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03.03.18

China’s Patent System is a Trade Barrier and a Legal Wall Preventing Fair Competition With the Communist Party of China (CPC)

Posted in America, Asia, Patents at 4:25 pm by Dr. Roy Schestowitz

Giant Chinese corporations are connected to the government (CPC) and are guarded by patent thickets and platoons of lawyers

Panorama

Summary: With over 200,000 lawsuits per year (a 40% jump in just one year) and millions of patents of questionable value/validity China is becoming an assembly line of lawsuits that favour large domestic firms which are connected to the government

THE Chinese patent office, SIPO, is harvesting patents for China. Almost all the patents in there are from Chinese firms. So are the lawsuits. Who is targeted by these patents and the lawsuits? Sometimes foreign companies. It seems as though the goal of SIPO is to drive out competition from abroad. The EPO and USPTO are nothing like that. In fact, many patents there are not domestic; the same is true in India.

Danny Friedmann is attempting to make sense of China’s strategy, but it’s behind a paywall (in spite of the .org domain suffix). We too have our theories, which we have put forth over the years. IAM has just said that the “Chinese cabinet body under leadership of President Xi plans major changes to IP litigation: * Higher damages * Reforms to evidence collection regime * More specialist courts * Tech-savvy, “politically determined” (!) judges…”

Maybe politically-motivated is what they meant. It’s all about politics. Pooh the Bear (Xi) and the misguided CPC that kills (e.g. works to death) people under the guise of “People’s [Communist] Republic” (for enrichment of CPC-connected capitalist oligarchs) now realises that its patent strategy is reducible to a legal mess. As IAM noted, litigation has skyrocketed (up 40% in just one year). To quote:

At a press conference on Wednesday, China’s leading IP jurist, Supreme People’s Court vice-president Tao Kaiyuan, announced that 2017 saw a 40% jump in IP-related litigation in the country. The figure for new first-instance cases for all categories of rights nationwide was 213,480. Justice Tao also made the first public comments on a new roadmap for IP reforms unveiled this week by the very highest level of the Chinese state.

Surging past the 200,000 mark for the first time, Chinese IP cases have more than doubled in four years. That is about 18 times greater than the total figure for new patent, trademark and copyright cases in US federal courts during 2017, which according to Lex Machina was 11,602.

“IP suits in China in 2017 came in at over 200,000,” IAM added. “That’s 18 times greater than the total in the US.”

Tian Lu wrote about the opening of another court because China seems to actually believe that more and more patent lawsuits would do its overwhelmingly producing economy any good. “Since 24 February 2018,” Lu wrote, “the Xi’an Intellectual Property (IP) Tribunal has officially come into operation. Located in Xi’an International Trade & Logistics Park, it is the first specialized IP tribunal in Northwest China, and is considered to be a major development in the National IP Strategy, in terms of promoting the judicial system reform, and fully implementing the ongoing Belt and Road Initiative.”

Unsurprisingly, this judicial system reform mostly benefits friends and allies of the government, not ordinary Chinese businesses.

These 200,000+ lawsuits per year are affordable for large companies, not for small ones.

This comes to show how out-of-touch China is. Not the US. If the goal is to become a litigation hub, then they sure are succeeding. IAM is loving it because it fronts for the litigation ‘industry’. A few days earlier IAM attempted to shame Korea into the same thing. “Korea’s IP royalty deficit grew last year,” it said, “thanks largely to big payouts to US companies.”

As if the solution to patents (or patent litigation) is yet more of them. This pure nonsense is promoted by those who fail — or simply refuse — to understand that Korea rejects patent maximalism including patents on software. The US is in fact becoming more like Korea and IAM has just pointed out this amicable resolution. IAM’s Zhao is merely describing how China (with its patent trolls epidemic) hammers away at LG and Samsung — showing, if anything, China’s insanity, not Korea’s weakness. LG has quit China and it’s actually China’s loss. It might result in fewer manufacturing contracts. To quote Zhao: “Although data shows Korea has continued to achieve IP surplus with China, big Korean companies seem to be going through a rough patch in the country. Most recently, this blog reported Huawei’s victories in Chinese IP office and courts against Samsung Electronics, as well as LG Chem’s difficulty in licensing battery to Chinese companies. There are few examples of Korean companies asserting patents in China.”

