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10.14.18

USPTO FEES Act/SUCCESS Act Gives More Powers to Director Iancu, Supplying Patents for Litigation ‘Business’ and Embargo (ITC)

Posted in America, Finance, Patents at 11:25 am by Dr. Roy Schestowitz

Athens

Summary: Corruption of the US patent system contributes to various issues which rely on the extrajudicial nature of some elements in this system; companies can literally have their products confiscated or imports blocked, based on wrongly-granted patents

UNLIKE the unaccountable EPO, the U.S. Patent and Trademark Office (USPTO) is loosely connected to the government, it can be sued, and it can be held accountable. This is a good thing.

“Donald Trump is also the person who nominated Iancu after Iancu’s firm had worked for Donald Trump.”Laws that govern the USPTO are also decided upon by courts and politicians, not USPTO managers (who may merely supply guidelines for compliance with these laws, e.g. 35 U.S.C. § 101). Last month we said that USPTO FEES ACT Makes the US Patent Office a Money-Making Machine That Systematically Disregards Patent Quality and days ago patent maximalists rejoiced this:

The SUCCESS Act (HR 6758) has now passed through both the House and Senate and will very likely be signed into law by President Donald Trump within the next couple of weeks.

The key aspect of the bill is extension of USPTO fee setting authority that ended in September 2018 (7 years after AIA enactment). Under the new law, USPTO will retain authority to set its own fee structure until September 2026 (15 years from AIA enactment).

[...]

Within 1 year, the PTO Director will provide a report to Congress on the results.

Donald Trump is also the person who nominated Iancu after Iancu's firm had worked for Donald Trump. We worry that there’s a rather gross attempt to bypass the courts and become more lenient in examination. As we shall cover tomorrow, there’s evidence of this. Nothing good will come out of an office which favours money over reputation. It’s not like some corporation that should strive to meet fiscal objectives and raise revenues on a quarterly basis.

Speaking of Trump and Iancu, how about the following recent photo?

Trump and Iancu

And another one tweeted by the bribed/bought-for politician (for pharmaceutical patents)?

Trump and Hatch

Best policies corporate money can buy?

Wrongly-granted patents are a very big deal because embargoes can be imposed using such patents. Consider what Justin M. Sobaje (Foley & Lardner LLP) wrote some days ago on how to embargo or how to put more blackmailing power/pressure if you’re a patent troll (a.k.a. “NPE”). The National Law Review published this:

Many patent practitioners assume that non-practicing entities cannot obtain permanent injunctions in patent cases. This is attributed to the belief that NPEs fail the four-factor test set out by the Supreme Court in eBay. Given that belief, it is surprising for some to learn that a recent decision from the Northern District of California resurrected decade old case law indicating that non-practicing entities can get injunctive relief. Practitioners having cases involving NPEs would do well to study this line of reasoning to be prepared for arguments surrounding permanent injunctions.

The four-factor test identified by the Supreme Court in eBay for determining whether to award permanent injunctive relief to a prevailing plaintiff requires the plaintiff to demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law are inadequate to compensate for that injury; (3) that considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction. eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391, 126 S. Ct. 1837, 1839 (2006). After the eBay decision in 2006, it has been extremely rare for NPEs to be awarded permanent injunctions, but a recent district court decision has resurfaced the issue.

The ITC is notoriously lax and only a couple of days ago Watchtroll said that “ITC Institutes Section 337 Investigation of ResMed’s Sleep Apnea Masks — a case we covered a month ago. This is the latest twist (from earlier this month): “On Friday, October 5th, the U.S. International Trade Commission (ITC) issued a notice of institution of a Section 337 patent infringement investigation requested by New Zealand-based appliance manufacturer Fisher & Paykel against San Diego, CA-based medical equipment firm ResMed. The ITC instituted the Section 337 investigation after Fisher & Paykel alleged that certain sleep apnea products imported for sale by ResMed infringe upon U.S. patents held by the New Zealand firm.”

