03.31.18
Posted in America, Courtroom, Patents at 10:27 am by Dr. Roy Schestowitz
Reference: Administrative Law Judge Photos
Summary: Once again we are seeing the International Trade Commission giving ‘teeth’ to patents that aren’t really legitimate (or nearly invalid/expired) and serve no purpose other than embargoes, which merely harm customers by limiting choice
Yesterday we found this new little rant from the CCIA. Josh Landau alluded to something from Thursday:
Yesterday, the ITC published the Federal Register notice of the initial determination of an ITC administrative law judge (ALJ). The ALJ determined that the investigation, instituted in January based on a complaint filed last year, shouldn’t go further forward and terminated the case for good cause.
I’m going to totally set aside the merits of the (questionable) patent involved in this case, U.S. 7,930,340. (I will note that the plaintiff has previously been sanctioned by the Federal Circuit for trying to evade word count limits by deleting spaces between words.) I’m going to focus on one thing—expiration.
The patent was filed claiming priority to an application filed August 5, 1996. It was given 577 days of extra patent term due to time in prosecution. That means that it expires 20 years and 577 days after August 5, 1996—on March 6, 2018.
The ITC just forced the defendants to spend several months paying to defend themselves against a patent that everyone involved knew would expire before the ITC acted.
This is truly incredible (and well caught by CCIA). What is the ITC thinking?
“The odd thing is, Cisco is one of the vocal proponents of PTAB.”Unfortunately we’ve found ourselves having to criticise ITC quite a lot over the past year. Even earlier this month. The latest in Arista Networks v Cisco Systems, or Arista challenging patents that Cisco uses in an effort to embargo the competition (through ITC), is now the subject of a new post at Patently-O. As a reminder, ITC (in)famously discarded the judgment of PTAB and persisted with an embargo. To quote Patently-O:
In what is mecoming [sic] a more regular outcome, the Federal Circuit has again vacated a PTAB IPR holding — holding that the USPTO’s panel of Administrative Patent Judges failed to “adequately explain its reasoning on a point that was central to its analysis.”
This time the case involves a PTAB finding for the patentee — that the IPR challenger Arista had not proven obviousness (for several challenged claims of Cisco’s Patent No. 8,051,211). The identified failure was in addressing a particular argument for how the prior art taught the claimed invention.
Does it mean that the embargo carries on (or products modified, i.e. made worse, just to bypass it)? That while guilt has not been established Arista is still being punished (quite severely in fact, sinking the stock)?
“The bottom line is, Cisco seems to enjoy PTAB and support PTAB as long as ITC weirdly enough snubs PTAB and simply maintains an embargo on Cisco’s competitors.”The odd thing is, Cisco is one of the vocal proponents of PTAB. It even funds PTAB advocacy front groups.
Meanwhile, a Microsoft-connected law firm mentions (as recently as yesterday) some company we never heard of. It’s suing Cisco using patents, which might explain why Cisco does support PTAB (it also employed Patent Troll Tracker, who got himself and Cisco sued after the late Ray Niro had unmasked him). To quote:
In a new twist in competitor-based lawsuits involving cloud computing, Centripetal Networks, a relative newcomer, filed a patent lawsuit against industry incumbent and Fortune 100 Company Cisco in the U.S. District Court for the Eastern District of Virginia in February 2018. Centripetal has focused its technology on network intelligence and security solutions since its founding in 2009. In its 136 page complaint against the networking solutions giant, Centripetal has alleged infringement of ten patents (out of its total portfolio of fourteen patents).
The bottom line is, Cisco seems to enjoy PTAB and support PTAB as long as ITC weirdly enough snubs PTAB and simply maintains an embargo on Cisco’s competitors. █
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Posted in America, Courtroom, Deception, Patents at 9:52 am by Dr. Roy Schestowitz
Summary: Manipulation of the legal system, or arm-wrestling the law in order to get one’s way, still a problem for the credibility of today’s patent system (rife/riddled with misconduct)
EVERY now and then we document or pile/assemble together examples of misbehaviour, not necessarily at patent offices (EPO, USPTO and so on) but in courts and law firms. There’s no lack of examples. The system is far from perfect, transparency can always help, and pointing out flaws can help correct these.
A few days ago “massive discovery misconduct” was reported in a case where the “plaintiff’s severed litigation misconduct was exceptional.”
“Following plaintiff’s post-Markman stipulation of dismissal and a bench trial finding inequitable conduct,” Docket Navigator summarised, “the court granted defendant’s motion for attorney fees under 35 U.S.C. § 285 because plaintiff’s severed litigation misconduct was exceptional.”
Well, patents are, with few exceptions, not used amicably. And those who use them for hostile purposes are not exactly likely to act in good faith.
