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01.24.17

China Drowns in Worthless Patents, the United States (FTC) Bemoans Patent Trolls, and Australia is Urged by Its Commission to Decommission Software Patents

Posted in America, Asia, Australia, Patents at 8:41 pm by Dr. Roy Schestowitz

The patent gold rush may be reaching its end, except in China, the land of rare metal

Gold
Too much of anything devalues the whole

Summary: A roundup of news from three continents, where patent dynamics move in similar/parallel and sometimes opposite directions (EPO and SIPO getting worse, whereas Australia and North America recognise the need for reform)

WE TYPICALLY focus on the EPO and the USPTO because they are English-speaking and thus easier to follow, but in the far east we gradually learn about a trolling epidemic and a plague of low-quality patents.

Hugo Barra made some headlines a few years back (we wrote about it) when he went to China to (later on) focus on patents at Xiaomi. Well, he is now fleeing from China, which is rapidly becoming a patent cesspool full of patent trolls, boosted by low patent quality or armed by a wealth of patents that should never have been granted. IAM, a trolls’ apologist, spins this departure (“IP strategy set to play an even bigger role in Xiaomi’s global expansion plans”) instead of focusing on the news, which is Barra quiting his job. This was covered in various news sites a few days ago and IAM put it like this: “Xiaomi’s vice president of global operations, Hugo Barra, will leave the company after the Chinese New Year festival later this month. Wang Xiang – senior vice president for strategic cooperation and the man that oversees Xiaomi’s IP function – will step into his shoes.”

Barra was previously mentioned here in relation to his pursuit of patents. Well, with over a million patent applications in just one year (at SIPO) no doubt the value of pertinent patents has eroded; they’re colossally devalued and depreciated. Barra is wise enough to see that. Recall what Microsoft did to Xiaomi last year. Xiaomi needed to pay a patent troll like Microsoft, essentially paying Microsoft for devices that don’t have anything of Microsoft in them (Android).

In another piece of spin from IAM (also published today) we saw this promotion of patent maximalism in the US. The Trade Commission is not a fan of the patent microcosm; in fact, it slammed patent trolls only a few months ago, in a long-awaited report about PAEs. After trashing this FTC study about patent trolls (we mentioned this at the time) IAM is now latching onto one single person at the FTC to advance the trolls’ agenda. What on Earth would ever compel people to treat IAM as a news site? The site is literally being paid by patent trolls. It’s agenda wrapped up or dressed up as "news".

In the mean time, the Productivity Commission of Australia finishes and releases the final report, which was also long-awaited and it slams software patents, as is made evident by Lexology today (analysis by Ben Hayes of FB Rice). To quote the key parts:

The Productivity Commission published its final report on Australia’s Intellectual Property (IP) Arrangements in the week prior to Christmas.

The Commission was tasked with analysing the efficacy of Australia’s intellectual property arrangements. In particular, the Commission investigated whether current arrangements provide an appropriate balance between

– access to ideas and products, and
– encouraging innovation, investment and the production of creative works.

The Commission began looking at these issues in 2015, and this final report represents the culmination of 12 months’ work.

[...]

Scrutinise software patents going forward

Significantly, the Commission has retreated from its earlier anti-software patent stance. The Commission does not explicitly acknowledge that software patents have positive social value but accepts that software patents are in fact suitable for some types of innovation (with particular reference to Qualcomm’s submissions) and that software patents should be closely scrutinised going forward. We consider that there remains great value in software patents when used to protect quality inventions. We believe the existence of the patent system incentivises significant investment into research and development in information and communication technologies in Australia.

A particularly notable recommendation was for IP Australia to collect and publish information on patent applications that are accepted or rejected on the manner of manufacture test. This would include information on how the decisions in Research Affiliates and RPL Central have affected IP Australia’s consideration and patentability of software inventions. We consider that such information would be beneficial to both patent owners and practitioners who have been grappling with inconsistent applications of the law by examiners (as referred to earlier).

Being an analysis from the patent microcosm, it’s expected that a lot of attention will be placed on think tanks or front groups. IP Australia has become a major inconvenience for them.

The growing/strengthening bond between Battistelli and China (not just on human rights but also patent quality) is truly a cause for concern here. Australia and North America are moving ahead, whereas Europe imitates the imitators.

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