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11.19.18

A Fresh Look at Recent 35 U.S.C. § 101 Cases Reveals Rapid Demise of Software Patents Even in District (Lower) Courts

Posted in Courtroom, Microsoft, OIN, Patents at 5:23 am by Dr. Roy Schestowitz

Summary: Contrary to narratives that are being spread by the patents and litigation ‘industry’, there’s anything but a resurgence of patents on algorithms; in the United States they’re almost always rejected by courts at all levels

THINGS have come along pretty nicely after Alice (SCOTUS) because in light of 35 U.S.C. § 101 the courts are rejecting a lot of software patents, no matter what the U.S. Patent and Trademark Office (USPTO) said or still says. The law is what matters. If the USPTO grants patents which are then used to subvert justice, the USPTO will suffer in the long run.

Let’s start with some examples of recent rulings. A pro-software patents blog implicitly admits — by way of example/s — that software patents are worthless junk nowadays. They’re nearly impossible to defend. Peter Keros wrote about the Southern District of New York rejecting an asserted patent, citing § 101.

A method for analyzing text to determine a strength of an opinion is not patent-eligible subject matter under § 101. Isentium, LLC v. Bloomberg Fin. L.P., 17-cv-7601 (PKC) (S.D.N.Y. Oct. 29, 2018).

U.S. Patent No. 8,556,056 is directed to a multi-step method for evaluating statements that discuss publicly traded assets to determine whether the statement express a positive, negative, or neutral opinion (i.e., a “polarity”) and to assign a strength value to the opinion. Specifically, Plaintiff analyzed Tweets to provide information for financial professionals. The Court granted a 12(b)(6) motion to dismiss the Complaint, holding that the claims of the ‘056 patent were ineligible under 35 U.S.C. § 101.

The Central District of California, according to Nathan Smith, did similarly. Even district courts are growingly fed up with software patents. As Smith explained:

The Central District of California recently granted, in part, a motion to dismiss based on lack of patent-eligible subject matter, under 35 U.S.C. § 101 and the Alice/Mayo test, in claims of U.S. Patent No. 8,934,535, directed to a method for data compression and decompression. Realtime Adaptive Streaming LLC v. Google LLC, et al., No. CV 18-3629-GW(JCx) (C.D. Cal. Oct. 25, 2018). The court denied the motion for two other patents (U.S. Patent Nos. 9,769,477 and 7,386,046) with claims directed to system of data compression and decompression. The method claims of the ’535 patent were ineligiblebecause the patent failed to state that the claimed method would result in an increased compression speed. Concerning the’477 and ’046 patents, on the other hand, Google failed to show that the claimed systems, which included multiple compression encoders selected for use based on evaluating data, did not impart structural organization to computer processing comparable to the computer memory system in Visual Memory LLC v. NVIDIA Corp., 867 F.3d 1253, 1259 (Fed. Cir. 2017).

Going back again to the Southern District of New York, Bryan Hart wrote about another fake US patent or software patents that § 101 renders obsolete.

Personal Beasties stumbled out of the gate against Nike, with a district court invalidating Personal Beasties’ patent for ineligible subject matter on a motion to dismiss. Personal Beasties Group LLC v. Nike Inc., An animated character—even an encouraging one—did not provide enough to leap the § 101 hurdle.

Personal Beasties accused Nike of patent infringement in the Southern District of New York over U.S. Patent No. 6,769,915 for an “Interactive System for Personal Life Patterns.”

This blog’s sole exception (lately) has been covered by Charles Bieneman. It is from Delware, not the higher court, so this case/outcome can still be overturned on appeal (CAFC is tougher):

Patent claims directed to mapping “a physical location determined by the user . . . to a video game environment” have survived a Rule 12(b)(6) motion alleging patent-ineligibility under 35 U.S.C. § 101 and the Alice patent-eligibility test. Blackbird Tech LLC v. Niantic, Inc., No. 1-17-cv-01810 (D. Del. Oct. 31, 2018). U.S. Patent No. 9,802,127 allows a user to “experience[] objects from the users [sic] entered location while playing the video game.”

[...]

In arguing for application of the Aliceabstract idea test, the defendant took a broad approach in alleging an unpatentable abstract idea: arguing “that the ’127 patent claims are directed to the abstract idea of ‘receiving, processing, and displaying or storing location information.’” The defendant argued that its motion should be decided like a Rule 12 motion in a 2016 Colorado case, Concaten, Inc. v. Ameritrack Fleet Solutions, LLC, which held patent-ineligible claims directed to providing data to assist in snow removal.

But the court here disagreed, because here “[t]he mapping application requires taking camera images of a real physical space, where the user is located, and integrating those images as a video into a virtual video game environment.” Moreover, “the mapping step here is tethered to specific instructions” specifying images to be mapped, their locations, and how to display them. Citing Enfish, LLC v. Microsoft Corp. (Fed. Cir. 2016), the court found that the defendant’s proposed abstract idea was too broad, applying “an inappropriate level of abstraction such that its description of the claims is ‘untethered from the language of the claims.’”

Verizon, over at the Eastern District of New York, is mentioned by the patent maximalist Matthew Bultman, who explains that the Federal Circuit is sane/rational/honest enough to explain why patent lawsuits must be filed in the appropriate venue. From the outset:

Verizon subsidiary Oath Holdings Inc. does not have to defend a patent lawsuit over advertisement technology in the Eastern District of New York, the Federal Circuit ruled Wednesday

Not only Verizon grapples with such patent cases; see Motorola’s new press release and shallow press coverage that says: “The U.S. International Trade Commission (ITC) affirmed an administrative law judge’s finding that Hytera Communications of China infringed several Motorola Solutions patents.”

