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10.12.15

Many New Losses for Software Patents in the US, Courtesy of Alice Case/§101

Posted in America, Law, Patents at 4:59 am by Dr. Roy Schestowitz

Defeatism or learned helplessness increasingly unjustified in the fight against software patents

Eye in the sky

Summary: The United States’ supposed leadership in software patenting grinds to a halt as more software patents simply die in the courtrooms and patent lawyers try hard to overcome this new debacle of theirs, usually by misleading current and prospective clients

COMPANIES that are consciously — as matter of strategy in fact — patenting software usually patent everything in bulk. A handful of patents would just be ineffective, unless one is a patent troll (i.e. lacking any real products) or plans to sell the patents to a patent troll somewhere along the way (e.g. bankruptcy). There is no one patent for every single program or — put another way — there is no one-to-one correspondence between a component in a program and a single patent. Think of poetry and ponder the equivalence involving a program’s components and verses (or paragraphs). Software is, by its very basic nature, quite suitable for copyright assignment (not at a binary level) but not for verbal descriptions asserting a monopoly over a mathematical (implemented and executed by a machine) idea. In practice it means that in order for a company to effectively use software patents (offensively) it needs a huge pile of software patents — much bigger than those of its competitors. Suffice to say, such a state of affairs favours and inevitably benefits vast companies such as IBM. No small software company can sue IBM over software patent infringement because IBM, in response, can sue with far greater a number of patents, covering an almost infinite number of software that can conceivably be created. It’s shameless stockpiling that makes up deterrence. People who have actually looked into pertinent software patents will probably know why; they’re so vague and often so trivial that almost every simple program can infringe on thousands of patents (some patents may already be expired, inferring woes for past generations and possibly planned retardation of science and technology).

“No small software company can sue IBM over software patent infringement because IBM, in response, can sue with far greater a number of patents, covering an almost infinite number of software that can conceivably be created.”Thankfully, courts in the United States have not lost sight of last year’s SCOTUS ruling — an important and very widely-referenced ruling which determined that abstract software patents (that’s a lot of them!) have no room in the system. Not only has that discouraged filings of new software patents and lawsuits; it also helped invalidate existing software patents which, once brought forth litigiously (even defensively, in response to offensive action), were subjected to lengthy challenges in courts, whereupon they stood little chance of surviving (statistically-speaking, so far). Today we present some new examples that we have been gathering over the past 4 weeks. We will start, however, with a cautionary tale or two. It is largely reactionary as we still see misconceptions about patents in the mass media.

The Mirage of ‘Defensive’ Software Patents

The Alice Case/§101 has already shut down many cases involving software patents, but not everyone caught up with the news. Some companies carry on pursuing software patents. Bank of America, for instance, is patenting software [1, 2, 3, 4, 5, 6] pertaining to cryptocurrency, such as Bitcoin.

“Does Coinbase really think it can take on Bank of America when it comes to patent battles?”Coinbase, a Bitcoin company, is already patenting software too (applying for nine patents at the moment) although according to this article: “The CEO went on to say that while he does not personally believe in software patents, the company would invest effort in ensuring it would “play nice” while navigating the realities of the patent space.”

Does Coinbase really think it can take on Bank of America when it comes to patent battles? Who would be bankrupted first due to quickly-amassing legal fees? Which side would have more leverage in a court of law? Patenting of software is the core issue; the solution to it isn’t acquiring more patents of one’s own.

“We continue to protect our freight tracking software with new patents,” said this statement some weeks ago, from a company which is apparently hoping it can block competition using software patents. Has it not heard the news about the status of software patents in the US? Has it considered hypothetical scenarios in which this patent can actually help the company? Is this patent just purely for marketing/posing (as is often the case these days)?

“These examiners put aside science for the sake of business-minded considerations.”Misguided USPTO examiners will no doubt continue to issue some software patents, in order to increase their profits (quantity rather than quality). By rushing their job (not properly reviewing the applications and searching for prior art) they actually increase income rather than compromise their income (rewarded for doing a poor job as opposed to a proper job). These examiners put aside science for the sake of business-minded considerations. They operate in somewhat of a business now, and they treat other patent offices as “competition”. The EPO has had the same problem in recent years and it even prioritised large applicants (discrimination by design), disgracing the very foundations of this overly glorified occupation.

The USPO still glamourises monopolies (patents) in a bunch of recent articles in which the sheer number of patents is publicly boasted, as if the more patents get granted, the merrier (irrespective of the quality/thoroughness of an examination job). China has a huge number of patents (probably the most granted per year in recent years), but that doesn’t mean that China is at the forefront of innovation. To quote one article: “The US Department of Commerce’s United States Patent and Trademark Office (USPTO) launched PatentsView(link is external), a new patent data visualization platform. The PatentsView beta search tool allows members of the public to interact with nearly 40 years of data on patenting activity in the United States.”