They would need actual Chinese patents. It’s unfortunate that the general tone at IAM is, “get lots and lots of patents and then file lots and lots of lawsuits.” That makes sense when one considers the firms IAM fronts for. Later this month IAM will attempt to disclose its bias by differentiating “News” and “Analysis”; it will still be lobbying for those who are paying e.g, Battistelli and the lawyers, patent trolls etc.

“Sisvel and Via launch mobile technology patent pools on the same day in anticipation of 5G roll-out,” IAM wrote some days ago regarding this blog post about patent parasites going east (it’s a real problem for China because they prey on Chinese companies).

IAM got some quotes too:

Speaking to the IAM blog Via President Joe Siino commened: “Given the direction of technology in mobile and certain fields like automotive, there’s an increasing need to license multiple standards at the same time and so having a multi-generational option available is very important and that’s only going to increase as 5G rolls out.” As the fifth generation of mobile technology starts to be implemented Via will launch both a standalone pool but also combine the new innovations into its new combined mobile platform.

Sisvel’s move should also help simplify things for the growing band of manufacturers which are including mobile technology in their products. “With the mobile communication program, Sisvel makes the implementation of the enabling technologies simpler, giving implementers yet another level of peace-of-mind,” David Muus, program manager of the new platform commented in the press release Sisvel issued about its launch.

Sisvel’s new press release can be in a patent troll’s site.

“Chinese patent market may not be as unpredictable as you think,” IAM said, “based on findings from new study” it wrote about earlier on. This says China is not the “Wild East many patent owners believe it to be”; they want patent chaos, so some of them relocate. “The research,” IAM said, “finds that although better patent quality generally leads to a higher likelihood of an invention patent sale, both lower and higher quality patents are less likely to be licensed out than medium-quality patents. Meanwhile, quality had no effect on the transaction of utility model patents. It should be noted, though, that quality here is defined broadly, as the study uses the R&D cost of patents reported by companies that have participated in the Chinese Inventor Survey as a proxy.”

China is where patent lawsuits now crush competitors that are small or foreign; the ultimate winners are large firms. Here’s Taiwan’s Foxconn suing smaller firms:

Major Taiwanese liquid crystal display panel maker Innolux is suing two affiliates of its mainland Chinese rival HKC for infringing on 17 of its intellectual property rights.

The move by the subsidiary of Hon Hai Precision Industry, better known as Foxconn, is believed to have been led by its Chairman Terry Gou, who is trying to bolster the group’s display panel business.

Foxconn is a gigantic company; although it is Taiwanese, a lot of its workers and production are in mainland China. It’s not hard to imagine Foxconn getting its way because is has deeper pockets and more patents. The Chinese patent system is now tilted in favour of such corporations.

Just Months After Japan’s Giant Canon Joined a Patent Nonaggression Pact (OIN) It’s Filing Dozens of Patent Lawsuits

Posted in Asia, Courtroom, OIN, Patents at 3:10 pm by Dr. Roy Schestowitz

A lantern

Summary: The company better known as a victim of patent aggression is now approaching the U.S. International Trade Commission (ITC) in pursuit of protection money if not injunctions

A FEW months ago Canon joined the Open Invention Network (OIN), but its USPTO-granted patents are still afloat and they are being used offensively, not defensively. To quote Law 360:

Canon filed three dozen suits Wednesday against companies in 15 federal jurisdictions along with a complaint at the U.S. International Trade Commission alleging that the companies are infringing patents that cover its printer toner cartridges.