Another example of misconduct was covered a few days ago by David Hricik, who focuses on ethical matters. “In addition to this evidence,” he said, “the district judge heard evidence of various litigation misconduct…”
Here are the details:
Last month, the Federal Circuit held oral argument in an appeal, styled Gilead Sciences, Inc. v. Merck & Co., Inc. (Appeal Nos. 16-2302 & -2615) from a judge’s decision which held a patent unenforceable — for unclean hands — after a jury returned a verdict of $200 million. A more detailed write up is here which includes a link to the oral argument.
Boiled down, in a bench trial after the verdict, the judge heard evidence that Gilead had agreed to share information with Merck regarding an antiviral agent against Hep C — provided Merck personnel working on Merck’s competing work be walled off rom the information. Gilead shared information on a call… and a Merck attorney who was on the call who was prosecuting a Merck competing application then amended claims to cover the Gilead product.
As a twist, the application that was amended supported the Gilead product, and the jury had found no derivation. The reason was that the amended Merck application had support for a large genus of compounds, but the amendment narrowed to a subgenus which included Gilead’s leading agent. In other words, Merck had invented the Gilead product, and so there was no but-for materiality (in any meaningful sense that I can see, at least).
In an ideal patent system the patents granted would be of high quality, litigation be a last resort, and the legal process involve no misconduct. But in a world where lawyers on both sides just try to win the case can we expect justice or a shouting match where the longterm goal is to drain the opposition’s pockets (with legal fees)? █
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Posted in America, Law, Patents at 9:03 am by Dr. Roy Schestowitz
Last weekend: Using Politics to Do the Patent Trolls’ Bidding With STRONGER Patents Act, Just Like the UPC in Europe
Summary: A little update about the Patent Trial and Appeal Board (PTAB) and attempts to disrupt PTAB inter partes reviews (IPRs) at a political level
THE big (and rather encouraging) strides of the USPTO‘s PTAB have been tracked here for years. We, notably software professionals, ought to guard PTAB from critics, who are mostly patent parasites who became accustomed to suing or threatening to sue using software patents. PTAB, for the uninitiated, eliminates a lot of software patents. There’s no lack of examples and we’re unable to keep abreast of them all (some try, mostly PTAB haters).
One very vocal PTAB hater recently spoke about a patent which he said got “rejected anyway under 101 because calculating cost of virtual processor cores is an “abstract idea” when you don’t do anything tangible with the result…”
“PTAB, for the uninitiated, eliminates a lot of software patents.”“Palantir loses patent case at PTAB,” he also said, because “analyzing large data sets is just an “abstract idea”” and, among the exceptions: “Super RARE split decision at PTAB declares advertising in virtual worlds with Avatars is NOT “abstract idea” [...] What a difference a panel makes!”
PDFs are included there (original decisions).
A few days ago Docket Navigator took note of DODOCASE VR, Inc. f/k/a DODOcase, Inc. v MerchSource, LLC d/b/a Sharper Image et al. It’s about denying a petition (IPR) at PTAB: “The court granted plaintiff’s motion for a preliminary injunction requiring defendants to withdraw their petitions to the PTAB seeking to invalidate plaintiff’s patents-in-suit because plaintiff established a likelihood of success on the merits of its related breach of contract claim.”
“Those who dislike IPRs (and try to stop them altogether) are typically those possessing and actively using — in a litigious sense — weak patents. A lot of these are patent trolls.”PTAB typically considers some very weak and very abstract software patents after defendants (or victims of extortion) petition it to do so. Those who dislike IPRs (and try to stop them altogether) are typically those possessing and actively using — in a litigious sense — weak patents. A lot of these are patent trolls. Sometimes it’s their representatives and front groups, e.g. sites such as IAM.
Politicians for patent trolls, however, persist with their laughable proposal or a bill, the “STRONGER Patents Act” (actually weaker patents). Reposted yet again by Jones Day was this piece titled “STRONGER Patents Act Being Introduced to the U.S. House of Representatives” and United for Patent Reform wrote: “The STRONGER #Patents Act prevents state attorneys general from protecting their citizens from abusive #patenttrolls & creates numerous loopholes that will allow trolls to escape liability.” Read more of our letter to @RepSteveStivers and @RepBillFoster: http://bit.ly/2ukBoKS
We posted that letter earlier this month. The CCIA’s Josh Landau has just mentioned another threat, this time from Senator Coons: He explains:
Senator Coons has long been interested in strengthening patents. While some of his efforts, like the STRONGER Patents Act, would actually harm the U.S.’s innovation economy by strengthening patents at the expense of innovation, his latest bill is different.
Last week, Senator Coons (along with Senator Hatch) introduced the Building Innovation Growth through Data for Intellectual Property Act, or “BIG Data for IP Act.” The bill has two main features—extending the Patent Office’s fee-setting authority, and requiring the Office to produce a report on its IT infrastructure, a plan for modernizing that infrastructure, and a report on the use of advanced data science techniques to improve the examination process.
