Summary: How media which is dominated or steered by patent law firms covered the McRO v Bandai Namco case, and why it’s bound to mislead a lot of people into thinking that software patents are OK
YESTERDAY we wrote about how patent law firms had turned rather nasty against anyone who enforces Alice and trashes software patents in lieu with the law. These firm are losing the battle, so now they play dirty. As far as we are aware, the McRO v Bandai Namco decision was first reported on by IAM and quickly thereafter mentioned by pro-software patents people (along with the misleading headline). In a nutshell, the Court of Appeals for the Federal Circuit (CAFC) defended a few software patents (or just one single patent!) in one rare case (less than 10% of the time do we see such an outcome at CAFC), so patent maximalists make a lot of noise and try to amplify the message (whilst ignoring the decisions they dislike because it’s not supportive of their agenda and ‘sales’). We expect to see a lot more articles about McRO v Bandai Namco because it is good marketing of their ‘services’ (or ‘products’). They are hoping — inter alia — to help their large clients’ agenda.
“These firm are losing the battle, so now they play dirty.”“Don’t Assume an Abstract Idea” was the headline at Patently-O today. It said: “In an important Eligibility case, the Federal Circuit has ruled that MRCO’s software patent claims are eligible — rejecting District Court Judge Wu’s judgement on the pleadings that the non-business-method claims are invalid as effectively claiming an abstract idea. In my 2014 post in the case I wrote that the case may serve as an opportunity fo the Federal Circuit “to draw a new line in the sand.””
“Federal Circuit rules software patents valid in McRO v Bandai Namco” was the headline in MIP. The truth of the matter is, the Federal Circuit did not rule software patents valid but only very particular patents (or patent), in one single case (it almost always finds software patents invalid). As long as the US Supreme Court does not rule again on software patents (and as we noted here before, no such case is pending at all right now), Alice still stands, it is very much applicable, and software patents are effectively or generally dead. CAFC must follow the lead of the Supremes (Justices). That’s just how the law works.
“We expect to see a lot more articles about McRO v Bandai Namco because it is good marketing of their ‘services’ (or ‘products’).”The following headline (shown at the top) from Reuters is basically a lie. Software makers (developers) don’t want software patents; few oligarchs that own large software monopolies may want them (e.g. IBM and Microsoft), but not actual software makers, people like yours truly. “Animation patent saved, software makers exhale,” says the headline of this report, but every software maker (coder) out there is probably mortified by the idea that patent trolls with their software patents can use this decision to bolster their campaign of intimidation (patent shakedown). This is the same spin as found in the seminal headline from IAM — spin which strives to convince us that software makers actually want software patents. It’s a lie.
Speaking of software patents, watch the details of an upcoming event where software patents lobbyist David Kappos (and former USPTO Director) will share the stage with the current Director who reportedly denies fraud at the USPTO. “Michelle Lee has testified before a House of Representatives committee amid accusations of USPTO examiners claiming unsupported hours,” MIP wrote. In addition, the chief judge of the Patent Trial and Appeal Board will be there. To quote IAM: “Joining keynote speaker USPTO Director Michelle Lee will be the chief judge of the Patent Trial and Appeal Board, David Ruschke, ex-USPTO Director David Kappos and former Federal Circuit Chief Judge Paul Michel. Alongside them will be senior representatives from companies that are closely involved in the ongoing patent reform debate, including Google, Johnson & Johnson, Qualcomm, Bristol-Myers Squibb and IBM. Also in the faculty, we have lead counsel in two of the pivotal Supreme Court patent cases of the last decade – KSR v Teleflex and Cuozzo v Lee – as well as several high-profile patent investors.”
“This is the same spin as found in the seminal headline from IAM — spin which strives to convince us that software makers actually want software patents. It’s a lie.”This seems like a corporate lobbying event, much like that EPO-supported pro-UPC event that IAM set up in the US earlier this year. We don’t know what will be discussed in this event, but certainly it’s so expensive to attend that it will essentially shut out dissenting views, just like Managing IP recently did (a pro-UPC lobbying event, as we noted last night). The
EPO tends to pay published to sell out these days. Sometimes it works.
