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11.04.18

Rather Than Accept That 35 U.S.C. § 101 Has Put an End to Software Patents the Large Law Firms Insist on Working Around the Law

Posted in Law, Patents at 8:39 am by Dr. Roy Schestowitz

Summary: US patent courts/judges quite consistently decline/refuse to accept software patents; so why are patent law firms still advising clients to pursue such patents — or worse — initiate litigation with such patents?

IN A NEW article which uses the terms “software patents” and “patent troll” (“Court irons out disagreements over patents related to Rodeway Inn’s rewards system”) we’re just seeing more of the same, namely a judge who throws out bogus (fake) software patents (or cases associated with these), quite frankly as usual. Why does the USPTO grant these patents in the first place? This will be the subject of a later (separate) post. “A federal court has thrown out a dispute over software patents related to hotel loyalty reward points,” the article says, “dismissing both a lawsuit against an alleged patent troll as well as a countersuit over deceptive trade practices.”

The US patent office continues to grant fake software patents that involve nothing physical, usually mere concepts. Speaking of the hospitality sector, one company called Carnival Corporation has just boasted about such patents in a press release [1, 2] soon followed by very shallow puff pieces [1, 2]; it’s a lot of Bluetooth+software, or Bluetooth Low Energy (BLE) as they call it.

It’s not hard to see that when abstract patents reach actual courtrooms they typically get invalidated. Will patent lawyers deliver/dispense advice accordingly? No, they will not. Most of them will try to maintain the illusion of good odds (of winning cases) and in a later post we’ll show how they continue to name-drop Berkheimer etc.

Charles Bieneman’s tips regarding Section 101 are noteworthy because he runs a whole blog dedicated to patenting software in spite of the rules/law. Only days ago he wrote about 35 U.S.C. § 325(d):

Recent PTAB decisions on petitions for Post-Grant Review (PGR) demonstrate how little deference judges can give to patent examiners patent-eligibility decisions. Even if the USPTO in the form of a patent examiner has deemed claims patent-eligible under 35 U.S.C. § 101 and the Alice/Mayo test, the USPTO in the form of the PTAB may turn around and deem the claims unpatentable under Section 101 . Two recent cases saw the Patent Owner make the argument that it needs to make under 35 U.S.C. § 325(d), namely that the Petitioner was simply rehashing arguments already rejected by a patent examiner. These arguments were to no avail. As the PTAB receives more and more petitions for Post-Grant Review on Section 101 grounds, we may see the PTAB second-guess the examining corps regarding the patent-eligibility of more and more recently-issued patents.

On another day, only days apart, McRO was brought up again by Bieneman. It’s an old Federal Circuit case — one that Patent Trial and Appeal Board (PTAB) inter partes reviews (IPRs) are unlikely to even cite at the end of 2018. This shows how manipulators try bypass Alice/Section 101. From the post:

Patent claims directed to pricing and cataloging products have survived a Rule 12 Motion because the court thought that there was a chance that the patent owner might be able to show a technological improvement as in McRO, Inc. v. Bandai Namco Games Am. Inc. (Fed. Cir. 2016). Vendavo, Inc. v. Price f(x), No. AG et al, 3-17-cv-06930 (N.D. Cal. Oct. 22, 2018). Regardless of whether you think the patent-eligibility test should be more or less stringently applied, you may find this decision vexing if you share my (admittedly subjective) perspective that the USPTO would not today allow these claims, and that many courts would have invalidated them under 35 U.S.C. § 101 and the Alice patent-eligibility test.

[...]

While not new, there are three points to be drawn from this case. First, courts’ applications of patent-eligibility rules remain unpredictable. Second, even though patent-eligibility and prior art invalidity are supposed to be separate questions, they are often conflated; showing novelty or non-obviousness (or a lack thereof if you are the patent owner) can be very important in prevailing on a patent-eligibility motion. Third, if you are the challenger, you have the initial burden to show that there is no technological invention – make copiously clear to the court how that burden is met.

It has become hard to patent software in the US and then actually enforce the patent/s in court. But it doesn’t matter to law firms because the final outcomes have no effect on their ability to bill gullible clients. Here’s Bieneman commenting on the fact that “using a telephone to verify a person registering for an account” isn’t just shallow but also patent-ineligible:

Claims of four patents directed to using a telephone to verify a person registering for an account are invalid under 35 U.S.C. § 101 and the Alice patent-eligibility test, the court held in TeleSign Corporation v. Twilio, Inc., Case No. 18-cv-03279-VC (N.D. Cal. Oct. 19, 2018). Accordingly, the court granted a Rule 12(c) motion for judgment on the pleadings that asserted claims of the four patents-in-suit were invalid under 35 U.S.C. 101. The patents are U.S. Patent Nos. 7,945,034 (“Process for determining characteristics of a telephone number”), 8,462,920, 8,687,038, and 9,300,792(each entitled “Registration, verification and notification system” and sharing a common specification).

This is very much expected. Why was a lawsuit even attempted? Those are software patents, hence fake patents. Sure, they have the ribbon and all, but they’re good for nothing but extortion (outside the courtroom), rendering them a case of gross injustice or a racket. Bryan Hart, a colleague of Bieneman, wrote about Berkheimer in relation to obviously fake software patents that even district courts aren’t tolerating. To quote:

The District of Massachusetts recently granted a motion to dismiss for ineligible subject matter under 35 U.S.C. § 101 and the Alice/Mayo test in a case involving home electrocardiogram sensors, CardioNet, LLC v. InfoBionic, Inc.—demonstrating that despite some courts’ decisions to the contrary, Rule 12 dismissals are available for ineligible subject matter notwithstanding the Federal Circuit’s decision in Berkheimer v. HP that such decisions can involve factual inquiries.

CardioNet and InfoBionic compete selling home electrocardiogram (ECG) sensors that monitor a patient’s heartbeat via the electrical activity passing through the heart muscles. In this dispute—not their first—CardioNet accuses InfoBionic’s MoMe Kardia Systems of infringing CardioNet’s U.S. Patent No. 7,941,207. The ’207 patent covers a way of detecting atrial fibrillation and atrial flutter, two types of heart arrhythmia.

It has actually become very major news when software patent do withstand scrutiny and are upheld as valid by courts. Why are such patents even pursued anymore? And actual lawsuits? Maybe the large and wealthy companies just rely on getting lots of these low-quality patents in large quantities, then cross-licensing to establish a cartel.

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