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04.13.18

East Asia Should Have Adopted the Patent Strategy of South Asia, Notably India

Posted in Asia, Patents at 6:10 pm by Dr. Roy Schestowitz

A world map

Summary: China seems to be so interested in patent maximalism that it has lost sight of the effect on foreign investment, e.g. US/European/Taiwanese/Japanese/Korean firms operating/manufacturing in mainland China

TONIGHT we focus a little less on the EPO and USPTO. Let’s face it, a lot of software development is nowadays being done in India and virtually all sophisticated hardware is being designed/developed or at least manufactured in eastern Asia, usually in China. India’s de facto ban on software patents in the country is working well for the country, whereas in China, where not much Western software development is being outsourced to, software patents are broadened and more widely accepted, especially since one year ago.

As one can expect, radical sites like IAM try to make China a “role model” while constantly shaming India. IAM wrote about an “Indian licensing transparency debate” a few days ago, citing a few patent parasites like “Nokia and Ericsson” in the headline. To quote:

Asian patent owners including Canon, Huawei and Samsung have joined a group of big European companies in asking the Indian Patent Office to stop collecting certain licensing information. The opinions come amidst a public-interest litigation in which Professor Shamnad Basheer is pressing the country’s government to more strictly enforce the legal requirement that patentees disclose how they are commercially exploiting the Indian patents they hold. Each year, owners of Indian patents must submit Form 27 – which asks them whether or not the invention covered by the patent is being ‘worked’ in India.

The Indian Patent Office has managed to resist pressure from the maximalists; let’s hope it keeps it that way.

“The Indian Patent Office has managed to resist pressure from the maximalists; let’s hope it keeps it that way.”As for China? A lost cause almost. It’s setting itself ablaze with low-quality patents.

“How Lenovo Navigates The Patent Gauntlet” was published a few days ago by Ira Blumberg, a former patent troll lawyer who became disgusted by it (soon to become Lenovo’s head of ‘IP’), as mentioned here before [1, 2, 3]. To quote Blumberg:

Most people have no idea of the patent roadblocks their smartphones have to go through before they ever reach the hands of consumers.

Take my company Lenovo, a $50 billion technology enterprise that is one of the world’s top makers of smartphones, tablets, personal computers, and other smart gadgets. We spend tens of millions of dollars each year to patent our innovations. Yet despite all our diligent patenting efforts, Lenovo is still forced to run a gauntlet of patent claims from others.

[...]

For all these reasons, Lenovo and other major companies in the wireless market have joined Via’s LTE patent pool as both licensors and licensees.

It is an axiom of economics that markets function better when there is adequate information and impartial ground rules for buyers and sellers. If patent owners and product makers wish to avoid a repeat of yesterday’s costly smartphone war in tomorrow’s connected car business, we had better bring a lot more transparency and fairness to the patent business.

Lenovo does not seem to initiate much litigation, at least not outside China. In relative terms, Lenovo is not the same kind of giant some Chinese enterprises are, e.g. Huawei.

“Lenovo does not seem to initiate much litigation, at least not outside China.”Earlier today we learned that in China, based on a Chinese author, “software patents related to input methods (IM)” cause problems. The country foolishly embraced software patents and this leads to legal chaos (good for law firms). The outline says:

This month, the Beijing IP Court handed down six first instance decisions in an ongoing patent battle between internet search companies Sogou and Baidu. The rights concerned are software patents related to input methods (IM) for Chinese characters. The court called three counts of infringement in favour of the plaintiff, Sogou, and another three decisions for the defendant Baidu. The rulings cap the first round in one of the highest profile competitor cases in China’s internet industry. The two-and-a-half year long dispute has been an attention-getter in China, with the total damages requested reportedly setting a new record for patent litigation…

Sogou and Baidu are not small companies and the above looks like nuisance litigation relying on patents that would not be granted (almost) anywhere outside China. So bear in mind what China does to its own operating/producing companies. It exposes them to a lot of litigation.

“…bear in mind what China does to its own operating/producing companies. It exposes them to a lot of litigation. “Meanwhile, a Taiwanese (arguably in China, but it’s a highly political and polarising topic) company everyone knows as “HTC” celebrates this win : “ND of Cal. Dist. Ct. Held Display Patents Asserted Against HTC Were Patent Eligible under 101/Alice…”

The same sort of caselaw that would have rendered all Chinese software patents invalid overnight. HTC was also mentioned this week in relation to Local Intelligence, LLC v HTC America, Inc. et al (US parasite against a Taiwanese company that operates in the US). The court ruled, perhaps incorrectly, that surveillance patents are not invalid under 35 U.S.C. § 101 (even though it seems like software patents). The district courts, however, are known for not being as strict as CAFC. The Docket Report put it concisely as follows:

The court denied defendant’s motion to dismiss on the ground that plaintiff’s patent for displaying location-relevant communications on a phone encompassed unpatentable subject matter because the asserted claims were not directed toward an abstract idea.

