Summary: The reemergence of abstract patents using trendy hype waves and buzzwords notwithstanding, there's no evidence suggesting that courts really fall for these

AS WE last noted yesterday, patent law firms try really hard to convince people and firms to still pursue software patents, based on their misinformation. Sure, major patent offices like the EPO and USPTO may grant such patents, but that does not mean that these patents become (successfully) enforceable. Failed enforcement can cost the plaintiff a fortune (paying the defendant's legal bills as well). Nowadays, patents can also be invalidated outside the courts, owing to Patent Trial and Appeal Board (PTAB) inter partes reviews (IPRs) which receive affirmations from the Federal Circuit.

"Some applicants are using buzzwords to patent software, but these patents are still not honoured by courts and Iancu hasn't changed this."Hours ago Watchtroll published yet another attack (among many attacks) on PTAB's credibility; these people are simply afraid of PTAB, knowing that PTAB is voiding thousands of software patents. Hours ago another site of patent maximalists published this "Guest Post" (advertisement/advocacy) from Richard P. Beem, falsely claiming that "[s]oftware patents and applications are making a quiet comeback under Director Andrei Iancu’s leadership of the U.S."

This is totally false; it's what some call "fake news" because there's no evidence backing it. Some applicants are using buzzwords to patent software, but these patents are still not honoured by courts and Iancu hasn't changed this. He does not control the courts. From Beem's post:

In the hands of reductionists, the Alice formula for rejection/invalidation was easy to apply. Every invention can be reduced to an abstract idea. Whatever is left can be explained away as “routine” or “conventional.” In the last four years, many software patent applications suffered repeated rejection and the ignoble death of abandonment for lack of will or lack of funds. Even when granted, many software patents were mowed down in inter partes review (IPR) in the Patent Trial and Appeal Board (PTAB).

Yes, this has not actually changed. Iancu cherry-picked some court cases, resulting (at best) in some negligible changes.

We understand that patent law firms are desperate to sell their 'products' and 'services' (such as lawsuits), but lying to prospective clients only harms their cause. Clients don't appreciate poor advice. In the remainder of this post we shall present our observations from this past week, showing that the only resurgence -- if it can be called that at all -- is that of buzzwords.

“PTAB keeps breaking new records every year (e.g. number of filings, even in spite of soon-to-be-repeated fee hikes) and its invalidation rates are very high, some might say extremely high.”
      --AnonymousPTAB has not relented. PTAB keeps breaking new records every year (e.g. number of filings, even in spite of soon-to-be-repeated fee hikes) and its invalidation rates are very high, some might say extremely high. Not only for Section 101, either. Earlier this month a technical attorney, Peter Keros, wrote about Sections 102 and 103 (prior art) in relation to a case which was mentioned here before. What's exceptional about this case is that the Federal Circuit did not agree with PTAB, which is rare. To quote:

The Court disagreed with the PTAB, noting that while Perrodin discloses an embodiment that “happened to result in continuity,” “[n]othing about Perrodin’s algorithm required contiguity.” In re Facebookat *5. Perrodin disclosed another embodiment in which resizing one image element resulted in a grid that lacked images in one or more spaces in the grid, i.e., the image elements were not contiguous in the grid. Perrodin’s algorithm allowed noncontiguous image elements in the grid, so “Perrodin could not have disclosed the ‘rule requiring the image elements to be contiguous’” as recited in claim 1. Id.at *6. The Federal Circuit reversed the PTAB’s decision and remanded for further proceedings.

This case isn't about Section 101. It's quite rare and unusual for CAFC judges to disagree with PTAB on Section 101. Berkheimer was the only memorable exception.

A few days ago Suzanne Monyak wrote about another case of patents perishing at PTAB because Nomadix was foolish enough to think that trivial patents have merit. This one was obvious:

The Patent Trial and Appeal Board on Wednesday refused to revive claims from a Canadian hotel entertainment company that two patents owned by network device maker Nomadix Inc. are invalid as obvious.

In a pair of decisions, the PTAB denied Guest-Tek Interactive Entertainment Ltd.’s request to rehear its challenges to Nomadix’s computer network systems patents, after the PTAB granted review of the patents, and then expunged that decision and denied review 10 days later.

On a move which was covered a lot earlier month (PTAB and Ex Parte Jung) Christopher Francis wrote: "This case nonetheless raised an interesting discussion of SuperGuide Corp. v. DirecTv Enters., Inc., 358 F.3d 870 (Fed. Cir. 2004), which interpreted language in the form of “at least one of A and B” to mean at least one of A and at least one of B, as well as the line of subsequent cases discussed in the Jungdecision that distinguish SuperGuide."

"It's quite rare and unusual for CAFC judges to disagree with PTAB on Section 101."This isn't about Section 101, but it shows PTAB on top of its agenda.

