Business Model of Patent Trolls Terribly Shaken as Their Weapon of Choice (Software Patents) Tackled, New Developments Emerge

Posted in America, Patents at 3:32 pm by Dr. Roy Schestowitz

Summary: A positive take on recent developments, impacting statistics in the United States, which serve to highlight the importance of abolishing software patents

IN THE previous post, the decline or demise of software patents was noted, backed by new examples. CAFC‘s introduction of software patents nearly 4 decades ago in the United States has reached a crossroad or a turning point. No longer are the weapons of patent trolls effective, unless the trolls manage to settle out of court (as is usually the case when they silently extort small companies). It’s nothing other than “protection money”, shrewdly disguised as “business as usual” or a legitimate “business model”. According to the EPO-funded IAM ‘magazine’, there is a “Big fall in US patent suit filings following pleading standards change” (they cite a respected data source which keeps track of the numbers). Remember that IAM ‘magazine’ is again, by its own admission (as was the case last year), being paid by patent trolls (sorry, we mean, “NPEs”). The alleged decline in lawsuits must be a cause of concern for these patent maximalists. It means less money for patent lawyers.

Alluding to the Court of Appeals for the Federal Circuit (CAFC), Dennis Crouch writes that it “has released an interesting new (though non-precedential) decision on patent exhaustion – in particular the court affirmed a lower court finding of exhaustion based upon a retroactive sublicense filed after the lawsuit was filed and the patents had expired. The case offers some further guidance as to how patent licenses are treated in complex mergers.”

“No longer are the weapons of patent trolls effective, unless the trolls manage to settle out of court (as is usually the case when they silently extort small companies).”This is noteworthy as it further serves to limit passage of patents for aggression before expiry (this is where a lot of patent trolling comes from).

Another noteworthy report says that Google, which is less than 20 years old (the lifetime of a patent), is hiding software patents. Jesse Drucker wrote: “More than a decade ago, Google moved a chunk of its software patents offshore as part of a Double Irish.” Slashdot is meanwhile indicating that “Google Submits Patent Application For Online Voting”. That’s very clearly and unambiguously a software patent. To quote Slashdot: “Google has outlined a concept for real-time online voting in the Google home page in a patent to the U.S. Patent and Trademark Office. Entitled ‘Social Voting-Based Campaigns in Search’, the application proposes a voting user interface (VUI) that will enable a user to submit one or more votes in a voting-based campaign, giving the hypothetical example of a campaign to vote for the ‘Top American Singer’, with users authenticated via Google log-ins. If implemented, the system would represent a new foray for Google into generating rather than recording analytics and metrics of popularity.”

“The alleged decline in lawsuits must be a cause of concern for these patent maximalists. It means less money for patent lawyers.”It will be interesting to see if some time in the future Google might choose to disseminate patents to trolls (for attacks, or weaponisation through proxies) in the same way that Microsoft gives patents to trolls which soon thereafter attack Linux (we gave several examples of this in the past), often addressing/sending the lawsuits and letters to Red Hat and Google. Some of the above news, regarding lawsuit numbers, potency of software patents and a new decision from CAFC serve to reassure us that things may be getting better faster than they get worse. But we must all be vigilant.

Alice Continues to Eliminate Software Patents in the United States and Even Microsoft Beats Some

Posted in America, Microsoft, Patents at 2:58 pm by Dr. Roy Schestowitz

Summary: An overview of some very recent cases involving software patents and situations in which the US Supreme Court’s stance helps squash them

THE US Supreme Court‘s ruling on Alice is the best thing that ever happened regarding software patents as far as Techrights is concerned. It helped stop software patents (or significantly slow them down). The 2014 ruling exceeded our expectations in the sense that its breadth touched CAFC as well (CAFC is where software patents were originally ‘born’). Every week we learn of new cases in which Alice helps crush software patents, sending a warning sign to anyone who considers patenting software or wants to sue a company using software patents.

“I think the Supreme Court is going to be pretty sick of Apple by the end of this year,” wrote this person the other day. “Apple v Samsung also may be heard by the justices,” based on this update from SCOTUS blog. Apple apparently cannot effectively compete without suing companies using software patents and design patents, which typically resemble software patents. According to this, “Samsung v. Apple appeal to the Supreme Court: petition & response are now available.”

