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Medtronic v. Boston Scientific – Supreme Court Appears Prepared to Reverse the Federal Circuit on the Burden of Persuasion in Declaratory Judgment Actions Between Patent Owners and Licensees
The Court’s scrutiny primarily focused on the method recited as claim 1, however, the Court reasoned that “[a]s the other claims of the [’545] patent are drawn to a similar process [as claim 1], they suffer from the same infirmity as claim 1 and need not be considered further.” Id.
first step of receiving, from a content provider, media products that are covered by intellectual-property rights protection and are available for purchase, wherein each said media product being comprised of at least one of text data, music data, and video data;
second step of selecting a sponsor message to be associated with the media product, said sponsor message being selected from a plurality of sponsor messages, said second step including accessing an activity log to verify that the total number of times which the sponsor message has been previously presented is less than the number of transaction cycles contracted by the sponsor of the sponsor message;
§ 101 analysis begins by identifying whether an invention fits within one of the four statutorily provided categories of patent-eligible subject matter: processes, machines, manufactures, and compositions of matter.
Then, in the second step, if we determine that the claims at issue are directed to one of those patent-ineligible concepts, we must determine whether the claims contain “an element or combination of elements that is ‘sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.’”
The Court reasoned that “[a]lthough certain additional limitations, such as consulting an activity log [as recited in the second step of claim 1], add a degree of particularity, the concept embodied by the majority of the limitations describes only the abstract idea of showing an advertisement before delivering free content.” Id.
The Court stressed this point by elaborating on the distinctiveness of the first step of the two-part analysis, stating that: “any novelty in implementation of the idea is a factor to be considered only in the second step of the Alice analysis.” Ultramercial III, slip op.
“Adding routine additional steps such as updating an activity log, requiring a request from the consumer to view the ad, restrictions on public access, and use of the Internet does not transform an otherwise abstract idea into patent-eligible subject matter.
Regarding the machine prong of the machine-or-transformation test, the Court explained that the recitation of a “facilitator” in the preamble of claim 1 did not tie the claims to a novel machine, because “the specification [of the ’545 patent] makes clear that the facilitator can be a person and not a machine.” Id.
Regarding the transformation prong of the test, the Court concluded that “[t]hese manipulations of ‘public or private legal obligations or relationships, business risks, or other such abstractions cannot meet the test because they are not physical objects or substances, and they are not representative of physical objects or substances.’” Id.
Judge Mayer explained: “Because the PTO has for many years applied an insufficiently rigorous subject matter eligibility standard, no presumption of eligibility should attach when assessing whether claims meet the demands of section 101.” Id.
The concurring opinion admitted that the Supreme Court “declined to hold ‘that business methods are categorically outside of § 101’s scope.’ Notably, however, [the Supreme Court] invited [the Federal Circuit] to fashion a rule defining a ‘narrower category’ of patent-ineligible claims directed to methods of conducting business.” Id.
Judge Mayer appears to believe that his proposed rule “holding that claims are impermissibly abstract if they are directed to an entrepreneurial objective, such as methods for increasing revenue, minimizing economic risk, or structuring commercial transactions, rather than a technological one, would comport with the guidance provided in both Alice and Bilski.” Id.
Given that the Supreme Court previously admonished the Federal Circuit for formulating bright-line rules, it is not surprising that the Court did not proffer a definition of “abstract idea;” instead, the Court provided a benchmark, noting that the ’545 patent failed to claim “significantly more” than simply the abstract idea.
Going forward, perhaps the Court’s repeated references to a “majority” of the 11 steps recited in claim 1 of the ’545 patent may suggest a new best practice for patent practitioners drafting new patent applications and prosecuting existing applications, particularly in the business method and software arts.
Fintech trends and updates
Update posted: 05 July 2019 By Paschalis Lois Since our last Libra update, there have been a few developments on the regulatory front due to more substantive statements made by regulators.
In similar fashion, albeit not specifically directed at Libra, a letter by the Financial Stability Board’s chairman, Randal Quarles, notes that “[a] wider use of new types of crypto-assets for retail payment purposes would warrant close scrutiny by authorities to ensure that that they are subject to high standards of regulation.
Due in part to the fact that e-money must be represented by a claim on the issuer: As cryptoassets are typically issued through pre-determined algorithmic processes, as opposed to on-demand by a central issuer in receipt of funds, they would usually fail on that front.
Update posted: 05 July 2019 By Paschalis Lois In a wider policy statement concerning restrictions on the sale of CFD and CFD like options to retail customers (see here for summary), the FCA announced its intention to publish a new consultation paper on a potential outright ban on “the sale to retail clients of derivatives and certain transferable securities that reference cryptoassets”.
To that effect, the FCA released its consultation paper on 3 July 2019 in which it looks for stakeholder opinion on its proposed ban on the “the sale, marketing and distribution to retail clients of all derivatives referencing unregulated cryptoassets that allow transferability (i.e.
The underlying risks outlined by the FCA, prompting the ban, include the inability to properly value cryptoassets, risks of market abuse and illicit activity, as well as the extreme volatility of cryptoassets.
