Hunt, Graham. Dear All,

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Hunt, Graham

From: Private Equity and Venture Capital Committee <[email protected]> on behalf of Mattia Colonnelli <[email protected]>

Sent: Tuesday, November 27, 2012 12:26 PM

To: [email protected]

Subject: Start-Up_Algorithm_Patent

Dear All,

I am advising an Italian start‐up company (big data). I am currently negotiating a first round investment with a venture capital fund. The main and more valuable asset of the start‐up is an algorithm. According to certain high level researches conducted, it seems that an algorithm is patentable in US, if certain conditions are met (while in Italy, and Europe at large, the scenario is different). The client is considering to patent such algorithm in US before going forward with the first round. Is an algorithm patentable in US? Under which conditions? What are the associated costs? Any advise will be more than welcome.

Many thanks.

Best regards from Italy, Mattia

avv. Mattia Colonnelli de Gasperis Colonnelli de Gasperis Studio Legale Via G. Morone, 6 20121 Milano T +39 02.3657.2261 F +39 02.3657.2269 Mobile +39 338.796.8866 E-mail [email protected]

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(2)

Hunt, Graham

From: Private Equity and Venture Capital Committee <[email protected]> on behalf of Frank Natoli <[email protected]>

Subject: Re: Start-Up_Algorithm_Patent

Attachments: image001.jpg

Hi,

A mere algorithm is not patentable because it is only the manipulation of data. This is a very controversial area. You have to convince the USPTO that it is not just abstract data and that it will culminate into a concrete outcome (not being a machine invention). A good example of a successful business method patent that was not considered mere data is Amazon’s one-click shopping cart process. But even here you can see the arguments against patentability.

This is not to say that your client should not explore all the opportunities, but being in the IP business I recognize that these type of patents end up being a huge waste of time and money in my opinion especially if you are not dealing with a larger company with great resources.

The big question for your client here is “what are you seeking to protect exactly?”

In so many cases the client mistakenly believes that a patent will protect the “what” of their idea when in fact it only protects the “how.” For example, if I write the code in another language have I obviated your invention claims and frustrated your business purpose?

It is always worth a consult with a good patent lawyer skilled in this area, but I am quite skeptical when clients come to us with similar concerns.

For the record, while my firm handles patents through our patent counsel and I am not a patent lawyer, but do advise in this area.

Very best, Frank

Frank A. Natoli, Esq.

Founder & CEO

Natoli-Lapin, LLC

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From: Private Equity and Venture Capital Committee [mailto:[email protected]] On Behalf Of Mattia Colonnelli

Sent: Tuesday, November 27, 2012 1:26 PM To: [email protected] Subject: Start-Up_Algorithm_Patent

Dear All,

Many thanks.

Best regards from Italy, Mattia

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Hunt, Graham

From: Private Equity and Venture Capital Committee <[email protected]> on behalf of Qin Shi of ETL <[email protected]>

Dear Mattia,

From your description, your client would be well‐advised to get a patent application (and a priority date) on file before

negotiating the first round.

Generally speaking, a pure mathematic algorithm (without more) is not patent eligible under 35 USC 101. However, an

algorithm‐based invention can be patentable if it satisfies the patentability standard under the patent statue. The US

patent office and courts look at a number of factors to determine whether an algorithm‐based invention is nonetheless

patentable; one relevant test is the so‐called “machine‐and‐transformation” test. The cost to file and prosecute a

patent application in the US varies depending on the subject matter of the invention and the complexity of the

application among other things.

Feel free to get in touch directly if you’d like to discuss in more detail. Best, Qin

Qin Shi | Managing Principal | EDGETECH LAW LLP | 2225 E. Bayshore Rd., Suite 200, Palo Alto, CA 94303, USA | +1 650

320 1626 (T) | +1 650 320 1668 (F) | +1 650 248 7297 (M) | www.edgetechlaw.com * * * * * *

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From: Private Equity and Venture Capital Committee [mailto:[email protected]] On Behalf Of Mattia Colonnelli

Sent: Tuesday, November 27, 2012 10:26 AM To: [email protected]

Subject: Start-Up_Algorithm_Patent

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conducted, it seems that an algorithm is patentable in US, if certain conditions are met (while in Italy, and Europe at

large, the scenario is different). The client is considering to patent such algorithm in US before going forward with the

first round. Is an algorithm patentable in US? Under which conditions? What are the associated costs? Any advise will be

more than welcome.

