Starchan LTD. Furthermore, Kniya Tova B’Internet LTD. alleged that Kniya Tova l’Starchan LTD. launched their own website as a further attempt to steal customers from Kniya Tova B’Internet LTD. Kniya Tova B’Internet LTD. also noted that their trademark application was filed first, some two months before that of Kniya Tova l’Starchan LTD.

Kniya Tova l’Starchan LTD. claims to have made extensive usage both the phrase Kniya Tova and their graphic image since 2009, and had spent some 823,000 NIS in advertising. The owner of Kniya Tova l’Starchan LTD. provided some evidence of usage of the term Kniya Tova from 2005, but it wasn’t clear that the usage could be considered as relevant to Kniya Tova l’Starchan LTD. Despite not investing in website optimization, Kniya Tova l’Starchan LTD. noted that the phrase Kniya Tova used as a Google search term listed their company fourth, only three places behind Kniya Tova B’Internet LTD. they attributed this to their reputation built up through telesales, etc. Kniya Tova B’Internet LTD. gave evidence of sales of 1,167,031 NIS in 2009, rising ten fold to 11,246,089 in 2011, which they considered showed massive usage of their branding. Kniya Tova l’Starchan LTD. suggested that since Kniya Tova B’Internet LTD. also uses a graphic image KTL standing for Kniya tova l’Israel, they do not only use the term Kniya Tova as their trademark. They therefore alleged Kniya Tova B’Internet LTD. of inequitable behaviour (?!) Finally, Kniya Tova l’Starchan LTD. proposed that the graphic trademarks and logos of the two firms could co-exist.

Decision

Citing Section 29a of the Trademark Ordinance, the Deputy Commissioner Ms Jacqueline Bracha noted that in cases of competing marks, there are three elements to be considered: who filed first, extent of usage and equitable behaviour. She stressed that the apparent irregisterability of the word mark Kniya Tova, was irrelevant to the present proceeding which was not to rule on whether either mark was registerable, but only which mark should proceed to examination.

Kniya Tova B’Internet LTD.‘s mark was filed first. It was certainly in use for longer, and apparently was used more widely as well. (the fact that they also used other marks was not considered evidence of bad faith or otherwise considered detrimental. The main issue is one of equitable behaviour. Ms Bracha ruled that Kniya Tova l’Starchan LTD.‘s arguments that Kniya Tova B’Internet LTD. had acted in bad faith were not persuasive. Furthermore, the fact that Kniya Tova l’Starchan LTD. was a Johnny come lately who had chosen the same mark was at least suspicious. The decision now cites some of the cross-examination, and then Ms Bracha concludes that Kniya Tova B’Internet LTD. have the better case in this regard as well.

Coexistence

Having established inequitable behavior on the part of Kniya Tova l’Starchan LTD., coexistence isn’t really an option. Furthermore, both companies using logos that include the same phrase was clearly confusing to the public and there was also evidence of actual confusion. In such a case, Ms Bracha doubted that the co-existence was possible, even were both marks to include graphic elements.

Conclusion

Kniya Tova l’Starchan LTD.‘s mark was rejected, and Kniya Tova B’Internet LTD.‘s word mark was allowed to continue to examination. Costs of NIS 2000 and NIS 18,000 in legal fees were awarded to Kniya Tova B’Internet LTD.

COMMENTS

The decision is a correct one. I suspect that the word mark Kniya Tova will be rejected as descriptive and laudatory. It doesn’t even have the saving grace of having been registered in its home country.

Big Deal. Goodbye.


Toll Reader Patent Application Considered Business Method in Israel, and Refused

June 28, 2013

200px-Phantomtollbooth

Raytheon filed Israel patent application number 179203 titled “Licensed Driver application for High Occupancy Toll Lane Qualification” back in November 2006. The application is a national stage entry of PCT/US2005/052162. The corresponding patent issued in the United States as US 7,091,880, and, on 22 January 2007, the applicant brought the claim set of the Israel application into conformance with that of the issued US Patent, and requested allowance in Israel under section 17c.

The claims

The claim set of the corresponding US patent includes 17 claims, of which three, claims 1, 9 and 15 are independent. Claim 1 relates to the method, claim 9 to the system as a whole, and claim 15 to the specific apparatus:

Claim 1 is as follows:

A method of collecting tolls on a high occupancy toll lane comprising: Detecting a count of driver’s licenses inserted into a card reader located in a vehicle using the high occupancy toll lane; and transmitting the count of driver’s licenses to a roadside transceiver for a determination of a toll amount for the vehicle based on the count of the driver’s licenses.