It does not really say much except lenience in acceptance of applications. Consider the fact that about 92% of US patent applications eventually reach "success" (granted). It’s nothing to brag about, it highlights the poor quality of these patents and the USPTO’s incompetence (if not corruption).

“Consider the fact that about 92% of US patent applications eventually reach “success” (granted).”Courts, unlike the USPTO, don’t earn any less or any more based on the validity of patents. They usually just do their job and each time a patent gets re-examinated (and usually then trashed after a court’s intervention) it serves to discredit the USPTO. Below are recent examples of this.

Video-On-Demand Patent Killed by Alice Case/§101

Earlier this month we learned from this post that the famous “pen and paper” analogy was used to invalidate (or in the process of invalidating) a software patent. Here is the core of the story: “The court granted defendant’s motion for summary judgment that plaintiff’s video-on-demand patent was invalid for lack of patentable subject matter and found that the claims were directed toward an abstract idea. “Plaintiff briefly complains that Defendants’ descriptions of the patent claims are ‘oversimplifications,’ but it does not delineate what, if anything, Defendants leave out. . . . [T]he patent claims the concept of ‘using the same hierarchical ordering based on metadata to facilitate the display and locating of video content.’ To do so, the patent exploits matches between hierarchical identifiers – uploaded at one end of the process as metadata, and read at the other end to display listed videos – in order to facilitate the automatic [electronic program guide] listing of videos sent to cable companies by outside publishers. . . . Even though the [patent-in-suit] anticipates that its steps will be performed through computer operation, it describes a process that a person could perform ‘[u]sing a pen, paper, and her own brain.’””

Signal Transmission Patent Killed by Alice Case/§101

“Another signal transmission patent [was] held invalid under 101/ Alice,” Patent Buddy noted, linking to this analysis (same blog as above). To quote: “The court granted defendants’ motion for judgment on the pleadings that plaintiff’s signal transmission patent was invalid for lack of patentable subject matter and found that the patent was directed toward the abstract concept of translation. “Plaintiff argues that the claimed invention is not directed to an abstract idea because it addresses a problem that ‘specifically arises in the context of communication networks due to the presence of incompatible devices and formats.’. . . This problem, however, does not ‘specifically aris[e] in the realm of computer networks,’ and the solution is not ‘necessarily rooted in computer technology.’ Incompatible communication types have existed since before the emergence of computers and the Internet. Translators have been used for centuries to facilitate communication between individuals who speak different languages. The translator receives a message in one language, translates it into another, and delivers the translated message. Here, the claims require a computer system that receives a payload in one media form, translates it into a different media form, and delivers the translated payload. This is no different than the function of a translator.”

“Courts, unlike the USPTO, don’t earn any less or any more based on the validity of patents.”Take note of the punchline, so to speak. “This is no different than the function of a translator.”

eDekka Lost to 84 Defendants Thanks to Alice Case/§101

“Notorious Patent Troll, eDekka,” wrote Patent Buddy, “Lost Patent and 84 Defendants with one Alice/101 Kill” (cited case).

This has also been covered by Joe Mullin, who wrote: “The most prolific patent troll of last year, eDekka LLC, has had its patent wiped out. The ruling (PDF) will shut down 168 lawsuits that eDekka filed based on US Patent No. 6,266,674, according to Texas Lawyer, which first reported the ruling.

“The ruling comes from a surprising source: US District Judge Rodney Gilstrap, the East Texas judge who has been criticized for making life extra-difficult for patent defendants. Gilstrap, who hears more patent cases than any other US judge, will eliminate about 10 percent of his entire patent docket by wiping out the eDekka cases.”

“Patent profiteers try to sell the impression that all is fine and dandy for software patents.”Over the weekend it was mentioned here too, with the author saying that there is a lot of public interest in the outcome (many victims, hence widespread concern).

Sole Survivor of Alice Case/§101

We only know of one case where a patent seemingly withstood challenge from Alice Case/§101 in recent weeks. This is about US patent number 6,963,859 and it’s quite a rare case where software patents are successfully defended in court. Patent lawyers, understandably, always latch on to such rulings and hype them up (endless jubilation and repetition). Patent profiteers try to sell the impression that all is fine and dandy for software patents. They are cherry-picking for their desired bias.

Let’s look at what patent lawyers have had to say about the status quo in recent weeks.

What Patent Lawyers (Profiteers) Are Saying

“Maybe they would rather not pay attention or remain in denial over the facts, or the statistically-meaningful number of rulings against software patents since Alice (2014).”The spin from patent lawyers is very much expected. Asking them about the situation here is like asking companies which manufacture weapons about the state of war (or peace) in some countries where weapon sales are imminent, possible, or at risk. Patents are the armament equivalent in the field of patent litigation.

