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12.02.18

35 U.S.C. § 101 Continues to Crush Software Patents and Even Microsoft Joins ‘the Fun’

Posted in America, Courtroom, Microsoft, OIN, Patents at 4:32 pm by Dr. Roy Schestowitz

Software patents are truly a threat to Free/Open Source software

“Steve Jobs threatened to sue me, too. [and also] Bill Gates and Steve Ballmer. They’d flown in over a weekend to meet with Scott McNealy. [...] Bill skipped the small talk, and went straight to the point, “Microsoft owns the office productivity market, and our patents read all over OpenOffice.” [...] Bill was delivering a slightly more sophisticated variant of the threat Steve had made, but he had a different solution in mind. “We’re happy to get you under license.” That was code for “We’ll go away if you pay us a royalty for every download” – the digital version of a protection racket.”

Jonathan I. Schwartz, Sun

Summary: The Court of Appeals for the Federal Circuit (CAFC) and even courts below it continue to throw out software patents or send them back to PTAB and lower courts; there is virtually nothing for patent maximalists to celebrate any longer

AS promised earlier today, here’s a quick outline of the smashing of software patents, erroneously granted by the U.S. Patent and Trademark Office (USPTO) only to be squashed in district (lower) courts, the higher court (Federal Circuit, CAFC) and the Patent Trial and Appeal Board (PTAB), where inter partes reviews (IPRs) are undertaken.

As usual, it’s hard to find even a single example of a software patent withstanding scrutiny at a higher court (CAFC or SCOTUS). Those are rare exceptions — ones that patent extremists would tout for many months if not years.

“An appeal would likely have this decision overturned because of the district’s notoriety.”Looking at the blog dedicated to advocacy of software patents (it’s a law firm’s blog), Mark St. Amour looks downwards to the notorious Eastern District of Texas for examples — however rare — of software patents finding feet (until CAFC throws them out if defendants can afford justice). He found this: “In IDB Ventures, LLC v. Charlotte Russe Holdings, Inc. (2:17-CV-660-WCB-RSP), the Eastern District of Texas highlighted the effectiveness of showing that a patent claim is directed to a specific improvement to computer functionally for overcoming a challenge based on 35 U.S.C. § 101.”

An appeal would likely have this decision overturned because of the district’s notoriety. Charles Bieneman, a colleague of Amour apparently, meanwhile admits that gifting (or a gift certificate) is not an “invention” just because you do it “on a computer” or “over the Internet”; why does the USPTO grant such laughable software patents in the first place?

To quote Bieneman (this is in Delaware, not Texas):

Patent claims directed to electronic gift certificates are not patent-eligible under 35 U.S.C. § 101 and the Alice/Mayo test, according to a US magistrate judge’s recommendation to grant a Rule 12(b)(6) motion to dismiss. Coqui Technologies, LLC v. Gyft, Inc., No. 17-777-CFC-SRF (D. Del. Nov. 16, 2018). The court found that claims of U.S. Patent No. 7,580,864, entitled “Method for circulating an electronic gift certificate in online and offline system,” were “directed to the abstract idea of selling, gifting, and using electronic gift certificates” without an additional inventive concept.

Another new pick/highlight comes from the District in California, which finds software patents pertaining to “User Interface Features Not Patent-Eligible,” according to Mike McCandlish. Thanks to 35 U.S.C. § 101, as usual…

Finding a lack of technical innovation, a court held claims for three features for a user-vehicle interface to be directed to patent-ineligible abstract ideas under the Mayo/Alice test and 35 U.S.C. § 101. Thunder Power New Energy Vehicle Development Co. Ltd. v. Byton North America Corp., No. 18-cv-03115-JST (N.D. Ca., Oct. 31, 2018).

Plaintiff, Thunder Power, alleged infringement by Defendant Byton of claims of Patent Nos. 9,547,373, 9,563,329, and 9,561,724. Byton moved to dismiss, contending that the asserted claims failed to recite patent-eligible subject matter under 35 U.S.C. § 101. The court granted the motion to dismiss.

