10.12.16

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Patents Roundup: Blackjack Patent Application, Apple’s Software and Design Patents, Decline in Patent Litigation and Alternating Troll Trends

Posted in America, Patents at 5:12 pm by Dr. Roy Schestowitz

Summary: News about patents from around the Web, focusing on the USPTO in particular

Method of Playing Blackjack as a Patent?

A “patent application claiming a new method of playing Blackjack” was the subject of this new article from Patently-O — an article involving yet another one of those ridiculous patents (or applications) which often end up being used to shake down a lot of small companies, either in court or outside of the courts system (small companies usually prefer to settle outside any court because of the costs associated with legal defense).

To quote Patently-O:

The underlying appellate decision In re Smith involves a patent application claiming a new method of playing Blackjack. The new approach offered by offers ability to bet on the occurrence of “natural 0” hands as well as other potential side bets. Claim 1 in particular requires a deck of ‘physical playing cards” that are shuffled and then dealt according to a defined pattern. Bets are then taken with the potential of more dealing and eventually all wagers are resolved.

Apple Aggression With Patents

Not only small players are suffering. Large companies are trying to string barbwire around everything and then tax everyone.

This past week in the news we found FRAND proponents in Watchtroll, patent troll apologists everywhere in relation to the FTC and the VENUE Act, and we also found a lot of coverage of Apple’s patent war/assault on Android, either in relation to the infamous slide-to-unlock patent or those silly design patents which SCOTUS is poised to assess.

“Apple is competing in the courtrooms, not in the market, such that patent lawyers pocket a lot of money and products are modified for the worse.”Regarding the former, here is MIP alluding to a “107-page opinion [which] includes a majority opinion written by Judge Moore and three separate dissenting opinions filed by Chief Judge Prost and Judges Dyk and Reyna.”

Also in relation to the slide-to-unlock patent, here is Patently-O‘s coverage that says: “this case involves Apple’s patents covering slide-to-unlock; phone number recognition; and auto spell correction. At the district court, the jury found that three of Apple’s touch-screen patents infringed by Samsung devices (resulting in $119.6 million in damages). The jury also found one Samsung patent infringed by Apple, but only awarded less than $200,000 in damages. In a February 2016 opinion authored by Judge Dyk, the Federal Circuit reversed the jury verdicts – finding two of Apple’s patents invalid as obvious and the other not-infringed.”

These are software patents and separately there are design patents — a subject that the CCIA’s Mr. Levy wrote about (cross-posted at the Huffington Post), noting: “CCIA and other amici argued strenuously that under the Federal Circuit’s interpretation of § 284, it would be easy for patent trolls to start using design patents. After all, a design patent lets a patent troll threaten a company with losing all of its profits for any accused product. That’s orders of magnitude higher than they might be able to get with a utility patent, and should lead to much higher settlements.”

Apple is competing in the courtrooms, not in the market, such that patent lawyers pocket a lot of money and products are modified for the worse. Corporate media wrote about the latest twist, e.g. “Conundrum for Justices: Does a Design Patent Cover a Whole Smartphone?” from the New York Times and this from USA Today:

Chief Justice John Roberts said Apple’s iconic iPhone design applies to the exterior face of the phone — not “all the chips and wires.”

Apple is desperate to beat (or tax with patents) Android phones. How much money are they after? And given Apple’s declining share in tis market, how long will it be before Apple — like Microsoft — becomes more like a patent troll in this area?

The United States Government Recognises the Problem

Help might be on the way. “The government and the courts are finally getting fed up with patent trolls — and stupid patents,” (this means software patents) writes Michael Hiltzik of the Los Angeles Times today. It’s not a very thoughtful or profound article, but it does hit two birds with one stone (two strands of news). To quote:

Almost nobody disputes that America’s patent system is a mess, or that it’s been that way for an unconscionably long time.

Overworked and misguided patent examiners issue patents for manifestly undeserving claims. An entire industry of patent trolls has sprung up to assemble patent rights and exploit them, not to make products or develop services, but to harass other businesses into paying them off to avoid costlier litigation.

