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02.14.16

Patents Roundup: Software Patents, Patenting Loopholes, PTAB, Patent Trolls, and Software Patents Propagandists

Posted in Patents at 5:25 am by Dr. Roy Schestowitz

One of the few things we remember Justice Scalia for…

Justice Scalia

Summary: A digest of recent news about (primarily) software patents and people who oppose or promote them in the United States

THE laws of the land are dynamic; it’s an ever-changing thing. They adapt to new societal standards and humanitarian perspectives, as well as emerging trends (such as airplanes, computing, and atomic science). Patent law landscape, like many other legal landscapes, constantly changes in lieu with court rulings, including those that come from SCOTUS. Incidentally, Justice Scalia, who has just died, once told Microsoft: “You can’t patent, you know, on-off, on-off code in the abstract, can you?” (we covered that nearly a decade ago as we interpreted that as nuanced opposition to software patents).

Software Patents Rot

“Patent law landscape, like many other legal landscapes, constantly changes in lieu with court rulings, including those that come from SCOTUS.”Today’s long article deals with some of the latest developments in the United States, where software patents — quite notably in fact (more so than the rest) — are a dying business area. The same cannot be said about hardware patents. Earlier this month, for example, we once again learned how “Nvidia claimed that Samsung Galaxy phones and tablets containing Qualcomm’s Adreno, ARM’s Mali, or Imagination’s PowerVR graphics architectures all infringed its patents on core GPU technologies.”

Samsung, which has a large trove of patents of its own, launched a counterstrike and lost. Compare this to the OpenTV case which we recently covered. It showed patents on software falling flat on their face. Here is another new article about the OpenTV case. It describes the patent in question as follows: “The ‘081 patent focuses on expediting program-to-program accessibility for programs that require credentials for access. Accordingly, the 081 patent discloses storing additional permissions in an interactive TV application that can access other applications. An example embodiment included an application for processing a credit card transaction used in the context of a shopping application.”

Software Patents Disguised as Hardware

“Some companies get away with patenting software by misleading examiners and courts, characterising software as hardware, or a combination thereof.”The above is quite clearly too abstract a patent. This is a software patent. Courts wouldn’t tolerate it. Some companies get away with patenting software by misleading examiners and courts, characterising software as hardware, or a combination thereof. Microsoft even bragged about doing this. Apple is now being sued with such patents. To quote a new article, “Apple rolled out 3D Touch last year for the iPhone 6s and iPhone 6s Plus after introducing a similar Force Touch feature with the Apple Watch. However, one firm claims it’s been working on the same technology for 20 years and has the patents to back it up. Now it’s taking Apple to court.” Consider this new press release titled “PacStar® Receives Hardware and Software Patent Awards”. When technical employees of a company are unable to do their work because of software patents and liability everywhere (impossible to keep track of patents in one’s area because of their vast number) one has to wonder if software patents ever do any good to innovation. Irrespective of the domain, patents provide a sort of protection, but in some domains the patents do a lot more damage (overall) than good.

The Patent Trial and Appeal Board (PTAB)

PTAB has been getting a lot of press recently. IAM, for example, noted in relation to what it dubbed dark IPRs: “Those rates have dropped off since the early talk of “patent death squads” at the Patent Trial and Appeal Board (PTAB), but there’s no doubt that the new review procedures have re-shaped the litigation dynamic for patent owners and alleged infringers in a way that few expected.”

From patent maximalists such as IAM it should not be surprising to see those who treat patents harshly characterised as “patent death squads”. We mentioned this before.

“Apple is the top petitioner at the PTAB,” Patent Buddy noted the other day, “with 228, 111 of which were filed in 2015.”

“This is an example of patents when used for protectionism, price fixing, etc.”Here is another very recent article which mentioned PTAB as follows: “A federal court has upheld a previous ruling by the Patent Trial and Appeal Board, declaring Stan’s NoTubes’ U.S. Patent Number 7,334,846 to be valid. The patent protects technology used in Stan’s rims ZTR rims, sales of which exceeded 350,000 between 2004 and 2011.”