Taking note of the arrogance and the audacity of the patent microcosm, see this new article by Robert Sachs, a proponent of software patents. Yesterday he wrote: “Of course, one can say that the Federal Circuit is bound by precedent and has no choice but to follow the Supreme Court. This is true but fails to grasp the problem: The Federal Circuit does not even recognize that the Supreme Court’s definition is wrong. There have been no dissents by the Federal Circuit raising this issue. Instead, they apparently believe that the Supreme Court is correct, and thus only raise other concerns about the application of the Mayo test.”
This is part one of a newly-published series (maybe paper) and when Sachs says that the “Federal Circuit does not even recognize that the Supreme Court’s definition is wrong” he basically flings another nonsensical attack on Alice/Mayo, much like Kappos and other interresants. Over at Patently-O, Professor Crouch goes with the headline “Patent Venue at the Supreme Court: Correcting a 26 Year Old Legal Error” and it’s basically a rant which relates to the VENUE Act — a subject which we covered here before.
“East Texas has been somewhat of a cesspool of patent trolls with their ludicrous software patents and they enjoy favourable treatment from the courts there.”Crouch does not say “patent trolls” but instead speaks of East Texas. He wrote: “Patent litigation continues to be concentrated in a small number of venues. This case is potentially a big deal because it could eliminate this concentration — especially patent cases in the E.D.Texas. Both the PTO and Congress appear in favor of venue reforms, but statutory reforms will likely wait until the Supreme Court decides TC Heartland.”
Well, any such reforms are sorely needed and the sooner, the better. East Texas has been somewhat of a cesspool of patent trolls with their ludicrous software patents and they enjoy favourable treatment from the courts there. It’s time to stop this. █
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IP Watchdog is turning into a blatant attack dog of patent law firms
Summary: The latest new developments in the software patents landscape, including some of the latest vicious attacks on the Patent Trial and Appeal Board, which invalidates software patents at a rather high pace
IT CAN be truly sickening to see what goes on in the US amid the demise/end of software patents. As we noted the other day, the patent law firms fight back and they fight back dirty. Left unchallenged, they will have a lot of leeway and possibly discourage participation by those who merely apply the law. They’re bullies with ‘class’.
“Left unchallenged, they will have a lot of leeway and possibly discourage participation by those who merely apply the law.”Litigation and blackmail has a new euphemism, “Monetization”, over at patent law firms’ news sites. To them, it’s all about the money, never mind innovation, justice and so on.
After Alice, which put an end to many software patents, the monetisers come up with articles like “How to Overcome Rejections Based on the Alice Decision”. Litigation and prosecution, moreover, are described in terms from consumerism, e.g. “Repeated Clients”. What on Earth? Have they no tact. They pretty much show what they stand for and it’s nothing but money in this case. Watch this new example of marketing (“Patent Services USA Offers Inventors Who Conducted Invention Research Elsewhere with Investment Protection Up to $1,200″). Again, all about money…
“What ever happened to the promise of innovation and protecting the “little guy” (or gal, or inventor)?”What ever happened to the promise of innovation and protecting the “little guy” (or gal, or inventor)? Well, that’s all just pillow talk now. The system has been taken over by other interests.
Google wants to control your car along with the State (whatever the state may be) and files/pursues a patent on that. So much for innovation, eh? Big Brother must be very pleased.
“Watchtroll has got an agenda and it’s not even hiding it.”Well, continuing their attacks on PTAB/AIA, as expected and noted here the other day, Watchtroll and chums now pick on Google in the article “How the America Invents Act Harmed Inventors” (yet another PTAB/AIA attack piece, one among many recently). One Twitter account linking to this said: “How the America Invents Act Harmed Inventors – OR, How Google et al Stole Thousands of Inventions.” (Google is mentioned thrice in this article)
Watchtroll has got an agenda and it’s not even hiding it. More than 90% of (tested in courts/boards) software patents on this area (payments) are dead/dying, but Watchtroll is cherry-picking to make it seem otherwise. Another new Watchtroll piece is an attack on PTAB, as usual. Watchtroll is attacking PTAB almost every day now, for PTAB is invalidating software patents in lieu with Alice. In other words, it’s just doing its job and applying (or carrying) justice. How dare these people uphold the law? Resorting to insults like "Impotence", Watchtroll and chums have already turned the site into some kind of attack site (nonstop attacks on PTAB for invalidating software patents in the US, as can be seen almost every day these days over at Watchtroll). Here is another new example, this one from yesterday. If anyone deems Watchtroll (IP Watchdog) a legitimate source of information, now is a good time to reassess and reconsider.
