Insurance Company Invents Faster Way To Deliver Life Insurance

Yesterday The Hartford announced via press release that it had invented a faster way to deliver life insurance, which is now patent pending.  Can you that be true?  As with many things associated with the law, particularly patent law, a simple, straightforward answer is not possible.  In a nutshell, it is possible that one could patent a method of more quickly delivering life insurance if the process is new and non-obvious.  However, given the law that the United States Patent and Trademark Office is required to apply there will need to be much more than a real world business method, or “pure business method” as they are sometimes referred to.

“Today’s consumers are used to buying products online and receiving them at home within 48 hours,” said Brian Murphy, who heads The Hartford’s life insurance business. “We see no reason why they should have to wait more than a month to receive a new life insurance policy. By creating a new way of assessing a person’s risk factors and reordering the underwriting process, we can now provide consumers with life insurance coverage in a fraction of the time it used to take.”  But surely a reordering of the underwriting process isn’t enough for a patent, is it?

The only pending non-provisional patent application that lists The Hartford as the assignee and uses the term “life insurance” in the specification is U.S. Patent Application No. 2009029991, which relates to a method and system for managing funds within separate accounts. This particular invention permits a distributor to market and an investor to purchase a single product that combines the benefits of a family of funds with the protection element of a death benefit or living benefit. This does not appear to be the pending patent application that The Hartford is referring to when it says it has invented a faster way to deliver life insurance.

It is not necessarily unusual that a pending patent application cannot be found, although it does raise questions that the company didn’t have to deal with if only they had included some basic, relevant information in the press release. A patent application is not published until 18 months after the priority date, so if this were a new patent application that did not claim the benefit of an earlier filed patent application it won’t be findable for 18 months. Thus, it is impossible to know whether this is a non-provisional patent application or a provisional patent application. It is likewise impossible to know when the patent application was actually filed, all of which could have been easily contained within the press release.

If the goal is to drive interest and tout a positive development, such as the invention of a revolutionary new process, shouldn’t the press release give some basic information about the patent application, explain why the technology is exciting and explain how the company is at the cutting edge of industry technology? Perhaps I am missing the point and press releases are supposed to be mindless dribble that contains only platitudes and self congratulatory, non-informing nonsense, but I have to think that press releases are best when they are substantive. After all, don’t we already know that those issuing press releases believe they are onto something important? So why not share details?

The absence of any details also allows mischief in the uninformed and anti-patent communities.   There are those that actually believe that patents harm innovation, and things like this press release given them all the justification to conclude that the patent system has run amok.  Never mind that the press release clearly overblows reality, that patents objectively foster greater innovation by providing an incentive for innovators, creating a market for technologies and creating a race between parties.  See The Myth of the Sole Inventor by Professor Mark Lemley.  The reality is that these types of method patents are not at all easy to get unless there is really a substantive, technical advancement.

But if you could patent a method of selling life insurance by asking 8 questions, trusting the answer of the party seeking life insurance and issuing the policy before checking the veracity of the answers, then there might be a good argument that the patent system has run amok. After all, haven’t people been selling life insurance policies for some time, and is it really “inventive” (whatever that means) to change the order of a known process and sprinkle in a leap of faith as The Hartford seems to suggest they are doing?

Even if the process of selling life insurance is new you are not able to obtain a patent on a method like this unless it satisfies the so-called “machine or transformation” test. Allow me to explain this last statement, which is realistically true but literally false.

Just over three years ago the United States Court of Appeals for the Federal Circuit issued its decision in Bilski. The Federal Circuit at that time said the machine or transformation test was the only test and if a method did not satisfy that test it could not be considered patent eligible subject matter. On appeal to the Supreme Court the ultimate decision that the Bilski invention was not patentable was upheld, but the Supreme Court said that the machine or transformation test was not the only test, but rather an important clue. See Supremes Decide Bilski and Dissecting Bilski.

The way that the law has developed since the Supreme Court’s decision in Bilski v. Kappos shows us that the real world test is in fact the machine or transformation test because it offers a safe harbor. While you might have a patentable invention even if the machine or transformation test is not satisfied, if the machine or transformation test is satisfied then you have patent eligible subject matter. So patent attorneys write these patent applications so that they satisfy the strict machine or transformation test. The Patent Office has also pointed out that so far there is no example of an invention failing the machine or transformation test and still being patent eligible.

This begs the question: What is the machine or transformation test?

It is first important to understand that not every claimed method qualifies as patentable. In order for a process claim to be patent eligible subject matter it must be limited to a particular practical application. The machine or transformation test ensures that the process is not simply claiming an abstract idea, a mental process or substantially all practical uses of a law of nature or a natural phenomenon, which would preempt other uses. In accordance with the machine or transformation test, in order to be patentable subject matter the claimed process must:

1. be tied to a particular machine or apparatus (machine implemented); or
2. particularly transform a particular article to a different state or thing.

A method claim that does not require machine implementation or does not cause a transformation will fail the test and will be rejected under § 101. Thus we know that The Hartford must be pursuing a patent on something far more elaborate than a new way to sell and deliver life insurance policies.

The mere presence of a machine or a transformation is not, however, sufficient to pass the test. The particular machine tie or particular transformation must satisfy two inquiries to pass the test for subject matter eligibility. First, the use of the particular machine or transformation of the particular article must impose a meaningful limit on the claim’s scope. For example, a machine mentioned only in a field-of-use limitation would not be sufficient. Second, the use of the particular machine or the transformation of the particular article must involve more than insignificant “extra-solution” activity. Insignificant “extra-solution” activity means actions that are not central to the purpose of the method invented by the applicant. For example, saying that results would be sent via e-mail would be an example of insignificant extra-solution activity, merely added as an additional step to somehow tie an otherwise unpatentable method only vaguely to a machine.

Furthermore, with respect to transformation, one has to weigh the nature of the transformation in terms of the type or extent of change in state or thing.  For example, is there a different function or use?  If yes, that weighs in favor of patent eligibility.  On the other hand, if the alleged transformation is shifting of location from point A to point B that would weigh against patent eligibility.

Thus, it would seem that the shifting of the order to deliver life insurance as described in The Hartford press release would not be transformative under the machine or transformation test.  That would mean that in order to have a realistic change to obtain a patent there has to be some kind of computer system and architecture involved that enables the process.  But none of that was mentioned in the press release.


Warning & Disclaimer: The pages, articles and comments on do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of

Join the Discussion

2 comments so far.

  • [Avatar for Johnny Chung]
    Johnny Chung
    December 12, 2011 01:06 pm

    Please call me I have a question.

    Johnny 801-541-8817

  • [Avatar for patent enforcement]
    patent enforcement
    November 15, 2011 12:47 am

    If this “invention” is as it has been described above, then it seems to me that issuing a patent on it would be like acting as if the Bilski ruling never happened. “Abstract idea,” anyone?