04.01.18

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In the Wake of 35 U.S.C. §101 Eliminating Software Patents Many Patent Law Firms Are Nowadays ‘Pulling a Berkheimer’ and Pretending Everything Has Changed

Posted in America, Deception, Patents at 3:41 am by Dr. Roy Schestowitz

Nothing has really changed except perception (due to a sort of PR campaign from the patent microcosm)

Pulling a Berkheimer

Summary: The CAFC (Federal Circuit) continues to reject a lot of software patents, but citing some old decision which did not even pertain to software the patent microcosm is trying to make the public feel as though software patents still have ‘teeth’ and are thus worth pursuing at the patent office and the courtroom (because the patent microcosm profits from that)

THE granting of software patents in the US, in hindsight at least, was a Pyrrhic victory because many patents that got granted are now worthless. Sure, the USPTO recognises these, but courts would not (if these actually reached courts).

Software developers are relieved. Those who preyed on them are not. Posted a few hours ago was this promotion of a so-called ‘webinar’ (commercial) in which software patents boosters will be attempting to teach people how to patent software in spite of the new rules — examination guidelines which pretty much exclude the ‘abstract’ patents (we prefer to think of them as patents on thoughts). In this post we’ll also share similar examples from the past week.

We start this little journey with this article from Richard A. Catalina Jr. and Hill Wallack. Blockchain hype is being embraced to enthusiastically herald “Patentability of Blockchain and Distributed Ledger Technology” (a somewhat loaded headline). “Since Alice,” they admit, “the CAFC has tackled the issue of software patents and whether the claimed subject matter merely comprises abstract ideas or whether the methods and processes thereof comprise “significantly more” as required by Alice.”

CAFC has been pretty consistent on the matter, especially since last year. It’s very unusual for CAFC to tolerate software patents. “Blockchain” or not (often (mis)used synonymously/interchangeably with “database” these days), software is still software. Watch Watchtroll trying to piggyback “Blockchain” as well. We very much doubt anyone in that site even knows what blockchains are, let alone explain how they work. It’s a site by technically-incoherent people, targeting other technically-incoherent people who just love making money out of patents they barely understand.

But we digress…

The software patents boosters from Anticipat have also chimed in. “The Supreme Court in Alice v. CLS Bank struck down the method claims as abstract ideas, but also, importantly, struck down the computer system and computer readable medium claims for the same reason,” it said a few days ago. The post as a whole is actually somewhat of a distortion of what is really happening. They are also using hype and/or buzzwords to promote patents on software. “In the episode,” they said, “the podcast walks through the patent process in a way that even someone unfamiliar with patents can follow. Trent Ostler discusses the fundamental balancing act in getting a patent.”

We don’t deny that it is still possible to patent software. It’s just that enforcing it in court is extremely hard and given the odds this is simply not worth the investment of time and money.

“The United States Patent and Trademark Office (USPTO) has issued two more patents” on software, according to this new press release. Software patents are a mistake to grant, but here they go:

The United States Patent and Trademark Office (USPTO) has issued two more patent allowances for Glytec’s FDA-cleared proprietary software used by healthcare providers to guide the dosing of insulin.

It does not matter if it’s proprietary software or Free/libre software, algorithms are excluded from patenting on the basis of being abstract.

“Changing attitudes towards patentees in the US” is what a recent analysis labeled the current situation. But actually the attitude has changed towards certain kinds of patents, not the patentees. “The problem of patent trolls has been a hot topic for some time,” says this article, “and both the US Congress and the courts have actively been working to tackle the issue and help to drive innovation forward.”

They have only succeeded to a certain degree because, as we pointed out yesterday, the proportion of lawsuits initiated by trolls is still high.

Several days ago Robert F. Shaffer and Scott A. Allen from Finnegan (Finnegan, Henderson, Farabow, Garrett & Dunner LLP) were once again pushing the Berkheimer inane one-liners that pretend software patent are suddenly OK and CAFC is accepting them (it’s not). We knew this would happen, which is why we wrote about a dozen articles regarding Berkheimer only days the decision. It was widely distorted. It’s marketing!

McDermott Will & Emery’s Matthew J. Gryzlo and Michael Hemes (patent lawyers) are panicking that so many of those lousy patents which they advised people to pursue, notably software patents, now perish en masse. Waste of time and money and no lawsuits filed, i.e. no money for the lawyers. Here they are ‘pulling a Berkheimer (mentioning or name-dropping Berkheimer and Aatrix):

Setting a new course with respect to 35 USC § 101 litigation issues, the US Court of Appeals for the Federal Circuit held that the issue of whether a claim recites patent eligible subject matter—a traditional question of law—may also contain disputes over underlying facts sufficient to prevent a court from granting summary judgment. Berkheimer v. HP Inc., Case No. 17-1437 (Fed. Cir., Feb. 8, 2018) (Moore, J). The underlying factual disputes in Berkheimer involved step two of the Alice analysis (IP Update, Vol. 17, No. 7) as decided by the district court on summary judgment. Here, the Federal Circuit vacated the grant of summary judgment with respect to some of the disputed claims.

