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11.26.18

No, the Court of Appeals for the Federal Circuit (CAFC) Has Not Changed Its Position on Software Patents, Which Are Bunk

Posted in Courtroom, Deception, Patents at 12:06 am by Dr. Roy Schestowitz

Summary: Patent law (litigation) firms, looking to profit from software patenting and litigation with such patents, are still offering intentionally bad advice (about patentability and success rates in courts); they should instead embrace PTAB and undo the mess they’ve created

THE FINE art of cherry-picking, e.g. cherry-picking of court decisions, has been mastered by law firms looking for “marketing opportunities”. We saw that earlier this year with the Berkheimer lie and as we shall show in a moment, they’re doing it again. Their goal is to legitimise this old fiction that software patents are still worth pursuing at the U.S. Patent and Trademark Office (USPTO) and moreover suing over. Only lawyers would win. They don’t care if the patents are virtually worthless and litigation goes nowhere because they profit regardless (legal bills).

“They don’t care if the patents are virtually worthless and litigation goes nowhere because they profit regardless (legal bills).”For similar reasons, law firms encourage automation; they would want millions of patents pursued per year (like in China) and they constantly promote the concept of computer-generated inventions [sic], which sometimes get conflated with “AI” (not searching patents using classifiers or patenting software by dubbing it “AI”). Unified Patents, incidentally, has just taken note of an essay, “Computer-Generated Inventions, addressing the legal issues surrounding the patenting of computer-generated inventions.”

Terms like “computer-generated inventions” (a misnomer) aren’t to be confused with “computer-implemented inventions,” the misnomer long used by the European Patent Office (EPO) to bypass the EPC and facilitate software patents in Europe, except in European courts (they would typically reject these). There was an attempt to bypass the national courts using an EPO-connected Unified Patent Court (UPC), but thankfully it’s never going to happen. As one UPC proponent from Germany has said: “The draft Agreement on the withdrawal of the UK from the EU (“Brexit” Agreement, draft of November 14) is completely silent on the faith of the Unified Patent Court (UPC). Does this mean that the participation of the UK in the UPC system is off the table?”

“The patent maximalists try hard to abolish PTAB or overcome the courts, which they frequently bash or misrepresent.”“UPC has been off the table for at least a year,” I told him, but “CIPA and other lobbies, conjoined with law firms-owned media, just keep lying about it and lying to politicians…”

How does all this relate to the US? Well, the Federal Circuit keeps rejecting software patents, typically upon appeals emanating from Patent Trial and Appeal Board (PTAB) inter partes reviews (IPRs). The patent maximalists try hard to abolish PTAB or overcome the courts, which they frequently bash or misrepresent. They would have us believe that the Federal Circuit changed its position, but this couldn’t be further from the truth. Let’s examine the past week’s news.

Last week Joseph Herndon wrote about a Federal Circuit case where prior art (§ 102) was leveraged to show that a US patent was invalid. This related to PTAB as explained below:

Patent owner Acceleration Bay, LLC (“Acceleration”) appealed the final written decisions of the Patent Trial and Appeal Board holding unpatentable claims of U.S. Patent Nos. 6,829,634; 6,701,344; and 6,714,966. Activision Blizzard, Inc., Electronic Arts Inc., Take-Two Interactive Software, Inc., 2k Sports, Inc., and Rockstar Games, Inc. (collectively, “Blizzard”) cross-appealed portions of the Board’s decisions holding that the Lin article is not a printed publication under 35 U.S.C. § 102(a), among other issues.

Here, we look at the determination of features in a “preamble” as being limitations of the claim, as well as, requirements of an article being considered a printed publication for prior art purposes.

The patents at issue are directed to a broadcast technique in which a broadcast channel overlays a point-to-point communications network. The communications network consists of a graph of point-to-point connections between host computers or “nodes,” through which the broadcast channel is implemented.

Blizzard filed six inter partes review (“IPR”) petitions—two for each of the ’344, ’966, and ’634 patents—based principally on two different prior art references: one set of IPRs challenged claims based on the Shoubridge article alone or combined with a prior art book Direct-Play (“Shoubridge IPRs”), and another set of IPRs challenged claims based on the Lin article alone or combined with DirectPlay (“Lin IPRs”).

[...]

Here, the Board found that although Lin was indexed by author and year, it was not meaningfully indexed such that an interested artisan exercising reasonable diligence would have found it, which is a proper consideration under the Federal Circuit precedent. As such, the Federal Circuit found that Lin was not a printed publication under § 102.

