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12.10.18

US Courts Make the United States’ Patent System Sane Again

Posted in America, Courtroom, Patents at 3:57 am by Dr. Roy Schestowitz

“The only patent that is valid is one which this Court has not been able to get its hands on.”

Supreme Court Justice Jackson

Summary: 35 U.S.C. § 101 (Section 101), the Patent Trial and Appeal Board (PTAB) and other factors are making the patent system in the US a lot more sane

THE U.S. Patent and Trademark Office and the courts aren’t the best of friends these days. The courts often disagree with the decisions of the Office. The higher courts also increasingly resist/anatagonise Office-friendly and trolls-friendly litigation venues. Consider TC Heartland and its application by lower courts.

“Seven Networks LLC on Friday urged the Federal Circuit not to reconsider a ruling that allowed a patent lawsuit it brought against Google LLC to remain” (in Texas), Matthew Bultman (Law360) wrote. Also from Bultman and colleagues we have this: “Verizon subsidiary Oath Holdings Inc. can defend a patent suit over advertisement technology in Delaware, a New York federal judge has ruled, following the Federal Circuit’s decision that the judge failed…”

“The higher courts also increasingly resist/anatagonise Office-friendly and trolls-friendly litigation venues.”Lawyers are trying to find creative new ways to pick courts/judges in patent cases. It’s not working for them. Well done, US courts and judges. When it comes to tackling the Cult of Patents at least. When I say “Cult of Patents” I don’t mean to suggest all patents are inherently evil. The same goes for religion. It’s when people take it to the extreme that the whole broth spoils and the system looks like rubbish. Here is more on this from Watchtroll and from Law360: “A Texas federal court has jurisdiction to hear whether several banks infringe a licensing company’s patents covering electronic banking procedures because the company sent demand letters to the institutions…”

There’s nothing such parasites won’t do to drag victims to patent courts that advertise their bias.

“It’s when people take it to the extreme that the whole broth spoils and the system looks like rubbish.”It has meanwhile been pointed out, e.g. in a couple tweets [1, 2] spotted by Florian Müller, that Makan Delrahim (former lobbyist, consistent with a pattern of corrupt officials) may be having yet more problems [1, 2].

“William Barr,” one said, “who may become the next attorney general, had a serious dispute with Makan Delrahim, the Justice Department’s top antitrust lawyer, implicitly accusing him and his deputy of lying about a meeting on the AT&T-Time Warner Merger https://www.washingtonpost.com/technology/2018/12/07/trumps-likely-pick-attorney-general-said-justice-departments-antitrust-chief-gave-inaccurate-account-meeting-with-time-warner/?utm_term=.964435282f54 …”

“Makan Delrahim just backed the Antitrust Division out of the 2013 agreement with the PTO on FRAND remedies,” said the other tweet, “apparently it now takes the position that you can get an injunction even if you’ve committed not to.”

The CCIA’s Josh Landau has meanwhile written a blog post about it. To quote:

This alone threatens to reduce U.S. competitiveness in standardized technologies. But Delrahim goes further, claiming that competitors will be subjected to new antitrust scrutiny for making reasonable commercial decisions about which standard-setting organizations (SSOs) to participate in.

For example, Delrahim threatens to sue companies that choose to avoid SSOs that are too favorable to patent holders. Participation in a standard-setting organization is voluntary.1 Stating that “competitors would come under scrutiny if they orchestrated a group boycott of an SSO with a patent policy that is unfavorable to their commercial interests,” Delrahim appears to suggest that DoJ will use its authority to investigate companies who don’t want to participate in standards that have unfavorable commercial terms and organize competing standards with better terms.

Separately, Landau wrote: “My sympathy for journalists grows in direct proportion to the number of Friday night emails I receive calling me “enemy of the people” for having the gall to post a summary of a paper showing evidence that NPEs don’t promote innovation.”

“There’s nothing such parasites won’t do to drag victims to patent courts that advertise their bias.”I received death wishes for criticising patent trolls. These people bully companies for a living, so why not bully their critics as well?

Landau (in his capacity as CCIA staff) cites the recent work of Colleen Chien and Jiun-Ying Wu on 35 U.S.C. § 101 and says “Increase In § 101 Rejections Due Almost Entirely To Rejected Business Methods” (there are other aspects we covered here, such as fewer people even bothering to sue with weak patents). To quote Landau:

Prof. Colleen Chien, along with her student Jiun-Ying Wu, recently published an analysis of the impact of § 101 on patent prosecution. While their analysis clarifies which art units are impacted by § 101 decisions like Alice and Mayo, the published article doesn’t clearly answer the question of how each art unit contributes to the overall impact on prosecution from § 101. Fortunately, thanks to Prof. Chien and Wu’s decision to publish the code used to derive their data from the Google Patents public dataset for BigQuery, it’s easy to answer that question.

And the answer isn’t surprising. Essentially the entire increase in rejections from § 101 is driven by increased rejections of business method patents.

Another group that combats patent maximalism is Unified Patents, whose CEO was recently interviewed. Watchtroll really, really does not like Unified Patents. This should mean that patent trolls hate Unified Patents. This means Unified Patents is technology’s friend. Here is what Watchtroll wrote 6 days ago: “On Tuesday, November 27th, the Patent Trial and Appeal Board (PTAB) issued a redacted version of a decision to institute an inter partes review (IPR) proceeding petitioned by Unified Patents to challenge the validity of patent claims that have been asserted in district court against at least one of Unified’s subscribing members. The PTAB panel of administrative patent judges (APJs) decided to institute the IPR despite the patent owners’ assertion that the petition should be denied because Unified didn’t identify all real parties in interest (RPIs) including members of Unified’s Content Zone.”