Fee-Setting Authority Matters
Prior to the America Invents Act, the Patent Office didn’t actually set its own fees. Instead, Congress set them. This meant that, even though the Patent Office is supposed to fund its operations through the fees it collects, they couldn’t change those fees to reflect changing costs or to fund needed infrastructure—they had to wait for Congress to do it for them. That’s not an ideal situation.
But it’s actually worse than that. The Patent Office now collects enough, overall, to fund its own operations—but the fees for a given action don’t necessarily reflect the cost of that action. In particular, the fee for examining a patent is actually significantly lower than the cost of examination, with the shortfall made up for by issuance and renewal fees (which are significantly more expensive than the cost of issue or renewal.)
[...]
The final portion of the bill, reporting on the use of data science like machine learning and big data to improve the patent examination process, is also useful. Using big data tools like Google BigQuery, Patent Progress has been able to show that the Alice decision affects a very small proportion of patent applications and that so-called “IPR off-ramp” procedures are already available, if patentees want to use them.
If a patent lawyer can produce this kind of insight in a limited timespan using these kinds of tools, a trained data scientist with support from the Patent Office should be able to provide real insights into improving patent examination. And improved patent examination, in turn, leads to fewer low-quality patents issuing, fewer inter partes reviews to challenge low-quality patents after issue, and less abusive patent litigation.
PTAB IPRs, part of AIA (America Invents Act), will certainly come under many attacks ahead of a decision on Oil States (expected to come soon from the US Supreme Court). Over the past week, for example, Watchtroll ramped up its attacks on CAFC and on PTAB, even during the holiday.
“PTAB IPRs, part of AIA (America Invents Act), will certainly come under many attacks ahead of a decision on Oil States (expected to come soon from the US Supreme Court).”Joseph Robinson and Robert Schaffer wrote two pieces just before Easter [1, 2] in which they speak about PTAB (the Board).
“The Federal Circuit thus vacated the Board’s claim construction as erroneous,” they wrote, “construed aseptic to mean the “FDA level of aseptic,” as previously decided, vacated the Board’s non-obviousness determination, and remanded for further proceedings.”
Robinson and Schaffer basically picked one of those rare cases. Here’s a more common outcome:
The ’435 patent, owned by Steuben, is directed to a sterilization tunnel pressurized with sterile air, as part of aseptic packaging of food products. After Nestle challenged the ’435 patent in an inter partes review, the Board found a number of the claims obvious and unpatentable. The claims recited a specific sterilant concentration levels in the different zones of the sterilization tunnel. Steuben appealed, and the Federal Circuit affirmed.
Watchtroll went a lot further than this in recent days, but we shall cover that separately. Attacks of PTAB recently become attacks on Techrights itself. I’ve received threats. █
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Posted in America, Courtroom, Patents at 7:12 am by Dr. Roy Schestowitz
This is not innovation but parasitic taxation
Summary: Some complete/exhaustive statistics (not interpolated/extrapolated but limited to one area) from Unified Patents help demonstrate trends in patent litigation in the United States; it’s clear that much work remains to be done by patent reformers
EVEN though it’s Easter (so we’ve been writing less) the USPTO continues granting patents and lawsuits continue to be filed. On Wednesday/Thursday, for example, Unified Patents showed that patent litigation is dominated by patent trolls, at least when it comes to software patents ‘dressed up’ as “Internet of Things”. There are plenty of figures in this analysis and we have reproduced only one (above) under Fair Use.
From the outline:
From 2012 to 2017, NPE litigation activity for Internet of Things (IoT) technologies remained consistently high (between 85% and 98% of all IoT litigation). After reaching a record number of new IoT litigations in 2016, new filings in 2017 returned to pre-2016 levels. While litigation involving most IoT technologies either decreased or saw marginal increases in 2017, the proporation of IoT litigation over Communication Protocols & Networking increased from 3% (2016) to 44% (2017).
Unified Patents’ Robert Jain later (yesterday) added: “Whatever the cause, the volume of NPE-related filings [troll lawsuits] remains high as is seen in the figures below.”
Patent litigation in Q1 2018 held steady with the number of new filings slightly exceeding the volume of cases seen in the second half of 2017. In recent years, the number of new filings has been highest in the first and second quarters which may indicate we will see fewer patent litigations in 2018. However, the uncertainty surrounding upcoming changes in patent law, such as the pending Oil States decision, may be in part responsible for these lower filing rates. Whatever the cause, the volume of NPE-related filings remains high as is seen in the figures below.
In relative terms, patent trolls are still a major problem. Sure, the overall number of patent lawsuits nosedived, but that did little to tackle patent trolls specifically and a lot of their nefarious activity goes on not inside the courtroom but outside the legal system. They bully and eventually extort companies, otherwise that ends up with lawsuits.
We are far from done reforming things; the software community should not assume that 35 U.S.C. §101 changes have fixed everything. Much of the blackmail is extrajudicial in nature, which means that the views/interpretations of courts/PTAB never get factored in (or into calculations associated with the harm done by trolls). █
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