PTAB found these claims to be lacking novelty and thus unpatentable. It should not matter whether the prior art was printed or fully implemented or whatever; the important point is, prior art does exist. If something is not novel, then it isn’t novel, period.

“It should not matter whether the prior art was printed or fully implemented or whatever; the important point is, prior art does exist.”§ 102 isn’t so commonly leveraged in this context. Fake patents that are software patents are trivial to discredit and easy to invalidate using Section 101 (35 U.S.C. § 101). When it’s just algorithms, nothing physical, the SCOTUS Alice decision comes handy. A few days ago someone wrote: The U.S. Patent and Trademark Office (USPTO) has awarded Xerox a patent for a blockchain-driven auditing system for electronic files, according to a patent filing published Nov. 13. #xerox #blockchain https://lnkd.in/dxSzNNx

We wrote about it last weekend; this should be presumed invalid, just like every other “blockchain” patent.

But sometimes marketing defies reality and logic. How about the buzzword/term “AI”?

“…it’s almost the end of the year and the Berkheimer lie (from back in Valentine’s Day) is still being propped up by lying lawyers looking for a buck.”Aaron V. Gin is trying to call algorithmic patents i.e. software patents, “AI”. It’s done to hide/distract from the fact that Section 101 would invalidate all of them in court. They’re all abstract. As we explained numerous times in the past, the term “AI” is just being invoked/used/misused a lot more than before; Gin, however, says that “research indicates, perhaps as expected, that AI-related patent application filings have been increasing throughout the world at growing annualized rates. Figure 1 illustrates the number of AI-related patent application filings in various jurisdictions between the years 2006 and 2016.”

So they (mis)use the term more than before. That means nothing at all. It’s like a fashion. “An interesting piece of work from one of the world’s largest patents law firms,” a patent maximalist called it. So they analyse a bunch of buzzwords? More so ones that have been (re)popularised in the past couple of years? What a weak hypothesis and method.

Moving on to the next example, it’s almost the end of the year and the Berkheimer lie (from back in Valentine’s Day) is still being propped up by lying lawyers looking for a buck.

“To claim that Berkheimer had any meaningful effect would be patently false, but the above is just marketing anyway.”“Courts are trending toward broader patent eligibility,” wrote Jessica L.A. Marks in the headline. She “is a patent attorney at Finnegan, Henderson, Farabow, Garrett & Dunner, LLC,” according to her bio and she wrote along with “Virginia L. Carron [who] is a partner at Finnegan, Henderson, Farabow, Garrett & Dunner, LLP. She practices patent and trademark litigation and counseling.”

They are just spreading lies. The patent courts do the exact opposite, narrowing patent scope. So what’s the premise of this article? The Berkheimer nonsense, which changed nothing at all. To quote some portions:

In addition to those Supreme Court decisions, the lower courts and the USPTO’s Patent Trial and Appeal Board (PTAB) also began finding numerous previously patented inventions unpatentable under the new guidance. For example, between the Alice decision and June 2015, over 70% of patents challenged in federal courts as ineligible under this new standard were ultimately found invalid.

The U.S. Patent Office followed suit, strictly analyzing and rejecting applications under 35 U.S.C. § 101, the statute that governs patent eligibility. The number of rejections under § 101 for biological, genetic, and organic chemistry inventions doubled after Alice.

But in the last year, the tide has been turning. The Federal Circuit, the appellate court one step below the Supreme Court that handles all patent appeals, has issued several decisions that have gone the other way, upholding patent eligibility. Based on these decisions, the USPTO has issued memoranda to its patent examiners. These memoranda interpret federal circuit decisions and provide guidance to the patent examiners on issuing patent eligibility rejections. Each of these memoranda indicate that the USPTO is interested in allowing more patents.

For example, the Berkheimer memo, issued April 19, 2018, instructed that examiners could no longer reject claims as being “well-understood, routine, and conventional” without providing written support as to why each individual element and the combination of elements was “well-understood, routine, and conventional.”

To claim that Berkheimer had any meaningful effect would be patently false, but the above is just marketing anyway. Truth is not a necessity to them.

“In a super rare decision, one single software patent was upheld in CAFC…”As Berkheimer did not really help them much, on they move to (or latch onto) another case, the exceptionally rare kind of decision on HTC and Ancora (covered here before). A patent troll expressed glee over it, saying: “software [patent] licensing [extortion] is an area we pioneered: happy about this ruling…”

They linked to Charles Bieneman, a software patents proponent (law firm, obviously!) who belatedly wrote about Ancora Technologies, Inc. v. HTC America, Inc.