“The title of this new article is “The CAFC finally issues the Planet Blue decision and it’s good news for US software patent owners,” but it could also be typed as “The CAFC finally issues the Planet Blue decision and it’s bad news for US software developers” (because software developers generally loathe software patents).”According to the EPO’s mouthpiece, which is also a longtime proponent of software patents (blatantly so): “The Court of Appeals for the Federal Circuit has issued its long-awaited decision in the McRO Inc., DBA Planet Blue v Bandai Namco Games America et al case. This involved two patents relating to lip synchronisation which had been ruled invalid on Section 101 grounds by the Central California district court months after the Supreme Court handed down its controversial Alice decison in June 2014. Owners of software patents in the US were hopuing that the CAFC would use this case to provide more clarity on the thorny subject of eligibility, and it looks like that has happened.”
The title of this new article is “The CAFC finally issues the Planet Blue decision and it’s good news for US software patent owners,” but it could also be typed as “The CAFC finally issues the Planet Blue decision and it’s bad news for US software developers” (because software developers generally loathe software patents).
Writing in another Web site, here we have another sort of attack on AIA and PTAB (behind paywall). The summary says: “An interview with McDermott Will & Emery partner Bernard Knight Jr., who served as the U.S. Patent and Trademark Office’s general counsel from 2010 to 2013 as the America Invents Act went into effect.”
“They mostly write about PTAB and complain (rudely or politely, depending on their style) about it for trashing software patents (their lifeline which taxes software developers and users).”Yes, because a USPTO insider would be truly objective about Congress enforcing/imposing restrictions on the USPTO? Another lawyers’ site has just written about Inter Partes Reviews (IPRs) at PTAB. It’s quite clear that patent law firms in the US are freaking out. They mostly write about PTAB and complain (rudely or politely, depending on their style) about it for trashing software patents (their lifeline which taxes software developers and users).
In other news, design patents (sort of like software patents) are being advocated by patent maximalists at Watchtroll, i.e. those who profit from them no matter who loses and who wins. Apple patents so-called solutions to problems that aren’t real, unless Utopia for humanity means making phonecalls inside the shower. It also patents non-original designs and then drags companies in the courtrooms over it. Samsung was wealthy enough to insist on appeals and this will soon reach the US Supreme Court. Florian Müller has the latest on that. Earlier today he wrote a long post and concluded: “If the Supreme Court (or Judge Koh on remand) finds that Apple failed to identify the relevant “article of manufacture,” then there won’t have to be another jury trial–and the clear message to the rest of the world would be that rationality has been restored with respect to design patent damages, period.” █
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Factory mentality, as opposed to research mentality, inevitably takes its toll
Summary: Stocks are being depleted by superficial work (searches or examination) at the EPO, whereas belatedly, inside the USPTO, the problems associated with shoddy work or lenient examination are being realised, and ramifications noted even by the U.S. Government Accountability Office (GAO)
“As we have discussed,” Patently-O wrote earlier today about the Duke Law Patent Quality Conference (regarding the USPTO), “the two of us are following closely the USPTO’s efforts to address issues of patent quality through its Enhanced Patent Quality Initiative (EPQI) – an urgent but also enduring challenge that one of our nation’s first patent examiners, Thomas Jefferson, struggled with. Our institutions, the Duke Law Center for Innovation Policy and the Santa Clara High Tech Law Institute, are also co-sponsoring two conferences on EPQI and other levers for improving patent quality.