Did Watchtroll find anything new that it can trumpet and shout about? No, not really. It returned to a month-old case, Ancora Techs. v. HTC Am., Inc.

The firm behind the outcome is still celebrating in paid articles and seeing how Watchtroll is still falling back on the HTC case (old news that it covered several times before) is rather revealing. There has been nothing for them to brag about for a very long time. “The Federal Circuit,” they said, “recently [sic] reversed the Western District of Washington’s grant of a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure where the district court held that the claimed subject matter was ineligible for patenting under 35 U.S.C. § 101.”

“Did Watchtroll find anything new that it can trumpet and shout about? No, not really.”They say “recently” about something roughly a month old. They find it noteworthy because it’s a CAFC case, but Watchtroll is begrudgingly coming to accept that the high court, CAFC, is even stricter than PTAB when it comes to software patents as software patents almost always come there just to be thrown away. As Steve Brachmann put it a few days ago, “Federal Circuit Vacates PTAB Decision That Video Messaging Patent Claims Were Nonobvious” (most patent maximalists just tried to ignore it as it doesn’t suit their agenda).

Funnily enough, Rachel Elsby, Rubén Muñoz and Dorian Ojemen (Akin Gump Strauss Hauer & Feld LLP) would have us believe that CAFC gives or offers “tips” but that’s actually shameless self-promotion from them. We spotted this earlier today and our only comment is amusement. “On Wednesday, November 14th,” they argued, “the Court of Appeals for the Federal Circuit issued a nonprecedential decision in WhatsApp, Inc. v. TriPlay, Inc., which vacated a final written decision terminating an inter partes review (IPR) proceeding and remanded the case back to the Patent Trial and Appeal Board (PTAB).”

Wow. So basically it’s back to PTAB. What a ‘victory’…

CAFC very much insists that software patents are bunk and void. Here’s a new example titled “Fed. Circ. Won’t Reconsider Nixing Robotics IP Under Alice” (Section 101 basically).

“CAFC very much insists that software patents are bunk and void.”“The Federal Circuit has refused to reconsider its September ruling that parts of four robotics patents asserted against Invensys Systems Inc. and other automation companies are invalid,” Law360′s Matthew Bultman wrote. His colleague Tiffany Hu wrote that “Microsoft scored a win Tuesday when the Patent Trial and Appeal Board invalidated a technology company’s patent covering a way to attach conversation point reminders for mobile contacts…”

When Microsoft doesn’t blackmail the competition using software patents it is trying to invalidate others’. Precious.

Speaking of Microsoft’s patents, OIN has just recalled Microsoft’s history when it comes to such patents and the Irish media covered it as follows some days ago:

“OIN was conceptualized about 15 years ago largely in response to some activities that Microsoft was involved in. Microsoft funded litigation by a company called SCO against Red Hat, IBM and Suse. While these three companies were sued for violations of copyrights, the litigation triggered a concern around broader IP risks.

There was a belief that patents could be used to slow or stall the progress of Linux. The rhetoric from Balmer and Gates historically had been very negative about Linux being a ‘cancer’ and that it would be eradicated. It was for hobbyists. It would never be used for mission-critical applications. It wouldn’t scale. All the things ironically that IBM said against personal computing 20/25 years before. It was eerily similar. It’s what happens when you control the market and can’t make sense of what you see so you retreat to fear, you retrench to control.”

Reuters’ Jan Wolfe, who routinely covers patent matters, took note of another defeat for notorious patents. CAFC has gutted fake patents of a patent troll from Canada (WiLAN). To quote:

A federal appeals court on Wednesday said it would not reconsider an earlier decision that likely doomed patent litigation cases the licensing firm WiLAN Inc brought against industrial automation companies Rockwell Automation Inc, Schneider Electric SE and the Emerson Electric Company.

