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04.09.16

Patents Roundup: US Patent System/Landscape Disqualified, Corrupted, Saturated With Patent Trolls, and Funded by Microsoft

Posted in Apple, Microsoft, Patents at 11:21 pm by Dr. Roy Schestowitz

Still sticking its dirty fingers in many patent pies

HNBA Microsoft

Summary: An all-encompassing (based on our admittedly limited breadth or scope of research) roundup of patent news pertaining to software in the US

THIS article is a summary of recent USPTO news. It’s as comprehensive as possible and it focuses, as usual, on software patents. Those are just most relevant to us.

“Anyone can probably see that USPTO greed (for both power and money) is going way too far.”

Quality Control Out the Window

Patently-O, a decent source of information on the subject of patents (albeit a little subjective at times, which is understandable given the audience it reaches), looked at recent changes related to infringement and invalidity of patents. The latter article said that “the district court rejected the plea for vacatur — finding that the PTO decision does not “displace a district court judgment” and that it would be “against the public interest” to allow a patentee to overcome an invalidity judgment simply by “amending its invalid claims.” [...] What is unclear here is the level of claim & issue preclusion that will apply going forward when Cardpool asserts the patent against some third party.”

“What we deal with here is a patent troll that claims it ‘owns’ scanning activity.”Watch what the USPTO is up to. Basically, as usual, having seen the courts invalidating many of its bogus patents (minimal quality control is to blame here), it now looks to bolster/improve its business by making a mockery of the course of justice. What is this, a third world country? Anyone can probably see that USPTO greed (for both power and money) is going way too far. The USPTO is very plaintiff-friendly because plaintiffs are its ‘clients’ (applicants). The USPTO must be kept out of the legal process altogether. The same goes for the EPO (increasingly abusive in that regard under Battistelli’s regime). Some people are now bombarding the patent system with more automated tools/robots (like DMCA requests that are bogus and served by algorithms, or trading activity in stock markets, also using algorithms). See this new press release about a “Proprietary Patent Application Software”. These help exhaust, fool, mislead examiners. They even say “proprietary” as if it’s some kind of marketing term. “Every bloody unit will be using proprietary software components jealously guarded by patents,” said this article from 2 days ago.

Patently-O noted that in some particular cases even antitrust laws creep in.”In other new blog posts from Patently-O the MPHJ patent troll is revisited (it can come to Europe with UPC hooks perhaps, suing everyone who uses a scanner if all goes as Battistelli foresees). “HP challenged claim 13 on both obviousness and anticipation grounds,” noted Patently-O, after MPHJ had already sued so many people who habitually use a scanner at a business (and often retrieved ‘protection money’ without as much as a legal challenge). What we deal with here is a patent troll that claims it ‘owns’ scanning activity. It’s really about as bad as it sounds. No exaggeration is needed, hence it resulted in plenty of press coverage over the years.

Institutional Corruption in the US Patent System

Another new Patently-O article deals with a patent “case involving both plaintiffs and defendants presenting false expert testimony.”

“When a nation’s patent system mostly serves to protect one’s giant (and often taxpayers-funded) monopoly the perception of corruption will inevitably increase.”Yes, nice to have ‘justice’… whoever has the deeper pockets (or less to lose) tends to win. Who benefits from all this chaos? Patently-O noted that in some particular cases even antitrust laws creep in. To quote this new post about GlaxoSmithKline (GSK): “The question in the case, now pending before the U.S. Supreme Court is whether that license structure can raise a plausible antitrust claim under F.T.C. v. Actavis, Inc., 133 S. Ct. 2223 (2013).”

When a nation’s patent system mostly serves to protect one’s giant (and often taxpayers-funded) monopoly the perception of corruption will inevitably increase. Who’s being served here? The public that will consequently be overcharged and have few (or none at all) alternatives? Going back to the false testimony, Patently-O wrote: “On cross-examination, Rembrand’s technical expert witness Dr. Thomas Beebe “drastically” changed his testimony regarding his methodology for testing whether the accused contact lenses were “soft.” After being called-out by the defense’s expert Dr. Christopher Bielawski, a jury found no-infringement. Post-trial, the district court doubled-down by also granting J&Js motion for JMOL of non-infringement. Bielawski’s testimony may have been particularly damaging – with his statement: “You should not trust Dr. Beebe, and you should throw out his testimony, not in part, but in whole. You should not trust Dr. Beebe.””

“A patent system of secrecy defeats the very purpose (original goal) of the patent system.”Judging any case at all based on written/oral testimony is dangerous and misguided. It’s like using the words of cops or some errand bystanders as evidence in criminal trials. Any such ‘evidence’ is the weakest form of evidence because there is no way to ascertain/verify claims. Moreover, people are often corruptible and when there’s much at stake in a trial (not just prison but a lot of money) there’s plenty of room for abuse, such as bribery. Remember those infamous cases of Apple with jury foreman Hogan? Probably trial misconduct. Don’t forget Court of Appeals for the Federal Circuit (CAFC) corruption either.