Japan-based Canon Inc. hit Ink Technologies Printer Supplies LLC, Print After Print Inc., and Billiontree Technology USA Inc. in Ohio, Arizona, and California federal courts and 33 additional companies in various federal district courts with complaints alleging that the companies are infringing up to nine patents that cover its printer toner…

Canon was a victim of Microsoft's patent troll (in spite of paying ‘protection’ money to Microsoft) and it was one of the few firms the EPO discriminated for. Is Canon becoming what it fought?

“Holy cow,” one patent maximalist uttered. “Canon went ham yesterday filing new patent complaints.”

“Is Canon becoming what it fought?”“It is also very unJapanese,” IAM said, “at least traditionally – and very, very unCanon. It would be interesting to know whether this is all about preventing infringement or generating licensing income.”

“Litigation is a common response after strong assets do not sell,” said another person. “They’ve been selling to NPEs [trolls] for a while, without blowback, so…”

These patent trolls are living in a fantasy world. Many of these trolls cease operations and go ‘bankrupt’ nowadays (they’re not real businesses anyway).

“These patent trolls are living in a fantasy world.”“If that is the case,” IAM continues, “it’s a big turnaround as the top IP executives at Canon have always been very sceptical of the benefits of litigation-based monetisation. If Canon is doing it, then we can probably say Japan Inc as a whole is in the process of a big conversion.”

A couple of weeks earlier Bluefin bragged about pursuing another Japanese patent. JPO recently made headlines for softening its stance on patents. Does that explain why Canon ‘exported’ its patents to trolls? Is it that desperate?

In Order to Thwart Patent Reform (AIA) the Patent Microcosm Makes a Caricature of the United States

Posted in America, Deception, Patents at 2:43 pm by Dr. Roy Schestowitz

As if patent litigation is the only thing the country has to offer

Herald Square

Summary: There’s a lot more to the US than patents and its issues are vastly different from a growing lack of lawyers and litigation

THE USPTO has improved its reputation among technology firms; it’s only upsetting radical elements of the patent microcosm. So to blame the USPTO for loss of US leadership would be worse than misguided. It’s merely an attempt to shame the Office into changing (in favour of the patent microcosm).

With government shutdowns and maladministration under Trump it’s not exactly surprising that there are bureaucratic difficulties. Carl Oppedahl, a partner in his own law firm, wrote about the Hague Agreement a few days ago [1, 2] and then mentioned claims of a USPTO closure. Some “people are telling me they think the USPTO is actually open today,” he said. “If this is true, then maybe the resetting of response dates to Monday won’t happen after all.”

“With government shutdowns and maladministration under Trump it’s not exactly surprising that there are bureaucratic difficulties.”There are quite a lot of associated tweets, saying that the “USPTO operating status is CLOSED.”

HIGH WINDS? Something else?

Either way, there are accusations now that communications by the USPTO are poor, leaving stakeholders uncertain about its status.

What’s more ludicrous, however, is this rant from 2 days ago. Watchtroll’s Paul Morinville now repeats their infamous lie that patent reform is the cause of “America’s Decline in Global Competitiveness” (in his words). Sometimes they blame the Chinese; they’re just jealous of the litigation climate in China (more on that in a separate post).

“The patent microcosm is deluded beyond belief and it is attempting to spreading this delusion far and wide.”“The U.S. Patent System” is not why the US is declining (in patents it’s improving, namely by improving patent quality). Techrights already wrote many articles debunking this famous new lie (that improving US patent quality — not loss of factories, erosion of education etc. — is to blame for all US troubles). The Watchtroll crowd also does lots of shaming of technology firms. What keeps the US at the forefront in many areas are strong universities and large producing firms, not a bunch of patent trolls and a judge called Rodney Gilstrap*. The patent microcosm is deluded beyond belief and it is attempting to spreading this delusion far and wide. Earlier today Watchtroll was trying to blame US economic woes on patent reform yet again.
______
* Patent parasites are still trying to drag their victims to courts that are notoriously defendants-hostile. But once again that fails spectacularly:

The court granted one defendant’s motion to transfer for improper venue because defendant lacked a regular and established place of business in the district through its former office that closed shortly before plaintiff filed suit.

