04.01.19

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Patent Trolls Destroy the European Economy Because EPO Gives Them Questionable Patents

Posted in Europe, Patents at 2:02 am by Dr. Roy Schestowitz

Demolishing crane eating the building

Summary: The EPO’s lust for patents (as many as possible, as that’s what productivity or “success” will be measured by) is a blessing not for European businesses but for those eager to prey on them

NOTHING is improving at the European Patent Office (EPO), certainly not the quality of granted patents. António Campinos can smile and flatter himself all he wants, but he hasn’t done a darn thing to improve matters, except at the most superficial level (like silencing the union and representatives*). He or his administration is aggressively promoting European software patents, which are favoured among patent trolls.

“How long can the EPO grant patents on nature, life, maths and even food without the public retaliating?”The EPO doesn’t speak about “software patents”; it uses all sorts of sneaky buzzwords such as “AI”. One can see Bristows LLP staff getting slapped down for spreading “AI” hype and lies a few days ago. To quote the comment: “Stop taking us for simple minds and define something as being intelligent which actually only is something defined by a programmer.”

We used to write a lot of articles about this “AI” hype and how it relates to patents. We no longer do this as it would seem repetitive. Last week Bastian Best wrote: “AI and patents: Does the @EPOorg grant software patents for text document classifiers?”

Those classifiers aren’t “AI” but algorithms; The EPO will typically grant software patents if one calls them “AI”, however, so Best’s colleague Patrick Heckeler wrote (without invoking this buzzwords nonsense) that it is considered “non-technical”, as per the Board:

As a result, the Board ruled that a the claimed mathematical algorithm does not contribute to the technial character of the claimed method. The only implementation features specified in the claim are references to the method being “computerized” and the text documents being “digitally represented in a computer”. The skilled person, when given the task of implementing the algorithm, would certainly have chosen to represent text documents “digitally in a computer”. The Board further considers that the skilled person, using only his common general knowledge, would have had

Bastian Best did a post of his own and said aloud: “Data modelling is hardly patentable in Europe, at least on an abstract level…”

There’s a case (referral to the Board) coming soon that can eliminate every such patent (by mean of legal extrapolation). There may also be a decision to end patents on seeds and plants some time soon (see “Open-source seeds: protecting new crops from privitisation”, a new article written by Katie Burton).

How long can the EPO grant patents on nature, life, maths and even food without the public retaliating?

We have sadly seen IAM rearing its ugly face again in recent days. It gave a platform for Team Battistelli and then wrote: “The @EPOorg received over 7,000 4IR-related patent applications in 2017, says Yann Meniere the office’s chief economist…” [sic]

More buzzwords for software patents from the EPO. How does he even define “4IR” and classify patents accordingly? It’s pseudoscience. This man is a pseudo ‘scientist’, who calls himself an “economist” when all he really did was perpetuation of Battistelli’s lies (that’s his real job).

IAM also proceeded to promoting a patent troll, as it so habitually does (it’s paid for it). “Big news from Sisvel this morning,” it wrote, “the launch of a new licensing programme covering VP9 and AV1 video compression technology. Should cause a few waves!”

It linked to this puff piece outside the paywall: (to help the troll)

Sisvel has announced that it is launching a new platform which will license patents reading on the VP9 video encoding format, made available by Google in June 2013, and the AV1 (AOMedia Video 1) open video coding format developed by the Alliance for Open Media (a consortium founded in 2015 by Apple, ARM, Cisco, Facebook, Google, IBM, Intel, Microsoft, Mozilla and Netflix), the first version of which was released in June 2018.

Both VP9 and AV1 have been described as royalty free, but Sisvel claims that there are a number of innovators whose patent protected inventions have been implemented by the codecs.

This is about European trolls, which aren’t being discussed enough in the media (not in English anyway). IAM is advertising a blackmail expert and a patent troll, Sisvel. And if one checks the funding sources of IAM, it’s ever more clear that it’s a front group of trolls.

Jan Ozer, over in “Online Video News”, was also doing a puff piece (maybe they don’t realise how truly evil this troll is). Here is the corresponding press release. It’s about software patents.

If nowadays in Europe patent trolls can write articles and present talks, even keynotes, why not issue press releases too? Thanks to corrupt EPO management, these patent trolls (some from the US!) nowadays get a treatment of a 'celebrity' (EPO is constantly legitimising trolls).

“Luxembourg smells fiscal evasion,” Benjamin Henrion remarked on this particular troll. “Sisvel patent troll now attacking Google’s “royalty-free” VP9 and AV1,” he added, “the patent nightmare continues in the quest for a “free web”…”

This troll was last mentioned yesterday by IAM. “Sisvel is launching a new video compression licensing programme covering patents reading on the VP9 video encoding format and the AV1 open video coding format,” it wrote. Hardly a good description of what’s happening here. These are software patents being leveraged by a villainous troll in Europe, without having to even face a court.

