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11.13.16

The Fall of Software Patents Continues, But Should Not be Taken for Granted

Posted in America, Patents at 12:28 pm by Dr. Roy Schestowitz

Summary: A roundup of news about software patents in the face of aggressive lobbying from patent law firms that depend on them

THE STATUS of software patents in the US is very iffy right now. If software patent/s cases are revisited and rulings are appealed a sufficient number of times to reach CAFC (sometimes even SCOTUS), they simply won’t survive. It makes one wonder if patents on software only exist on paper (but not in practice) in the United States and whether it’s worth suing anyone using software patents anymore.

The case of Amdocs v Openet received a lot of attention recently. Patent law firms used it to pretend to themselves (or to clients) that CAFC was softening its stance on software patents, but that’s just wishful thinking — the kind of thinking (or optimism) now embraced by Fish & Richardson PC, a frequent litigator that we covered here a great deal in the past.

“It makes one wonder if patents on software only exist on paper (but not in practice) in the United States and whether it’s worth suing anyone using software patents anymore.”Prof. Crouch recently counted citations of Mayo and Alice (the SCOTUS-level cases) and found that these go through the roof, typically invaliding bad patents by means of precedence. The graphs can be seen in this post. So, if anything, the impact of Alice is growing. It’s possible that only patents with very high certainty of validity would be asserted at this stage; this in effect can tilt the statistics and distract somewhat from the overall trend. What proportion of patents on software would the CAFC deem valid if it had to reassess each and every one of them (there are hundreds of thousands of them, so this is infeasible)?

A very recent article by Grant Langton and Joseph Teleoglou from Snell & Wilmer has a loaded headline: “Software Patents – Not a Waste of Money After All?”

Actually, they are a waste of money, assuming they are abstract and have no merit for a grant (the USPTO would probably grant these anyway because it’s greedy and impatient, unlike the courts). To quote Langton’s and Teleoglou’s shameless self-promotion: “Since the Supreme Court ruling in Alice Corp. v. CLS Bank International, that a specific software algorithm was ineligible for patent protection, rumors abound that all software-related inventions are unpatentable. Although the Alice decision made it more difficult to obtain software patents, clever patent attorneys continued to find ways to secure software patents for their clients. Recently, the Federal Circuit Court of Appeals (Federal Circuit) made their job easier by issuing software-friendly rulings in at least three cases.”

“What proportion of patents on software would the CAFC deem valid if it had to reassess each and every one of them (there are hundreds of thousands of them, so this is infeasible)?”Well, maybe they find tricks or loopholes for tricking the examiners, but what happens if these patents reach CAFC? Less than a handful of such cases this year were ruled in favour of the patent/s — a fact that patent law firms would rather we overlook.

We were somewhat amused to see this pro-software patents attorney reaching out to an old case by writing: “How a TB Diagnostic Test Patent Survived a 101/Alice/Mayo Challenge: http://www.newenglandipblog.com/files/2016/10/75-2016-08-31-Report-and-Recommendation.pdf …”

It’s a PDF that is rather old by now (August) and there is also this new tweet about a decision from July (CAFC). To quote: “Online Merchandise Customization Methods Were Not Patentable–Affm’d by the CAFC w/Rule 36: http://www.chicagoiplitigation.com/2016/07/online-merchandise-customization-methods-were-not-patentable/ …”

Could he not find any recent or new cases with which to bolster such a narrative? Surely not because, as Watchtroll recently put it, more people landed on a moon than patents on software accepted by CAFC (or something along these lines). The latest articles from Watchtroll are still head-scratching nonsense about CAFC (how to bamboozle judges into thinking that software patents are not abstract). Separately, Watchtroll asserts that Trump will give the upper hand to patent maximalists, but there is no evidence to support that with. For all we know, it can take years before anything changes at all. There is political turmoil in the US right now and patent policy is hardly on the agenda at all. It’s nowhere as urgent as Constitutional matters.

“There is political turmoil in the US right now and patent policy is hardly on the agenda at all.”Not only are patents on software fading away these days; patent litigation is, in general, going down. Here is an article with a misleading headline from Michael Loney. The headline should say something like “October patent litigation down for 4th year in a row” (based on the data), but instead it says “US patent litigation picks up in October” (as if it’s reasonable to compare different months of the year). To quote Mr. Loney, “October district court patent case filing was above average for the year, but 2016 is still greatly down on recent years. The entity filing the most cases in the month was a new entity suing broadcasters and publishers, with the EFF already labelling its patent the “Stupid Patent of the Month”…”

Prof. Crouch’s Web site, in the mean time, shows how the growing number of low-quality patent applications affected pendency.

Both data points (Mr. Loney’s and Prof. Crouch’s) serve to reinforce our belief that litigation falls as a function of software patents going away, which is correlated also to the number of troll cases/litigation (they typically use software patents).

Not only the courts are shooting down software patents in their country of origin/birth. PTAB does this too and based on this report, as expected, PTAB is being increasingly influenced by the vultures, the PTAB Bar Association (patent law firms). As MIP put it: “The PTAB Bar Association was announced on September 16 – the five-year anniversary of the America Invents Act. It was founded by more than 45 law firms with the mission “to promote the highest professional and ethical standards among lawyers and stakeholders who appear before the PTAB”. The association, which is incorporated in Virginia and based in Washington DC, will provide a forum for communications between the legal community and PTAB officials and administrative patent judges. The association noted it wants to “particularly share best practices and stay abreast of the rule making, procedure and jurisprudence emanating from the PTAB.””

“Lobbyists and bullies like Watchtroll keep shaming judges and boards, PTAB itself is being infiltrated and vilified by them, and just about every dirty trick in the book is attempted these days in a desperate last effort to Make Software Patents Great Again.”Think of the PTAB Bar Association as an annoying bunch of lobbyists — people who represent the interests of patent maximalists such as law firms, not scientists like those who work at PTAB. We worry that the growing and escalating veracity of attacks on PTAB's legitimacy can eventually ruin it. Attempts to undermine PTAB have already been brought before the court (CAFC), but fortunately these are failing yet again. Prof. Crouch’s blog has put it like this: “Today, the Federal Circuit denied SAS’s en banc request challenging the USPTO’s approach to partial-institution of inter partes review petitions. In a substantial number of cases, the PTO only partially agrees with the IPR petition and thus grants a trial on only some of the challenged claims. In the present case, for instance, SAS’s IPR Petition challenged all of the claims (1-16) found in ComplementSoft’s Patent No. 7,110,936, but the Director (via the Board) instituted review only on claims 1 and 3-10. [...] In what appears to be a 10-1 decision, the Federal Circuit has denied SAS’s petition for en banc review. Although the majority offered no opinion, Judge Newman did offer her dissent (as she did in the original panel decision).”

We oughtn’t take the death of software patents for granted. Lobbyists and bullies like Watchtroll keep shaming judges and boards, PTAB itself is being infiltrated and vilified by them, and just about every dirty trick in the book is attempted these days in a desperate last effort to Make Software Patents Great Again.

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