07.21.10
Patents Roundup: RPX Grows, Netflix Issues a Patent Challenge, More on In Re Bilski
Summary: Potpourri of software patent news from the past week and a half (focused on the United States)
HAVING taken a break for a while, a lot of patent news piled up. Here are the important bits of information from the United States:
• Association of Press Release Distributors, LLC (“Association of Press Release Distributors, LLC fight against #swpat on publishing press releases on websites,” emphasises Rui Seabra)
There are hundreds of press release distribution companies. Most exist with little to no interaction with each other in their industry. That ends today.
• RPX Client Network Grows 150% in Six Months (see our Wiki page about RPX)
The new clients include global electronics companies NEC Corporation and Hitachi, Ltd.; infrastructure software provider Novell, Inc.; semiconductor manufacturer Nanya Technology Corporation; software developer Lawson Software, Inc.; wireless voice and data solutions provider Leap Wireless International Inc.; speech-recognition leader Nuance Communications, Inc.; and the world’s largest bookseller, Barnes & Noble, Inc.
• Netflix Tries to Fix One Part of the Patent System
There’s a very interesting case, Media Queue v. Netflix, where Netflix is asking the Federal Circuit to revisit the standard for awarding attorneys’ fees. Here’s their appeal brief [PDF]. It would like the court to create parity between plaintiffs and defendants. Right now, the system tilts to help plaintiffs recover their fees if willful infringement is demonstrated, which is fairly easy to demonstrate. But defendants wrongfully sued have little hope of success when asking that their legal fees be covered, unless they can prove the claims were objectively baseless or brought in bad faith, a mighty high bar to get over. Netflix would like to change that to allow district courts to have discretion to award attorneys fees when folks bring litigation unlikely to succeed.
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Netflix, in short, is asking the court to think about defendants who are attacked with very weak patents, and who then are more or less pragmatically forced to settle rather than fight, just because it’s cheaper. If they can’t get their attorneys’ fees paid, what in the world makes them whole? Netflix says Media Queue is “a non-practicing entity,” which is the polite way to call such entities. Setting an “objectively reckless” standard is a lower bar than proving frivolity or bad faith, and Netflix seems to be of the opinion that patent holders with weak patents are over-incentivized to bring questionable and very costly litigation, knowing they are unlikely to have to pay their victim’s attorneys’ fees, which can typically be in the millions.
• NTP Keeps On Making The Case For Patent Reform As It Sues More Companies
• Company suing eBay for $3.8B: eBay “unfairly stole the idea” of e-Payment systems
Another day, another major lawsuit. This time, a company called XPRT Ventures LLC has sued eBay for allegedly stealing “the idea and method of payment used in eBay’s PayPal and similar electronic payment systems” according to the press release put out by the XPRT’s lawyers Kelley Drye & Warren LLP.
• Write Brothers, Inc. Celebrates a Decade at Comic-Con International 2010
Write Brothers currently holds three software patents. It holds two for the Dramatica® story assistant, and one for the timeline-based presentation of text used in the StoryView™ outlining software. Streamline is the fourth technology patent Write Brothers has filed.
• Microsoft will offer test versions of Dynamics CRM in September
Microsoft biggest competitor in this arena is Salesforce.com, which sells a Web-based software service for customer relationship management. The two companies are currently suing each other over software patents.
There is still a lot of new coverage about the Bilski case:
• The silver lining in the Bilski decision isn’t where most people believe (“Florian Müller” warning — he is sometimes misguided in his targeting of issues)
About two weeks ago the Supreme Court of the United States (SCOTUS) handed down its opinion in re Bilski, a business method patent case. The patent application was rejected, but in a way that didn’t draw any kind of line that would affect patents on software technology.
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Let’s better face this fact: there isn’t a single killer argument against software patents that will convince a non-programmer if that same counterpart has also heard the pro-patent argument. If you can ever convince a majority of decision-makers, you’ll have to do it indirectly. The direct approach has been tried by many people for many years — to no avail (except, as I mentioned before, in a defensive situation).
• Patent Litigation Weekly: Eben Moglen on Bilski, Software Patents, and Big Pharma
Moglen’s position on the subject of software patents—that they should be banned—is, to say the least, outside the mainstream in legal circles. It has, however, garnered support among software developers and other techies, especially those who work in the world of open-source and free software.