To quote:

Reversing a District Court decision, the Federal Circuit had held that patent claims directed to enforcing software licenses are patent-eligible under 35 U.S.C. §101 and the Alice abstract idea test. Ancora Technologies, Inc. v. HTC America, Inc., No. 2018-1404 (Nov. 16, 2018) (precedential) (opinion by Judge Taranto, joined by Judges Dyk and Wallach). Claims of U.S. Patent No. 6,411,941 recite “methods of limiting a computer’s running of software not authorized for that computer to run.” Relying on Enfish, LLC v. Microsoft Corp., (Fed. Cir. 2016), the Federal Circuit reversed the lower court’s Rule 12(b)(6) dismissal, holding that “the claimed advance” was patent-eligible as “a concrete assignment of specified functions among a computer’s components to improve computer security.”

The most hilarious spin came from the patent trolls’ lobby, IAM. It not only wrote about it behind paywall; it then proceeded to encouraging fruitless litigation with tweets like: “Patent owners [sic] have less to fear from early Alice motions after recent CAFC decision…”

“That was 10 days ago and they’re still talking about it. How much longer? A month? A year?”“A welcome 101 boost for software patent owners [sic] from CAFC,” said another tweet and later they added: “A CAFC judgment which overturns a lower court decision to invalidate a software-relate patent has provided some welcome relief to those holding rights [sic] in the field.”

In a super rare decision, one single software patent was upheld in CAFC and the firm behind it, Brooks Kushman P.C., is showing off as follows:

On November 16, 2018, the U.S. Court Appeals for the Federal Circuit ruled that a software security patent owned by Ancora Technologies, Inc. claims eligible subject matter under 35 U.S.C. § 101. The decision reversed a district court ruling that the patent was invalid as directed to an abstract idea. The decision establishes that patents claiming computer-related inventions directed to improving the function of a computer system by applying a specific improvement, rather than claiming only the improvement in the abstract, are patent-eligible under §101. Brooks Kushman PC represented Ancora in the Federal Circuit appeal.

That was 10 days ago and they’re still talking about it. How much longer? A month? A year? Like we said last weekend, this is a rare exception of a case, hardly the ‘norm’; almost every other 35 U.S.C. § 101 case winds up with CAFC’s unanimous invalidation of the underlying patents (the above is about one single patent, unlike cases where several are involved). Watchtroll wrote about a more typical 35 U.S.C. § 101 outcome at CAFC (from around the same time):

On Tuesday, November 13th, the Court of Appeals for the Federal Circuit issued another in a growing number of Rule 36 judgments. This particular Rule 36 patent eligibility loss for the patent owner came in Digital Media Technologies, Inc. v. Netflix, Inc., et al., and affirmed the district court’s finding that patent claims asserted by Digital Media against Netflix, Amazon and Hulu were invalid under 35 U.S.C. § 101 because they were directed to an abstract idea.

The Federal Circuit panel of Circuit Judges Alan Lourie, Timothy Dyk and Todd Hughes decided to issue the Rule 36 judgment without opinion despite counsel for Digital Media contending at oral arguments that the district court did not properly administer the Alice/Mayo test when reaching a determination that the asserted patents were patent ineligible, and despite the district court admitting the pure subjective nature of determining whether a claim is directed to an abstract idea.

The patent-at-issue in this case is U.S. Patent No. 8964764, titled Multimedia Network System with Content Importation, Content Exportation, and Integrated Content Management. It claims a multimedia system that addressed various needs in the field of managing digital information in a way that makes it easy to download audio/video content from the Internet while providing reliable and flexible content protection and incorporates the use of digital video recorders (DVRs) for multiple users within a premise or vehicle.

It would be wiser for law firms to just simply accept 35 U.S.C. § 101 and try to profit from the invalidation of bogus patents. Over the weekend Strafford had this ‘advert’ in which is dealt with the question: “How can patent litigation defendants take advantage of the guidance for §101 challenges?”

“It would be wiser for law firms to just simply accept 35 U.S.C. § 101 and try to profit from the invalidation of bogus patents.”It is a “Patent Eligibility Post-Alice” ‘webinar’ (one among other Strafford ‘webinars’ that Patent Docs has just advertised [1, 2], the sole exception being the American University Washington College of Law). It is no secret that software patents have generally become easy to invalidate. Lawyers can profit that that, too

Why don’t they focus on cleaning up the mess they created rather than combat the status quo and lie to their customers? As it stands at the moment, any time they 'pull a Berkheimer' they just harm their reputation by offering bad advice to clients.

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