“You just wonder how Stan could get a patent over such rim design,” Benjamin Henrion wrote before he asked them for more information (they apparently provided none). There’s some new evidence in Dennis Crouch’s blog that patent ‘fraud’ can cost dozens of millions of dollars in damages. A lot of patents at the USPTO are utter nonsense (we’ll get to that later). “How crazy patent law is,” wrote Pranesh Prakash, “especially in the USA,” is illustrated by this news he highlighted. It’s about Lexmark, which Dennis Crouch’s blog covered as well. This is an example of patents when used for protectionism, price fixing, etc.

“In the UK,” this recent analysis stated, “a party who receives unjustified threats that they will be sued for infringement of a patent, trade mark or design right has a statutory right of redress.” Would the EPO guard such rights? What about the UPC?

“It is rather revealing that patent lawyers are rather afraid of the PTAB, which they compare to a “death squad”. The negative connotation serves as somewhat of an insult to PTAB’s role.”Returning to PTAB and the US, MIP recently published an article (behind paywall) which was summarised as follows: “Scott A McKeown discusses three important Patent Trial and Appeal Board cases that addressed the important issue of estoppel, and looks ahead to this year with the Federal Circuit continuing to work through appeals and the Supreme Court set to rule on Cuozzo”

Dennis Crouch’s blog wrote a couple more posts about PTAB [1, 2]. In the first one Michelle Lee’s role is mentioned as follows: “The Patent Act includes a number of roles of the USPTO Director, including issuing and rejecting patents[3], making copies of patent documents, classifying patents, etc. The Director does not personally make these decisions, but delegates them to the Commissioner for Patents and other PTO employees. That structure is usual for administrative agencies and also highlighted by the statutory structure.[4] Both the commissioner and the “other employees” are – by statute – placed into the role of general management and duties.”

“This isn’t a system optimised for progress but for lack of change.”Jason Rantanen later wrote on “Strategic Decision Making in Dual PTAB and District Court Proceedings”.

It is rather revealing that patent lawyers are rather afraid of the PTAB, which they compare to a “death squad”. The negative connotation serves as somewhat of an insult to PTAB’s role.

Who Benefits?

In the US, especially nowadays, people fret and small business feel paranoid about patent trolls (these can and sometimes do cause bankruptcies) whilst large companies bicker over software patents to manage and secure monopolies in their field/s of operation. This isn’t a system optimised for progress but for lack of change. Patents throttle or pace it down. Who benefits other than patent lawyers and big businesses with full-time patent lawyers (among their regular staff)?

“I’ll pause here to suggest that Adobe got away with something here,” another post from Dennis Crouch’s blog stated. “It is unbelievable to me that Adobe’s counsel did not know of the published application – the sole child application of the patent that was the subject of an infringement lawsuit.”

“Who benefits other than patent lawyers and big businesses with full-time patent lawyers (among their regular staff)?”Adobe is one of those large corporations which hoard software patents and guard their area of operation using patents (to keep Free/Open Source software away or at bay).

Patent Trolls

Only one kind of entity other than large corporations can benefit from software patents. This entity is parasitic. “Patent Trolls Target Nearly 50 Connecticut Businesses, Filing Suits in Friendly Texas Court” was the title of a recent article. “Over 50 MO businesses have been sued by patent trolls in the Eastern District of TX,” this one person said. The article quotes a victim as follows: “I know firsthand how detrimental patent trolls can be to small businesses, as my Connecticut small business was recently the victim of abusive patent litigation in which bad patents were used as weapons of financial intimidation against my small business. $100,000 in legal fees and ten months of litigation later, we successfully defended against these frivolous lawsuits, explained Michael Skelps, General Manager of Middlefield-based Capstone Photography recently in a published report.”

It is worth remembering and making a mental note of the fact that software patents are only truly enjoyed by patent trolls, large corporations, and their patent lawyers. It’s a tax on everything and it leaves about 99% of society just passing money to that (less than) 1% which is patent trolls, CEOs (or other high management, including shareholders), and lawyers specialising in patents.

A Case Apart: Software Patents Propagandists

The patent maximalists of IP Watchdog talk about ‘consumerism’ with patents, or the sales of patents as though they are physical products. Well, they typically defend patent trolls, so in a way it makes sense. Patent trolls in the United States typically use software patents. The impact of these practices don’t matter to patent maximalists, except as they pertain to their income as mediators or middlemen. Based on my conversations with the founder, Quinn, who keeps promoting software patents, he has very poor comprehension of how computers work (cannot tell the difference between code and data for instance), but nonetheless wants more patents on computer programs.

