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06.17.18

To Keep the Patent System Alive and Going Practitioners Will Have to Accept Compromises on Scope Being Narrowed

Posted in America, Patents at 12:55 pm by Dr. Roy Schestowitz

They want to keep the pie and eat it as well

Big pie

Summary: 35 U.S.C. § 101 still squashes a lot of software patents, reducing confidence in US patents; the only way to correct this is to reduce patent filings and file fewer lawsuits, judging their merit in advance based on precedents from higher courts

THE USPTO has undergone quite a few changes in recent years, triggered initially by AIA and then SCOTUS downwards (‘trickling’ down to lower courts over time).

“The patent microcosm prefers to cherry-pick cases based on their outcome.”Among the main casualties? Software patents. The patent microcosm prefers to cherry-pick cases based on their outcome. The latest such example is Zeroclick v Apple, a Federal Circuit (CAFC) case from the very start of this month [PDF]. We wrote about it a couple of days later and Watchtroll did too (a relatively long time afterwards); it’s said to be about “(G)UI code” even though there’s no such thing (in programming there’s a callback function associated with pertinent GUI elements, but the GUI itself is just a layout, which could possibly be seen as copyrighted). Anyway, this isn’t a case about software patents or even § 101/Alice. Some say it is about § 112. Those same people (or a colleague, Charles Bieneman) speak of DDR Holdings, which is utterly desperate to salvage some abstract patents from § 101; the ‘famous’ case of DDR Holdings was mentioned a lot in 2016 (even here, e.g. [1, 2, 3, 4]), but it was rarely cited since. The word “Saves” (not “Survives” as patent maximalists typically put it) was used to describe the following move:

The Federal Circuit’s famous (or infamous) decision that one DDR Holdings’ patent was not invalid under 35 U.S.C. § 101 was used to support a district court’s denial of a motion for judgment of § 101 for three other DDR Holdings’ patents. In DDR Holdings, LLC v. Priceline.com, LLC, No. 17-498 (D. Del. June 5, 2018), the court denied a motion for judgment on the pleadings, because the three present patents-in-suit share the same inventive concept” as U.S. 7,818,399, which the Federal Circuit held patent-eligible in its 2014 decision in DDR Holdings, LLC v. Priceline.com, LLC.

The previously-litigated ’399 patent is entitled “Methods of expanding commercial opportunities for internet websites through coordinated offsite marketing,” and claims, in a nutshell, one online merchant to presenting retail opportunities framed with branding of another online merchant.

If business methods or software patents are being authorised by the district court, it oughtn’t necessarily mean that CAFC will agree. In fact, it seems quite likely that an appeal would void these patents, judging by the deviation in views and interpretations (CAFC is a lot harsher or stricter than any of the district courts). Ideally, in order to improve certainty around patent eligibility, the district courts will need to become more like CAFC, which itself became more like SCOTUS. That’s just how application of law works. The precedents cascade downwards, not upwards.

“If business methods or software patents are being authorised by the district court, it oughtn’t necessarily mean that CAFC will agree.”Staying with that same law firm/site, which is actually not bad at all (pretty moderate), here they give a new example of 35 U.S.C. § 101 in action. It still puts an end to a lot of patents wrongly granted by the Office, especially software patents. Well, the ‘famous’ case of DDR Holdings was brought up to no avail:

Patent claims directed to monitoring Internet activity “to increase the objectivity of the search results returned responsive to a search for talented original content creators” were held invalid under the Alice/Mayo abstract idea test and 35 U.S.C. § 101. Accordingly, in Talent Broker Tech. LLC v. Musical.ly, Inc., CV 17-08532 SJO (MRWx) (C.D. Cal. May 22, 2018), the Court granted the defendant’s Rule 12 Motion to Dismiss, finding claims of US 8,510,154 and US 8,630,894 patent-ineligible.

This was the defendant’s second motion to dismiss, the first having been granted with the plaintiff given the significantly more than an old and fundamental idea. As before, on the present motion the court found “that the claims of the Patents-in-Suit are directed to the abstract idea of organizing, differentiating and retrieving information.” For example, claim 1 of the ’894 patent, said the court,

It was a software patent and now it’s gone. Bieneman’s colleague Daniel Hegner meanwhile covered a district court case regarding a major patent troll, Uniloc. This troll is losing yet another software/abstract patent, owing to 35 U.S.C. § 101. To quote Hegner:

N. District Court of California grants Apple’s 12(c) motion for judgment on the pleadings (following full briefing and oral argument) finding claims of U.S. Pat. No. 6,661,203 ineligible under 35 U.S.C. § 101 based on broad functional claim language that does not recite how to achieve the claimed process beyond what is known in the admitted prior art. Uniloc USA, Inc. v. Apple, Inc., Civil No. C 18-00358 WHA (N.D. Cal. May 18, 2018).

Uniloc (Uniloc USA and Uniloc Luxembourg) sued Apple for infringement of its battery charging and discharging system.

There have been other examples lately, especially at the Patent Trial and Appeal Board (PTAB). Sooner or later Uniloc might go out of ‘business’. It operates via rather dodgy proxies (like the one in Luxembourg, Europe) and its patents are being axed one by one, sometimes owing to the bounties-offering Unified Patents.

“For law firms, as well as for courts, predictability is very important. They otherwise look like fools or cheats to their clients.”Seeing that such patents mostly perish in the face of § 101 we have to wonder how long it will be before: 1) the USTPO will quit issuing such patents. 2) patent law firms will stop advising clients to pursue such patents (or clients themselves lose interest). 3) no more lawsuits of this kind will be filed, knowing the the outcome will be favourable to the defendant or neither side (both sides just having to pay legal bills, potentially with the plaintiff footing both sides’ bills).

The sooner (1)-(3) may happen, the more rational, sane and predictable the US patent system will become. For law firms, as well as for courts, predictability is very important. They otherwise look like fools or cheats to their clients.

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