EPO Annual Report Will Dominate the News Next Week, Whereas Unitary Patent (UPC) is a Goner

Posted in Europe, Patents at 1:18 pm by Dr. Roy Schestowitz

UPC fluff and bluff has become the norm, but it’s detached from underlying facts

Bluff

Summary: The EPO’s fluff will be seeded in news sites next week, distracting from profound declines in quality and the demise of the UPC (a failed gamble of Battistelli)

THERE will be a lot of press coverage about the EPO next week. Plenty of puff pieces about the annual report, parroting the PR people rather than doing journalism with fact-checking and critical thinking. That’s fine, we’ve grown accustomed to it and some of the publications that participate in this PR charade got paid by Battistelli (at the expense of EPO stakeholders).

“They try to trick British politicians.”What we won’t be hearing much about next week is the UPC. Team UPC will get a lot louder again around Easter time. A patent attorney based in Germany (with “a focus in patent infringement and licensing” i.e. enforcement a la UPC) doesn’t accept the death of the UPC; nobody in his position likes to think that Brexit among other things (FCC, EPO scandals etc.) kills the UPC for good. He wrote: “[Theresa] May on #ECJ and #Brexit : ‘the jurisdiction of the ECJ in the UK must end’ vs ‘if we agree that the UK should continue to participate in an EU agency the UK would have to respect the remit of the ECJ in that regard’. what does that mean for #UPC Full text: https://blogs.spectator.co.uk/2018/03/theresa-mays-our-future-partnership-speech-in-full/ …”

It’s pretty obvious what it means. He also relayed Mathieu Klos as saying (German users’ tweets in English): “2 days in London with talks tonine patent firms brought no clear picture whether the UK will finalise the remaining steps of #UPC ratification. Range of predictions varies from “it will happen around Easter ” to “totally unpredictable because of cabinet Brexit discussions””

“Without the UPC, there would still be EPO and EPC. There would be Boards of Appeal too, i.e. judges.”That former group would be liars like Bristows and cohorts who fabricate statements and resort to dirty tricks. They try to trick British politicians. Don’t pay much/any attention to them. They just lobby for their financial interests, sometimes anonymously and often while deleting opposing views from sites (they don’t respect freedom of expression in comments).

There’s this new guest post by Matteo Dragoni, a Stanford TTLF Fellow. That covers the UPC and EPC, noting that it didn’t quite work as intended (NPOs are still very much relevant). To quote:

Second, the current EPC system has established a “regional” patent system which is better than the PCT system, but it is still far from having eliminated all the economic/bureaucratic hurdles to patenting. It is true that European patents, once granted, can be validated/extended—and so recognized—in every single EPC country, but such validation/extension process comes at a cost. The patent often needs to be translated, some other taxes must be paid and the help of a local patent attorney is required. Annual patent fees must also be paid or the even the local patent expires. Once the European patent is granted, the patentee usually has 6 months to decide the validation/extension countries.

Since the grant of a European patent usually happens 3-4 years after the patent application has been filed, this means that an entity might not be ready to extend or validate the patent in many other countries, and if it has to drop some countries, it usually does so with less appealing, small, markets, most of which are the accession States considered in Hall and Helmers’s article. Moreover, a European patent usually reduces costs only if the patentee is interested in having patent protection in at least 3-5 EPC Countries (depending on the local costs and fees).

The above also answers a bit to Risch’s concern that a “unified” patent protection might not imply a “strengthening” of IP protection. As the situation is now, the European patent merely grants a bundle of nationally regulated patents that, once validated/extended, are governed by national rules and are subject (for some aspects) to the exclusive jurisdiction of national courts. This makes the patent rights obtained through a European patent costlier but also quite strong: it is not so cheap to obtain and validate/extend a European patent, but it is also quite expensive to invalidate the validated/extended European patent in all the single EPC jurisdictions.

Without the UPC, there would still be EPO and EPC. There would be Boards of Appeal too, i.e. judges. The rush to ratify something like the UPC is nothing but a wet dream of Big Litigation firms, which not only promote UPCA but also wrote a lot of UPCA. It’s a failed coup and this coup has already caused tremendous damage to the EPO.

