Section 101 Emerges As Threat To NPE’s

A post on Law.com by Jan Wolfe reports that Section 101 of the Patent Act (essentially holding that laws of nature and abstract ideas can’t be patented) has emerged as a real threat to certain claims of some NPE’s:

“Section 101 wasn’t really part of the standard patent defense arsenal….but…. {a}s we reported, late last month a U.S. district court judge in Washington, D.C., finally dismissed the case against Freddie Mac, ruling that the the Graff/Ross patents do little more than use a computer to perform a mathematical computation. Two weeks earlier, a judge in San Francisco rejected infringement claims that OIP Technologies Inc. brought against another Moore client, Amazon Inc. The judge favored Latham’s Section 101 arguments, concluding that OIP’s patent ‘teaches nothing more than the calculation of a demand curve based on consumer response to different price points.'”

The defense bar is excited about this new Section 101 defense. Wolfe quotes Matthew Moore of Latham & Watkins (representing Freddie Mac):

“‘It’s a great defense to raise early,” Moore told us. ‘For defendants, this is a chance to get dispositive result before having to spend millions of dollars on discovery.’ The Section 101 defense is also ‘fun to raise,’ Moore said. In the Amazon case, to make the point that OIP’s patent covers that age-old idea of supply and demand, he quoted from Adam Smith’s treatise The Wealth of Nations in his motion to dismiss.”

Now raising that Section 10 defense sounds like big fun. Is this the Holy Grail for defendants? This seems headed for the Supremes.

For much more about Section 101 and the pertinent cases go this link:  http://www.law.com/corporatecounsel/PubArticleCC.jsp?id=1202574242242&Defendants_Racking_Up_Wins_over_Abstract_Patent_Claims&slreturn=20120910113724

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Filed under NPE Articles, Patent Litigation

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