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10.29.17

Large US Companies Continue to Stockpile Patents, But US Courts Have Learned to Repel Patent Maximalism

Posted in America, Apple, IBM, Patents at 7:49 pm by Dr. Roy Schestowitz

Patents on software are just about as inane and worthless as patents on musical notes

Papers with musical notes

Summary: In spite of misguided campaigns to accumulate/hoard tens of thousands of patents and then cross-license these, courts do not see the legitimacy of most of these patents

SEVERAL days ago someone pointed out this case of a lawyer who had been fired for being ethical. It’s not too shocking; lawyers aren’t expected to be honest, only to maximise profit. To quote:

The Third Circuit reversed the grant of the dismissal of a lawsuit by in-house counsel who sued because, he alleged, he was forced to choose between complying with an application filing quota or complying with his ethical obligations to the USPTO. The case, Trzaska v. L’Oreal USA, INc., (3rd Cir. July 25, 2017), is here.

“The complaint alleged that complying with the quota meant filing “frivolous” patent applications,” Generare Oy Ltd. told me about this. The situation may seem familiar to some.

What’s with all the stockpiling? Why has this become so normal? Yesterday we saw blind acceptance of patents and endless admiration of Apple/Steve Jobs, leading to this kind of terrible Web site which equates/conflates patents with innovation and celebrates accumulation of patents based on quantity alone (because large companies just cross-license a massive number of patents without even assessing these individually).

“What’s with all the stockpiling? Why has this become so normal?”The above is about Apple, but IBM too plays that game and IBM is far too proud of software patents that are likely invalid (it still uses these to bully rivals). See this press release [1, 2, 3] which said “IBM leadership in storage systems and software is based upon more than 380 system patents, including IBM FlashCore technology and more than 700 patents for IBM Spectrum Storage software.”

Around the same time (as this press release) we saw IBM’s patents chief gloating that “Snap-On gets hammered” by patents, having just been judged by a jury that probably does not understand what patents are. The report in question says this:

The Journal Sentinel reports Snap-on’s Rick Secor says the company strongly disagrees with the jury’s verdict and will “vigorously appeal.”

In the lawsuit, the Brookfield-based Milwaukee Tool says the lithium-ion battery packs it invented revolutionized the industry after the technology was introduced in 2005. It replaced packs that used nickel-cadmium batteries.

This particular case is not about software patents, but it’s interesting that IBM is keen to promote it. The patents chief has also just linked to a patent troll’s site (Dominion Harbor) in support of software patents. “The sad, confused state of US #patent eligible subject matter described here,” he said in relation to a patent troll known as Secured Mail Solutions (SMS) — a troll we just mentioned here the other day. To quote:

Because I believe that everyone, as a means of self-improvement, should occasionally test their patience and evaluate their ability to manage pain, I was reading the Federal Circuit’s recent decision in Secured Mail Solutions, LLC v. Universal Wilde Inc., upholding the district court’s ruling on the pleadings that Secured Mail’s seven asserted patents were all ineligible under 35 USC § 101. These patents all address tracking mail through an encoded marking, e.g., a barcode, QR code or URL, on the outside of a mailer which is intended to provide information to the recipient about the contents and the sender. Setting aside that when you see a panel of Prost, Clevenger and Reyna you know the patent’s dead, it’s just a matter of how they will craft the language to that desired effect, let’s just look at how the famed Alice test was handled in this case in general.

It’s safe to say that almost every such case now yields invalidity. Courts understand, in light of Alice, that it’s a matter of great certainty. Software patents are out.

“Software patents are out.”If the rumours are true, the USPTO‘s patent examiners too will soon follow suit. Maybe the EPO‘s also?

The EPO mentioned PCT applications a few days ago and so did Patently-O (compare China to Korea in this graph). PCT is the Patent Cooperation Treaty and if one nation abandons software patents, we can expect others to follow the lead.

Moreover, as Patently-O pointed out a few days ago, better examiners will result in fewer incorrect patent grants. The research explores the “[r]elationship between examiner specialization and examination outcomes.”

“So it shows empirically that “specialization is associated with a more stringent examination process,” as one might expect. Lack of knowledge (or ignorance) in the problem domain leads to more patents.”The summary says, “we find a significant degree of technological specialization among patent examiners working in the same art-unit. This specialization is less pronounced in some of the computer-related technology centers. We found no evidence that examiners specialize in handling important or controversial applications. And it seems that specialization is associated with a more stringent examination process, perhaps because it allows examiners to more easily identify relevant prior art.”

So it shows empirically that “specialization is associated with a more stringent examination process,” as one might expect. Lack of knowledge (or ignorance) in the problem domain leads to more patents. Here we see the importance of the recruitment process, or the ability to attract top talent. It’s hard to mislead examiners who assess patents in their own field of expertise. Consider for instance this new example that says: “The court found the defendant’s argument “not unreasonable,” but nonetheless rejected it. The “great weight of the case law” made clear that the duty to “disclose all material information to the patent examiner” did not extend to ensuring that “the patent examiner understands that information.””

Sadly, if the examiners don’t understand, they often just grant patents. It should be the exact opposite. If the applicant cannot properly explain to the examiners what is being claimed, then the examiner should assume it’s likely intentional. “If you can’t explain it simply, you don’t understand it well enough,” Albert Einstein famously said. He too was a patent clerk (before becoming famous).

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