Many thanks.

Best regards from Italy,

Mattia

______________________________________

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. This new List Subscription Page

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(7)

Hunt, Graham

From: Private Equity and Venture Capital Committee <[email protected]> on behalf of Stephen Y. Chow <[email protected]>

The climate has changed for “algorithms” in the US. In fact, the standards are somewhat similar with Europe that there

needs to be “technological content”, i.e., something in physical data movement/processing rather than simply the use of

the Internet. It’s not quite “machine‐or‐transformation”, which the U.S. Supreme Court rejected as too stringent, but

one may not preempt all uses of a mathematical formula (algorithm) and thus must have some meaningful restriction to

some physical (even electrical) element.

The preparation cost here in the Boston area is $7‐9K (unchanged over decades because solo practitioners compete in

this area, and they are perfectly acceptable to universities, start‐ups and industrial companies building patent portfolios

[rather than their strategic patents]). It may be worth filing a provisional application (just “enabling disclosure” actually

kept confidential until a “real” application is filed) to preserve a priority date (then file a real application or international

application within a year). Pre‐funding this is always a good idea. You can legitimately say “patent pending” and put

non‐NDA prospects (and subsequent seekers of funding) on notice.

Stephen Y. Chow Burns & Levinson LLP

From: Private Equity and Venture Capital Committee [mailto:[email protected]] On Behalf Of Mattia Colonnelli

Sent: Tuesday, November 27, 2012 1:26 PM To: [email protected]

Subject: Start-Up_Algorithm_Patent

Dear All,

I am advising an Italian start‐up company (big data). I am currently negotiating a first round investment with a venture

capital fund. The main and more valuable asset of the start‐up is an algorithm. According to certain high level researches

conducted, it seems that an algorithm is patentable in US, if certain conditions are met (while in Italy, and Europe at

large, the scenario is different). The client is considering to patent such algorithm in US before going forward with the

first round. Is an algorithm patentable in US? Under which conditions? What are the associated costs? Any advise will be

more than welcome.

Many thanks.

Best regards from Italy,

Mattia

avv. Mattia Colonnelli de Gasperis Colonnelli de Gasperis Studio Legale Via G. Morone, 6

(8)

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(9)

Hunt, Graham

From: Private Equity and Venture Capital Committee <[email protected]> on behalf of Hawthorne, Michael de Leon <[email protected]>

The algorithm would have to be tied to something that is material transformed or to physical structure (algorithms in the abstract are not patentable). The obviousness of the algorithm itself would also likely influence the overall patentability of the invention. For example, we have been successful with patents relating to MRI algorithms by simply reciting the steps of the algorithm and including an additional steps of acquiring data from an MRI scan and generating an MRI image from the data using the algorithm (the data being that which is transformed into an image). However, such MRI

algorithms are novel and nonobvious by themselves (they just aren’t patentable subject matter by themselves). To the extent an algorithm is obvious, merely automating it via a computer or network might render it patentable subject matter,

but won’t necessarily render it nonobvious.

The costs of preparing such applications tend to be on the high side, especially when the inventors aren’t sure what the

particular points of novelty are (maybe $15,000-$20,000, unless the point or points of novelty are clear).

Please feel free to contact me directly if you would like to discuss further.

Michael

Michael de Leon Hawthorne [email protected] P: 202.585.6936 F: 202.508.1027 M: 202.731.3327 Thompson Coburn LLP 1909 K Street, N.W. Suite 600 Washington, D.C. 20006-1167 www.thompsoncoburn.com

Licensed in Illinois and Kentucky; District of Columbia Bar application pending - supervised by DC licensed attorneys

From: Private Equity and Venture Capital Committee [mailto:[email protected]] On Behalf Of Mattia Colonnelli

Sent: Tuesday, November 27, 2012 1:26 PM To: [email protected]

Subject: Start-Up_Algorithm_Patent

Dear All,

(10)

Mattia

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