The various dependent claims relate to (claim 2) extracting information concerning the driver’s license from the card reader, (claim 3) using a bar-code or magnetic swipe line on drivers’ license, (claim 4) to determine if the driver’s license is currently in force or not, such that only valid drivers’ licenses are considered. Claim 5 adds other parameters to determine the toll to be collected. Claim 6 uses the number of drivers’ licenses associated with the vehicle as an indicator of the number of passengers for the purpose of determining the toll charge. Claims 8 and 9 add a facility under which if there are no detected registered drivers licenses associated with the vehicle on which to base a toll charge, the lane is illuminated so that a toll may be manually collected

Claim 9, which relates to the system, is as follows:

A toll collection system comprising: a transceiver positioned adjacent to a lane and including a receiver for receiving radio frequency signals; and a transponder positioned on a vehicle using the lane comprising a card reader for reading information from one or more driver’s license inserted into the card reader and a processor operative to generate a licensed driver count related to a count of the driver’s licenses inserted into the card reader, where in the transponder further comprises a transmitter for transmitting a radio frequency signal indicative of the licensed driver count to the transceiver.

Claims 10 to 14 correspond, more or less, to claims 2-8.

 Claim 15 relates to the transponder, and is reproduced below:

 A transponder located on a vehicle and adapted for use on a high occupancy toll lane, comprising a card reader for reading information from one or more driver’s licensed inserted into the card reader, wherein the transponder includes a processor operative to generate a licensed driver count indicative of a count a driver’s licenses inserted into the card reader.

 Claims 16 and 17 depend on claim 15 and relate to the transponder being able to transmit a number of driving licenses to a roadside receiver via radio waves, and to the receiver that can process and determine that the licenses are in force and accordingly adjust the counting.

 The Examination

The Examiner refused to allow the patent under Section 17c, on the grounds that it was directed to a business method, and not to a technical problem, and thus contravened Section 3. Furthermore, he cited prior art that allegedly rendered the claimed invention known / obvious and thus in contravention of Sections 4 and 5. The Examiner relied on the Decision of former Commissioner, Dr Meir Noam concerning Application 131,733 to Tamir which (according to Ms Shoshani-Caspi) codified the 23/94 Jerusalem Court Decision concerning United Technologies vs. Patent Office (District Court Vol. 28(8) 729.  The Examiner essentially considered the method as being a business method, addressing the issue of collecting tolls, but also the components and system standard, and their use as obvious to people of the art.  Furthermore, citing US 5,493,304 to Cunningham et al. and WO 2004038663, as lacking novelty and/or inventive step.

The Chief Examiner upheld the Examiner’s position, and the application was refused. However, the applicant was invited to appeal the decision to the commissioner – hence this hearing.

The Applicant’s position

The applicant had two issues:

  1. Where Section 17c is invoked, the Applicant considered the Examiner was prohibited from raising novelty and inventive step issues.
  2. As far as patentable subject matter was concerned, the Applicant considered that the subject invention is not a business method per se. but rather a technical solution to a problem that although it had financial aspects, was, nevertheless, essentially technical. The solution required a system of elements that worked together and were all essential. Consequently, the patent application could not be dismissed on the grounds that the elements themselves were known, or on the grounds that the this was merely a business method.

The ruling

The adjudicator cited Section 17c and noted that if the application fulfilled all other requirements, the Examiner need not consider Sections 4, 5, 8 ,12 and 13. However, based on the IL 136482 Bromium Formulations LTD. vs Albermarle decision, the Examiner was entitled to reject a Section 17c request based on prior art that he considered rendered the Application non-patentable. Furthermore, since the Examiner considered the application as not fulfilling Section 3, it was legitimate for him/her to do an independent search and cite prior art. See IL 168734 to Anna and Reuven Berman (a decision relating to paying car parking fees).

Ms Shoshani Caspi summarized her position that the Examiners were responsible for ensuring that patents that should not issue didn’t, even if corresponding patents had issued in other jurisdictions having competent Examining authorities.  

As far as the system claim is concerned, there is no argument that the components are known and are not being used in an inventive manner, apart from the application, which is a business method. Based on the Berman decision, and also on IL 171773 to Teicher, the system is essentially a computer based business system and the invention is thus fundamentally related to software and business methods, even though there are hardware elements included. The Adjudicator considers that the system has to be considered in its entirety and not as a collection of elements, and the issue is whether there is an inventive technological solution.

The adjudicator noted that in the background, the applicant himself acknowledged that there such systems were known:

“Automated toll collection systems are known. Typically, these systems comprise a reader transponder or transceiver and at least one vehicle transponder. The reader transceiver includes either laneside, overhead or in-pavement antennas in each traffic lane. The reader transceiver senses the presence of the vehicle transponder by employing a vehicle sensor or by transmitting an RF signal to which the vehicle transponder responds with an identification message.

High occupancy toll (HOT) lanes are in use in many states in an effort to reduce highway demand. In specially designated HOT lanes, vehicles having at least a predetermined number of occupants, such as two or three, (i.e., high occupancy vehicles, or HOVs) are given a discounted toll rate or are not required to pay a toll at all. Single occupancy vehicles (SOVs) may be permitted to use the HOT lanes, but are required to pay a higher toll.

