10.31.16

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The Insane World of Patent Maximalism and Professor Joshua Pearce’s Case for Weakening Patent Rights

Posted in America, Europe, Patents at 5:25 am by Dr. Roy Schestowitz

A Case for Weakening Patent Rights
A Case for Weakening Patent Rights [PDF] (shown above are the first five pages among 70 in total)

Summary: Patent scope is being broadened to the point where it has gone way too far and academics push back against this trend, warning that patents are not accomplishing what they were originally intended to accomplish

THE PATENT system in the US, notably the USPTO (one branch among several), seems to be improving. This is good news for the competitiveness of the US. Contrariwise, the EPO has become a menace/liability to Europe.

“The Supreme Court finally accepted that software patents are on abstract things and should thus not be granted anymore.”An “EPO Advertisement,” an EPO insider wrote to us, is “Another Pathetic Attempt By The #EPO @ Desperately Fishing For New Engineers & Scientists http://www.telecompaper.com/jobs/engineers-and-scientists-in-various-technical-fields–444 …” (this link/advertisement was mentioned here before).

We still have a lot of material that we wish to publish about the EPO, but today we wish to share assorted news from the US. Some of it relates to Europe, as we shall explain as we go along.

It doesn’t matter if and when you implement something in a patent (one could be a troll with no products at all, at least not anymore). Based on this, all that matters is the filing date. “Regardless of whether the Phillips statement is correct,” Patently-O wrote yesterday, “going forward for Post-AIA patents, the court should now eliminate “the time of the invention” from its claim construction process. Under the statute, all of the focus now is on the effective filing date with invention shifted to a mere historic element of the patenting process.”

“The Battistelli-led EPO wants to replace examiners with machines, so will machines too apply?”When patents cease to be viewed from the perspective of benefit to society or practical contribution we can expect them to become little more than trophies or a tool of taxation. Sadly, a lot of systems where low patent quality prevails (e.g. SIPO) are like that, with the US only belatedly tackling quality issues and the EPO getting worse over time. Another new article from Patently-O says that “the plaintiff stipulated that Merck’s Dr. Scholl’s process did not infringe and the case was dismissed.” In other words, the only one/s to benefit here would be legal representatives. What a wasteful system.

Regarding patent exhaustion, this recent article says that “[t]he Solicitor General’s recommendations make a cert. grant highly likely in this important case, which goes to the heart of two of the Supreme Court’s favorite patent topics: the scope of the patent right and the extraterritorial effect of U.S. patents. The strategic impact on large multinational businesses, complex licensing deals and so on is potentially enormous.”

“Will machines apply for patents, in order for them to be ‘examined’ by other machines and generate billions of ‘patents’? Where does this insanity end?”The Supreme Court finally accepted that software patents are on abstract things and should thus not be granted anymore. Why does the EPO fail to see this and actively encourages software patents in Europe these days (we gave about 4 examples so far this month). To make matters worse, also in relation to computer algorithms, some believe that Battistelli now envisions replacing patent examiners with deficient computer programs, as if human judgment can conveniently be swapped with a machine. Now, bear in mind that the following news is definitely not satire [1, 2, 3, 4, 5, 6]. Computer-generated patents are now being entertained too, along the lines of online humour where computer-generated academic papers (complete gibberish) got accepted into conferences/journals (SCIgen about a decade ago). The Battistelli-led EPO wants to replace examiners with machines, so will machines too apply? Because of the practices of hedge funds and other bankers, a lot of so-called ‘financial trading’ these days is just machines talking to other machines (algorithms drive the vast majority of trading volume). Are the patent systems next? Will machines apply for patents, in order for them to be ‘examined’ by other machines and generate billions of ‘patents’? Where does this insanity end? How can humans even keep up with such a thing and stay abreast of new patents? If the patent system becomes more like the financial sector (i.e. just a bunch of machines talking with other machines, rigging the system), won’t that render the whole system obsolete?

Here is Watchtroll, a proponent of patent maximalism, saying that “It’s Time to Fix the Global Patent System Before It Breaks Under the Weight of New Applications”. To quote:

What’s happening? Simply put, patent offices are failing to keep up with the growth of the innovation economy and the resulting increase in patent applications. Unfortunately, the problem could easily get worse in coming years. Many patent offices apparently have yet to process applications from recent years, when huge increases in applications have occurred.

It’s a problem that threatens to undermine the global patent system, but what’s both encouraging and discouraging by turns is that it’s largely a basic problem of good governance. Many of the solutions to the problem are relatively straightforward. They require the application of sufficient resources and a willingness to hire an appropriate number of examiners and share work between patent offices. These solutions are a matter of political will and effective management, rather than complex policy. Some countries have shown the will to turn things around, and we hope others will follow.