“We suppose that in this age of Iancu and Trump, however, business rather than justice is what matters.”The ITC tends to favour the companies from the US, as its own name serves to suggest. It’s a protectionist entity that relies on the false assumption US patents are valid, no matter what the Patent Trial and Appeal Board (PTAB) says. In the case of Cisco the ITC vainly disregarded the PTAB’s decision to invalidate the patent under investigation.

We suppose that in this age of Iancu and Trump, however, business rather than justice is what matters. It’s all about money and authority over finances is back with Iancu now. This is not good.

Over at IAM, the megaphone of patent trolls, SpencePC (US) has meanwhile published this long piece titled “Global patent litigation strategy” (what ITC is enabling). These patent law firms are scheming/planning how to sue the whole world in order to charge their clients and tax everything. They pursue more and more patents for the sake of patent litigation alone. No good will come out of it.

Court of Appeals for the Federal Circuit Decides That USPTO Wrongly Granted Patents to Roche

Posted in America, Courtroom, Patents at 10:22 am by Dr. Roy Schestowitz

Not just 35 U.S.C. § 101; nature is not an invention either

A stormy paradise

Summary: Patent quality issues at the U.S. Patent and Trademark Office (USPTO) — motivated by money rather than common sense — continue to be highlighted by courts; the USPTO needs to raise the bar to improve the legal certainty associated with US patents

THE USPTO isn’t exactly renowned for patent quality; it’s known as the ‘go-to office’ for quick and easy patents and it’s also known for its ridiculous number of patents (recently exceeded 10 million).

Suffice to say, the USPTO has granted grant many bogus patents or fake patents (ones that should never have been granted and have no legal standing in actual courts of law). Natural Alternatives International has decided to sue the USPTO for having invalidated its patent in a Patent Trial and Appeal Board (PTAB) inter partes review (IPR). Donald Zuhn wrote about it a few days ago. They’re suing the USPTO because it’s granting patents falsely and even its own staff admits that. It recently explained that such patents should not have been granted, leading to this suit:

Last week, in Natural Alternatives International, Inc. v. Iancu, the Federal Circuit affirmed a determination by the U.S. Patent and Trademark Office Patent Trial and Appeal Board in an inter partes reexamination affirming the Examiner’s rejection of the challenged claims of U.S. Patent No. 8,067,381 as being anticipated or obvious over the cited prior art, as well as the Board’s denial of the patentee’s request for rehearing. The ’381 patent is owned by Appellant Natural Alternatives International, Inc. (“NAI”).

The inter partes reexamination was requested by Woodbolt Distributors, LLC, which had been involved in district court litigation with NAI concerning the ’381 patent. In its request, Woodbolt asserted that the priority claim of the ’381 patent was defective because NAI “deliberately and expressly terminated” its claim to the benefit of the first four priority applications by breaking the chain of priority between the fourth and fifth priority applications.

Iancu ought to know that the only solution is for USPTO management (and in turn examiners) to raise examination standards.

More media attention has been dedicated to Swiss giant Roche. The Federal Circuit continues to ‘finish off’ bad patents that should never have been granted. It adds its weight to PTAB’s and Roche isn’t happy.

“The Federal Circuit on Tuesday upheld a ruling that a tuberculosis test patent Roche Molecular Systems Inc. asserted against Cepheid is invalid for claiming only natural phenomena,” Matthew Bultman wrote. Bultman is a patent maximalist.

Reuters’ Jan Wolfe, who is more impartial, wrote this:

A federal appeals court on Tuesday said a patent owned by Roche Molecular Systems Inc on a method of detecting tuberculosis should not have been granted, handing a win to rival diagnostics company Cepheid Inc.

