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02.29.16

Why the US Political Debate About Patent ‘Reform’ is Still Deficient and the Legal System Probably Broken Beyond Repair

Posted in America, Patents at 9:37 am by Dr. Roy Schestowitz

When the Establishment serves Power rather than Justice

Trump with supporters
Photo credit: Evan Guest, licensed under the Creative Commons Attribution 2.0 Generic license.

Summary: As the number of patents granted by the USPTO doubles (in just a few years), lawsuits leap through the roof, small businesses are severely harmed, and the political debate, the corporate media, the patent office and so on are all controlled by predators whose interests align with patent lawyers, patent lobbyists and their large clients (multinationals)

THE USPTO is the world’s most dominant patent system. It issues patents on software even though it’s becoming much harder a thing to enforce in a court of law, especially after Alice. Patent lawyers are still trying to undo or reverse Alice because it hit them where it hurts: patent scope.

Longing for Scalia/GOP Influence

Pro-patents (or patent maximalism) Web sites bemoan what they call “Change Inventorship on Issued U.S. Patent” and even long for corporations-leaning Justices like Scalia (see this new article by Louis Carbonneau), who died earlier this month, leaving SCOTUS more liberal (or leftist) than before.

“Patent lawyers are still trying to undo or reverse Alice because it hit them where it hurts: patent scope.”As of last week, we have begun seeing the debate about patents resurfacing in US politics, even if it’s the same old misguided debate about “patent trolls” rather than about patent scope. Here is the latest lobbying by patent maxlmalists (for USPTO lenience and greed). It says: “The U.S. government has a bad history of taking money from the USPTO. Since 1991, $1 billion has been skimmed from the office’s budget during the appropriations process and diverted to unrelated agencies. This isn’t taxpayer money, but fees paid to the USPTO by patent and trademark applicants (i.e., inventors and brand owners).”

Yeah, whatever…

“It has made a killing by doubling the number of granted patents (innovation did not double at all).”So now USPTO is the poor victim? It has made a killing by doubling the number of granted patents (innovation did not double at all).

“All these conclusions came together,” wrote a respected patents blog the other day, “to confirm a finding that Colvin had intent-to-defraud the USPTO.”

Foxes and Hen Houses

Well, generally speaking, the problem with the USPTO is that it’s run by a lot of lawyers and thus it serves lawyers. The examiners there, who are mostly qualified scientists with practical experience, don’t have much of a say. It more or less mirrors what happens in the EPO in the policy/scope sense. “Join free IP Seminar “Overcoming Alice in Electronic Signal Processing”, March 10, Munich,” wrote European patent lawyers the other day.

“Patent lawyers have a twisted view on things, where laws and rules are seen as obstacles to leap over rather than something that should be respected and obeyed.”Well, “Overcoming Alice” is like “Overcoming the law,” or simply getting around the rules. Patent lawyers have a twisted view on things, where laws and rules are seen as obstacles to leap over rather than something that should be respected and obeyed.

Watch this this article by Nicholas Landau (Bradley Arant Boult Cummings LLP). After the Alice decision at SCOTUS level (2014) the patent lawyers still struggle as they try to convince the public that software patents are legitimate and potent. They are not. That’s ill advice. “Due to the rapidly shifting requirement for subject matter eligibility,” says the author, “some patent examiners seem to believe that, when it comes to software inventions, they are entitled to assume the invention is not patent eligible subject matter under § 101, and it is the applicant’s duty to prove otherwise.”

Well, “some patent examiners seem to believe…”

“Not too long ago Apple managed to bamboozle EPO examiners into granting it software patents, only to have them invalidated in a court (several times in fact).”So much for respect to examiners. They’re viewed as naive and misguided by patent lawyers.

Apple’s Bogus Software Patents

Not too long ago Apple managed to bamboozle EPO examiners into granting it software patents, only to have them invalidated in a court (several times in fact). These were invalidated only after the defendants had spent millions (in legal fees) and years in the courts defending Android/Linux. See this new article (among many on the subject) titled “Appeals Court Dumps Apple’s Slide To Unlock Patent, Tosses Massive Jury Award Against Samsung In The Trash”. To quote this non-mainstream/non-conformist piece from TechDirt: “Apple may have been able to convince a jury that Samsung violated a bunch of its patents, on concepts like “slide to unlock,” but apparently the Court of Appeals for the Federal Circuit (CAFC) disagrees. Despite the court’s reputation for regularly expanding the power of patents (and getting smacked around by the Supreme Court for doing so), CAFC has sided with Samsung and tossed out a jury’s $120 million award and with it some Apple patents — including “slide to unlock.”

“This is the outcome of the infamous “thermonuclear war,” to quote the megalomaniac Steve Jobs, who simple could not stand competition.”This is a software patents — a callback functionality on a mock-up/design/UI.

This is the outcome of the infamous “thermonuclear war,” to quote the megalomaniac Steve Jobs, who simple could not stand competition. Watch what people think of this misguided war. Even former Apple proponents are upset at Apple right now. Who is this good for anyway? Patent lawyers of course. As many people consider Apple to be anything but a patent troll (even if it does no manufacturing, mostly branding and design), it ought to be clear that the problem does not boil down only to patent trolls. We wrote about this very recently

More Patent Litigation for Happier (Richer) Patent Lawyers

See this new article from IP Watch. It says: “The United States worked hard over the last five years to reduce patent infringement suits. Congress enacted patent reform, the courts handed down important anti-patentee rulings, and the US Patent and Trademark Office began a campaign of energetically rejecting patents and patent claims. Despite all this, from 2014 to 2015, new patent infringement suits increased 18 percent and the number of defendants sued for patent infringement increased 21 percent. What went wrong?”

