06.24.18

Stronger Patents or None at All: How the Greed of Patent Law Firms and the Patent Office Contributes to Bogus Software Patents Being Amassed

Posted in America, Patents at 10:12 am by Dr. Roy Schestowitz

Iancu and his colleagues at the USPTO should make the Office fit for purpose, not a patent-printing machine

Summary: Alice Corp. v CLS Bank continues to be the sole recent reference for handling of software patents; that being the case, it’s rather disturbing that patent law firms continue to recommend patenting of software and offer lousy excuses for that (mainly because they profit at the expense of those foolish enough to believe them)

THE strength of patents, as noted in the previous post, is determined by the goodness or the legitimacy of patents (based on prior art, inventive merit etc.) and it’s something that the EPO departs from whereas the USPTO reluctantly adopts. It begrudgingly adapts to SCOTUS and the Federal Circuit, which deals with plenty of appeal from district courts and the Patent Trial and Appeal Board (PTAB).

Whether it likes it or not, the USPTO will have to improve; already, as we showed early this year, PTAB helps examiners elevate the quality of patents it grants (many get rejected based on Alice). Thankfully, we have not grown tired of writing about patents. Even after 12 years! I’ve personally done that for about a decade and a half and seeing the progress made in the US and Europe it looks like advocacy does have an effect, albeit a very slow one.

“Whether it likes it or not, the USPTO will have to improve; already, as we showed early this year, PTAB helps examiners elevate the quality of patents it grants (many get rejected based on Alice).”Media coverage regarding patents is still quite appalling. It’s like the patent microcosm appointed itself “reporters” and is now writing the so-called ‘news’ about patents (more spam/ads that we’re keeping track of and taking stock of). When the media posts pure spam for patent law firms or ‘business’ (all new examples from the past week) we’re ever more convinced that sites like Techrights are necessary. There’s a reason why EPO scandals aren’t covered much by the media, certainly not in the US.

Scanning through the past week’s news feeds we see that software patents are still being granted by the Office (USPTO), e.g. this to Genpact (announced days ago). Here’s more on that one.

Why was it granted?

“In 2014, the Alice decision made it much harder to patent software in the USA, ” Cory Doctorow recalled a few days day in an article about something else.

Well before 2014 there was another case, which almost nobody brings up (ever). “A controversial ruling limiting software patents has been making a comeback,” Timothy B. Lee wrote. [via]

There’s a lot more beyond the summary and it looks like it took much research to produce, citing the eminent Mark Lemley.

Forty years ago this week, in the case of Parker v. Flook, the US Supreme Court came close to banning software patents. “The court said, ‘Well, software is just math; you can’t patent math,’” said Stanford legal scholar Mark Lemley. As a result, “It was close to impossible in the 1970s to get software patents.”

If the courts had faithfully applied the principles behind the Flook ruling over the last 40 years, there would be far fewer software patents on the books today. But that’s not how things turned out. By 2000, other US courts had dismantled meaningful limits on patenting software—a situation exemplified by Amazon’s infamous 1999 patent on the concept of shopping with one click. Software patents proliferated, and patent trolls became a serious problem.

But the pendulum eventually swung the other way. A landmark 2014 Supreme Court decision called CLS Bank v. Alice—which also marks its anniversary this week—set off an earthquake in the software patent world. In the first three years after Alice, the Federal Circuit Court, which hears all patent law appeals, rejected 92.3 percent of the patents challenged under the Alice precedent.

The shifting rules about software patentability reflect a long-running tug of war between the Supreme Court and the Federal Circuit. The Federal Circuit loves software patents; the Supreme Court is more skeptical.

That fight continues today. While the Federal Circuit has invalidated many software patents in the four years since the Alice ruling, it also seems to be looking for legal theories that could justify more software patents. Only continued vigilance from the Supreme Court is likely to ensure things don’t get out of hand again.