Kevin Noonan, a proponent of patents on life, noted that “[t]he District Court granted summary judgment of invalidity for both types of claims for patent-ineligibility, and the Federal Circuit affirmed, in an opinion by Judge Reyna” (the one who patent maximalists like to mock). To quote:

This recognition significantly reduces the precedential effect of the BRCA1 decision and provides, perhaps, a way for a future panel to distinguish claims to primers from this precedent. Judge O’Malley reminds her colleagues and us that the BRCA1 decision did not rule on the patent eligibility of PCR primer claims and does not compel the result the Court announced here.

Judge O’Malley’s concurrence also notes that this case, unlike the BRCA1 case, contains unresolved questions of material fact that, while disregarded by the Court may provide another basis for distinguishing the BRCA1 decision. Citing the distinctions drawn by the Supreme Court in Myriad between genomic DNA and cDNA, Judge O’Malley opines that while the BRCA1 opinion sets forth the basis for finding the PCR primer claims to be patent ineligible, “it is not clear from the BRCA1 opinion or record why we reached this conclusion. The lack of record evidence underlying BRCA1′s conclusion on this point is important in light of the record in this case.” She then goes on to recite the factual distinctions argued by Roche regarding the differences between the claimed primers and the sequences as they occur in nature (including the differences in strandedness, complementarity (“a primer comprising a nucleotide sequence of ATCG is complementary to, but unquestionably different from, a natural DNA strand comprising a sequence of TAGC”), the presence of a 3′ hydroxyl group, the linearity of the primers versus the circular nature of bacterial DNA, and that natural “primers” comprise RNA and not DNA). All these facts were adduced from expert testimony and thus for Judge O’Malley raise “genuine issue of material fact” that are not appropriate for summary judgment. Judge O’Malley also notes that the claimed primers here have a markedly different function, unlike the genomic DNA in Myriad, due to the presence of the 3′ hydroxyl group which permits PCR amplification to occur. Judge O’Malley apprehends that the patentee in this case raised factual issues not addressed in the Court’s BRCA1 decision, and thus, “unlike the appellants in Myriad and in BRCA1, here, Roche submitted evidence of record that, at the very least, raises genuine issues of material fact as to whether there exists anything in nature that both has the structure and performs the function of the claimed primers.” Accordingly, she believes not only that the BRCA1 decision does not compel the Court’s conclusion here, but that the question should be taken up en banc to clarify the law regarding the patent eligibility of oligonucleotide primers and perhaps methods of using such primers to amplify targeted portions of DNA.

While this concurring opinion is a welcome ray of sunshine on a cloudy day, the practical effects of this, like so many Federal Circuit decisions on eligibility, is to incentive non-disclosure of inventions such as these, with the concomitant injury to progress that trade secret protection of diagnostic methods is almost certain to create. It should be self-evident that this outcome is contrary to the Constitutional mandate underlying the patent system, but it appears the current constitution of the Court is unconcerned with this outcome. Perhaps Chief Judge Woods of the Seventh Circuit was right after all.

What we have here isn’t an example of software patents and what’s noteworthy about it is that it demonstrates patent quality issues beyond the domain of software. The USPTO needs to think carefully how to better align with courts’ decisions rather than expect courts to bend in favour of Iancu’s “business model” — incidentally the subject of our next post.

Even Judge Gilstrap From Texas is Starting to Accept That Software Patents Are Invalid

Posted in America, Patents at 9:45 am by Dr. Roy Schestowitz

Rodney Gilstrap

Summary: Amid new lawsuits from Texas (e.g. against Citrix) we’re pleased to see that even “reprehensible” Rodney Gilstrap (that’s what US politicians call him [1, 2]) is learning to accept SCOTUS on 35 U.S.C. § 101

THE Federal Circuit and the Patent Trial and Appeal Board (PTAB) long ago accepted SCOTUS and began invalidating software patents en masse (2016 or 2017 was the turning point and this year new records are reached). Will the U.S. Patent and Trademark Office (USPTO) follow suit and stop granting such patents? We sure hope so. This doesn't seem promising though.

