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03.15.17

More Good News About the US Patent System Crushing Software Patents While the Reformer, Michelle Lee, Stays

Posted in America, Microsoft, Patents at 5:18 am by Dr. Roy Schestowitz

Something positive for a change

Reading newspaper

Summary: A quick roundup of patent cases in the US and what these mean to growing optimism about the practicing industry, not a bunch of parasitic firms that prey on and tax the practicing industry

TECHRIGHTS has been emphasising for nearly a decade now that low patent quality leads to patent trolls or gives them greater strength. If one removes software patents, that will immediately knock out a large majority of patent troll lawsuits. To a certain degree, in the US at least, this is already happening, thanks largely to Alice.

“Another example of the value of Alice in improving patent quality & protecting businesses from trolls,” United for Patent Reform wrote this week about this article, which was mentioned here before. To quote a portion again, it’s about Microsoft’s patent troll which was a ticking time bomb until several years back:

After staying quiescent for years, IV [Intellectual Ventures] opened up a barrage of lawsuits to enforce its patents in 2010. But the companies that decided to stand up to IV rather than buckle under have been faring well, as judges have found the patents that IV has chosen to enforce in court less than impressive. It’s a telling sign about the giant patent-holder’s collection. Given the opportunity to pull just about any patent out of its huge collection, one would assume the company would choose the best of the lot. But much of it appears to be exactly the kind of easy handouts from the dot-com boom era that have been called out by critics of “patent trolls.”

Never forget Intellectual Ventures’ very strong ties to Microsoft, and to Bill Gates at a personal capacity. A lot of people choose to forget this or simply don’t know. Intellectual Ventures also has literally thousands of satellite firms, based on numerous reliable reports. This is very relevant in light of our previous post. Microsoft runs an expensive and extensive trolling operation which is being used to coerce (or exercise control over) a lot of companies out there. It’s a form of blackmail: do as we tell you or someone out there will come and burn your house/business (e.g. patent trolls). Microsoft now offers the equivalent of ‘protection’ money, in the form of “Azure IP Advantage”, equivalent to “peace of mind” back in the Novell days (one decade ago).

Thankfully, as the above report shows, Intellectual Ventures is not so successful (so far) and there have been both layoffs (since about 3 years ago) and departures of top executives. Intellectual Ventures is basically rotting. It wouldn’t have rotten if it weren’t for decisions like Alice, which some fear the Trump administration has a financial incentive to overturn (Trump’s family business). IP Watch has just caught up with the ‘news’ about Michelle Lee (it’s not really news that she keeps her jobs; Nobody ever said otherwise, except the patent maximalists’ propaganda mill, which had been hoping and trying to oust her in favour of trolls-friendly candidates). To quote IP Watch:

A letter made public only by a United States Freedom of Information Act (FOIA) request confirms that Michelle Lee remains the director of the US Patent and Trademark Office (USPTO), ending a mystery that has been curiously kept secret since President Trump took office over 50 days ago.

One might ask, why do we care so much about Michelle Lee? Well, we have written more than a dozen posts about her since Trump’s inauguration because we noticed a malicious lobbying campaign to remove her, primarily because she did not tolerate trolls and was reasonably OK with the demise of software patents. For those who may be wondering where we stand right now, it’s still looking good. As of this week, software patents proponents take note of software patent being invalidated, with holders relying on wasteful/futile appeals. To quote this one example: “Patent Owner Brief Appealing Invalidation of Email Patent under Alice/101: https://dlbjbjzgnk95t.cloudfront.net/0901000/901132/document%20(27).pdf

That’s unlikely to change. See this new article titled “Fed. Circ. Affirms Nixing Of Email Patent Under Alice,” which says a “district court had found the asserted claims of Network Apparel Group LP’s patent to be invalid…”

Even a district court found the patent to be invalid. District courts are typically more tolerant of software patents than the Court of Appeals for the Federal Circuit (CAFC). Here is another new report from the same site:

Fed. Circ. Affirms Medical Billing Patent Invalid Under Alice

The Federal Circuit on Monday affirmed the Patent Trial and Appeal Board’s rejection of an application for a patent on a method of electronically transferring patient medical records over a network, saying the concept is abstract and therefore not patent-eligible under Alice.

In a per curiam opinion, the three-judge panel said the claims of inventor Angadbir Singh Salwan’s U.S. Patent Application Number 12/587,101 are unpatentable because they cover the abstract idea of billing insurance companies and organizing patient health information.

See the trend? The Patent Trial and Appeal Board (PTAB) is crushing software patents and, as happens about 80% of the time, CAFC reaffirms its judgment. Dennis Crouch is trying to put an end to that or at least slow that down as it makes him increasingly redundant/obsolete. Yesterday he chose to cover a particular CAFC/PTAB case because challenged patents were not invalidated, for a change (as happens only about 20% of the time). Here’s an except:

That suggests to me that the case is over with the patentee winning the IPR.

Claim Scope: I’m still somewhat confused about whether the claim structure used here is proper under the law. 35 USC 112 states that “A claim in dependent form shall be construed to incorporate by reference all the limitations of the claim to which it refers.” In my mind, one element of claim 12 is that it is a “method” and claim 21 is a “machine . . . configured to perform the method.” As such, claim 21 cannot itself meet the method limitation of claim 12.

Well, there are far, far more such cases where CAFC agrees with PTAB and invalidates patents; we suspect that Crouch just doesn’t want to highlight such cases; maybe he picks edge cases or exceptional scenarios for the purposes of open inquiry. Whatever it is, let it be clear that software patents are in an unprecedented crisis in the US and this is hurting firms which choose to just sue rather than innovate.

“In the more than two years since the Alice decision,” Industry Week wrote yesterday, “courts have held many software patents invalid as claiming nothing more than an abstract idea.”

Let it stay that way.

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