09.27.16

Patent Trolling a Growing Problem in East Asia (Software Patents Also), Whereas in the US the Problem Goes Away Along With Software Patents

Posted in America, Asia, Patents at 9:50 am by Dr. Roy Schestowitz

Section 101 is like patent reform 101

Korea software patents

Summary: A look at two contrasting stories, one in Asia where patent litigation and hype are on the rise (same in Europe due to the EPO) and another in the US where a lot of patents face growing uncertainty and a high invalidation rate

AS SOFTWARE DEVELOPERS often insist, copyrights are enough for them. These protect against misuse, plagiarism and so on. Software patents, given the inability to inspect binary files and properly study them, don’t add any more protection.

A patent law firm from South Korea (i.e. parasites that make no actual software) started the week by trying to make a case for software patents (see the above screenshot). Here is the opening part which speaks of rejection of such patents:

In recent years, there has been substantial interest in changing existing law and practice in order to expand the protection for computer program inventions. The Korean Intellectual Property Office (KIPO) sought to enact such a change by officially releasing its revised Examination Guidelines for Computer-Related Inventions on July 1 2014. Three months later, an amendment bill to the Patent Act was submitted to the National Assembly, which attempted to broaden the scope of protection for computer-related inventions (eg, by opening up the possibility of patentees bringing infringement claims against online sellers of an allegedly infringing computer program, something which would not be subject to infringement liability under the guidelines). The National Assembly seemed to recognise that the proposed amendments could have profound effects on the software industry and thus rejected them, noting that more opinions from the industry were needed to gain a consensus on this issue.

As we have already seen in the case of LG and Samsung, Microsoft utilises software patents so as to extort OEMs in South Korea and this month it is pursuing even more money, in essence trying to tax Linux (we wrote about that twice last week). In addition to that, Microsoft creates and arms patent trolls that go after Linux and/or Android. We gave many examples of that in the past and earlier this month we warned that patent trolling was becoming commonplace in China and other countries in east Asia. IAM ‘magazine’ does not quite see what the problem is and today it has this new article about a silent passage of patents to Oppo, after concerns about the US ITC targeting companies in Taiwan (where many products are actually made) without even a proper trial, imposing massive sanctions that are absolute and ruinous. When companies such as Microsoft use the US ITC in an attempt to simply embargo the competition, using patents that are often dubious (USPTO does a shoddy job), everybody loses. Regarding the problem of trolls in Asia, we see more and more articles from IAM. In the US, says IAM, trolling activity has gone down and Joff Wild finally uses the T word (troll):

The week before last I hosted a webinar for IAM Market entitled Readying a Patent Portfolio for Sale: What You Need to Know to Be Successful. Over 350 people signed up to get the materials and the recording, while close to 200 listened live as presenter Kent Richardson, a partner at Silicon Valley-based Richardson Oliver Law Group, talked through his slides and then answered questions from me and from attendees. It was a fascinating hour, which my colleague Jack Ellis has written up in a blog for the IAM Market knowledge centre (where there are also details about how you can get hold of the presentation, talk and interview).

This week I am in Gothenburg for the CIP Forum and yesterday at a session about defensive patent aggregation something that Kent (who is also here and took part in the session) said during the webinar came back to me. As a firm that does a lot of transaction-based work, ROL closely monitors activity in the patents sales market, in particular packages being offered by brokers. IAM subscribers will know that each year ROL produces an update for us about the activity it is seeing in areas such as pricing, sales rates, package sizes and so on – the next one will be published in issue 81 of IAM, which comes out at the end of November. One of the things it is set to show, Kent stated in our conversation, is that prices finally seem to have stabilised, essentially because they probably could not go any lower, and that for the first time it looks like operating companies are buying more than NPEs are.

Coming from a trolls denialist, the above is interesting. If it’s true that trolls have shrunk somewhat (in terms of activity like litigation and acquisitions), then we suspect it has a lot to do with the demise of software patents, as we foresaw all along. Later today we’ll show how the US patent microcosm tries to change things for the worse again.

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