Mastercard's audio-only press release described how the changes will add a new dimension to their brand identity and reflect the changing way consumers interact with the world around them.
A similar feature is also available on Monzo where customers are alerted to account activity by a cash-register style 'Kerching' noise.This may seem frivolous but companies are desperate to stand out in a crowded market.
Traditionally this was done through financial incentives and, while this remains important, low interest rates and growing commoditisation of financial services have created a new focus on brand identity.
This is particularly true of the credit/debit card market where banks have switched the orientation of cards, changed the material or even, in the case of the UK-based business account app 'Anna', introduced a card which 'meows' when you make a purchase.
Time will tell whether sonic branding is the new frontier for customer loyalty, or whether it’s just the latest attempt to avoid becoming ‘the dumb pipes’.
Addressing the third Annual Fintech Conference this week, the Commission’s Vice President Valdis Dombrovskis shared his enthusiasm for the scheme’s potential to create 'a pan-European, fast bank-to-bank payment network.' The lack of adoption within the market, however, is both surprising (given how great this technology is) and a cause for concern.
The gpi gives each transaction a tracking reference so it can be followed through the system (which was previously a black hole), allows the sender to choose the route through various intermediary banks, see the fee levels, and keep an eye on the performance levels of each intermediary in the process (e.g.
Most of the media reporting on this is recycling the following statement provided by R3: SWIFT GPI will integrate directly to Corda Settler, the application that allows participants on the Corda blockchain to initiate and settle payment obligations via both traditional and blockchain-based rails.
Update posted: 22 November 2018 By Gareth Malna With the publication of Discussion Paper 'Casting Light on Central Bank Digital Currency' by the International Monetary Fund, the Bank of England stating that it is open to the issuance of a digital currency and the Swedish e-krona starting its pilot scheme in 2019, digital currencies are firmly on the radar of central banks.
Head of the IMF, Christine Lagarde, suggests digital currencies should be the responsibility of the state, designed to (i) deal with decreases in cash usage (ii) strengthen financial inclusion, (iii) strengthen security and consumer protection and (iv) provide better privacy protection.
The IMF’s idea that central bank digital currency could supplant existing cryptocurrency is potentially the first notable move to bring crypto currencies back under the bank’s control.
With around 2.5 billion people in the world not using any formal or semi-formal banking or financial services, Lagarde argues that central bank issued digital currencies would be able to reach people in remote and marginalised regions where banks do not serve customers, and on this point we can see the benefit of the proposal.
According to Lagarde, security and consumer protection, in the absence of cash, would also be better protected by digital currencies issued by the state as opposed to private payment providers, who would be open to cyber-attacks and glitches.
The veracity of this argument is not fully clear and fails to fully describe how the current systems proposed for Bitcoin and Ether (to consider the two largest currencies) are insecure - though one could see how a state-backed currency may be less prone to value swings based on the Tweets and commentary of relatively few individuals than some of the less voluminous currencies.
In summary, the IMF’s proposal begins to look less like an electronic replacement for cash and more like a distributed substitute for existing debit/credit card systems but potentially without the ability to “cash out”
The group’s advice to ESMA is to provide level 3 guidelines or create supervisory convergence on the following areas: 1.Interpreting the MIFID definition of 'transferable securities' This includes clarifying whether transferable asset tokens which have features typical of transferable securities are subject to MiFID II and the Prospectus Regulation.
The group was of the view that payment tokens and utility tokens are not covered, however, since they share similar risks to securities traded on capital markets, the group recommended that ESMA raise this with the EBA and European Commission.
On the other hand, transferable asset tokens may already be subject to MiFID II and the Prospectus Regulation depending on their characteristics and the group recommends that ESMA: 2.Interpreting the MiFID definition of 'commodities' This concept is crucial to determine whether an asset token with features typical of a derivative is a MiFID financial instrument or not.
The group recommends that ESMA clarifies this in level 3 guidelines together with the circumstances in which asset tokens giving a right to a commodity are to be considered MiFID financial instruments;
3.Interpreting multilateral trading facilities (MTFs) and organised trading facilities (OTFs) The group was of the view that the organisation of a secondary market in asset tokens should be covered either within the concept of an MTF or OTF and urged ESMA to clarify the definitions of MTF and OTF under MiFID II to make it apparent if this was the case and that, if so, the Market Abuse Regulation should then apply.
4.Authorisation/Licence requirements Regulatory convergence/guidelines on the fact that, in all situations where an asset token is to be considered a MiFID financial instrument, persons giving investment advice on those asset tokens or executing orders in those asset tokens are to be considered investment firms and should be licenced as such unless they qualify for an exemption under MiFID II.
5.Sandboxes The group also recommends that, whilst sandboxes should not be 'overly coordinated' at the European level, some coordination is necessary and it advises ESMA to set minimum criteria for the: For further details, including the recommendations made by the group for the regulation of ICOs and crypto-assets,read the full report.
Digital Street is trying to rethink the way everyone currently buys and sells property, which sounds like a standard half-baked ICO white paper until you realise its coming from the UK government.
The goal of this blockchain collaboration will be to produce another proof of concept, using distributed ledgers and smart contracts, to prove that they can make another part of the buy/sell process easier.