The 40-year-old Flook ruling remains a key weapon in the Supreme Court’s arsenal. It’s the court’s strongest statement against patenting software. And, while software patent supporters aren’t happy about it, it’s still the law of the land.

It’s a pretty good report. Thom Holwerda said “it’s a great article that looks at the history of the tug of war between the Supreme Court and the Federal Circuit.” (when it comes to software patents policy in the US)

Kevin E. Noonan, a patent maximalist, has meanwhile mentioned SCOTUS in relation to patent eligibility. SCOTUS, having reformed patent scope in the US, seems fine with the way things are nowadays. To quote:

Like Sherlock Holmes’ quiet dog, the significance of the Supreme Court’s patent eligibility jurisprudence following their decision in Mayo Collaborative Services v. Prometheus Laboratories, Inc. and Alice Corp. v. CLS Bank Int’l is that there hasn’t been any. The Court has shown a similar reticence towards wading into the uncertain waters created by the Federal Circuit regarding the safe harbor created by the Hatch-Waxman Act, codified at 35 U.S.C. § 271(e)(1). Last Monday was the most recent instance of the Court’s refusal to address how the lower courts have implemented these statutory provisions in denying certiorari in Cleveland Clinic Foundation v. True Health Diagnostics LLC and Classen Immunotherapies, Inc. v. Elan Pharmaceuticals Inc.

[...]

Denying certiorari petitions cannot be used to interpret the Court’s views on whether the lower courts are properly applying its precedent; the Court frequently permits an issue to “percolate” through the courts and then chooses a case that, in their view provides a suitable vehicle for further clarification of the law. The Court has recently used this practice in other contexts (Gill v. Whitford; Benisek v. Lamone). In the meantime, however, patentees and the public await the time when the Court will deign to weigh in on either of these questions.

Seeing that Alice Corp. v CLS Bank just isn’t going away any time soon, the patent microcosm latches onto isolated and old CAFC cases. The anti-PTAB outfit Anticipat, for instance, is once again trying to prop up Berkheimer as though it is still relevant (it’s not, it’s old) and Scott Graham, in patent maximalists’ media, cherry-picks some low court’s case (Delaware District Court) to make it seem like Berkheimer is still relevant (it’s not). To quote the relevant part:

The chief judge of the busiest patent court in the country made it clear this week that he’s still going to grant at least some Section 101 motions at the summary judgment stage. Chief Judge Leonard Stark of Delaware recalled patent claims against Amazon Cloud Services that he’d thrown out last year, so he could reconsider them under the Federal Circuit’s new Berkheimer framework.

He threw them out again. “Although plaintiff tries to rely on expert testimony, here this is insufficient to create a genuine issue of material fact,” Stark wrote in Kaavo v. Amazon.com.

Kaavo is a software company that holds a patent that fairly bleeds ineligibility. The title is “Cloud computing lifecycle management for N-tier applications.” According to Stark, the patent is directed to the abstract idea of setting up and managing a cloud computing environment. Neither the claim language nor the specification discloses specific improved methods or systems of cloud computing, he added.

Kaavo argued that various dependent claims contained limitations that preserved their eligibility. For example, claim 11 describes “receiving security information; determining a requested security action based on the security information; and sending a security event based on the requested security action.”

It’s not to hard too understand why they try so desperately to keep Berkheimer in some headlines; a Delaware case, however, isn’t of much significant. Decisions often cite CAFC, not district courts and definitely not PTAB.

But don’t expect the lawyers to lie down and give up; some patent “Prosecution” and “Willfulness” so-called ‘webinars’ from the Intellectual Property Owners Association (IPO) and Practising Law Institute (PLI), respectively, are coming up. Such agenda-pushing by IPO and PLI has been covered here for a very long time. They just try to push litigation agenda, urging more people to sue (initiating ‘business’ both at the plaintiff’s and defendant’s side).