“It is an epidemic of feuds which software patents are a large cause of and patent lawyers are beneficiaries of.”MIP also looked into litigation figures from 2015 and any way one looks at it, there’s more litigation, which is hardly a positive development. It is an epidemic of feuds which software patents are a large cause of and patent lawyers are beneficiaries of.

Excessive Focus on Patent Trolls, Not Patent Scope

When it comes to US public policy, only “trolls” are currently mentioned as the problem. Matt Levy (CCIA) focuses on patent trolls, as usual, not on software patents, noting that “Tyler, TX Brags About Its “Friendliness” to Patent Trolls”. Here is what patents do to small companies, as put in the words of United for Patent Reform the other day: “In 2014, 62% of companies sued by patent trolls had revenues <$100M. Ask Congress to protect #smallbiz & #fixpatents http://bit.ly/1FgqNiT ”

“Even when cases are dismissed the legal costs can rarely be recovered by the damaged defendant (except in rare cases, like NewEgg’s recent win).”Remember that this is a matter of life or death to them. To successfully shoot down a patent it can cost millions of dollars. Even when cases are dismissed the legal costs can rarely be recovered by the damaged defendant (except in rare cases, like NewEgg’s recent win). To quote another new tweet: “Patent trolls sued 4000+ companies in 2015, incl. homebuilders & other #smallbiz. Congress needs to #fixpatents”

But not only trolls are the problem. Nevertheless, all the debate is about them. See for instance this new article titled “Bill Designed to Subdue “Patent Trolls” Loses Momentum”. To quote:

Nearly a year after it was reintroduced and met with widespread support from House Republicans, the Innovation Act, designed to subdue “patent trolls,” has lost momentum after various businesses, universities, and conservative groups deemed it harmful to innovators.

Before the bill died in the Senate, the Innovation Act passed the House in 2013 after a substantial bipartisan vote of 325–91. A new bill reintroducing the Innovation Act, H.R. 9, which was formulated last July, has since passed the Judiciary Committee with a 24–8 vote.

Why not tackle the sorts of patents which patent trolls are using? They are not going after some utility companies over use of particular screw and pipe designs. They almost always use software patents. Therein lies the problem. Here is a new press release that says “Knowledge Group’s webcast entitled: “Emerging Issues: Patent Trolls and Deceptive Tactics – Impacts and Implications Explored!””

“What about large companies that act like patent trolls and extort/blackmail small companies similarly?”What about patent scope? Not noteworthy? What about large companies that act like patent trolls and extort/blackmail small companies similarly? The patent propaganda alliance (“Innovation Alliance”) has released this misleading statement on the matter, without even stating who’s funding it anyway. It’s patent maximalists. The patent propaganda alliance pretends to represent SMEs with tweets such as CPIP’s. It says: “Great to see recognition of importance of patents to startups at today’s hearing!” Well, neither entity cares about startups. These are just patent maximalists and they pretend to speak for small businesses, just like Microsoft’s ACT does.

“Get the facts straight,” Gary Shapiro (president and CEO of Consumer Technology Association) wrote the other day. “Patent trolls drain $1.5B a week from the economy…”

Here is his article, “Patent trolls drain US economy,” which says: “To preserve our nation’s entrepreneurial spirit and grow our innovation economy, patent trolls must be driven back under the bridge where they belong. Letting them run amok is, well, patent nonsense.”

“Well, they should work hard to abolish software patents in the US, as that too would contribute a lot to trolls’ demise.”The Consumer Technology Association (CTA) even issued a press release to express opposition to patent trolls, but what about patent scope? Not a word.

Another new article, “What retailers can do about patent trolls,” was published the other day by Beth Provenzano. “We’ve been talking about patent reform for a while,” she wrote, “and for good reason. The number of patent disputes reached a record high last year, and retailers are often the targets of “patent trolls” — companies that own patents for technologies they didn’t invent and don’t use.”

“All that these things are doing is patent tax collection, like a vigilante knocking on every door to collect money for the vigilante that’s supposedly intended to protect from the patent Mafia.”Well, they should work hard to abolish software patents in the US, as that too would contribute a lot to trolls’ demise.

Protection Money and the Vigilante Non-Solution

The solutions proposed by patent maximalists are not solutions but merely additions to the problem. ‘Protection money’ and vigilantes in the patent world don’t make anyone any safer (overall), but this is what IAM is proposing in this article. To quote: “As a network designed to provide coverage from patent suits, Freedom has some obvious parallels with the License on Transfer Network (LOTNet). LOTNet was launched in 2014 by a group of operating companies led by Google. Those that join agree that if they transfer any patents to an NPE then the other members of the network automatically receive a licence to those patents. This is in large part because the vast majority of NPE lawsuits involve patents developed and filed by operating companies.”

There is actually one such patent vigilante that calls itself “Freedom”? All that these things are doing is patent tax collection, like a vigilante knocking on every door to collect money for the vigilante that’s supposedly intended to protect from the patent Mafia. Therein lies exacerbation of the issues/problem, but then again, when you’re a patent lawyer, it’s “mo’ problems, mo’ money.”

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