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04.28.18

Patent Trolls Roundup: The Patent Trial and Appeal Board (PTAB), Microsoft Trolls, and the Eastern District of Texas

Posted in Microsoft, Patents at 11:04 am by Dr. Roy Schestowitz

Hublink, LLC, a Dominion Harbor subsidiary
Hublink, LLC, a Dominion Harbor subsidiary, is also based in Texas (Dominion Harbor receives its patents from Microsoft’s patent troll, Intellectual Ventures)

Summary: A look at challenged patents and patent lawsuits that are associated with patent trolls or Microsoft’s distant proxies that are based in Texas

THE FEDERAL GOVERNMENT in Canada is coming to grips with the need to tackle patent trolls, whereas the EPO does anything it can to attract them (e.g. low-quality patents, UPC and expensive appeals). As for the USPTO, things are improving a bit over time. We’re optimistic.

“The general pattern is, PTAB tackles a lot of software patents, which are the trolls’ favourite weapon (for reasons we explained before).”Earlier this week, according to RPX, patent trolls still accounted for too many lawsuits in the US. RPX will probably go out of business some time very soon (good riddance), but these statistics are valuable. “According to RPX Corp.,” United for Patent Reform wrote, “of the 32 patent suits filed yesterday, 27 were filed by patent trolls. That’s 84%.”

A few days later it wrote:

According to RPX Corp., 15 of the 22 patent suits filed yesterday were filed by #patenttrolls. That’s 68%.

That’s relatively low (compared to most dates). Sometimes it’s well over 90%.

Mr. Gross, who writes for patent trolls (including Dominion Harbor), continues to moan about the status quo not because there are too many trolls but not enough of them (according to him). We’re generally rather cynical about his tweets; among the latest, about IBM and PTAB:

IBM invention on customizing messages fails as “abstract idea” bc it does not “improve any technology”? https://e-foia.uspto.gov/Foia/RetrievePdf?system=BPAI&flNm=fd2017002782-04-23-2018-1 … PTAB also confuses role of claims and spec: “Although it may be a feat…emulating human intelligence, the claimed invention provides no particularity”

Another rant about abstract ideas:

PTAB perverts ALICE 101 test: “The issues of eligible subject matter tum primarily on whether the claims recite more than abstract conceptual advice of what a computer is to provide without implementation details.” https://e-foia.uspto.gov/Foia/RetrievePdf?system=BPAI&flNm=fd2016005837-04-20-2018-1 … ALICE silent re: “implementation details”

Then there’s one about Microsoft:

Your dose of daily PTAB insanity: MSFT discovers that “creating an insulator in a host webpage in a browser” is just an “abstract idea” https://e-foia.uspto.gov/Foia/RetrievePdf?system=BPAI&flNm=fd2016008168-04-24-2018-1 … HOW DOES THIS NOT MEET THE DDR TEST???

The general pattern is, PTAB tackles a lot of software patents, which are the trolls’ favourite weapon (for reasons we explained before).

Take for example Uniloc, which Microsoft paid a lot of money about a decade ago. Robert Jain from Unified Patents (an RPX competitor) is causing this patent troll to run away, having petitioned PTAB. In his own words:

On April 25, 2018, the Board granted Uniloc’s request for adverse judgment and cancellation of all challenged claims in IPR2017-01850 filed by Unified Patents. This request comes shortly after the PTAB’s decision to institute trial on US 8,838,976 directed to an online service user authentication system.

Good riddance. “Uniloc abandons patent after Unified [Patents] files IPR,” Jain wrote. Jain also wrote about the large patent troll Dominion Harbor (connected to Microsoft through Intellectual Ventures) and one of its proxies called Hublink, sporting its likely bogus patent.

In his words:

Unified is pleased to announce the PATROLL crowdsourcing contest winner, Raman Deep Singh, who received a cash prize of $2000 for his prior art submission for U.S. Patent 7,239,338, owned by Hublink, LLC, a Dominion Harbor subsidiary and well-known NPE. The ’338 patent, directed towards a video conferencing system, has been asserted against numerous companies in district court litigation. To help the industry fight bad patents, we have published the winning prior art below.

We would also like to thank the dozens of other high-quality submissions that were made on this patent. The ongoing contests are open to anyone, and include tens of thousands of dollars in rewards available for helping the industry to challenge NPE patents of questionable validity by finding and submitting prior art in the contests.

It’s worth remembering that we deal here with several levels of ‘proxies’. Hublink is controlled by Dominion Harbor, which is being armed by Intellectual Ventures, which is being sponsored by Microsoft. All these indirections don’t quite fool us as we’ve been tracking and writing about these trolls for almost 12 years. According to this, “Hublink, LLC filed as a Domestic Limited Liability Company (LLC) in the State of Texas on Tuesday, June 27, 2017 and is approximately one year old, according to public records filed with Texas Secretary of State.”

Texas again, just like its creator, Dominion Harbor.