“Value of software patents has fallen by 80% since SCOTUS decisions in Mayo and Alice,” wrote one ‘IP’-centric account at IPO Annual Meeting (#IPOAM15). Another, from IAM's patent maximalists, said: “No surprise that it’s standing room only for #IPOAM15 session on software post-Alice and Oracle” (the case of Oracle has been covered here too).

In short, patent lawyers try to deny the importance of Alice. There are some exceptions to this, but they are few. Here we have “Hawley Troxell partner Brad Frazer, with contributions from Hawley Troxell Patent Group Chair Phil McKay and patent attorney Allison Parker,” going with the dramatic headline “Software patents are dead! Long live software patents!” The article is in fact in favour of software patents and claims that they are far from dead. Here is the punchline: “So the next time you hear or read that software patents are dead because of Alice, think of young King Tommen and remember that a good experienced software patent attorney can still do much to obtain patent protection for your software-based inventions.”

“It’s sometimes referred to as cognitive dissonance.”It doesn’t seem as though they have been paying attention. Maybe they would rather not pay attention or remain in denial over the facts, or the statistically-meaningful number of rulings against software patents since Alice (2014). It’s sometimes referred to as cognitive dissonance.

Here we have proponents of software patents who are also patent lawyers admitting (in the headline even) that “Statistics show Alice PTAB interpretation not favorable to patent applicants”. To quote some relevant parts: “The United States Supreme Court is commonly known to resolve difficult issues of law. Yet, Alice v. CLS Bank[ii], last year’s unanimous Supreme Court decision, has caused confusion about whether computer-implemented business methods and software innovations are patentable under 35 U.S.C. §101. The question of patentability of software-related innovations – even those involving merely implementations of business-related innovations – seemed settled after State Street v. Signature Financial[iii], the Court of Appeals for the Federal Circuit’s 1998 decision[iv].

“After State Street, the U.S. Patent & Trademark Office (USPTO) granted thousands of patents related to computer-implemented business methods and software.[v] Simultaneously. America experienced an explosion of growth in e-commerce, Internet, and mobile phone technologies. Nonetheless, without even mentioning the terms “business method” or “software,”[vi] Alice has upended the understanding that computer-implemented business method innovations and software innovations are patentable under §101. One veteran litigation attorney starkly stated that the decision left us with the question of “[a]re software patents dead?”[vii] The Federal Circuit’s decisions after Alice have not provided much clear guidance to answer this question.”

“To say that software patents are as potent as ever before is to shamelessly lie.”The author says that the USPTO “granted thousands of patents related to computer-implemented business methods and software.” But how does the number relate/compare to previous years? There was a reported slowdown in litigation, application, etc. To say that software patents are as potent as ever before is to shamelessly lie.

Seyfarth Shaw LLP (patent lawyers) decided to come out with a gross dichotomy that frames secrecy and software patents as very much necessary. What about copyrights? They are not even mentioned before therein no lawyers fees are likely to ever materialise/emanate. To quote the lawyers-like language: “There are many ways to obtain intellectual property protection for software creations. Many keep the software code confidential and maintain the software as a trade secret. Others seek patent protection on the software, which discloses the higher-level concepts surrounding the software without explicitly publishing the source code. Recent changes in patent law have changed what types of software inventions are patentable and the requirements for obtaining such patents. However, the evolution of the law has been ongoing for quite some time.”

What about copyrights? They just pretend that it does not exist. How convenient. Gross propaganda terms like “intellectual property” are used instead.

“Parasitic, self-serving elements (or Hubris) in any patent system are ultimately its Nemesis.”IAM’s own patent maximalists (patent lawyers who profit from it) accept that software patents are now besieged by courts, albeit not in the USPTO. We mentioned the reasons for this earlier on. This is an institutionalised conflict which needs to be overcome by structural changes. Both the USPTO and patent lawyers profit from the injustice of dealing with bogus patents. Technical people are the ones whose personal wealth will be afforded and wasted. IAM uses the word “uncertainty” to say invalidity — the same word that other patent maximalists use (“Uncertainty is Where Patentability Resides”). Why are patent lawyers and lobbyists of software patents so eager to associate bogus patents with uncertainty? Is that really what they mean to say? That’s like saying that only in case of error or bad decisions will software patents be granted right now. It’s almost like admitting that they are trying to fool, game, and maybe even corrupt the system. Some cynics would nonchalantly say that this is what they indeed do; it’s their job and this is what they’re paid for. Parasitic, self-serving elements (or Hubris) in any patent system are ultimately its Nemesis.

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