Pressing on, the EFF celebrates progress in a patent case it intervened in one year ago. It says it “has put significant time and effort into getting this one document in one case unsealed. Unfortunately, it is just one of countless documents that are routinely sealed without good reason in patent cases around the country. Just last week we asked the court in a different patent case to unseal documents that almost surely should not have been completely hidden from public view.”

“It is worth adding that while the number of lawsuits did provably decline it does not tell the full story for more than a single reason and we should generally take with great degree of caution any conclusions that accompany this, e.g. that things are improving on their own, hence no intervention is needed at all.”

Overlooking Patent Trolls in Post-Alice Era

A patent system of secrecy defeats the very purpose (original goal) of the patent system. This kind of secrecy gave rise to shady, secretive operations such as Intellectual Ventures, which boasts thousands of shell companies. This whole kind of system (unaccountable and unregulated) is ripe for abuse by trolls.

“US patent case filing in district courts dropped in the first quarter,” MIP wrote, “down 39% on the fourth quarter and 34% on the first quarter last year, according to Unified Patents. An analysis of Eastern District of Texas filing reveals a disproportionately large drop in the district” (that’s the summary of a paywalled article from MIP).

This echoes several other Web sites which reference the same data and conclude that it’s all about trolls and the Eastern District of Texas. This is a somewhat simplistic view because in reality, as we pointed out the day before yesterday, there are also settlements outside the courts and it might be worth looking at what proportion among these patent lawsuits involved some kind of software patents, hence identifying a correlation between scale of litigation and patent scope rather than lawsuit venue, a plaintiff’s business model and so on. In reality, some of these surveys are politically or commercially motivated, or are set up by academics (or lobbyists) to suit a particular narrative and then push for some particular kind of reform (e.g. a ‘reform’ for more certainty around software patents in the US — something which Kappos lobbies for with money from patent aggressors such as IBM, Microsoft, and now Apple as well).

It is worth adding that while the number of lawsuits did provably decline it does not tell the full story for more than a single reason and we should generally take with great degree of caution any conclusions that accompany this, e.g. that things are improving on their own, hence no intervention is needed at all.

As we found out only earlier this year, one verdict in favour of a patent troll such as VirnetX can cost a great deal of money. VirnetX, according to CCIA’s Matt Levy, now denies that it’s a patent troll, which is of course somewhat laughable a thing to do. “A patent troll is,” Levy explains, “essentially, a company that makes its money by suing companies that it claims are using patents that it has acquired. (For comparison, the FTC said that “The business model of [patent assertion entities] focuses on purchasing and asserting patents against manufacturers already using the technology, rather than developing and transferring technology.” Brian Kahin describes patent trolls as companies whose business is being infringed and whose product is litigation.)”

If one asks IAM ‘magazine’, no such thing even exists and it hardly surprises us that several trolls are paying IAM.

Speaking of payments, Oracle had paid Florian Müller, so it’s not too shocking that he took Oracle’s side in his latest article about Oracle’s war on Android. Müller spent a lot of his life campaigning against software patents and we hope this will precede the desire to make cash with so-called ‘consulting’ contracts.

“On March 22, 2016,” said this new article, the U.S. District Court for the District of Delaware issued a Memorandum Opinion in a case captioned Treehouse Avatar LLC v. Valve Corp., in which software patent claims survived a patent eligibility challenge.”

Alice does not always kill software patents, but it does most of the time. Another new article speaks of the Mayo/Alice Rule (both SCOTUS decisions). Now that there’s no Scalia at SCOTUS some people wonder what will happen regarding patent cases. Will the “T” word (trolls) come up again in transcripts or even formal rulings/determinations? Those who argue against reform regarding trolls are quoted in this new article which says: “Jessica Sebeok, associate vice president for policy at the Association of American Universities, believes universities will suffer unintended consequences if President Barack Obama succeeds in making it tougher for patent holders to defend their intellectual property.”

“And some people keep telling the world that Microsoft has changed or that there’s a ‘new’, gentler Microsoft…”Well, universities that essentially behave like patent trolls or feed trolls with their patents (we gave many examples here before) might suffer. And if so, that’s a good thing. The article later says: “Business coalition United for Patent Reform – whose membership includes influential allies of the Obama Administration like Google, Amazon and General Motors – and other supporters of HR 9 seek to stop patent trolling by making it riskier to file patent infringement suits and imposing additional costs of plaintiffs, but AAU argues this would put undue pressure on legitimate patent holders.”

Microsoft Licensing Still an Active Patent Troll

In the above, neither side speaks about patent scope. To them it’s just a so-called ‘Turf War’ between producing and non-producing (e.g. universities) entities. A company like Microsoft is both because while one company produces things another one, called “Microsoft Licensing”, is effectively a patent troll and based on this new page, Microsoft not only funds front groups for software patents and conferences that promote software patents, it now also puts its finger in the “2016 Hispanic National Bar Association/Microsoft IP Law Institute” pie, where Microsoft is the sole program supporter.

And some people keep telling the world that Microsoft has changed or that there’s a ‘new’, gentler Microsoft…

‘“Other than Bill Gates, I don’t know of any high tech CEO that sits down to review the company’s IP portfolio” —Marshall Phelps

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