It’s clear that things have changed in a positive way when even the notorious Rodney Gilstrap is starting to understand that software patents are bunk. CAFC agrees of course. “The Federal Circuit on Tuesday affirmed U.S. District Judge Rodney Gilstrap’s decision to invalidate seven mobile messaging patents that were asserted against Regal Cinemas, Baskin-Robbins, Edible Arrangements and the Culver’s restaurant,” Tiffany Hu wrote. Excellent!

We have meanwhile learned, however, courtesy of Triangle Business Journal (near Citrix), that Citrix got sued by what certainly sounds like another bogus patent lawsuits firms over bogus software patents. The plaintiff comes from Texas, home of Rodney Gilstrap.

It is no secret that Rodney Gilstrap made rulings the way he did in order to attract more litigation to his town; he said so himself. This means that justice itself had been compromised for business reasons and that’s not okay.

The sure thing is, in order to improve his record as a judge (fewer decisions overturned by a higher court), Rodney Gilstrap will need to ‘get with the programme’ and accept the Leahy-Smith America Invents Act. It’s not going away, it’s here to stay.

Thankfully, this trend (as above) means fewer lawsuits in Texas and far fewer patent lawsuits overall.

TC Heartland, which soon turns 1.5 years old, contributed a great deal to this too. Watchtroll spins that as it usually does. “Patent Infringement Lawsuit Against Comcast Highlights Attractiveness of Middle District of Florida for Patent Plaintiffs,” Watchtroll wrote four days ago, but that makes no sense because citing TC Heartland it looks like the patent lawsuit will be thrown out or relocated. TC Heartland is even explicitly mentioned as follows:

On August 1st, Fort Myers, FL-based over-the-top (OTT) Internet television provider WhereverTV filed a suit alleging patent infringement against Philadephia, PA-based telecommunications conglomerate Comcast Corporation. Despite the fact that Comcast is headquartered in Pennsylvania and the inventor listed on WhereverTV’s patent resides in Pennsylvania, the complaint was filed in the Middle District of Florida, a district which has been growing more attractive for parties filing patent infringement suits.

[...]

On September 18th, the defendants in this case filed a motion to dismiss Comcast for lack of personal jurisdiction and improper venue, along with a motion to dismiss WhereverTV’s suit for failure to state a claim. Comcast’s claim of improper venue relies on the U.S. Supreme Court standard set out in 2017’s TC Heartland v. Kraft Foods Group Brands. Comcast argued that it is not incorporated in Florida nor does it have a regular and established place of business within the state, and thus doesn’t reside in the state for the purposes of the patent venue statute. As Leahu points out, this motion is specifically limited to the parent Comcast Corporation entity and not the other three defendants in the case. “The other three defendants are all registered in the State of Florida to transact business in Florida,” Leahu said, noting that Comcast filed an application in 2001 to withdraw from transacting business in Florida. “If a company files the appropriate paperwork to do business in the State of Florida and claims the benefit of doing business in the state, that’s one of the factors going towards the argument that they can be hauled into court in Florida in most cases.”

TC Heartland was also recalled by another site of patent maximalists a few days ago:

A new Docket Navigator report assesses the impact of TC Heartland on the most popular districts for patent litigation, the number of patent cases and which districts are being affected by venue challenges

The full extent of the influence of TC Heartland v Kraft on patent litigation in the US has been revealed by a Docket Navigator report. It analyses the 2017 US Supreme Court decision’s effects on a range of different areas…

The headline is a loaded one: “TC Heartland shook up venue choice, did it reduce US patent litigation too?”

It did.

The number of patent lawsuits in the US has collapsed, never mind where the lawsuits get filed (it’s harder to get the courts that advertise being biased, such as Gilstrap’s court). Moreover, if one looks at the total number of lawsuits, the difference over the years and the decline of Texas, then it makes things intuitively clear that lack of access to the likes of Gilstrap discouraged further litigation of this kind. Gilstrap ruled on a huge number of software patent and patent troll cases. This is why he is being mentioned so much and US politicians bothered mentioning him by name, dubbing him “reprehensible”.