Shall HTC appeal, it’s still possible that this lawsuit will go away. But if this was in China, there would be no § 101 equivalent for HTC to rely on. China has become a much riskier market to operate in. HTC can probably take a lot more of its manufacturing back to Taipei (or New Taipei). China has already driven away Korean companies like LG, which like most Taiwanese/Japanese/Korean companies did its manufacturing in mainland China. Has China’s forever-ruling party thought about the full implications of such patent policies? Look no further than the Eastern District of Texas in the US. After TC Heartland it has become a massive liability to have any form of business operations there; having even a small branch there would cause a company to risk many lawsuits in notorious courts. And as we explained 3 days ago, "China became the Eastern District of Texas".

Samsung is the ‘New IBM’, Sans the Trolling With Patents

Posted in America, Asia, IBM, Patents, Samsung at 5:18 pm by Dr. Roy Schestowitz

IBM has itself become nothing but a trolls' feeder and patent bully

IBM floppy

Summary: The ‘relic’ company, IBM, loses its patent leadership (as measured using some yardstick) to Samsung, a company which is relatively calm when it comes to patent activity (unless/only when sued, as happens a lot nowadays)

SIZE matters. Especially when it comes to patents. Samsung is a very large company that employs a huge number of people and is viewed as a national asset. It’s to Korea what IBM used to be for the US. Samsung has already been ‘king’ of patents at the EPO and now IBM see itself dethroned in its own country. Reports and analyses have recently suggested that Samsung silently became ‘king’ of patents at the USPTO. We’ll come to the cited criteria in a moment (it depends on what’s being measured).

This sort of ‘triumph’ of Samsung could not be celebrated today; it was clouded by late(r) Friday news from a Texan court. Yes, patent trolls carry on suing Samsung with dubious patents and hours ago we saw reports about that [1, 2, 3]. It’s about a biometric patent or patents. And yes, it’s in Texas, so PACid, the plaintiff, is quite possibly a troll if not some major parasite. It wants almost $3,000,000,000 (no typo!) and it went after Samsung because it’s a leading OEM with many sales of Android devices. Speaking of Texas, in the Eastern District of Texas strikes again a Catalan university, exploiting the district in a get-rich-fast-type patent scam. Universities as patent trolls? No, IAM would not use the “T” word. Here is how its editor put it some hours ago:

Another tale of patent litigation with its roots in convergence is now being played out in the Eastern District of Texas. What makes this one slightly different to other stories is that its main protagonist is a small, Spanish company that was spun out of a Barcelona university back in the late 1990s. Earlier this week, antenna R&D business Fractus filed suits in Marshall against AT&T, Verizon, T-Mobile and Sprint, accusing them of infringing its patents relating to cellular base station antenna technologies.

Anyway, we digress. The point of this detour may be to show that Texas is where trolls go not for justice and companies go to defend themselves from injustice. Things are different in California, where Judge Lucy Koh does some good things these days (invaliding abstract patents) and is now being recalled by a longtime Apple v Samsung watcher. As he has just put it, “One month prior to yet another Apple v. Samsung trial, old and new disagreements on design patents surface” (headline). He ought to know this stuff, having covered it for nearly 8 years. Here’s the latest:

On May 14, Apple and Samsung will square off in court again. It’s going to be the third trial in their first California case alone. What makes it interesting is that it will involve a design patent damages determination (damages in this case amounting to a disgorgement of infringer’s profits) following a Supreme Court ruling in the same case. The exact amount of money that will change hands between Apple and Samsung won’t impact the parties’ positions in the smartphone market. However, it will be a signal to other design patent holders, including patent trolls. Should Apple be awarded a huge amount that Samsung could ultimately afford but the equivalent of which would potentially put many other companies out of business, design patents would be used in aggressive, extortionate ways.