For new examples involving Section 101, see what the patent maximalist Charles Bieneman wrote some days ago. When even the Eastern District of Texas accepts that software patents are bunk and someone like Bieneman accepts this decision it's pretty clear that hope for such patents is irrational and chances of withstanding a court's scrutiny (even in Eastern Texas) are slim. The Federal Circuit, upon appeal, agrees:

In a one-line order under its Rule 36, the Federal Circuit has affirmed a decision of Judge Schroeder in the Eastern District of Texas granted a Rule12(b)(6) motion to dismiss claims of patent infringement where claims were directed to “adjusting the number of devices allowed to use a digital product (e.g., software) under a license.” Uniloc, USA, Inc. v. Amazon.com, Inc., No. 2017-2051 (Fed. Cir., Aug. 9, 2018). The district court decision finding claims of U.S. Patent No. 8,566,960 patent-ineligible under the Alice/Mayo test and 35 U.S.C. €§ 101 is discussed in this post.

Charles Bieneman separately acknowledged that at the Federal Circuit not even a Microsoft patent case can salvage software parents. This time too it's the Eastern District of Texas backed by the higher court:

The Federal Circuit has affirmed a summary judgment from the Eastern District of Texas holding that claims directed to indexing and accessing information in large databases are patent-ineligible under 35 U.S.C. €§ 101 and the Alice/Mayo test. BSG Tech LLC v. BuySeasons, Inc.,No. 2017-1980 (Fed. Cir. Aug. 15, 2018) (precedential) (opinion by Judge Hughes, joined by Judges Reyna and Wallach). The patents at issue, U.S. Patent Nos. 6,035,294,6,243,699, and 6,195,652, “have substantially overlapping specifications and are directed to a ‘self-evolving generic index’ for organizing information stored in a database.”

Texan judges too are starting to 'get' it. As Karen Kidd put it, the "Federal Circuit affirms Texas judge's ruling that database patents failed Alice/Mayo test" (Section 101). To quote:

Three indexing software patents allegedly infringed by a Wisconsin-based party supply company are invalid because they only contain abstract ideas, a federal appeals court ruled in an East Texas case earlier this month.

The patents failed both steps in the so-called "Alice/Mayo" test, the industry standard for analyzing inventions under Section 101 of U.S. code, the U.S. Federal Circuit Court of Appeals ruled in a decision handed down Aug. 15.

"If a claimed invention only performs an abstract idea on a generic computer, the invention is directed to an abstract idea at step one," the appeals court decision said. "...We must, therefore, consider whether the focus of the claims is on a specific asserted improvement in computer capabilities or, instead, on a process that qualifies as an abstract idea for which computers are invoked merely as a tool."

The Federal Circuit agreed with an earlier ruling by a Judge Robert W. Schroeder III of the Texarkana Division of the Eastern District of Texas, who granted summary judgment in BSG Tech LLC v. BuySeasons Inc. after finding that plaintiffs' allegations were directed to abstract ideas rather than patentable inventions. The Federal Circuit affirmed the district judge's ruling, affirming that none of the patent claims were eligible under 35 U.S.C. ۤ 101.

So just because the USPTO grants some software patents doesn't mean they'll be honoured by courts, not even in Texas (not anymore).

"In 1990," an article said some days ago, "software accounted for just 5% of patents filed to the United States Patent and Trademark Office. In 2015, that number reached 40%."

"So just because the USPTO grants some software patents doesn't mean they'll be honoured by courts, not even in Texas (not anymore)."That's the hallmark of a bubble; and that bubble is nowadays bursting. That's really bad for the USPTO's reputation because all these software patents that it granted for a number of decades are now bunk, worthless. The worst it can do it continue to grant these.

We've been carefully watching patent news over the past week, with particular focus on software patents. We are still seeing many such patents being granted despite the above trends (in courts). Odessa American, for instance, said that "Princeton Identity Receives Three New Patents for Iris Recognition Technology". Citizentribune and other sites soon published the same thing [1, 2]. These are just software patents again. Computer vision is just software, maths. I know this because it is my field of research, which I practiced for about a decade. Can the examiners at the USPTO not see this (pun intended)? Computer vision (not processing but analysis) tasks are just algorithms.

"That's the hallmark of a bubble; and that bubble is nowadays bursting. That's really bad for the USPTO's reputation because all these software patents that it granted for a number of decades are now bunk, worthless. The worst it can do it continue to grant these."At around the same time/day we saw this new article claiming “worldwide patented software system for driver recognition.”