“It’s a tax on everything and it leaves about 99% of society just passing money to that (less than) 1% which is patent trolls, CEOs (or other high management, including shareholders), and lawyers specialising in patents.”To quote the above post from these guys: “We have been tracking the market since 2009 and have a database of nearly $7 billion of available patents, and we have tracked about $2 billion in patent sales.”

Now they’re meeting personally with the head of the USPTO (Michelle Lee), as reported here recently, thus becoming somewhat of a mouthpiece for the USPTO and its self-serving agenda. It’s sad to say that the USPTO has no incentive to address and resolve such issues.

The Donald’s Trump ‘logic’ of blaming China for everything is further amplified by Quinn, who links to the lobbyists’ press. A similar angle is being used by IAM, which has just written to say: “Over the course of the dispute, the ITC has slapped import bans on four models of BMC face mask, while a German court has also ordered several of the Chinese company’s models off the market.”

“Looking at the type of people who write for IP Watchdog these days, it clearly became some sort of biased cesspool of patent lawyers — people without a clue when it comes to technology.”Quinn and patent maximalists don’t like Sanders because rather than knock China for “knockoffs” he has been quite consistent with his patents-hostile rhetoric, especially when it comes to medicine.

Looking at the type of people who write for IP Watchdog these days, it clearly became some sort of biased cesspool of patent lawyers — people without a clue when it comes to technology. The other day they published a piece by Louis Hoffman, who describes himself as “a patent attorney licensed to practice law [...] Louis J. Hoffman, P.C., now known as the Hoffman Patent Firm.”

Hoffman is bemoaning and chastising SCOTUS for its decision on Alice. Watch how propagandists for software patents shamelessly spin the strength as a weakness. Even the headline says “The USPTO harms the economy with over-aggressive, haphazard Alice-based 101 rejections” (actually, these rejections are good news, except for patent lawyers).

“At this stage, more so than ever before, patent lawyers are just desperate to convince people (especially clients that give them money) that software patents are not dead/dying in the USPTO (or in various US courts that issue judgments).”The patent quality recalibration is good news for businesses in the US as it’s actually serving to restore some quality control, after the number of patents granted (per year!) nearly doubled because of declining examination standards. The USPTO only reluctantly changed its practices; watch how, over at Twitter, it sort of spread lies with its joke about obviousness; everything you send USPTO with a wad of cash is “non-obvious” nowadays. This ought to change, starting with software patents (which at the current pace may one day occupy the lion’s share of granted patents, unless they’re stopped at a categorical level). As Henrion put it, “you miss the subject matter test. On purpose?”

At this stage, more so than ever before, patent lawyers are just desperate to convince people (especially clients that give them money) that software patents are not dead/dying in the USPTO (or in various US courts that issue judgments). They are, in essence, misleading their clients. They give them poor advice, maybe willfully. Watch this new article titled “Still Alice: Not all software patents are being invalidated under Alice Corp. v. CLS Bank Int’l” (well, the large majority of them are being invalidated).

“We now have a new example where patent lawyers are reaching out to patents that are not software patents to make software patents look legit.”It doesn’t matter if a few (maybe a handful of) patents survived the Alice test in a court of law. Many are being invalidated (here are some statistics which suggest well over 80% get invalidated) and that’s enough to devalue them, discourage applications, deter against litigation, etc.

We now have a new example where patent lawyers are reaching out to patents that are not software patents to make software patents look legit. Here is one new example where a proponent of software patents (a patent attorney of course) uses an example which he even admits isn’t a software patents.”The invention considered by this US decision,” he admitted, “relates to signal transmission rather than software, as such. It does, however, require the application of a mathematical concept just as many software patents do, and so is highly relevant to software patents.”

Well, but it’s not a software patent, is it?

The EPO-Funded IAM ‘Magazine’

“IAM is funded by patent trolls in the sense that it organises pro-trolls events, with funding that comes from some of the world’s most notorious patent trolls.”Going back to IAM, here they are gloating or bragging about rise in patent litigation. When patent lawyers celebrate litigation (it is undeniably on the rise in patent cases, hence more income for the lawyers) one should remember their vested interests. This one particular site, IAM, is now being paid to promote the UPC as well (more lawsuits with higher damages). Even the EPO pays for this bias. “If you work at an NPE,” another new IAM article stated, “please click here to complete your survey.”

