Lawyer Loses Bid to Get Patent on Marketing

Lawyer Loses Bid to Get Patent on Marketing

California lawyer Scott C. Harris hoped to get the patent on marketing. But his hopes were dashed this week when the Federal Circuit Court of Appeals issued a ruling that a marketing business is not the sort of subject matter eligible for a patent.

Harris is familiar to patent lawyers as the one-time Fish & Richardson partner and occasional inventor whose former firm forced him out after he sold some of his patents to a holding company that then used them to sue Google, which is a Fish client. That holding company is represented by the firm Niro, Scavone, Haller & Niro, which turned around and added Fish as a defendant. Fish then countersued Harris and Harris countersued Fish. As all of this was being followed by the anonymous Patent Troll Tracker, his identity was unmasked and he got caught up in his own set of legal entanglements. Confusing, yes, but Joe Mullin makes sense of it all at The Prior Art.

Meanwhile, Harris -- as one of three plaintiffs and also as their attorney -- brought this appeal from a decision of the Board of Patent Appeals denying his claims to get a patent on a method and "paradigm" of marketing. He described the paradigm claim this way:

A marketing company that markets software from a plurality of different independent and autonomous software companies, and carries out and pays for operations associated with marketing of software for all of said different independent and autonomous software companies, in return for a contingent share of a total income stream from marketing of the software from all of said software companies, while allowing all of said software companies to retain their autonomy.

Sounds like a marketing company, right? That is what the Court of Appeals thought. It said the case fell squarely under its en banc decision last year, In re Bilski, in which it limited business-method patents to processes that meet its "machine-or-transformation" test. In other words, the process must either be tied to a particular machine or apparatus or transform a particular article into a different state or thing. "A marketing force is not a machine or apparatus," the court explained.

Harris argued that a marketing company is "analogous to a machine" in that a company "is a physical thing." The Federal Circuit did not see it that way. Citing Harris' own statement during oral argument that "you cannot touch the company," the court reasoned, "Applicants do no more than provide an abstract idea -- a business model for an intangible marketing company."

At his blog Patently-O, Dennis Crouch says the Federal Circuit got it right.

Under Bilski, this case is open and shut. The claim is not even arguably tied to a machine. ... On the second Bilski prong, the claim does not require transformation of any article into a different state or thing. The only transformation is that of legal rights and organizational relationships that were explicitly excluded in the Bilski decision.

As for Harris, he tells The Recorder that he may appeal to the Supreme Court. "The way the patent office and the Federal Circuit is acting lately is that they're really trying to restrict the scope of patents," he said, "and this is just one more in a series."

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Posted by Robert J. Ambrogi on March 11, 2009

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