The truth of the matter is that most patents in question are ‘dead’ (futile inside the courts), so nobody would benefit from litigation except the lawyers. Those who claim otherwise are just wasting time and money of people wrongly led to believe otherwise. How about this third ‘webinar’ advertised some hours ago (along with the above) by Patent Docs? From the description: “Michael L. Kiklis and Stephen G. Kunin of Oblon McClelland Maier & Neustadt will provide guidance to patent practitioners on how to draft patent applications to overcome both Section 101 and AIA challenges.”

How can they honestly recommend pursuing software patents in 2018? Just look at the record. One retired attorney has just said that CAFC, the “Fed. Circuit Denied en banc Review of the Invalidation of Vote Verification Patent Claims under 101/Alice: https://dlbjbjzgnk95t.cloudfront.net/1055000/1055429/petition.pdf … ”

Another patent maximalist ranted: “Worst EVER: PTAB screws IBM patent applicant, invents NEW “abstract idea” and includes 180 pages of new material (including an unpublished dissertation) in decision to argue “fundamental building block” – affirm §101 rejection https://e-foia.uspto.gov/Foia/RetrievePdf?system=BPAI&flNm=fd2017001831-06-06-2018-1 … never seen IDS in an opinion!”

Software patents are rarely original, so PTAB does a fine job eliminating those. It’s simply applying Section 101 — something which many examiners have been failing to do (especially prior to Alice when guidelines were different).

We’re not against patents. Here’s an example of a newly-granted patent which is not software-related, but still… we carry on finding new patents being granted despite being evidently abstract. The USPTO continues to grant many such patents, but the courts would throw them away if challenged; that’s a deterrent for plaintiffs to ever initiate any legal action. A new example of a software patent in the US also comes from Apple. Apple should know algorithms aren’t patentable (such patents would not be enforceable in courts anyhow), but it’s going for it anyway. As Will Hill put it in Diapora, “just when the ridiculous patents against graffiti should be expiring…”

Here’s another new example; the Office needs to stop granting patents which courts would not honour; it’s self-harming. It merely reduces confidence in US patents.

We’ve also just noticed this kind of resurgence of “blockchain” as a surrogate for databases in software. Ropes & Gray LLP’s Leslie M. Spencer and Marta Belcher ride the blockchain hype wave in order to promote patents that are bunk and likely void. They did it twice [1, 2] in recent days and it’s part of a troublesome trend.

Walmart too is pursuing software patents disguised as "blockchain" and days ago an article was published about it. It was titled “Why Walmart filed a patent for blockchain, wearables and EHR data” (these patents are just software).

How about Fortune with “As Blockchain Grows, Companies Look to Avert a Patent War”? 5 days ago Michaela Ross published in “Bloomberg Big Law Business” a report that mostly quotes lawyers, as usual. Here’s a portion:

Blockchain patent wars may be looming, and companies are experimenting with preventive measures.

Startups and industry leaders, like IBM Corp. and Alphabet Inc.’s Google, are winning patents for the technology that is fueling cryptocurrencies and being applied to traditional businesses. They are also increasingly coordinating to uncover solutions—from cross-licensing and pooling patents to patent pledges—that would help ward off patent trolls and infringement lawsuits that plagued past tech revolutions, like the semiconductor or mobile phone booms.

“You’re seeing a much more aggressive effort of a nascent industry to create pools and a pool environment,” Josh Krumholz, co-leader of Holland & Knight LLP’s intellectual property practice, told Bloomberg Law. “It’s unsurprising to me because they’re obviously taking lessons from other industries like telecom.”

A surging number of blockchain experiments and related patent applications across various industries present ripe opportunities for patent assertion entities or trolls, as they’re often known, who could hamper innovation if not properly contained, patent attorneys say.

When Ross says “patent assertion entities or trolls” she means the likes of Erich Spangenberg with IPwe. IAM did a puff piece for him just before the weekend, calling his trolling “monetisation”. █

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