As background to the Hytera case consider this old post of ours; the ITC got involved, leaning towards the American complainant, as usual. Microsoft turned to it over a decade ago when it sought to embargo rival products (mice).

Citing a case just over a month old (October 16th), Bradley Arant Boult Cummings LLP’s Ryan Letson covered in JD Supra and Lexology [1, 2] yet another invalidation based on 35 U.S.C. § 101:

Add internet telephony systems to the list of computer-related technologies considered for patent eligibility under 35 U.S.C. § 101. Under current law, among other requirements, in order to qualify as patent-eligible under § 101, a patent claim involving computer-related technology must be directed to something more than simply an abstract idea that fails to implement an inventive concept. A patent’s claims will fail this test if a court finds that they are simply directed to “method[s] of organizing human activity” or “a known idea” that “is routine and conventional.”

High courts continue telling/signaling to the Office that software patents are bunk, but will the officials at the Office pay attention or just ignore if not ‘diss’ the high courts?

Writing about Ancora’s case against HTC, Michael Borella has just taken note of another 35 U.S.C. § 101 case (one that many wrote about because of the unusual outcome):

Ancora sued HTC in the Western District of Washington alleging infringement of U.S. Patent No. 6,411,941. HTC moved to dismiss the case, contending that the claims of the patent were ineligible under 35 U.S.C. § 101. The District Court granted HTC’s motion. Ancora appealed to the Federal Circuit.

The ’941 patent is directed to mechanisms for preventing a computer from running unlicensed software. While using license keys to control software was well-known at the time of the patent’s earliest priority date (1998), the patent purports to do so in a rather unusual fashion (for that time).

[...]

On appeal, the Federal Circuit rapidly answered the patent-eligibility question in the positive. Relying on recent precedent, such as Finjan, Inc. v. Blue Coat System, Inc., the Court stated that “[i]mproving security—here, against a computer’s unauthorized use of a program—can be a non-abstract computer-functionality improvement if done by a specific technique that departs from earlier approaches to solve a specific computer problem.”

The Court went on to disagree with the District Court, noting that the claim does recite storing the verification structure in a section of BIOS with certain beneficial characteristics, which was asserted to be an unexpected technique at the time of invention. Thus, in the view of the Federal Circuit, the claim does not recite a mere desired outcome, but how to achieve this outcome. Further, the claim addressed a technological problem associated with computers — software license verification — rather than a business, mathematical, or financial problem.

Notice that Finjan got cited. It’s relevant to this because of an exceptional high court (CAFC) judgment from the start of this year. We wrote about it several times at the start of 2018. Finjan is connected to Microsoft. This patent troll had a shareholders’ conference not so long ago. Did Microsoft give some more money to this troll any time lately? Firms (litigation pipelines would be a more suitable description) like Finjan definitely help Microsoft sell ‘protection’ and Finjan always sues Microsoft’s competition. When Microsoft joined OIN some weeks ago it kept promoting Azure as the ‘safe’ (from its patent trolls) option. “Abusix Joins Open Invention Network as Licensee” is the title of this new press release, joining the likes of many recent articles regarding OIN (this for example; it has been circulating lately). Abusix will get virtually nothing out of it, except assurance of no direct lawsuit from particular non-troll companies (except indirectly). It is worth noting that a Microsoft-connected propaganda site last week spoke about FOSS, which it is trying to wed (a shotgun wedding) to software patents.

Going back to the aforementioned HTC case, Matthew Bultman explained it as follows: “The Federal Circuit on Friday reversed a lower court ruling that a computer security patent asserted against HTC Corp. is invalid under the U.S. Supreme Court’s Alice standard, saying the patent…” (paywall hereon).

“Fed. Circ. Revives Computer Security Patent Axed Under Alice” is the headline and noteworthy is the word “revive” here; It was used by Suzanne Monyak as well as her colleague Matthew Bultman almost at the same time (“Fed. Circ. Won’t Revive Xactware Patent Challenges” was the headline). They try to insinuate that fake patents that should never have been granted in the first place got ‘killed’ or ‘murdered’ or something equally criminal.

“The Federal Circuit on Tuesday refused to revive Xactware Solutions Inc.’s challenges to two patents related to aerial rooftop measurement software,” Monyak wrote, “rejecting the company’s bid to nix two Pictometry International Corp…”

Noteworthy were the responses from patent maximalists. Janal Kalis quoted the filing: “the claimed advance is a concrete assignment of specified functions among a computer’s components to improve computer security, and this claimed improvement in computer functionality is eligible for patenting. As a result, the claims are not invalid under § 101.”

He also took note of “Another Very Creepy Facebook Patent Application; This one killed at the PTAB with 101; Run, Don’t Walk Away from Facebook: https://e-foia.uspto.gov/Foia/RetrievePdf?system=BPAI&flNm=fd2017001718-10-22-2018-1 …” (and as we mentioned yesterday, there’s this bunch of articles with headlines like “Who lives with you? Facebook seeks to patent software to figure out profiles of households”).

What’s noteworthy in all the above is that it’s very rare nowadays for software patents to withstand 35 U.S.C. § 101, even in the face of the Berkheimer and Aatrix nonsense (or hype).

“Aatrix Expands Their Payroll Tax Reporting Offerings,” said a widely-spread new press release [1, 2]. It was published a few days ago. It’s another one of many which take note of the software patents. Aatrix has become associated with software patents predation and Aatrix the company might find it hard to dissociate from it (like Alice and Bilski).

“Apprenda sells assets for $1.55 million,” says this new headline, even though software patents are not an “asset” but an illusion thereof as they’re useless and immaterial.

As we approach 2019 we must wonder how many companies still think that it’s worth pursuing software patents in the US.

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