Patently-O, a reasonably reliable source of information on these matters, has just published a useful list of SCOTUS cases regarding patents. Will SCOTUS set even a stronger precedence regarding software patents?

According to this update, “US Pat 7,072,849, Network Comm Patent Survived Alice Attack in DE” (one of the few cases where Alice does not work in eliminating software patents). Contrariwise, according to lawyers’ media (published a few days ago), “The Supreme Court’s Decision in Alice Corp. v. CLS Bank Has Taken a Heavy Toll on Patents for Computer-Related Inventions” (even patent lawyers admit the undeniable impact on software patents). To quote the opening paragraph: “The patent statue broadly defines patent-eligible subject matter as “any new and useful process, machine, manufacture, or composition of matter” and any improvements. But inventors cannot patent laws of nature, natural phenomena, or abstract ideas. The prohibition on patenting abstract ideas has caused federal courts to declare hundreds of patents for computer-related inventions invalid since the Supreme Court’s June 2014 decision in Alice Corp. v. CLS Bank. After Alice, about 70% of challenges for failure to claim patent-eligible subject matter have succeeded.”

The key part is in that last sentence. We saw even worse estimates, e.g. with over 90% courtesy of Bilski Blog. John R. Harris, a patent lawyer, noted that: “Other law firm agrees that Alice decision taken heavy toll on patents for computer-related technologies” (more specifically, software patents).

The other day another lawyers’ site wrote: “The patent attorney often faces the problem that broad claims for a class can be rejected when prior art surfaces for one of the members of the class. One strategy is to exclude those members of the class found in the prior art, and to claim the rest of the class.”

Notice how patent lawyers basically tend to work, always looking for loopholes when applying for patents and suing. Here are the patent maximalists that the EPO funds saying (just a few days ago): “Two years ago the Supreme Court opened the floodgates for attacks on computer-implemented inventions in Alice Corp Pty, Ltd v CLS Bank International. The Supreme Court set out a “two-step framework” for determining whether patents are claiming laws of nature, natural phenomena or abstract ideas, as opposed to patent-eligible applications of those concepts. Under the first step, courts must determine whether the claims at issue are directed to a patent ineligible concept, such as an abstract idea. If so, the courts must look for an “inventive concept” – that is, an element or combination of elements sufficient to ensure the patent amounts to significantly more than the abstract idea or ineligible concept itself.

“Mortgage Grader joins the post-Alice wave of cases invalidating computer-implemented inventions in various forms. The court agreed that the claims were directed to the abstract idea of “anonymous loan shopping”, and that the claims as a whole recited nothing more than the collection of information to generate a “credit grading” and facilitate anonymous loan shopping. In particular, the court noted that the series of steps covered by the asserted claims could all be performed by humans without a computer.”

The noteworthy thing right here is that a lot of the worst maximalists out there have come to grips with the fact that Alice is a game changer. There’s no point denying that as anyone who does deny it simply discredits himself or herself. To IP Watchdog‘s credit, it did foresee the impact of Alice early on (shortly after SCOTUS had published the ruling), despite dissent from fellow patent maximalists. It wasn’t long afterwards that even the Court of Appeals for the Federal Circuit (CAFC) reinforced the precedence set by SCOTUS and software patents dropped like flies.

Speaking of CAFC, Secure Web has just lost to Microsoft, as this new post written by patent lawyer indicated the other day. It’s a win for Microsoft, but a loss for software patents, which Microsoft so heavily relies on. It turns out, based on this article, that the two software patents were aimed at Microsoft’s worse spyware (in some regards Skype is the worst). To quote WIPR: “Microsoft’s Skype computer program did not infringe two patents related to data encryption, the US Court of Appeals for the Federal Circuit has ruled.

“Yesterday, February 17, the federal circuit said the US District Court for the Eastern District of Texas correctly constructed the claims in two patents asserted by technology company Secure Web Conference.”

In a sense, for a change, we are happy that Microsoft won this court case as it serves to show that software patents are a dying thing, or a bubble that’s busting, even in the Eastern District of Texas, patent trolls’ capital.

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