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07.30.16

Continued Erosion of Software Patents in the US and With It a Demise in Abusive Litigation by Patent Trolls

Posted in America, Courtroom, Patents at 9:28 pm by Dr. Roy Schestowitz

~90% of technology patent lawsuits are said to involve patent trolls

Summary: Encouraging signs of patent scope tightening/improvement at the US patent system, bolstered by inter partes reviews which crowdsource (or crowdfund) so as to defang serial abusers that rely on dubious software patents

Unified Patents, which showed that patent trolls with their software patents dominate the scene, took unprecedented action several days ago, aided by PTAB’s inter partes reviews. This is delightful progress and a move in the right direction.

PTAB, especially post-Alice, is one of the best things to happen to the USPTO in recent history. The combination of these two things 2 years ago presently facilitates the systematic crushing of software patents in the US, whether or not these patents are being asserted in a court of law. Patently-O has this new article titled “Inter Partes Review Statistics” and it says upfront: “This post summarizes data on inter partes review proceedings and appeals from the Patent Office. Although the office publishes a monthly Patent Trial and Appeal Board Statistics packet, the narratives contained within that packet can create confusion as discussed in Michael Sander’s guest post earlier this year. Below are some of the charts that I’ve developed based on the publicly available information to attempt to get a better handle on what’s going on in terms of case flow and outcome.”

This is a very detailed post and a helpful one, too. Patently-O is quite a decent source of scholarly information on the state of affairs in the US and nowadays it is quite neutral/impartial on most data.

In various Web sites earlier this week we have begun seeing positive coverage of Unified Patents and its good fight. BoingBoing, for example, said that “Unified Patents raises money from companies that are the target of patent-trolling and then uses it to challenge the most widely used patents in each of its members’ sectors: now it’s going for the gold.

“Unified is challenging three patents at once: Shipping & Transit’s patent on bus-tracking (the basis of 500+ lawsuits, most against cities’ transit authorities); Uniloc’s patent on DRM; and Sportbrain Holdings’ patent on wearable health monitors.”

Uniloc is a particularly nasty patent troll, which basically denies being a troll and uses rather dubious software patents to make money out of nothing. Michael Loney, writing for MIP from New York, wrote:

Unified Patents has filed inter partes review (IPR) petitions at the Patent Trial and Appeal Board (PTAB) to challenge patents asserted by this year’s three most prolific patent litigants. The challenges to Shipping and Transit, Sportbrain Holdings, and Uniloc USA are part of Unified’s efforts to protect its members in technology areas from non-practicing entities (NPEs).

These three NPEs have sued more than 200 companies combined in 2016, accounting for almost 15% of patent cases filed against high-tech companies.

“Unified is the only company that refuses to pay off NPEs, instead disrupting and deterring them by challenging poor-quality patents,” Unified said in a blog post.

In a separate new article, Loney looked at recent litigation statistics, whereas at IAM there was only reminiscing of “the busiest month of patent litigation on record” (more to do with a filing cutoff/deadline). As even IAM admits: “Last November saw a huge spike in new patent case filings… 570 of those 847 have been terminated” (and more will probably be terminated soon). “Overall, though,” IAM notes, “what the November stats may tell us is that plaintiffs were looking for predictability. No one knew back then (and probably few know fully now) how the new regime was going to work. By getting in by the 30th November plaintiffs were making sure that they would be operating within a regime that they understood.”

That was the end of an era. No longer can patent trolls enjoy the same trolls-friendly platform which is tolerant and full of software patents. A new article by Daniel Nazer from the EFF (copied to TechDirt) speaks of one such software patent and explains it as follows:

Another month, another terrible patent being asserted in the Eastern District of Texas. Solocron Education LLC, a company whose entire “education” business is filing lawsuits, owns U.S. Patent No. 6,263,439, titled “Verification system for non-traditional learning operations.” What kind of “verification system” does Solocron claim to have invented? Passwords.

The patent describes a mundane process for providing education materials through video cassettes, DVDs, or online. Students are sent course materials, take tests, and, if they pass the tests, are allowed to continue on to the next part of the course. At various times, students confirm their identity by entering their biographical details and passwords.

Solocron did not invent distance education, encryption, or passwords. The patent doesn’t describe any new technology, it just applies existing technology in a routine way to education materials. That should not be enough to get a patent. Unfortunately, the Patent Office does not do enough to prevent obvious patents from issuing, which is how we get patents on white-background photography or on filming a Yoga class.

Such patents are no longer likely to withstand the scrutiny of a court other than perhaps in the Eastern District of Texas, which markets itself as trolls-friendly. Another case of software patents in their full ‘glory’ can be seen here, as “AGIS claims all require a “symbol generator” to track mobile phone user location” (sounds like surveillance patents with artistic terminology designed to mislead examiners/judges*) and according to this patent attorney, we can expect more of the same. “According to the S.Ct.,” he wrote, “this Alice Bank patent claims abstract subject matter: US5970479″ (the title of this patent is “Methods and apparatus relating to the formulation and trading of risk management contracts”).

We’re at the cusp of change right now because litigation numbers (on the decline) serve to indicate reduced certainty about the potency of software patents in the US, especially at the court which got them all started, the Federal Circuit.
____
* As Professor Dennis Crouch notes: “On appeal, the Federal Circuit affirmed the indefiniteness finding under its strict means-plus-function approach. The appellate panel first held that the “symbol generator” element should properly be interpreted under 35 U.S.C. 112 ¶ 6 as claiming a means for performing a specified function without reciting (in the claims) the supporting structure. Under 112 ¶ 6, means-plus-function claim elements are However, the statute requires that MPF claim elements be tightly construed to cover only “the corresponding structure . . . described in the specification and equivalents thereof.” Further, the Federal Circuit has repeatedly held that MPF claim elements that are not supported by corresponding structure within the specification are indefinite and thus invalid.”

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