Marshall Phelps, the man who turned IBM and Microsoft into de facto patent trolls, is still up to no good, urging for aggression again, this time in the context of Uber. Days ago he wrote this:

Everybody knows that strong patents help decide the winners and losers of business competition — which is why companies applied for roughly 600,000 of them in the U.S. last year (though only half that number were granted). But there’s another, little-known way for companies to acquire the patents they need: they can simply buy them.

Patent sales usually involve a smaller company buying patents from a larger one, with the transfers benefiting both buyer and seller alike. This is especially true for startups, which can use patent purchases to leverage the vast R&D resources of major technology firms.

Take Uber. As is often the case with startup companies, it would have taken Uber many years to internally develop a patent portfolio capable of protecting its innovations and ensuring freedom of action in the marketplace. This is a perennial problem faced by startups historically, from Google to Facebook more recently, especially as they prepare to go public, which along with generating cash also paints a giant patent bullseye on the newly-public company’s back.

Well, Mr. Phelps has not changed. Everything he touches turns into a patent bully/aggressor/troll. That’s just his career’s legacy in a nutshell.

Staying on the subject of Microsoft, which is not only a patent extortionist but also patent trolls feeder, Microsoft gets sued in the Eastern District of Texas. As reported several days ago by WIPR:

Microsoft is facing a legal battle over the alleged infringement of patents relating to video game lighting technology.

In a complaint, filed at the US District Court for the Eastern District of Texas, video game developers Infernal Technologies and Terminal Reality accused Microsoft of infringing its patents for in-game lighting and shadows with various game engines.

A game engine is a software development environment that allows developers to create video games. Game engines have a variety of functions, including a rendering engine, which allows developers to perform deferred rendering, deferred shading and deferred lighting, all of which affect the visual aspect of a scene in a video game.

A Microsoft advocacy site called it a “patent troll” and named the patent, which is a software patent:

Patent trolls are common in the technology industry and it seems like “Terminal Reality and Infernal Technologies” is targeting Microsoft this time. You might remember the name from a complaint involving EA from 2015. While that case was settled around October 2017, it seems like the company has a new target. Developer Terminal Reality closed in 2013, and since then it seems like its affiliate Infernal Technologies has been suing game developers.

According to post by IGN, Terminal Reality and Infernal Technologies has accused Microsoft of “egregious and wilful” patent infringement of Patent 6,362,822 and Patent 7,061,488 relating to game lighting and shadows. The plaintiff claims that it developed the “Infernal Engine” which it then licensed to other studios. The company also says that games like Halo 5: Guardians, numerous Forza titles, Sea of Thieves, and even PlayerUnknown’s Battlegrounds infringe upon its patents.

In the Eastern District of Texas they might actually tolerate such abstract patents, but can CAFC or PTAB get involved? 4 days ago the Docket Navigator wrote about Sandoz, Inc. et al v Duke University et al, which is another case in the Eastern District of Texas. It is the patent trolls’ favourite venue, but possibly an “improper venue” (after TC Heartland many of these things changed):

The court granted defendants’ motion to dismiss plaintiffs’ second-filed declaratory relief action under the first-to-file rule even though the defendants’ first-filed action was filed in an improper venue.

Docket Navigator also wrote about Elbit Systems Land and C4I Ltd. et al v Hughes Network Systems LLC et al. In the Eastern District of Texas, the patent trolls’ breeding ground, the “defendant’s litigation conduct was [deemed] exceptional” after Elbit (from Israel) had acted like a troll. Being Texas, one can expect a plaintiff-friendly ruling:

Following a jury verdict of $21 million, the court granted plaintiffs’ motion for attorney fees under 35 U.S.C. § 285 because defendant’s litigation conduct was exceptional.

Why have they put a jury in charge of a verdict on technical matters?! Appeal to CAFC perhaps?

Speaking of misconduct, watch the latest on this Gilead case, in which the “patents are unenforceable due to Merck’s “unclean hands” involving both business and litigation misconduct.”

To quote Patently-O:

The district court rejected a $200 million jury verdict against Gilead’s infringing Hep-C sofosbufir drugs. Rather than enforcing the jury verdict, the district court held instead that the patents are unenforceable due to Merck’s “unclean hands” involving both business and litigation misconduct.

There’s another case involving Gilead (Teva v Gilead) and it involves SPCs. As one site framed it the other day:

Advocate General Wathelet has rejected the UK court’s suggestion that “core inventive advance” is a relevant consideration in determining whether a basic patent protects an active ingredient within the meaning of Article 3(a)

Advocate General Wathelet has provided an opinion in the Teva v Gilead case in which a UK court referred a question regarding supplementary certificates (SPCs) to the CJEU.

Notice the role of the CJEU (European) in SPCs in the UK — something that Team UPC lobbies very hard for. They hope to make life a lot easier for trolls and massive pharmaceutical companies looking to shut down rivals (like generics), even by raids and embargoes. They are trying to turn Europe into another Eastern District of Texas.

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