Federal Circuit Doubles Down on User Interface Patents, Helps Microsoft-Connected Patent Trolls Curtail the Prime Competitor of Microsoft Office

Posted in Google, Microsoft, OIN, Patents at 8:29 am by Dr. Roy Schestowitz

Dan Bricklin
Dan Bricklin, photographed by Betsy Devine at a blogger brunch in Boston’s Chinatown 2/25/2007. Licence: CC BY 2.5

Summary: Patent trolls that are connected to Microsoft continue to sue Microsoft rivals using old patents; this time, for a change, even the Federal Circuit lets them get away with it

THE Federal Circuit (CAFC) with its current Chief Judge (Prost) is rather different from what it used to be. Perhaps it learned to accept that reversals by SCOTUS must end, not by means of changing SCOTUS itself but by getting rid of corrupt judges like Rader (he actually got caught).

Today’s CAFC is supportive of Patent Trial and Appeal Board (PTAB) inter partes reviews (IPRs) and typically affirms PTAB’s decisions — a topic we shall write about separately in view of newer/latest determinations. 35 U.S.C. § 101 at the U.S. Patent and Trademark Office (USPTO) has enabled both PTAB and CAFC to rule out patents quite promptly, without having to engage in a lengthy process like search and assessment of prior art.

“Back in 1992,” Patently-O recalled for those who forgot, “Borland Software invented a tabbed spreadsheet for its Quattro Pro that was then copied by Excel, Google Sheets, and others. Today, the Federal Circuit finally found the patent claims enforceable (or at least patent eligible).”

Microsoft copied everyone, but nowadays it is suing everyone, including Corel.

Found initially via [1, 2, 3] was this article/blog post titled “Tabbed Spreadsheet — Patent Eligible”. It’s what Patently-O covered along/after the above tweet:

D.Delaware Judge Stark dismissed DET’s case on the pleadings — holding that the Borland/DET spreadsheet-tab patent claims were directed to abstract ideas. On appeal, the Federal Circuit has partially reversed — finding that some of the claims are directed toward “specific improved method for navigating through complex three-dimensional electronic spreadsheets” and thus are patent eligible. The decision here is authored by Judge STOLL and joined by Judges REYNA and BRYSON.

The patents at issue here basically cover the use of tabs in a spreadsheet document. You might be thinking – “WHAT I’VE BEEN USING TABS FOR 25 YEARS” — at least that is what I was thinking. The thing is that DET’s patents were invented by folks at Borland Software — baker of Quattro Pro — and claim priority back to 1992. BOOM! Microsoft came out with its tabbed version of Excel in 1993 following Borland’s release. Back then I used Quattro Pro – and tabs were awesome. The case here is against Google for its tabbed sheets.

As you’ll see below, the claims include a “notebook tab” — and that feature seems to be the key for patent eligibility. This aspect of the decision makes it fairly questionable.

I’ll note that this case may well fit into the IP case-books as a companion to the 1996 Supreme Court case on spreadsheet menu copyright. Lotus Dev. Corp. v. Borland Int’l, Inc., 516 U.S. 233 (1996).

“CAFC only exists to be reversed by SCOTUS,” Carlo Piana wrote about it (he became famous for his Samba lawyering).

Benjamin Henrion said: “Despite Alice, CAFC just founds “tabs in a spreadsheet” to be patent eligible. Software patents are back, specialized patent courts are dangerous, biased, populated by the patent establishment, and don’t want to listen http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/17-1135.Opinion.10-9-2018.pdf …”

“It’s actually not so unusual for CAFC,” I told Henrion, “as not too long ago they said OK to other GUI patents; not exactly the same as algorithms/callback functions…”

We wrote about this as recently as January. To Piana I said: “That was true when Rader, the corrupt man, was in charge. His successor is OK and CAFC improved…” (under Prost)

Paul Redmond Michel was also pretty bad (he still is), but unlike Rader he was not corrupt.