When patent monopolies become so abundant rather than scarce fewer people can actually bother (or find the time) to read them. What has become of the system? Infinite growth (in the pace of granting) isn’t indicative of faster innovation, just greater lenience and patent office greed. This system will basically kill itself unless it stops and puts barriers on patent scope so as to improve patent quality.

Here is a very recent Patently-O article titled “Bad Patents and the False Claims Act”. An excerpt:

The False Claims Act provides special incentives for whistleblowers to uncover fraud against the U.S. Government. The Act authorizes the whistleblower to file a qui tam lawsuit on behalf of the Government and then receive a cut of any recovered damages. See 31 U.S.C. §§ 3729–3733. The whistleblower here LDPFC appears to be a branch of the hedge fund Foxhill Capital.

This case involves Allergan/Forrest Labs U.S. Patent No. 6,545,040 that is listed in the FDA Orange Book as covering the drug Bystolic. The basic false claims argument is that the market price of Bystolic is high because of the patent coverage – but the patent is (allegedly) invalid. If true, this means that Medicare, Medicaid, and the VA hospitals are all paying more than they should for the drug. As stated by the complaint: “The current market price for Nebivolol (Bystolic) is a false price because the ‘040 patent is invalid.”

Although the legal theory makes sense, the facts may get in the way: Is the patent invalid (PTAB says its close, but no) and, if it is invalid – did the patentee have knowledge of the invalidity?

PTAB, as we wrote yesterday, is the best hope of the US patent system right now. It cleans up the mess left by excess. Among patents that have not expired yet, PTAB might be able to find hundreds of thousands that need to be invalidated (before they even reach the court, if ever). Sent to us from Prof. Joshua Pearce earlier this month was his new paper [PDF] titled “A Case for Weakening Patent Rights”.

“Among patents that have not expired yet, PTAB might be able to find hundreds of thousands that need to be invalidated (before they even reach the court, if ever).”It sure looks like academics too are getting it. They also seem to agree with what Techrights has been saying for about a decade. Too many patents in too many domains do more harm than good.

Looking at the news, here is a very recent story about amicable resolution to a patent dispute:

LG Electronics said Miele was infringing patents for so-called steam washing machines and has sent a letter demanding that the German domestic appliance maker stop using the technology, setting an end-October deadline for a response.

Miele has been and is willfully infringing on LG’s patents, LG said in the letter, sent last week and seen by Reuters.

“In the interest of finding an amicable resolution of this matter, we are open to having an in-person meeting in November to discuss how to resolve this matter,” the company wrote.

The idea of willful infringing in the area of washing machines may make sense; after all, there aren’t hundreds of thousands of patents on washing machines, unlike software. It’s actually possible to keep track of patents pertaining to washing machines. That’s what the patent system was made for and we are not challenging patents in the physical domain (like mechanics). See also the article “Pure Storage agrees $30m patent litigation settlement with Dell” (via “this year’s highest damages awards”). This is about hardware, not software.

“It sure looks like academics too are getting it. They also seem to agree with what Techrights has been saying for about a decade.”Compare that to news about surveillance patents and patents on impossible (or fictional) things. What on Earth is that?

These patents exist “because patents are paper tigers,” Benjamin Henrion wrote, “no working prototypes required.”

Not much novelty is required either, especially when patent offices make “production” their primary goal, choosing quantity over quality.

“The idea of willful infringing in the area of washing machines may make sense; after all, there aren’t hundreds of thousands of patents on washing machines, unlike software. It’s actually possible to keep track of patents pertaining to washing machines.”Henrion said this in response to IBM’s Manny Schecter, a proponent of software patents. “If the quantum space engine is impossible,” he wrote, “how can it be patented?”

So suddenly even Schecter realises that patent scope has gone way too far? See this new article titled “The latest patent for the ‘impossible’ EM Drive has just been made public – and it’s wild” (from Science Alert).

A patent on something which is not even possible shows what some patent systems have sunk to. Yet Schecter fails to see his own double standard. On a separate day he wrote: “US #patent 9464453 is for a themed cemetery! We need to promote software innovation more than theme innovation-software must be patentable.”

“A patent on something which is not even possible shows what some patent systems have sunk to.”Well, IBM is still promoting and lobbying for software patents while suing small companies using such patents. The above “must not be patentable,” Henrion told Schecter. “Freedom of programming is not for sale.”

Well, policy is up for sale in the US. That’s why we’re still seeing the sordid legacy of software patents there. That’s why the US attracted or created so many patent trolls. Earlier this month I had a whole (and long) article written about me, the messenger, as I criticise software patents and this upsets some people. I guess that the software patents proponents would rather not tackle the message and instead go ad hominem. It’s OK, I got used to that. What patent software proponents don’t get is, if they dislike me, then I must be doing something right. I don’t try to be liked by people whose agenda is the opposite of mine.

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