05.06.18

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Alice/Section 101 and PTAB Continue to Eliminate Software Patents While Patent Lawyers Attempt to Distract From Oil States (US Supreme Court’s Decision)

Posted in America, Courtroom, Deception, Law, Patents at 11:19 am by Dr. Roy Schestowitz

Previously on Oil States:

A contract

Summary: In an effort to attract more business contracts, patent law firms give the impression that patent maximalism is alive and well in the US; in reality, however, the US undergoes some profound reforms and software patents are as toothless as they have been in recent years, not to mention that their elimination is only accelerating

THE US patent system gives us reasons for cautious optimism. Thus far, a few months down the line, the Director of the USPTO has not done anything abundantly damaging. He is under extreme pressure from the patent microcosm, which is trying to get him to become some sort of patent extremist like a certain disgraced (huge scandal!) judge who calls PTAB “death squads”.

“Software developers aren’t neutral on this subject; they want software patents destroyed.”We have had our share of ups and downs with the USPTO in terms of expectations. A decade ago, for example, we were highly critical of its approach towards software patents. That was back when David Kappos and his predecessor ran it. This was before Michelle Lee did some extraordinary things with the people around her — people who had helped introduce AIA (and with it PTAB).

Professor Michael Risch wrote this blog post a few days ago. He wrote about the impact of patents as a form of publication (for credit, documentation) — more or less the original purpose of patents (temporary monopoly in exchange for publication, preservation of human knowledge). To quote Risch:

How valuable is patent disclosure? It’s a perennially asked question. There are studies, like Lisa’s [colleague], that attack the problem using surveys, and the conventional wisdom seems to be that there are niche areas that read patents, but for the most part patent disclosure holds little value because nobody reads them.

[...]

Even if one does not buy into the strong version of their conclusions, however, this study has a really important real world payoff: publishing patents has an effect. They are seen, and they affect the body of prior art in a way that limits future claims (at the very least) and increases citations (which makes searching easier). This alone is an important function; as Lemley, Sichelman, Wagner, and I argued in prior work, one of the costs of not having software patents through the 1970s was that there was no prior art to knock out all the software patents of the 1990′s. This study confirms this for us.

Risch cites Lemley and others, then claims that software patents as a form of prior art is limited. We’d go further than this and say that there’s no need for prior art, just release of source code. In addition to this, copyrights — not patents — should provide a solution to plagiarism/copycats. Risch’s views on software patents have been covered here for many years and he recently wrote to me about it. He claims to be agnostic on the subject, but we still insist that software patents should be opposed. Software developers aren’t neutral on this subject; they want software patents destroyed.

“It’s like marketing in the form of a video (in the form of an ‘article’ at Mondaq).”Having reviewed the past week’s news, we’re still finding some references to the US Supreme Court. Most of these are self-promotional pieces from patent law firms, i.e. a form of marketing rather than impartial analysis. We’re therefore not going to write so much about that. A few days ago we saw this self-promotional video from Cislo & Thomas LLP. We have never seen anything like this. It’s like marketing in the form of a video (in the form of an ‘article’ at Mondaq). The summary says:

Veteran patent attorney Daniel M. Cislo discusses how patent litigation differs from other types of litigation.

Pure marketing. Why does that even enter news sites?

To give an example of marketing in the form of ‘analysis’ of the US Supreme Court’s latest decision, here’s a little something we caught a few days ago. The US Supreme Court has just declared IPRs Constitutional, but Jason E. Stach and Maureen D. Queler from Finnegan, Henderson, Farabow, Garrett & Dunner, LLP try to spin that as the exact opposite because they’re patent predators. What does their title say? “Oil States Q&A: How Will Other Constitutional Concerns Affect IPRs?”

So the reader may be left with the conclusion that IPRs are still unconstitutional — the very opposite of what the highest court in the United States has just said!

From their outline:

Oil States addressed constitutionality under Article III and the Seventh Amendment, but it did not directly address the other takings and due process issues raised by the Justices. Those issues will need to be addressed in future cases. However, many PTAB judges attended the oral arguments in November, and many more have listened to the argument or read the transcript. The sense in the profession is that the PTAB judges are acutely aware of the concerns raised by the Justices and they are working to quell those concerns. For example, it appears that the PTAB is now more willing to grant parties additional briefing, especially where denying that briefing might raise a due process issue. And since Chief Judge Ruschke has been at the helm, he has not expanded a panel to overturn an earlier institution decision. New Patent Office Director Iancu could also clarify that he will not use stacking as a way to “make sure [his] policies, [his] preferred policies are enforced,” which is what Oil States’ counsel argued predecessors had done.