Another booster of software patents has just taken note of Electronic Scripting Products, Inc. v HTC America, Inc.. District court deemed “claims related to virtual reality applications [to be] patent eligible under 35 U.S.C.” But do not expect CAFC to think similarly. The outcome suited the author’s agenda and was thus boosted:

Last week, Judge Seeborg of the U.S. District Court for the Northern District of California ruled that claims related to virtual reality applications are patent eligible under 35 U.S.C. § 101. Plaintiff Electronic Scripting Products, Inc. (ESPI) accused HTC American, Inc. (HTC) of direct and induced infringement through HTC’s VIVE virtual reality headsets. Defendant HTC then brought the § 101 challenge against ESPI in a motion to dismiss. While this challenge failed, HTC was still successful in having ESPI’s complaint thrown out for failure to state a claim, and the Court granted ESPI leave to amend.

Wait until the appeal (if there is one) and see what happens. They can twist software patents as all sorts of things (like “AI” or “blockchain”), but eventually it does not help. Critical skills kick in. There’s a similar phenomenon in marketing, such as this Apple advocacy site that glorifies Apple’s patents. Calling everything “smart”, for example, in order to pursue patents and then sell it to the masses is a short-term strategy. There are people who will wrongly assume buying something “smart” makes one smart, not dumb. There are even patent examiners who can fall for such spurious words/adjectives (“innovative”, “smart”), but in courts that is less likely to work.

The patent microcosm (Squire Patton Boggs’ Daniel Rabinowitz in this case) is still very much worried about 35 U.S.C. §101 as it annuls software patents even at CAFC. Here’s another spin attempt, distinguishing patent examination from CAFC’s assessment:

When examining subject matter eligibility of a patent application under 35 U.S.C. §101, the United States Patent and Trademark Office (USPTO) relies on a two part test established by the Supreme Court of the United States (See Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014)). The first part of the test requires a determination of whether the claims of a patent application are directed to a law of nature, a natural phenomena, or an abstract idea (See Alice Corp. Pty. Ltd., 134 S. Ct. 2354). When a claim is determined to be abstract, the USPTO requires its Examiners to “identify the abstract idea as it is recited (i.e., set forth or described) in the claim, and explain why it corresponds to a concept that the courts have identified as an abstract idea” (See MPEP §2106.07(a)). To help Examiners identify concepts that courts have previously “identified as an abstract idea,” the USPTO keeps an updated chart of court decisions that have held claims either eligible or ineligible as an abstract idea. While at first glance all of the decisions in the chart seem to be on equal footing, it is important for practitioners to keep in mind the different weight given to precedential and non-precedential decisions.

[...]

While it is easy enough for Examiners to rely on the general holding that “using categories to organize, store, and transmit information” is an abstract idea, it is important to note that Cyberfone is a non-precedential decision. Practitioners can overcome this subject matter eligibility rejection by simply distinguishing their claims from those examined in Cyberfone. In view of the above, it is important for practitioners to keep in mind that arguing distinctions between claims in a pending application and those examined by a court in a non-precedential decision can often be an effective tool for overcoming a subject matter eligibility rejection.

As if “overcoming a subject matter eligibility rejection” is the ultimate goal of all. The Federal Circuit’s judges know better than that. Another new post, this one by Jason Rantanen, speaks of appeals:

For the past few years, I’ve been working on a project with the working title “the Federal Circuit Database Project.” The goal of this project is to develop an accurate, reliable and transparent database containing information about the Federal Circuit’s patent law-related decisions that would be of interest to scholars, commentators and policymakers. In keeping with the public nature of the University of Iowa College of Law, I wanted the database to be accessible and usable by anyone.

Such a “reliable and transparent database” that he envisions is supposed to help one side or one agenda. It’s not really about transparency.

The EFF has meanwhile responded to the latest Berkheimer and Aatrix hype (law firms ‘pulling a Berkheimer‘). It wrote to CAFC along with the R Street Institute:

In its landmark Alice v. CLS Bank decision, the Supreme Court return some much-needed balance to the patent system. The court invalidated an abstract software patent, essentially ruling that adding “on a computer” to an abstract idea does not make it patentable. The Alice ruling has been particularly important because courts have often applied it early in litigation. This has allowed even small companies to fight back against patent trolls wielding weak software patents. We’ve featured many of these stories in our Saved By Alice series.

