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03.02.19

Decades of ‘Stupid’ Software Patents, Tactlessly Granted by the USPTO, Have Caused a Flood of Invalidations and Now a ‘Section 101 Day’

Posted in America, Patents at 3:17 am by Dr. Roy Schestowitz

Courts continue to be overwhelmed by briefs and motions for invalidation of abstract patents, Judge Leonard Stark (chief of the new American ‘rocket docket’) admits

Chief Judge Leonard Stark

Summary: Stunning admission from Chief Judge Leonard Stark, who is coming to grips with the severity of the quality issue and is announcing/heralding a ‘Section 101 Day’

QUALITY of patents is an important aspect of patent law. The quality of US patents — or patents granted by the U.S. Patent and Trademark Office (USPTO) — became the subject of much ridicule in recent decades. Going back to the days of ‘Slashdot glory’, people used to routinely shame patents over there. Companies like IBM were often forced (to save face) into conceding patents. At Sun, esteemed engineers had a game: let’s see who manages to get the most stupid patent accepted by the USPTO. Admissions about these games came out after Oracle had bought Sun.

“At Sun, esteemed engineers had a game: let’s see who manages to get the most stupid patent accepted by the USPTO.”Just before this weekend the EFF’s Joe Mullin announced the “Stupid Patent of the Month” (something he used to do a lot as a journalist). He now focuses on charlatans with fake patents that are software patents. To quote:

What if we allowed some people to patent the law and then demand money from the rest of us just for following it?

As anyone with a basic understanding of democratic principles can see, that is a terrible idea. In a democracy, elected representatives write laws that apply to everyone, ideally, based on the public interest. We shouldn’t let private parties “own” legal principles or use technical jargon to re-cast those principles as “inventions.”

But that’s exactly what the U.S. Patent Office has allowed two inventors, Nicholas Hall and Steven Eakin, to do. Last September, the government proclaimed that Hall and Eakin are the inventors of “Methods and Systems for User Opt-In to Data Privacy Agreements,” U.S. Patent No. 10,075,451.

The owner of this patent, a company called “Veripath,” is already filing lawsuits against companies that make privacy compliance software. With Congress and many states actively engaged in debates over consumer privacy laws, Veripath might soon be using this patent to extract licensing cash from U.S. companies as well.

[...]

Some background: Venpath, Inc., a company with a New York address that appears to be a virtual office, assigned the rights in the ’451 patent to VeriPath just days before the patent issued in September last year. As it happens, the FTC began enforcement proceedings against VenPath last September. The FTC’s complaint [PDF] alleged that VenPath’s website represented that “VenPath participates in and has certified its compliance with the EU-U.S. Privacy Shield Framework.” The FTC alleged a count of “privacy misrepresentation.” It claimed that VenPath “did not complete the steps necessary to renew its participation in the EU-U.S. Privacy Shield framework after that certification expired in October 2017.” The FTC issued a Decision and Order [PDF] requiring VenPath to remove the misrepresentations.

An exhibit [PDF] attached to the complaint shows that one of the named inventors on the patent, Nick Hall, contacted Faktor to ask what its prices were. Hall identified himself as the CEO of VenPath. Once Faktor responded, Veripath sued Faktor in federal court in New York.

In its lawsuits, Veripath claims that basic warnings about cookies on websites, a now-common method of complying with the GDPR, violate its patent. The lawsuit against Faktor notes that Faktor’s own website “might not work properly” unless a user consents to having her browser accept cookies.

[...]

Even when a patent is invalid, defendants face pressure to settle. Patent litigation is expensive and it can cost tens or hundreds of thousands of dollars just to get through the early stages. To really protect innovation we have to ensure that patents like the ’451 patent are never issued in the first place. The fact that this patent was granted shows the Patent Office is failing to apply the law.

We are currently urging the public to tell the Patent Office to stop issuing abstract software patents.

“Stupid Patent of the Month” used to be announced and/or selected by Daniel Nazer, but he recently changed jobs and now works for Mozilla.

“”Stupid Patent of the Month” used to be announced and/or selected by Daniel Nazer, but he recently changed jobs and now works for Mozilla.”At the start of the year we promised ourselves to focus more on the European Patent Office (EPO) and GNU/Linux, mostly at the expense of USPTO coverage, unless things take a sharp turn for the worse in the US. Two months down the line, have things gotten worse? No. Not really. But the concerns expressed above (by the EFF) are not baseless because at the moment the Office continues to grant software patents — abstract patents that oughtn’t be granted. We keep seeing more and more stories about such patents being squashed in courts; sometimes we only include them in daily links without remarking/talking about them. We have to budget our time.

Here’s another example: Paltalk/PeerStream case. The Patent Trial and Appeal Board (PTAB) will probably trash the underlying patents (there’s an inter partes review (IPR)), based on this new press release, but the lawyers will get money for the dispute anyway. Patents on software should never be granted by the U.S. Patent and Trademark Office (USPTO) in the first place. In case the lawsuits goes forward it can take a long time (months of legal bills); it’s very expensive to take this up to the Federal Circuit, and exceptionally difficult to get SCOTUS to even listen/consider. Either way, the lawyers always win. Mind this new piece from Finnegan, Henderson, Farabow, Garrett & Dunner LLP’s Adriana L. Burgy and Thomas L. Irving. They try to lure clients into lawsuits, not properly informing them about the risk. There’s no “Favorable Seas”; quite the contrary.

“That’s just 35 U.S.C. § 101 in action.”In the words of this new article (“‘Section 101 Day’ Yields Quick Ruling On Patent Eligibility”): “Sitting behind the bench at the Wilmington, Delaware, federal courthouse, Chief Judge Leonard Stark explained that his docket had become flooded with legal briefs arguing that a patent covers ineligible material…”

That’s just 35 U.S.C. § 101 in action. Similar things happen at the Office too, but patent maximalists such as Janal Kalis look really hard (exhaustively) for the exceptions. Here’s the latest one: “The PTAB Reversed an Examiner’s [35 U.S.C. §] 101 Rejection of Claims for “producing shipping labels based on information included in a shipping uniform resource identifier” But Affirmed the Examiner’s 102 and non-statutory double Patenting Rejection: https://e-foia.uspto.gov/Foia/RetrievePdf?system=BPAI&flNm=fd2017004956-02-06-2019-1 …”

Unified Patents published a string of overnight posts last night [1, 2, 3, 4]. It’s going after a bunch of software patents which are leveraged in bulk by a satellite of Qualcomm. To quote Unified Patents: “Velos claims to have and seeks to license patents allegedly essential to the HEVC / H.265 standard. The ’365 patent is part of a family of patents that were originally assigned to Qualcomm Inc. and transferred to Velos Media in 2017. After conducting an independent analysis, Unified has determined that the ‘365 patent is likely unpatentable.”

They are tackling several such patents (US 8,964,849, US 9,930,365 and US 9,979,981 were named last night) and they would be wise the do the same to MPEG-LA, whose cartel is a lot broader and recently chased companies in Europe for ‘protection’ money, even if software patents are not valid in Europe. We’ll focus on Europe in our next post.

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