“Unified Patents does a valuable service, whose net effect is removal of bogus patents, using Sections 101-103 typically.”Yes, there’s no reason why Unified Patents, which lowers the costs of IPRs by sort of crowdfunding them, can be seen as ineligible a petitioner. PTAB agrees. Unified Patents does a valuable service, whose net effect is removal of bogus patents, using Sections 101-103 typically. Prior art, for example, has just been found for U.S. Patent 7,050,043. Bad news for this patent troll as the panel will tackle Proximity Sensors with an inter partes review (IPR):

Unified is pleased to announce the PATROLL crowdsourcing contest winner, Hanhwe Kim, who received a cash prize of $1000 for his prior art submission for U.S. Patent 7,050,043, owned by Proximity Sensors of Texas, LLC, a well-known NPE. The ’043 patent, directed toward a proximity sensor, has been asserted against several companies in district court litigation. To help the industry fight bad patents, we have published the winning prior art below.

We would also like to thank the dozens of other high-quality submissions that were made on this patent. The ongoing contests are open to anyone, and include tens of thousands of dollars in rewards available for helping the industry to challenge NPE patents of questionable validity by finding and submitting prior art in the contests. Visit PATROLL today to learn more about how to participate.

And another patent troll, this time E-Credit Express, was mentioned by Unified Patents on the same day. Prior art found again:

Unified is pleased to announce the PATROLL crowdsourcing contest winner, Hanhwe Kim, who received a cash prize of $1,500 for his prior art submission for U.S. Patent 8,909,551, owned by E-Credit Express, LLC, an NPE. The ’551 patent, directed toward an electronic credit and loan processing method, has been asserted against several companies in district court litigation. To help the industry fight bad patents, we have published the winning prior art below.

We would also like to thank the dozens of other high-quality submissions that were made on this patent. The ongoing contests are open to anyone, and include tens of thousands of dollars in rewards available for helping the industry to challenge NPE patents of questionable validity by finding and submitting prior art in the contests. Visit PATROLL today to learn more about how to participate.

People can now win $1000 by helping an interception of the patent weaponised by Kojicast, another patent troll. As Unified Patents put it the following day:

On December 7, 2018, Unified added a $1,000 contest to PATROLL seeking prior art for US Patent No. 9749380 owned and asserted by Kojicast, LLC (an NPE). The ’380 patent, generally related to a media streaming method and system, has been asserted against Dailymotion S.A. in the Texas Eastern District Court.

A lot of these are software patents, which could probably also be tackled by Section 101. The legal angle depends on the petitioner’s attorney.

“People can now win $1000 by helping an interception of the patent weaponised by Kojicast, another patent troll.”And speaking of software patents, TechDirt now compares them to pot patents with plenty of prior art.

“This is actually quite reminiscent of the mess that came with software patents,” Benjamin Henrion wrote, citing “What Do Pot And Software Have In Common? Stupid Patent Thickets Based On A Lack Of Patented Prior Art” (originally published in TechDirt and soon thereafter reposted by Above The Law). It’s about the time the Federal Circuit (CAFC) opened the door to software patents (before today’s 35 U.S.C. § 101):

Basically, there hasn’t been that much official prior art because pot was considered illegal for so many years, and no one was rushing to patent anything. And, of course, patent examiners are somewhat limited in what they’re set up to research regarding prior art, and they often rely on earlier patents and scientific articles as the basis for prior art searches. And, with pot, there aren’t so many of those.

Of course, this is actually quite reminiscent of the mess that came with software patents. For a long time, most people didn’t consider most software to be patentable (this is not entirely accurate, as there are software patents going back many decades, but many people considered it limited to a few special cases of software). However, in 1998, we got the State St. Bank case, in which the Court of Appeals for the Federal Circuit basically threw open the doors on patenting almost any software. And those doors remained completely wide open until the Alice v. CLS Bank decision in 2014 (which hasn’t totally cleaned up the mess of the State Street ruling, but has certainly helped dial back the insanity).

But, for nearly two decades after the State Street ruling, the US Patent Office was patenting software willy nilly — often despite much of it having tons of prior art or being completely obvious. A big part of the problem was that examiners, again, focused on mainly looking at earlier patents and scientific journals for evidence of prior art. But because so many people didn’t think that most software was patentable, there were very few patents to look at, and it’s pretty rare for anyone to write up the details of software in scientific journals (they just make the damn software).

Days ago there was this report titled “Higher Law: Bay State Marijuana Shops Open | Tracking Pot Patent Cases | Plus: Who Got the Work” (litigation work).

“The patent system may be out of control, but there’s still hope that PTAB and the courts above it will correct things.”Welcome the parasites of pot. Who will benefit from people getting high? Yes, the lawyers (they wanted patents everything, making themselves ‘necessary’).

The patent system may be out of control, but there’s still hope that PTAB and the courts above it will correct things. What about European courts?

Yesterday we said there should be no patents on plants (like pot) and people now point out that “On 7 December 2018, the EPO posted a report on its website relating to the decision” (to allow patents on plants at the EPO, even in defiance of the EPC). The next comment speaks of the UPC (which is likely dead): “You seem to forget that the EPC has 38 member states and the EU presently 28 and soon only 27. You might thus have a long time to wait until the EU takes control of the EPO on the pretext of harmony. If the EU could have taken over the EPO, we would not have to do with the UPC, but EPLA would probably be in place now. However, Opinion C 1/09 came in between. I do not think that even the children of my grandchildren will see the EU take the control of the EPO!”

Given the direction the EPO has taken, it might not even survive much longer. Patent maximalism can doom offices (presumption of validity gone).

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