Enforcement of HOT lane qualification is typically performed by having a police officer monitor passing vehicles to ensure that the threshold number of occupants are present in cars using the HOT lanes or benefiting from the reduced or eliminated tolls. Such enforcement is only effective when a police officer is present and is a costly enforcement approach.”

Thus, the inventiveness for which a patent was sought was that defined in the Summary of Invention as follows:

“….by determining a toll amount for the vehicle based on the number of licensed driver occupants, the intent of HOT lanes, of reducing highway demand, is served.”    

The Adjudicator went on to note that “A physical technological process is an expression of a physical thing or a characteristic of a process” and referenced EPO ruling G0003/08.

Furthermore, she ruled that to be patentable, a software invention is required to be more than merely computerizing something that can be done manually. Since the cited references included the same components, she could not see that this invention was anything more than a computerized system for doing something known, and rejected the application.  

COMMENTS

Re Section 17c – Essentially, Ms Shoshani-Caspi’s position is that Section 17c establishes that where a patent has issued from a reputable patent office there is a presumption of validity that is rebuttable. The Examiner may rely on the issued patent not to do further searching or on the conclusion of the foreign Examiner that prior art is not identical or a combination of prior art does not render the invention obvious, but is not obliged to. Furthermore, since the standards of obviousness in each jurisdiction are determined by the relevant case-law, it does vary from country to country. Some combination may be considered non-obvious in the US, Australia or Europe, but may still be obvious by Israeli standards

I think this analysis is correct, but it is a change from the previous practice of the patent office. In consequence of the Israel Patent Office being an International search Authority, there are now some 100 examiners. There are more resources available for examining and we see not relying blindly on Section 17c as a positive development. What will, however, now happen, is that some patent attorneys will refrain from invoking Section 17c and will simply inform the patent office that corresponding patents with corresponding claims have issued elsewhere, providing details. This will probably slow down examination and increase costs to Applicants.

Re the Patentability of Computerized systems – IL 68409 to United Technologies Corporation, dealt with computerizing a system for the energy-efficient flying of a helicopter. The patent office rejected this, but on appeal, the Jerusalem District Court, C.A. 23/94 (Jerusalem) United Technologies Corporation v. The Registrar of Patents, Designs and Trademarks, District Court Decisions, Vol. 26 (8), 729. It would appear that where a system is computerised, to save fuel, the invention is not merely a business method but is technological. I accept that toll collection is more obviously a business method, but both really deal with efficient usage of resources, one case being a road and the other fuel for a helicopter. I can’t see any real philosophical justification to consider the two cases differently. I actually think the District Court was wrong, but the patent office didn’t appeal the ruling and it is thus good legal precedent. Dr Noam did not codify the ruling. He over-ruled it, and, despite the fact that I agree with him substantively, this was beyond his authority. Still, if this is the way the Israel Patent Office sees things, this is how they will rule, unless there is another appeal to the courts.


Venture Capitalism and Getting a Start-UP Started

September 2, 2012

Although many of my clients are established companies, a large percentage are start-ups in various stages. Some require a first patent application to tempt venture capitalists. Sometimes they want their patent portfolio summarized for an audit before a second or third round of fundraising. Venture Capital Funds and industrial incubators sometimes come to me for a due diligence report on the IP portfolio of a company they are interested in. I don’t get involved in the contracts between investors and entrepreneurs, but occasionally entrepreneurs complain about dilution and other issues they have with funders.

In all fields, there is a specialist vocabulary and a basic knowledge of terms is important, for anyone even peripherally involved in fund-raising for start-ups.

Recently, an associate of mine from US Law firm Womble & Carlisle kindly gave me a copy of a book by one of their partners, Clinton Richardson. The book, called 4.0 Growth Company Guide, is an alphabetical arrangement of articles about different company funding concepts. The entries are more than definitions. They try to present the rationale behind the concept and what the consequences of using one funding model or another are to initial investors, entrepreneurs and second round funders.

Concepts like Milestones, Angels, Leverage, Clubbing, Safe Harbors, Downside ISOs, leverage and buyout are explained in friendly, factual, neutral terms. The book seems like a handy reference for anyone getting involved in start-ups.

The book has been around since 1987. It is now in its fourth edition.

ISDN 978-0-6151-6409-0, the price on the jacket is $79.50. Not bad for 445 pages of reference material.

For those of you confused by the picture, the Wombles of Wimbledon Common featured in a TV series on BBC in the Seventies. They were very ecologically friendly and into recycling by  making use of the things that everyday folks left behind. One of their cousins, the Mac Womble, lived in Scotland. It seems an appropriate picture for a firm called Womble & Carlisle.