“NPE” meant patent troll. IAM is funded by patent trolls in the sense that it organises pro-trolls events, with funding that comes from some of the world’s most notorious patent trolls. Here we see the EPO-funded blogger pretending that SMEs should worry about lack of EPO advice. The EPO-funded IAM speaking about EPO is always a good laugh. There are much worse issues for European SMEs to worry about and the EPO is not their friend, not by a long shot. In some of their other articles, IAM bloggers mention patent thickets on devices (many of which use Linux, some BSD) and rank companies in terms of the number of patents they have (a misguided yardstick). To quote the latest such example: “South Korea’s conglomerates own some of the world’s largest patent portfolios. MDB Capital research published in issue 72 of IAM ranks Samsung Electronics’ portfolio in 1st place in terms of active US assets, with fellow Korean entities LG Electronics, SK Hynix, LG Display and ETRI also featuring among the top 100. Hyundai Motor’s portfolio comes in at 137th place and is also marked out as one of the top 20 fastest-growing portfolios, with a year-on-year compound annual growth rate in application filings of 24%.”

“Companies that spend much of their time (and budget) chasing patents will achieve little and pass a lot of wealth to patent lawyers, not R&D.”The gold rush for patents misses the point. As litigation against Samsung continues to show (see the example above), having many patents of ones own does not guard against bans imposed by the ITC, for instance. Companies that spend much of their time (and budget) chasing patents will achieve little and pass a lot of wealth to patent lawyers, not R&D.

Patent Lawyers and Maximalists: A Trojan Horse in Europe

IAM isn’t the only culprit here. Marks & Clerk, a contributor to the EPO-funded, pro-UPC propaganda in the US this month (paying the likes of IAM, which is similarly UK-based), serves as EPO megaphone and says: “Oppositions at the EPO provide an effective way of mitigating disadvantageous patent grants. However, although effort should primarily be spent focusing on argumentation, it is also important to avoid clerical errors before submission. One error that can occur, particularly when an opposing party has multiple divisions and/or subsidiaries, is inconsistency between documents with regards to the name of the opposing party.”

“We sure hope that Europe won’t follow the footsteps of the US when it comes to patents.”John Alty (UK-IPO) has expressed his interest in Google patents that cover little more than driving a truck (but by a computer). It’s quite telling that some people in the UK wish to emulate the US system, but these people are in the patent ‘business’. The London-based IP Kat has just promoted a book whose title contains the misleading propaganda term “intellectual property” (comparing patents to objects) and the Switzerland-based (but English-speaking) IP Watch published this article which was titled “Year Ahead In Biotech IP: Patents On Plants Under Fire, Biopharma Introspection, Plant Treaty Fund” and now (after a rewrite) is titled “The Year Ahead In Biotechnology And Intellectual Property”. It alludes to EPO patents on plants, which are not popular in Europe. This serves to demonstrate Europe’s growing trend of patent maximalism (to game the numbers and show expansion where there’s none that’s actually concrete).

We sure hope that Europe won’t follow the footsteps of the US when it comes to patents. The US seems to be withdrawing or moving away from software patents. It all boils down to a SCOTUS ruling.

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A Single Comment

  1. stites said,

    February 14, 2016 at 3:34 pm

    Gravatar

    The death of Justice Scalia leaves the U.S. Supreme Court with 4 liberal justices and 4 conservative justices. There will now be a political fight in the U.S. over appointing a successor to Justice Scalia.

    The President will nominate a candidate to replace Justice Scalia. President Obama will almost certainly nominate a liberal. The candidate must be confirmed by the U.S. Senate which is currently controlled by the Republicans. The Senate will almost certainly delay the confirmation until January, 2017 when a new president will take office in the hopes that a Republican will win the presidential election in November.

    There are several issues in the U.S. where the political leanings of the new appointment are very important. But software patents are not one of those issues. The Supreme Court in the past has not hewed to ideological lines when deciding patent issues. Indeed they decided Alice with a 9 – 0 vote.

    So I don’t think that the U. S. Supreme Court being ideologically split 4 – 4 for a year and then either being majority liberal or majority conservative in 2017 will make any difference on software patent issues.

    ——————————–
    Steve Stites

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