These are software patents and hence bunk patents except perhaps in China. SIPO is just about the only major patent office that formally accepts software patents; Software patents are not allowed in India and the rest of IP5 (China is the only exception). An article by Stuti Sinha (Khurana and Khurana) would have us believe otherwise because, quite frankly as usual, patent law firms lie or at best embellish on such matters. Citing an Amdocs case (35 U.S.C. ۤ 101), Sinha talks about "Surviving The Clouds Of Alice Rejections" (the term "surviving" is a loaded one, insinuating that patent invalidation is the moral equivalent of manslaughter). To quote:

The Patent Statute of the US defines patentable subject matter as 'any new and useful process, machine, manufacture, or composition of matter' and any improvements. But patent cannot be granted for laws of nature, natural phenomena or abstract ideas. On June 2014, the US Supreme Court's ruling in the Alice Corp. v. CLS Bank sent software patents down the rabbit hole. Essentially, the Court ruled that 'implementing the abstract idea' on a computer does not make it patentable. To determine whether claims are patent eligible or not, the Supreme Court gave a two-part test- In step 1, the Court has to determine whether the claims are directed to an abstract idea or not; Step two- If the claims are directed to an abstract idea, then the Court determines whether the claims include elements showing an inventive concept that transforms the idea into patent- eligible invention. Within two years of the decision, more than 8400 applications got abandoned while 60,000+ applications got rejected due to the decision. The ambiguity and uncertainty still reigns for both the patent owners and the defendants, making it difficult to navigate the eligibility issue.4

Amidst the rejection of software patents, there have been some decisions where the claims of the patents overcame the 35 U.S.C. ۤ 101 challenge under the Alice Decision, giving us a hope that even this tunnel of uncertainty can reach an end.

Hope for who? Who's "us"? Patent lawyers? Patent trolls? Besides, these people merely cherry-pick outcomes that favour their agenda while mostly ignoring the rest (the vast majority).

"...these people merely cherry-pick outcomes that favour their agenda while mostly ignoring the rest (the vast majority)."A few days ago Peter Leung (Bloomberg Law) wrote about Genedics' US patent numbers 8,319,773, 8,477,098, 8,730,165, 8,902,225, 9,110,563, and 9,335,890. Genedics is like a patent troll (last mentioned here back in March). Leung asserted that "Vagueness of 3D Interface Patents May Have Saved Them, For Now..."

Using buzzwords and hype (trendiness) to make abstract patents look as though they're valid even when they're not isn't too novel a trick. Quoting Leung:

A California-based company that makes augmented reality headsets lost its bid to knock out a patent infringement suit related to 3D user interfaces.

The U.S. District Court for the District of Delaware Aug. 21 rejected Meta Co.’s arguments that six patents owned by Genedics LLC, a Massachusetts-based patent licensing company, are ineligible for patent protection because they cover abstract ideas without an inventive concept.

The decision shows some of the difficulties courts face when determining whether a patent covers eligible subject matter.

The Federal Circuit can overturn such decisions, as it often does.

"Iancu isn't bringing software patents back. Iancu just strives to lower patent quality, thereby reducing confidence in US patents even further and in the process devaluing the whole."To give some more blatant misuses of hype and buzz, here we have Intuit trying to set up patent traps to ensure its competition cannot develop (without risk of litigation). These are bunk software patents -- one of which we mentioned before (Intuit has worried the cryptocurrency community with this patent). Microsoft too wants a monopoly on something evil: 'Trusted' Computing in relation to blockchains. As a cryptocurrency-centric site put it:

Two new patents from Microsoft reveal that the tech giant is looking to bolster its blockchain solutions with the use of trusted execution environments (TEEs), according to two filings published by the U.S. Patent and Trademark Office (USPTO) August 9.

Both applications outline how the use of TEEs could further improve security within a consortium blockchain network, which requires that specific nodes are endorsed to act as validator nodes (VNs) on the blockchain.

Those are patent applications on abstract ideas. Clearly! Will examiners see that? Also on the subject of cryptocurrency and blockchains, days ago there was a lot of press coverage such as [1, 2, 3, 4] (dozens more). The Bank of America continues to assemble a patent thicket around its perceived threat/competition:

The U.S.’s second-largest bank, Bank of America (BofA), has applied for another blockchain patent on the development of a secure crypto storage system, according to a patent document published by the U.S. Patent and Trademarks Office (USPTO) August 23.

The patent, entitled “Block Chain Encryption Tags,” describes a system of recording and storing cryptocurrency-related transactions that are handled by enterprises. In short, the invention offers a system of data security for blockchain networks by implementing encryption and linking data units to the blocks of a certain blockchain.

In the patent document filed on April 18, 2018, the North Carolina-based bank introduced a system that includes a device with a processor that first receives a set of data elements, and then acquires an encryption key prior to encrypting the elements within the first block on a blockchain.

Why are patents like these ever being granted? Why does the USPTO openly promote blockchain patents? When will courts finally have the opportunity to tackle such patents and make it clear that adding "blockchains" to software does not make that software any less abstract? Adding words like "cloud", "AI" and "IoT" to patents is no magic recipe, unless the principal goal is to fool examiners rather than manipulate judges.

Iancu isn't bringing software patents back. Iancu just strives to lower patent quality, thereby reducing confidence in US patents even further and in the process devaluing the whole. ⬆