Last week, Judge Lucy Koh ruled on the parties’ Daubert motions. Daubert motions and rulings are hard to figure out from the outside unless they’re just about numbers (such as damages claims that a court does or does not permit) because one would need to know the related expert reports to really understand the context. What became clear to me from Judge Koh’s ruling, however, is that she gave Apple various opportunities beyond the test proposed by the United States government in 2016 to argue that the relevant article of manufacture for a disgorgement of design patent infringer’s profits in this case is an entire phone, not just a casing. While Judge Koh adopted the broad lines of the DoJ’s proposed test, her Daubert order explicitly and intentionally declines to apply parts of what the DoJ had argued in its amicus curiae brief to the Supreme Court.

As we pointed out here many times before, Samsung tends to be more passive and defensive with patents. So we no longer view Samsung as much of a danger (if any).

Regarding Samsung’s stance in the US, the CCIA has just pointed out that “[w]hile IBM is the largest single corporation recipient each year, Samsung actually receives more patents than IBM when you include the various Samsung subsidiaries.”

Companies are filing for more patents every year—IBM received almost 1,000 more patents in 2017 than they did in 2016, an increase of 12% year-on-year. But, despite the fact that more patents are being filed for and granted every year, you still hear critics of patent reform claim that reforms have rendered patents worthless.

Samsung, IBM, Canon, Microsoft, Intel—these are all sophisticated users of the intellectual property system. They aren’t throwing money at something worthless; if they’re filing for patents, it’s because there’s value in doing so. And judging from all sorts of relevant statistics, as Patent Progress has previously covered, innovation is alive and well in the United States, including when it comes to patent filings.

A lot of IBM’s patents are worthless software patents.

Here’s a case — or IPR rather — against IBM patents (ZitoVault LLC v International Business Machines Corporation et al), based on prior art. The Docket Report put it explained:

Following two inter partes review proceedings, the court granted plaintiff’s motion for summary judgment that IPR estoppel under 35 U.S.C. 315(e)(2) barred defendants from asserting invalidity of previously instituted claims based on prior art that was known by defendants when they joined a third-party’s IPR, but which defendant’s failed to assert in that IPR.

There are many more patents like these which IBM loses nowadays. This barely happens to Samsung.

As IAM put it a short time ago, “Samsung’s patent portfolio is almost certainly the biggest in the world, it may also be the best.”

There’s a corresponding blog post and more behind a paywall. IAM, not IBM, said that “Samsung has the world’s largest active patent portfolio and among the highest quality ones, too, exclusive IAM-commissioned research reveals.”

From the summary:

In the IAM/ktMINE US Patent 100, published in issue 89 of IAM, we revealed that Samsung owns by far the largest US patent portfolio. Now, new research conducted for IAM shows that the Korean conglomerate not only has the largest portfolio in the world, but also one of the strongest. Below we provide a detailed analysis of Samsung’s patent holdings, including an examination of how the company has developed its assets and the most salient patent-related stories it has been involved in over the last five years. Patent portfolio breakdown With almost 250,000 granted patents worldwide….

We don’t typically wish to cite IAM, but in order to understand some things we keep track even of its spam from Japan (latest ad from Shobayashi International Patent & Trademark Office, or Satoshi Watanabe trying to sell services).

SCMP, which is now connected to the Chinese government through its new owner, wrote a few days ago about Huawei v Samsung. This shows how China uses patents to help the CPC-connected (the nation’s Communist regime) Huawei block/stop competition from Korea. We already wrote about these legal disputes many times before (LG has been driven out of China using such lawsuits) and here’s the latest:

A Beijing court specialising in intellectual property (IP) rights disputes has dismissed requests from Samsung Electronics seeking invalidation of Huawei Technologies’ certain patent rights on smartphones after an earlier local Chinese court decision banned sales of certain phone models from the South Korean brand.

The Beijing IP Court confirmed that Huawei’s patent rights on smartphones involved in the disputes with Samsung were valid and it denied any procedural violation in the previous patent review process, which had dismissed Samsung’s requests on the grounds of they lacked a factual and legal basis, according to a report by China Intellectual Property News on Sunday – a newspaper supervised by the State Intellectual Property Office (SIPO).

Well, SIPO and its aggressive/short-sighted approach will be the subject of our next post.

David Barcelou May or May Not be a Patent Troll, But He is Certainly a SLAPPing Bully and Watchtroll is Fine With It

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

“People disagree with me. I just ignore them.” ~Linus Torvalds

Summary: Like a thin-skinned person/entity (which many in the patent microcosm are), David Barcelou and Automated Transactions (“ATL”) SLAPP their critics and surprisingly enough it’s Watchtroll, who has been threatened by WIPO, coming to the bully’s rescue (double standards)

THE USPTO‘s decades of poor patent grants are a liability. It’s a toxic legacy which empowered patent trolls. As Daniel Nazer (EFF) put it about an hour ago: “Examiners spend an average of ~18 hours per app, roughly half on prior art. It’s no great insult to patent examiners that litigators with huge budgets and expert help find better art. Of course they do.”