Indeed, Iran and Russia have already said their governments could be interested in issuing stable coins backed by oil reserves as a way to avoid dollar transactions, allowing them to bypass sanctions imposed by the USA and the EU.
Given the wide regulatory coverage of the FCA it is not surprising that Charles Randell also highlighted how new technologies can leave some customers, particularly the most vulnerable behind and how technology therefore is a ‘double-edged sword’, which the FCA must manage.
The consultation sets out three main functions of the GFIN: As many aspects of fintech and financial markets are international, a global sandbox enables developers of fintech to trial and develop their technology so that it works to accommodate requirements in several different jurisdictions.
The GFIN looks to offers an agile way of financial services regulators working collaboratively, to conduct joint work and share their experiences of financial innovation, thereby improving financial stability, integrity, customer outcomes and inclusion.
It is envisaged that this may include collaborating on uses of regtech and suptech and provide a forum for certain policy debates between regulators, industry, academia and other relevant stakeholders.
The consultation requests feedback on the questions posed in the consultation that include requesting views on the mission statement for the GFIN, its proposed functions and where it should prioritise activity, by 14 October 2018.
The report is an interesting read for anyone interested in AI but, most importantly, asks vital questions about how society thinks AI should best be utilised while attempting to provoke a public debate.
This is clearly a world still under construction as many of the existing technologies offer limited functionality and/or require significant human training and integration before offering anything genuinely useful.
High-risk areas where crypto-related activities might be carried out include: The FCA also elaborates that following a risk-based approach does not mean banks should approach all clients operating in these activities in the same way.
If you are a bank and consider that your clients may be holding or trading cryptoassets (this may be discovered by enquiring about the source of a deposit), then existing requirements for checking the source of wealth and funds are still risk sensitive.
The policy came into effect at the start of this month, and bans the adverts of ‘Cryptocurrencies and related content (including but not limited to initial coin offerings, cryptocurrency exchanges, cryptocurrency wallets, and cryptocurrency trading advice)’.
FacebookandTwittermade the same move earlier this year, with consumer protection as the clearly stated aim.Scott Spenser, Google’s director of sustainable ads, toldCNBCin March: ‘We don’t have a crystal ball to know where the future is going to go with cryptocurrencies, but we’ve seen enough consumer harm or potential for consumer harm that it’s an area that we want to approach with extreme caution’.
Most people can agree that consumer protection is positive, so trying to prevent regular people from investing in extremely volatile products without being fully aware of the risks is also positive.
Update posted: 29 May 2018 By Harry Tiara Like much of the financial world, the insurance industry has been slow to recognise the growth of fintech (financial technology), regtech (regulatory technology), paytech (payment technology) and everything else ‘tech’.
For example, Lemonade (an American insurer aimed at individuals) automates pretty much everything that they do, such as using Chatbots and AI to run everything from the process of purchasing a policy, through to claims management, payouts and fraud prevention.
Update posted: 09 July 2018 By Gareth Malna and Georgia Bridgen The Bank of England’s (BoE) Dear CEO letter was published on 28 June by its deputy governor, and has all the hallmarks of preserving the status quo as far as prudential regulation of cryptoassets goes.
Financial services firms have long sought to gain exposure to cryptoasset classes to seek market outperformance.The Prudential Regulation Authority however, wants to make clear that valuation is not the only risk involved as fraudulent or ill-thought-out schemes may leave firms red faced if they invest directly.
On the up side, firms operating in the fintech space should be heartened by the confirmation by the BoE that it recognises that‘the underlying distributed ledger or cryptographic technologies, on which many cryptoassets rely, have significant potential to benefit the efficiency and resilience of the financial system over time.’
Meanwhile, for those regulated firms who are exposed to cryptoassets (whether directly or indirectly), be sure to apply a suitable risk-based approach to your strategies or the regulators may take a dim view of your activities.
Update posted: 03 July 2018 By Benjamin Boss On 30 May 2018, Ant Financial (Ant) signed a strategic cooperation agreement (SCA) with Shanghai Pudong Development Bank, the third SCA signed by Ant for the month of May. The SCA (as with those previously signed with Huaxia Bank and China Everbright Bank) creates a partnership under which Ant provides technological support for the prevention of fraud and to assist with online risk management (including loan, transaction and marketing fraud prevention).
Firms such as Ant do not fit into traditional marketplaces or face traditional competitors but as a firm offering wealth management, lending, insurance and credit scoring, it looks set to create a new global landscape for the provision of financial services facilitated purely by opportunities created by ‘Fintech’
Whether other firms will follow suit by agglomerating various businesses under one umbrella is yet to be seen - particularly as Fintechs have traditionally looked to act in more agile ways under niche specialisms.
‘While the FSB assesses that crypto-assets do not pose a risk to global financial stability at this time, they raise a host of issues around consumer and investor protection, as well as their use to shield illicit activity, money laundering and terrorist financing’
The report includes examples of AI systems able to review non-disclosure agreements with 9% greater accuracy than experienced lawyers, robot advisers designed to provide clinical negligence advice and AI algorithms able to predict the outcome of European Court of Human Rights cases with 79% accuracy.