Joe Mullin (EFF) has meanwhile named and shamed some more fake patents granted by the USPTO even though software patents are bogus, worthless, and harm society, science etc. This is the latest “Stupid Patent of the Month”:

In some fields, software bugs are more than the proverbial pain in the neck. When software has to ensure that an airplane lands safely, or that a pacemaker keeps operating, there’s no room for error.

The idea that mathematical proofs could be used to prove that software is error-free has been around since the 1970s, and is known as “formal verification.” But like a lot of technologies that some visionaries saw coming, it took time to develop. In recent years, computing power has become cheap enough for formal verification to become practical for more software applications.

Unfortunately, last month, the field had a monkey wrench thrown into it, in the form of U.S. Patent No. 10,109,010, which the patent office awarded to a U.K.-based company called Aesthetic Integration Ltd.

Claim 1 of the patent describes creating mathematical “axioms”—formal mathematical statements—that describe a computerized trading forum. The patented method then describes analyzing, with a “computer assessment system … the mathematical axioms that describe the operation of the trading forum.” In other words, the patent describes using formal proofs to check for bugs in a “computerized trading forum.” It’s formal verification—just applied to the financial services industry.

Of course, Aesthetic Integration didn’t invent formal verification, nor did the company invent the idea of software powering a “trading forum.” The company has apparently created software that utilizes formal verification in the financial services space, and that software might be perfectly good. But the Patent Office has effectively allowed the company to patent a whole sector of formal verification.

[...]

Ultimately, the ’010 patent reflects a broader problem with Patent Office’s failure to apply a meaningful obviousness standard to software patent applications. We have explained before that the Patent Office is all too willing to hand out patents for using known techniques in a particular field. Flow charts and whirligigs can make a concept look new when it isn’t—especially when a patent owner fills its application with obscure language and “patentese.” The Federal Circuit has also encouraged this through its hyper-formalistic approach to obviousness. The end result is an arms race where people rush to patent routine software development.

Perhaps one day the USPTO will stop issuing such patents. Patent quality is very important, more so than revenue of the Office.

“In a better world there would be far fewer patents, albeit ones that are strong, solid, and defensible based on public interest and scientific merit (as opposed to law firms’ and Office revenue).”Michael Risch has just cited this relatively new paper from Christopher Anthony Cotropia (University of Richmond’s School of Law) and David L. Schwartz (Northwestern University’s Pritzker School of Law), introducing it as “Patents Used in Patent Office Rejections as Indicators of Value” and remarking:

The quest for an objective measure of patent quality continues. Scholars have attempted many, many ways to calculate such value, including citations, maintenance fee payments, number of claims, length of claims, and so forth. As each new data source has become available, more creative ways of measuring value have been developed (and old ways of measuring value have been validated/questioned).

From the abstract of the corresponding paper:

The economic literature emphasizes the importance of patent citations, particularly forward citations, as an indicator of a cited patent’s value. Studies have refined which forward citations are better indicators of value, focusing on examiner citations for example. We test a metric that arguably is closer tied to private value—the substantive use of a patent by an examiner in a patent office rejection of another pending patent application. This paper assesses how patents used in 102 and 103 rejections relate to common measures of private value—specifically patent renewal, the assertion of a patent in litigation, and the number of patent claims. We examine rejection data from U.S. patent applications pending from 2008 to 2017 and then link value data to rejection citations to patents issued from 1999 to 2007. Our findings show that rejection patents are independently, positively correlated with many of the value measurements above and beyond forward citations and examiner citations.

It is interesting that they study Section 102 and 103 rejections (prior art and obviousness) but not Section 101 rejections — the subject recently explored by Colleen Chien and Jiun Ying Wu based on a lot of data. In a better world there would be far fewer patents, albeit ones that are strong, solid, and defensible based on public interest and scientific merit (as opposed to law firms’ and Office revenue).

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