Days ago we saw this report that said: “Intel has released an open source CPU encoder for the AV1 video format developed by the Alliance of Open Media (AOMedia) consortium. As one of its founding members, Intel has been involved in the development of the royalty-free next-generation format that was released last year.”

Meanwhile the patent troll from Europe goes after it with software patents that aren’t valid in Europe.

But worry not; according to IAM, there's no troll problem in Europe. IAM denies the underlying facts while flattering the EPO for “quality” of its patents. A few days ago IAM also cheered for US trolls that buy patents in auctions. “We recently released an analysis of US patent sales for the last three months of 2018 using data provided by Allied Security Trust,” IAM wrote. “Although the amount of assets transacted significantly dropped from 3,977 to 1,831, due to the absence of large-scale transactions, deal numbers increased 25% compared to the same period in 2017.”

So they spin the numbers, turning the halving in number into “increase”. Nice spin you got there. Typical IAM.

This patent trolls’ lobby, IAM, is also promoting software patents under the guise of “AI” [1, 2] (copied into Lexology) — a pattern we’ve noted at the start.

At the end of the day it all boils down to one thing: Quite extrajudicially software patents are being enforced in Europe by the likes of Sisvel and MPEG-LA, who in Germany act as fronts for Philips and Fraunhofer.

The latest post from Florian Müller in Germany shows that Germany is coming to grips with the fact that a lot of patent trolls have come: [via]

As a cross-jurisdictional patent litigation watcher I can tell that injunctive relief is what attracts plaintiffs to Germany more than anything else. That’s why they tend to play the lottery: they assert a bunch of patents, most of which tend to be weak, just in hopes of securing an injunction that allows them to settle an entire dispute on their preferred terms. Until the Court of Justice of the EU handed down its Huawei v. ZTE opinion, it was hard to avoid injunctive relief in Germany even over standard-essential patents (SEPs).

This may change, and I’m one of those who hope it will. Last week I attended a really great conference entitled “Enforcing Patents Smoothly–From Automatic Injunctions to Proportionate Remedies” that was organized and hosted by the Friedrich Alexander University of Erlangen-Nuremberg, where academics, practitioners, and a Mannheim judge (Presiding Judge Dr. Peter Tochtermann) discussed this subject. I wish to thank Professor Franz Hofmann for chairing this conference, and the ip2innovate industry body for supporting it. It clearly exceeded my expectations. At that conference I learned about a legislative initiative in Germany that appears to be in its embryonic stages.

Meanwhile I’ve obtained official confirmation from the Federal Ministry of Justice and Consumer Protection of Germany that an “expert talk” will take place on May 20, 2019, for the stated purpose of preparing a legislative initiative in the area of intellectual property policy. Industyr groups, academics and judges will discuss one of the potential elements of said initiative: a potential reform of the legal framework governing patent injunctions, particularly in connection with SEPs and, more generally, complex products.

All of the presentations at the Erlangen conference were great, and most of them would actually deserve to be discussed in greater detail, which I may do at a different point in time. What I do wish to share here is the impression that those advocating a more eBay-like approach in Germany, which would require some proportionality principle to be enshrined in statutory law, likely have far more political clout than those opposing it. And they have EU law on their side: the IP enforcement directive comes with a proportionality paragraph, just that Germany transposed it into national law only in connection with other types of intellectual property rights than patents.

[...]

Professor Christian Osterrieth, one of the name partners of the Reimann Osterrieth Köhler Haft (ROKH) firm that is now part of Hoyng Rokh Monegier, explained how eye-opening it was for him to see a case in which a single patent covering a secondary aspect of a technology could have had disruptive impact on Germany’s highway toll collection system. The way Professor Osterrieth described the problem was reminiscent of Justice Kennedy’s famous and influential eBay concurrence.

Professor Hofmann made a more theoretical argument for greater flexibility. Professor Thomas Cotter (University of Minnesota, and author of the Comparative Patent Remedies blog that I’ve recommended on various occasions) focused on the economics of patent injunctions. Simply put, injunctive relief creates a situation in which the parties will negotiate a price, and a court-determined ongoing royalty would be another, so the key question is which approach results in a more reasonable valuation. It’s about avoiding overcompensation as well as undercompensation.

So they merely try to ameliorate things; instead, maybe they should take a hard look at what goes on at the EPO in Munich, having systematically stonewalled and disregarded complaints from EPO staff.
____
* According to Dutch media, a key supporter of SUEPO is also suffering, so it may be part of a broader trend. [via]

The biggest Dutch trade union federation FNV is poised to cut its workforce by almost 20% or 400 full and part-time jobs, the Volkskrant said on Friday.

Membership numbers are declining and this is forcing the union to make cuts totalling €16m a year, the paper said. It bases its claim on the plan to reorganise the union’s operations.

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