Next Week’s Annual Report From the EPO Will Say Nothing About Decline in Patent Quality

Posted in Deception, Europe, Patents at 12:44 pm by Dr. Roy Schestowitz

The EPO is going downhill, but its PR people will claim the exact opposite (it’s their job to mislead)

Decline

Summary: Decline in patent examination standards for the purpose of ‘faking’ growth (like Battistelli wants) won’t be accounted for in the annual report, nor will attempts to attract more applications/applicants by offering them ‘discounts’

THE management of the EPO will release its annual report in a few days. As we explained some days ago, this report will hide the negatives and accentuate the positives, just like last year. We wrote many articles last year in order to explain how facts had been distorted and poorly presented by the EPO.

“As we explained some days ago, this report will hide the negatives and accentuate the positives, just like last year.”EPO PR people already prepare their rather limited audience (many followers are not real people): “Stay tuned to find out about patenting trends in 2017. We will publish our annual report on 7 March.”

On Friday they also resorted to more greenwashing tweets about patents that typically prevent proliferation of ‘green’ technology, rendering it an overpriced monopoly rather than the Commons.

“We wrote many articles last year in order to explain how facts had been distorted and poorly presented by the EPO.”In the meantime we are assessing the sorts of patents granted by the EPO. Some are more controversial than others, so those subjected to appeals/oppositions are a little more interesting. Well, meanwhile we have been looking into some European Patents (EPs) on algorithms as they do exist.

Patent number/ID EP2179387/EP2179387A4 (publication number 08775543) seems interesting because it’s summarised as follows: “Disclosed is a method and an advertising system for delivering advertisements in a mobile communication network. The method comprises detecting a need to deliver an advertisement, and arranging said delivery such that one or more indicators of advertisement behaviour specific to individual recipients of advertisements and/or to the overall system are taken into account. delivery of advertisements in mobile advertising system.”

No device or anything, just a simple chart. I’ve read it and it seems like a classic software patent. It’s not supposed to have been granted (in my humble assessment), yet law firms are all too eager to see everything patented. Benjamin Henrion, for example, has just highlighed this new blog post from epc.nl (entitled “Software patenteren vergt creativiteit”). The domain they chose for their firm is interesting because it sounds like EPC in the Netherlands (the EPC denies software patents actually), so the acronym “EPC” got sort of hijacked by software patents proponents.

“In the meantime we are assessing the sorts of patents granted by the EPO.”When the annual report comes out next week remember that this annual report includes no measure of quality and it exploits a depleted pool of pending/queued applications that are assessed and often granted in a rush. This annual report would not account for reduction in fees, which in our assessment may contribute to an artificial surge in number (“discount”/”sale” tactics) without adjusting the numbers accordingly, e.g. total revenue.

Someone has just posted the following comment at IP Kat to say:

But it does put me in mind of the current obsession inside the EPO with the “clarity” of the text of patent specifications. This obsession is absurd, but it does provide a glorious proof of what you write about, that every reader has a different and unique interpretation of any given text.

No patent attorney ever reached 100% “clarity”. For the EPO to refuse a petition from the inventor, applicant or patent owner because its clarity is less than 100% is outrageous. Perfect clarity is something one can approach only asymptotically. The EPO should confine its enquiry to whether the level of clarity is good enough, whether it is “fit for purpose”, and not whether it is 100%

From what we have heard or read, one serious issue at the moment is that many rejections are due to rather superficial things or clerical mistakes (how an application gets filed) rather than underlying technical deficiencies, lack of merit, prior art etc. It’s a lot easier to disqulity an application this way, creating an illusion of high ‘production’ whilst also maintaining similar rejection rates. If anyone inside or outside the EPO has further insight on this, please get in touch. Forums for discussions of EPO matters (e.g. CSC publications, blog comments and so on) are being suppressed these days, impeding free flow of information. EPO management has so much to hide.

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