Moglen’s critique of the patent system extends well beyond the software issues he writes about, however. He suggests, for instance, that the 20-year monopoly granted by a patent is the product of a bygone era. And though he rejects the notion that he is “anti-patent,” he says that the patent monopoly grant should be subject to a rigorous cost-benefit analysis, not simply handed out at the “monopoly window” that he believes the current Patent and Trademark Office represents.
• Sanity From the 1st Post-Bilski Decision from BPAI: In Re Proudler
Look at this, will you? The first decision from the Board of Patents Appeals and Interferences post-Bilski to reference that US Supreme Court decision, in In Re Proudler [PDF], a ruling rejecting HP’s application for a software patent, setting forth a rule stating, as I read it, as saying software is not patentable because it’s an abstraction:
Laws of nature, abstract ideas, and natural phenomena are excluded from patent protection. Diamond v. Diehr, 450 U.S. at 185. A claim that recites no more than software, logic or a data structure (i.e., an abstraction) does not fall within any statutory category. In re Warmerdam, 33 F.3d 1354, 1361 (Fed. Cir. 1994). Significantly, “Abstract software code is an idea without physical embodiment.” Microsoft Corp. v. AT&T Corp., 550 U.S. 437, 449 (2007). The unpatentability of abstract ideas was confirmed by the U.S. Supreme Court in Bilski v. Kappos, No. 08-964, 2010 WL 2555192 (June 28, 2010).
This is not the last word, I’m sure, as HP can certainly try to reword. But don’t you find this encouraging? I do. And that’s why I wanted it in our permanent record of the Bilski case and its aftermath.
• First Post-Bilski Patent Appeals Ruling Rejects Software Patent (Bilski precedence is already killing patents)
Well, well, well. Following the rather ridiculously vague Bilski ruling, that doesn’t actually say what the right test should be for whether or not business methods or software should be patentable, many people have been wondering what it really means. While some of the justices have hinted at the idea that most software really isn’t patentable, that’s not at all clear from the ruling. Instead, the ruling suggests that the courts come up with a new test, and then the Supreme Court will tell them whether or not that new test is okay. Many software patent system supporters have interpreted this to mean that software patents are perfectly okay. But perhaps they shouldn’t go that far just yet.
One of the first decisions post-Bilski has shot down an appeal of a rejected patent application by HP. The patent-examiner had rejected the patent on the grounds of prior art (It’s mostly AND applied to rules for passing data…) but the appeal-board rejected the claims on the grounds of non-patentability
• From the Editors: The Supreme Court’s road not taken
• Bilski patent ruling will increase costs of doing business, says expert
• Bilski, Business Method Patents and the Uncertainty Principle
• Bilski: One Step Forward… Two Steps Back
• Inventors Given Hope on Patents for Business Methods
• Software, pharmaceutical, and business method patents survive
• A Close Call for Silicon Valley
• Death Knell For Software Patents
• United States: The Long-Awaited Bilski (In) Decision
• [Ben Klemens on] Bilski and software patents
• Should software be patentable?
It seems to me that the concept of certain generic sorts of software patents could well be made redundant thanks to the growth of open source, while remaining for specialist applications that have a technical purpose.
• Patent Office Says No to Supreme Court and Software Patents
• Startups and University Research: Too Much Emphasis on Patents?
When the Supreme Court ruled last month on the Bilksi case, denying Bilski’s patent claim that Bilksi’s patent but not making any real statements on the overall patentability of business methods or software, several opponents of software patents, including VCs Jason Mendelson and Brad Feld expressed their disappointment.
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The study surveyed over 11,000 professors, and of the 1948 who responded who had started businesses, only 682 – about a third – had established them to exploit the patents obtained via the university intellectual-property systems. The remaining 1266 respondents had started businesses based on non-patentable knowledge.
Software patent advocates are praising the said decision of the Supreme Court like Tom Syndor saying that the Supreme Court was sensible in rejecting the said idea. A new layer and era of patent decade will help in requiring patent applicants to present plaintiffs to prove that their ideas are not abstract.
Paul Kedrosky’s article “Software Patents Need to Be Abolished” has spread further (also published in other places with Brad Feld, who is a critic of software patents [1, 2, 3]). █