[...]

EFF, together with the R Street Institute, has filed an amicus brief [PDF] urging the Federal Circuit to rehear the Berkheimer appeal en banc. This means that all the active judges of the appeals court would review the decision. We argue that the panel’s decision is both wrong on the law and bad policy. The panel’s decision disregards long-standing Supreme Court and Federal Circuit law that makes it the judge’s role to construe patents. On policy, we describe how early Alice rulings have helped end many of the most abusive patent trolling campaigns.

When the Alice case was originally before the Federal Circuit, one judge argued that a ruling finding the patent invalid would “would decimate the electronics and software industries.” This dire prediction turned out to be completely wrong. In fact, R&D spending on software began increasing at an even faster rate after the Supreme Court’s 2014 decision. Where Alice did not hurt the software industry, the Berkheimer and Aatrix rulings could hurt the industry by making software companies more vulnerable to the abstract patents that Alice invalidated.

It’s good to see the EFF naming software patents (not just ‘abstract’ patents) and working toward making it easier to trash them in the US. CCIA, another active group in that domain, recently (just over one week ago) tackled the subject and so did Watchtroll, which wrote about the Tinder lawsuit in order to promote the plaintiff. For the uninitiated, Match Group/Tinder uses software patents that are worthless to bully/sue a rival. CCIA, in the form of Patent Progress, said this:

Tinder swiped right on a lawsuit against Bumble last week, but their lawsuit has more than just surface flaws. Tinder’s lawsuit alleges a number of forms of intellectual property violations—but basically, it comes down to claiming that they own the idea and the design of swiping, especially for a dating app.

A Brief History Of Swipe

Of course, the idea of swiping (and even the word) isn’t new. It’s not even new in the context of a smartphone app. The iPhone was introduced in 2007 using the words “to go through pictures, I just swipe them.” And by 2009, Palm’s webOS used swiping on cards, including swiping cards away, in its multitasking interface. (Not to mention “swipe to unlock,” the focus of a number of lawsuits back in 2012.) All pre-date Tinder and Tinder’s patents.

And yet, Tinder claims they own the word “swipe.” Of course, they didn’t file the trademark originally—Tinder acquired the SWIPE trademark from another company in 2015.1

For that matter, Tinder even admits that it wasn’t just the trademark they didn’t come up with. Turns out, Tinder didn’t come up with the swipe idea for Tinder—according to Tinder’s former chief creative officer, the user interface designer “ripped off [swiping] from the flash-card app he worked on for Chegg.”

So it’s questionable whether Tinder came up with the idea in the first place, much less the word. But sometimes companies succeed with ideas they acquired elsewhere. So, what about their patents?

In short, it’s a worthless patent and this whole lawsuit is probably just a waste of time. Some say it’s intended to put pressure on a rival to be absorbed by the competition. Are courts being ‘gamed’ as bargaining chips now?

Speaking of games, Robert Ryan from Holland & Hart LLP wrote about this one particular new case which again proved that software patents are still an utter waste of time and money. This firm is actually paying to spread this (it is being pushed out as press release [1, 2]) and there’s a mention of Section 101. To quote:

High 5 Games Defeats Konami Gaming’s Slot Machine Software Patents

[...]

High 5 Games, a recognized pioneer in the slot game industry, including online games, has created hundreds of games that are played on six continents in more than 150 countries. High 5 Games’ robust library of virtual slot games includes some of the most complex math features in the electronic gaming industry.

Electronic gaming competitor, Konami Gaming Inc. (Konami), sued High 5 Games claiming that High 5 Games’ leading and patented line of Super Stacks slot games infringe 52 claims of four Konami patents. Konami had previously procured licenses under these patents from other stakeholders in the gaming industry. In its lawsuit filed in the United States District Court for the District of Nevada, Konami sought an injunction to prevent High 5 Games from using or licensing the accused game feature, Super Stacks, as well as unspecified damages.

High 5 Games aggressively disputed Konami’s patent infringement claims and brought a motion for summary judgment challenging all of Konami’s 52 asserted patent claims as invalid. High 5 Games attacked the Konami patents as “indefinite” because the patents did not disclose sufficient information for how to structure the game software and as “patent-ineligible subject matter” under 35 U.S.C. §§ 112 (6) (Pre-AIA) and 101.

Take it for what it is, folks. Software patents are dead and unless something very major happens, nothing is about to change that, not even perception/narrative wars and marketing, such as ‘pulling a Berkheimer‘.

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