The CCIA recently wrote something similar.

“The EFF’s Daniel Nazer (in his capacity as EFF staff) revealed that Automated Transactions (“ATL”) is also a SLAPPing troll, not just a patent troll, like those who send us threats by post.”Daniel Nazer isn’t really the subject of this issue, but he happens to be the main carrier of a message. It’s actually about David Barcelou. The EFF’s Daniel Nazer (in his capacity as EFF staff) revealed that Automated Transactions (“ATL”) is also a SLAPPing troll, not just a patent troll, like those who send us threats by post. Calling patent trolls what they are is perfectly lawful, especially in the US, but being the bullies that they are, they don’t care about the law; they attempt to twist everything and they just try to cause damage to their victims (of legal harassment). Posted about a day ago at the EFF’s Web site: [via]

A New Hampshire state court has dismissed a defamation suit filed by a patent owner unhappy that it had been called a “patent troll.” The court ruled [PDF] that the phrase “patent troll” and other rhetorical characterizations are not the type of factual statements that can be the basis of a defamation claim. While this is a fairly routine application of defamation law and the First Amendment, it is an important reminder that patent assertion entities – or “trolls” – are not shielded from criticism. Regardless of your view about the patent system, this is a victory for freedom of expression.

The case began back in December 2016 when patent assertion entity Automated Transactions, LLC (“ATL”) and inventor David Barcelou filed a complaint [PDF] in New Hampshire Superior Court against 13 defendants, including banking associations, banks, law firms, lawyers, and a publisher. ATL and Barcelou claimed that all of the defendants criticized ATL’s litigation in a way that was defamatory.

This started a sort of ‘chain letter’ between troll apologists (like Watchtroll) and Nazer, who wrote: “This defamation case received breathless coverage from @ipwatchdog that didn’t even mention the glaring First Amendment issues raised by the complaint. [] I thought this was pretty striking because IP Watchdog has itself been the recipient of some bullying defamation threats – I figured the publication might cover defamation with at least an awareness of the free speech issues at stake. [] Do you think it was an oversight for a legal blog to write about that complaint without even mentioning the First Amendment?”

That’s rather interesting and people took note of it; and on it goes: “Weird that the Court just dismissed the Complaint on First Amendment grounds then. The judge must not understand the First Amendment as well as you do. [] That’s right, Gene. Just as I’m sure your statement that the 1A doesn’t protect falsity was made after deep consideration of the nuances US v Alvarez – why would I dare challenge such a scholar of the First Amendment? [] They’re equivalent in the important sense that the 1A rightly protects both (I even liked your Gurry post, not that that’s relevant, I read it before it got taken down). Here’s the opinion by the way. A very routine application of 1A and defamation law…”

“If it’s actually a “watchdog”, then we know whose…”Well, patent maximalists typically protect patent trolls irrespective of anything, including the Rule of Law. Watchtroll is much of the same, which is why we call it that (for nearly a decade now). We rarely make up names for sites unless they’re really bad. Watchtroll is probably the only in this category because let’s face it, who is it a watchdog for if not trolls?

If it’s actually a “watchdog”, then we know whose…

Watchtroll then responded by insinuating that Nazer works for billionaires (the one Watchtroll habitually insults). He said: “Surprise! Surprise! @danielnazer Staff Attorney and Mark Cuban Chair to Eliminate Stupid Patents, called me out on Twitter, but now is afraid to a real live debate. I’ve challenged him multiple times, willing to debate on his turf too. Funny how folks like him only talk big.”

“Maybe we can ship Watchtroll 200 years back into the past where he can handwash his clothes and talk about how Web pages (as in Standard Generalized Markup Language) are “computer programs”.”Watchtroll does not debate; I attempted to debate him, but he blocked me and ran away after he had lost the debate. A few hours ago Watchtroll (Gene Quinn) wrote about this and then proceeded to inane “MAGA”-type nonsense, under the headline “America Needs an Eighteenth-Century Patent System”.

Yes, he actually typed that into the headline! Maybe we can ship Watchtroll 200 years back into the past where he can handwash his clothes and talk about how Web pages (as in Standard Generalized Markup Language) are “computer programs”. He actually said this repeatedly. He’s a clueless bully who just throws a fit when losing an argument. He’s nontechnical. Debating him on technical matters is like debating Creationists about science.

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