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09.23.17

The Court of Appeals for the Federal Circuit (CAFC) Gradually Champions Patent Quality, in a Spectacular Reversal on Its Past Ways

Posted in America, Courtroom, Law, Patents at 9:49 am by Dr. Roy Schestowitz

Under Chief Judge Sharon Prost

Sharon ProstSummary: Some of the latest actions and decisions from the Federal Circuit, which originally brought software patents to the United States and is now taking them away, gradually

LAST night we wrote about the Federal Circuit (CAFC) refuting Gilstrap yet again. We later updated our post with a statement from CCIA and then found this good coverage from a good journalist (a lot of those who cover patent issues are unfortunately with — and usually from — the patent microcosm). He summarised it as follows:

Not long after TC Heartland, though, the East Texas judge who hears more patent cases than any other turned down a motion to transfer by supercomputer maker Cray Inc., which was sued for patent infringement by Raytheon in 2015. Lawyers for Cray argued that, under the provisions of TC Heartland, their client was entitled to have its case in a home venue. But US District Judge Rodney Gilstrap disagreed and said that Cray’s ties to the district—a single salesperson, working out of his home—was enough to keep the case in the Eastern District.

Today, Gilstrap’s decision was reversed by the US Court of Appeals for the Federal Circuit, which hears all patent appeals. In a 20-page decision (PDF), the three-judge panel directed the case against the Seattle-based tech company to be transferred.

Gilstrap’s decision to keep Raytheon v. Cray in his court turned the normally wonky area of patent venue into a scorching political issue. At a Capitol Hill hearing about patent reform, the judge was denounced by both Rep. Bob Goodlatte (R-Va.) and Rep. Darrell Issa (R-Calif.), with Issa calling Gilstrap’s decision “reprehensible.”

Last week the patent microcosm wrote about a “declaration that, inter alia, the US patent is invalid, not infringed, and unenforceable.” This too was a CAFC case. To quote:

Allied then filed a declaratory judgment action in the US — asking for a declaration that, inter alia, the US patent is invalid, not infringed, and unenforceable. In the appeal here, the Federal Circuit has affirmed a lower court ruling that the DJ action is not based upon a “case of actual controversy” as required both by the Declaratory Judgment Act as well as the US Constitution.

It is good to see CAFC, which was originally worst of the worst (responsible for software patents in the US), changing its stance/stipulations on such matters. Watchtroll had gotten so angry about it that he called for dismissal of some CAFC judges and nowadays it’s relying on Trump for destruction of all the progress made. Watch Watchtroll’s political obsession, which four days ago culminated in this: “Trump’s selection for deputy director of management at the OMB, is an inventor who has received “14 successful U.S. patents,” an indication that someone knowledgeable about patents and the U.S. patent system will have a role in shaping U.S. policy on the budget for the executive branch, including the U.S. Patent and Trademark Office.”

“Watchtroll had gotten so angry about it that he called for dismissal of some CAFC judges and nowadays it’s relying on Trump for destruction of all the progress made.”Under Trump, however, with Iancu likely in charge of the USPTO, there’s a growing danger that the Office will soon be run by the patent ‘industry’ rather than scientists and technologists. The Trump administration is certainly on a warpath of destruction if it ends up putting Iancu in charge of other patent radicals. See the new articles titled “Trump’s Path to IP Wars” and “Intellectual Property Laws: Wolves in Sheep’s Clothing”. Quoting the summary: “The excesses of IP law are now a serious obstacle to innovation and economic growth.”

The article says that “the CAFC has reshaped the law by lowering the standards for patentability and expanding the scope of patentable inventions to include software, business methods, and even parts of the human genome.”

“The Trump administration is certainly on a warpath of destruction if it ends up putting Iancu in charge of other patent radicals.”And where has that gotten us? That was the past. Things have changed. While the patent microcosm chooses to obsess over every case where CAFC rules in favour of a patent (this new example is not even a ruling but a reversal of dismissal where “the district court should now pick-up the case again and give the patentee a chance”), the reality of the matter is that CAFC finally learned its lesson (after the Supreme Court had overruled almost every single time) and last year admitted that software patents are an impediment to free speech and should thus be invalidated.

As we shall show later, the anti-Alice lobby rears its ugly head again, pushing for changes irrespective of what CAFC and the Supreme Court (the highest courts) are saying. Facts don’t matter to these people, only cash speaks to them.

“…here again we see CAFC rejecting the temptation to side with patent maximalists.”As a side note, the other day Patently-O wrote about a CAFC case and argued that “[t]he approach here then is for the State Court to first figure out ownership. Then, if it decides that Interactive is the owner, an infringement case can return to Federal Court.”

Sorry, Dennis Crouch, but patents have assignees, not "owners". You should be smart enough to know that. WIPR should know that patents are not owned but merely assigned, but it repeated similar wordings around the same time (with the word “ownership” right there in the headline even). To quote:

The US Court of Appeals for the Federal Circuit has affirmed a ruling by the US District Court for the District of New Jersey that dismissed patent infringement claims centring on interactive software, and remanded questions back to the New Jersey Superior Court in a precedential ruling.

Eric Inselberg, the appellant, had invented various systems which audiences can use to interact with live events such as football games and live concerts.

The patents he received for his inventions were formerly held by Inselberg Interactive (also a party in the appeal).

[...]

The alleged patent law issues were “incidental and contingent” because Inselberg and Interactive were not the current patent owners, and neither were suing as the patentee.

McNulty dismissed the federal claims and remanded the state law claims back to state court.

Bisignano and First Data then appealed against the district court’s orders to the Federal Circuit.

The above certainly sounds like a software patents case, but we have not looked closely at the patents. Either way, here again we see CAFC rejecting the temptation to side with patent maximalists.

Not a good time to be in the patent ‘industry’…

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