Efforts to reform patenting tend to run into resistance from big businesses, such as the pharmaceutical industry, that long ago figured out how to game the process and are disinclined to give up their advantage. As a result, a system that was written into the U.S. Constitution to encourage invention and innovation has been turned into a “dead weight … on the nation’s economy.”

The editor of IAM, writing about an upcoming event, reveals that an official-turned-lobbyist, David Kappos, will be at this event (speaking even). We predict he will talk about “clarity” as means of reaffirming his position that Alice is too vague and needs to be thrown away.

Litigation Numbers Decline

Whether or not Kappos will succeed, the patent system in the US is gradually healing itself. Kappos is one of the people who made it ill. There are less trolls, less software patents, and patent litigation numbers at the District Court and beyond and down, based on these latest figures from Lex Machina. Here is what IAM has just said about those:

New patent litigation filings fell in the third quarter as the overall volume of cases for the year approached levels not seen since 2011, according to data from Lex Machina.

From 1st July to 30th September 1,127 new lawsuits were filed in US district courts. That’s down from the total for the second quarter of 1,289, although up slightly from Q3 last year when 1,114 new cases were brought.

According to Lex Machina’s current prediction for the year, 2016 will see a total of just over 4,700 new lawsuits. This would be the lowest level since 2011. Over the last four years litigation volumes have been at unprecedented levels thanks, in large part, to new joinder rules introduced by the America Invents Act.

One of the characteristics of litigation volumes over the last two years is that the quarterly totals have often lurched from one extreme to another. Last year, for instance, saw one of the quietest recent quarters in Q3 but also two of the busiest in Q2 and Q4 as external factors such as the prospect of new patent legislation and new federal court procedures had an effect.

Lex Machina’s latest numbers confirm that quarterly totals are still very up and down, but the trend line for this year has undoubtedly been pointing south. With a huge spike in cases last November thanks to changes to pleading standards in patent cases, which came into effect on 1st December, it seems safe to assume that we’re going to see a fall, year-on-year in Q4.

Now that the US is moving towards a software patents-free (hopefully trolls-free as well) era with zones including Texas being safe for software developers (even after the VENUE Act or equivalent) we hope that the patent microcosm won’t succeed at turning the tide. Here is the National Law Review, one of their publications, covering the latest from the FTC:

FTC Releases Report on Patent Assertion Entities, Calls for Reforms to Reduce Nuisance Patent Lawsuits

The U.S. Federal Trade Commission issued its much anticipated study on patent assertion entities (“PAEs”) on October 6, 2016. The report, entitled Patent Assertion Entity Activity: an FTC Study, defines a PAE as “a firm that primarily acquires patents and seeks to generate revenue by asserting them against accused infringers.” The report highlights the business practices of PAEs (based on non-public data from 2009 to 2014) and includes recommendations for patent litigation reform. FTC Chairwoman Edith Ramirez praised the report for providing “an empirical foundation for ongoing policy discussions,” and said that the report’s recommendations “are designed to balance the needs of patent holders with the goal of reducing nuisance litigation.” The report provides valuable insights into a key area of intersection between the antitrust and patent laws and proposes concrete reforms that seek to balance the benefits of legitimate infringement litigation against the harms of nuisance suits.

Patent Trolling More of ‘Thing’ in East Asia

Patent trolling is no longer just a problem in the US and more evidence emerges of the growth of patent trolling in east Asia. IAM writes a lot about it these days, without mentioning the T word [1, 2, 3], resorting to euphemisms like “NPE” and “PAE” instead. One article says that “Panasonic transferred around 500 patents to Inventergy in January 2014; Huawei had assigned a number of assets several months earlier. Nokia entered its licensing alliance with the company in June that year.” These are essentially PAEs. It looks like China, Japan, Korea, Singapore and various other countries will need their own FTC-like study and resultant patent reform pretty soon. These policies are self-destructive to any nation if they give rise to trolls.

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