Since the above alludes to spreadsheets, noteworthy is also coverage about Microsoft’s ‘proxy’ Acacia. These patent trolls of Microsoft continue to sue Microsoft’s rivals using dubious software patents. To quote Law 360:

The Federal Circuit on Tuesday reversed a lower court’s invalidation of three patents asserted against Google LLC by a unit of patent licensing company Acacia Research Corp.

So a unit of a patent troll of Microsoft (Acacia Research Corp.) sued Google, Microsoft’s main rival in this sector. Patently-O revisited the subject, citing/mentioning Dan Bricklin (the so-called father of spreadsheets):

This week’s decision in DET v. GOOGLE focuses on patent eligibility of a muti-sheet spreadsheet displayed with notebook tabs. The case is reminiscent of a 2014 Patently-O post by Howard Skaist written in the still roiling wake of Alice and Mayo. In his post, Skaist considered ways that the inventor of VisiCalc (Dan Bricklin) might have claimed the computerized spreadsheet he first created in 1979.

[...]

In some pre-Bilski writing, Dan Bricklin explained why he didn’t actually try to patent the spreadsheet.

After Alice these patents would be null and void anyway. Microsoft insists that it wants "truce" (as recently as days ago), but here we have a Microsoft-connected troll attacking another OIN member, Google. OIN has no way/mechanism for dealing with intermediaries.

Let’s Hope Apple Defeats All the Abstract Patents That Are Leveraged Against It

Posted in America, Apple, Courtroom, Patents at 7:56 am by Dr. Roy Schestowitz

Software patents disguised as “network provisioning” now?

Apple

Summary: Apple can be viewed as a strategic ‘ally’ against patents that threaten Android/Linux if one ignores all the patent battles the company started (and has since then settled) against Android OEMs

THE USPTO still grants patents far too easily, only for courts to repeatedly correct it by invalidating granted patents. Sometimes there’s a lot of money at stake, like Apple’s $234 million patent dispute with a university.

Last weekend we wrote about Apple‘s success in appealing the case [1, 2] for the Federal Circuit to deal with rather than the district court, which tends to be more lenient in terms of patent quality, much like the USPTO even in the post-Alice era. As one writer put it a fortnight ago:

A federal appeals court has ruled in Apple’s favor in a patent dispute with the University of Wisconsin-Madison. The court ruling, initially spotted by Reuters, said that that Apple didn’t infringe on one of the university’s patents, overturning a prior ruling in the university’s favor that had fined Apple $234 million. Another $272 million was later added to that fine to account for Apple’s continued use of the patent, but that will presumably be thrown out now that the underlying judgment has been reversed.

We expect this case to be “DOA”, but at what cost (legal bills)? Meanwhile, the patent troll Uniloc strikes again, still focused on the same target, Apple, after Microsoft paid Uniloc. As a pro-Apple site put it last week, this is a new case:

Apple is again in the crosshairs of Uniloc, with the patent aggregator alleging the process by which iPhone and cellular-connected iPad and Apple Watch models infringes on owned intellectual property.

[...]

The ’616 patent changed hands to Uniloc’s main Luxembourg arm in 2017 and was duly assigned to Uniloc 2017 LLC in May of this year.

Uniloc alleges all iPhone models from iPhone 5 through iPhone XS Max and cellular connected iPads including fourth- and fifth-generation iPad models, all iPad mini versions, iPad Pro, first- and second-generation iPad Air models and Apple Watch Series 1 through 3 infringe on multiple patent claims.

Uniloc seeks unspecified damages, reimbursement of legal fees and other relief deemed fit by the court.

It would be a stretch to call Uniloc a Microsoft proxy because the two entities had lengthy and expensive court battles. The real danger here is that this troll, ‘fattened’ by Microsoft cash, may soon go after Android/Linux players. Unless Apple manages to squash the underlying patents and drive Uniloc to bankruptcy (out of funds). Uniloc isn’t a real company and there’s a reason why it operates through Luxembourg.

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