That same firm (Finnegan) also wants you “[t]o listen to the podcast” by Joshua L. Goldberg, Cory C. Bell and Kevin D. Rodkey. They (Finnegan, Henderson, Farabow, Garrett & Dunner, LLP) focus on SAS Institute v Iancu — the far less relevant decision. From the outline:

In SAS Institute v. Iancu, the Supreme Court addressed the question of, “[w]hen the Patent Office initiates an inter partes review, must it resolve all of the claims in the case, or may it choose to limit its review to only some of them?” The Court found that, contrary to the prior USPTO practice, the Board may not limit institution to only some of the challenged claims. Finnegan attorneys Joshua Goldberg, Kevin Rodkey, and Cory Bell join us now to discuss what happens now.

In summary, Finnegan would rather speak about SAS Institute v Lee (or SAS Institute v Iancu) and when it covers Oil States — the far more important decision — it misleads its audience, spinning the decision as the exact opposite of what it was. Coincidence? Mischief? Misconduct? We’ll let readers decide, but this further erodes/exacerbates the image we already had in our minds (about patent law firms). What about Watchtroll? It’s just hoping that the USPTO will change something. Given Oil States, nothing will change in favour of the patent microcosm. As for SAS Institute v Iancu, it has no considerable impact, just minor (it might slow PTAB a little but not curtail its function).

“The reason Berkheimer gets brought up so often is that they want a software patents resurgence or a PTAB slowdown.”Looking at some other blogs of patent maximalists, Charles Bieneman is 'pulling a Berkheimer' again (he recently tried to coin terms like "Berkheimer Effect"). His blog post is titled “Berkheimer Prompts USPTO to Modify § 101 Exam Procedure”, but this is relatively old news which is still subjected to public input. The patent maximalists are trying to make it sound very final and inevitable; it’s not.

Bieneman didn’t quite stop there; the blog’s colleague, Bryan Hart, later on the day wrote about Oil States. But that was it. They wrote so many posts about Berkheimer (a far less important decision), but only one quick post about Oil States. Intentional? Malicious intent? Self serving? Whatever it is, it’s consistent with the dishonesty that’s plaguing the patent microcosm. Here’s Patent Docs going on about Berkheimer again. They barely talk about Oil States and would rather go back in time (months!) to Berkheimer:

The U.S. Patent and Trademark Office will be offering the next webinar in its Patent Quality Chat webinar series from 12:00 to 1:00 pm (ET) on May 8, 2018. The latest webinar, entitled “Subject Matter Eligibility: Revised Guidance in view of Berkheimer v. HP, Inc.” will be hosted by USPTO Deputy Commissioner for Patent Examination Policy Bob Bahr, will discuss the USPTO’s recently-issued memorandum implementing changes to examination procedure in view of the Federal Circuit’s decision in Berkheimer v. HP, Inc., which provides clarification on the subject matter eligibility analysis.

The reason Berkheimer gets brought up so often is that they want a software patents resurgence or a PTAB slowdown. Jonathan Cohen and Heenal Patel have in fact just given some bad advice on software patents, which are bunk (more or less worthless in courts). Here is what they wrote:

In general, software automation companies offer an attractive set of traits that include high recurring revenue bases, strong profit margins, high barriers to entry and robust cash flow generation, all of which can be protected by software patents.

What matters is that such patents cannot be properly enforced in courts. They’re rejecting these. Nevertheless, quite frankly as usual, it seems as though the USPTO has just granted more such patents; this new press release sounds like algorithms for decision-making processes:

CleanSpark, Inc. (OTC: CLSK), a microgrid company with advanced engineering, software and controls for innovative distributed energy resource management systems, today announced that it has received two new utility patents from the United States Patent and Trademark Office.

The first Patent, “Establishing Communication and Power Sharing Links Between Components of a Distributed Energy System, US 9,941, 696 B2″, awarded 4/10/2018, is a revolutionary patent that specifically addresses CleanSpark’s engineering and data-analytics technologies, processes and procedures. The patent covers CleanSpark’s ability to ‘receive data from a plurality of sources within a microgrid, which is then analyzed to forecast power needs across the microgrid, or a combination of multiple ‘fractal’ microgrids, and then determining whether or when to share power with the requesting module.’

In the following new press release it sounds like algorithms for software-defined storage:

Excelero, a disruptor in software-defined block storage, was assigned US patent #9,971,519 today – its second US patent – governing a technique of performing NVMe access directly from a chip. This intellectual property (IP) will be utilized in upcoming SmartNIC-based versions of its flagship NVMesh Server SAN and provides customers with more efficient ways to use distributed NVMe using the open standard NVMf. Excelero is also in talks with NIC manufacturers about licensing this technology, which will help accelerate not just NVMesh, but also NVMf from any vendor.

We don’t wish to delve into each new patent one at a time, but as the above couple of press releases may show, the USPTO can do just about anything it wants. But what’s a lot more important is what courts will be saying. After Oil States we expect PTAB too — not just courts — to be able to undo such grants.

In conclusion, Oil States remains largely ignored by law firms, which would rather speak about old decisions that better suit their financial agenda. They want to attract clients who may foolishly pursue patents that lack ‘teeth’ in courtrooms. It’s the applicants that suffer financially from these, whereas law firms just register more billable transactions.

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