As readers may recall, during the summer we mentioned the GAO report and its relevance to the EPO. The US patent system seems to be improving patent quality, whereas Battistelli goes in the opposite direction (maybe registration/filing alone given the current trajectory), so he definitely needs to attend the above conference. He might actually learn something, though we doubt he can ever acknowledge any mistakes of his. An article titled “Fixing why USPTO issues low-quality patents should be oversight hearing’s focus” has already just been published by The Hill. Notice the theme. The public debate/discourse sure is evolving.
Looking at the situation inside the EPO, there isn’t even an acknowledgement of the problem (at the management/executive level). Patent examiners, however, see the writings on the wall. Some of them wrote about “Patent rain, brain drain and quality bust at the EPO,” calling “Overcapacity and insecurity” an “HR tool” (controlling staff by workload and fear). To quote some bits from these insiders at the EPO:
1. Toward overcapacity, full steam ahead!
According to the EPO workload manager, on the 23.05 the EPO Search Backlog was 4000, on the 30.05 3500…. This trend is picking up as can clearly be seen on the rolling 12M stock curves taking a dive: the spread between applications and searches is increasing monthly since 2014, with an average between 25k and 30k monthly of excess searches. This “scissors effect” will soon lead to the end of the Search stock: presently, it is estimated to a little less than four months of stock!
The situation in Examination may seem less dramatic at this stage, but an inflection point has taken place (see evolution of the EPO examination workload) since January 2016 as staff have started to shift their attention to examination in certain areas due to the lack of search files. When the search stock will be depleted office-wide, the trend will accelerate as capacity will shift to examination. This is coherent with the “Early Certainty1” policy which clear and open objective is to tackle the backlog in examination.
At the present rate2, it is estimated that compared to previous years, the total product stock will melt at a 50k rhythm per year, corresponding in the middle run to a substantial amount of overcapacity in the workforce
1 The dedicated site FAQ attempts to be reassuring on this issue: “What happens with „supernumerary“ examiners once the backlog is cleared? Will young examiners be recruited on 5-year contracts? [...] there are for the moment no plans to recruit examiners on contract and if this discussion would ever come up, it would certainly not be due to Early Certainty”
2 According to the data, the output/input balance was 9500 searches and 3100 examinations in the first quarter.
Put in very simple terms, EPO staff foresees a situation wherein all the skilled (and well-paid) staff will be pressured to go or be laid off, ensuring that patent quality at the EPO declines even further. We are going to elaborate on this another day, as there are some more urgent matters to tackle tonight and some important news regarding patent scope (software patents) from the US. █
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Summary: New evidence suggests that software patents continue their plunge in the United States and those who make money from software patents cannot help shooting the messengers (in the media) and smearing those who simply do their job by applying the criteria agreed upon by the US Supreme Court
TECHRIGHTS has been watching very closely matters pertaining to software patents for about a decade (I’ve watched them much longer than that, predating this site’s existence). After so much activism we finally see tremendous progress; they’re dropping like flies and litigation involving software patents is so uncertain (for the plaintiff who takes a huge risk) that numbers indicate a sharp decline if not dampening. Only a fool would spend money pursuing new software patents; reckless patent holders would dare have them subjected to scrutiny by a court (the higher the court, the higher the risk, thus suing deep-pocketed players is riskiest).
“The number of some types of software patent lawsuits in the US has taken a nosedive since the 2014 decision in Alice v CLS Bank.”
–WIPRthe numbers are on our side. As WIPR put it the other day (note the use of the word nosedive): “The number of some types of software patent lawsuits in the US has taken a nosedive since the 2014 decision in Alice v CLS Bank.
“This is the finding of Patexia, an online patent research platform, which reported that software patent suits have declined heavily, although the fall was not equal across all software patent classification codes.
“Patexia identified 14 different US classes that describe some sort of software-related system or process.
“Patexia identified 14 different US classes that describe some sort of software-related system or process.”
–WIPR“These classes covered more than 14% of the 22,791 unique patents involved in patent suits from 2010 through to the first half of 2016.”
We are pleased to see that even insiders, such as Patexia, recognise the trend and write about it. Patent law firms prefer not to talk about it because it discourages their clients (or prospective/possible clients). Writing for “Canadian Lawyer Magazine”, one person gave 10 reasons you need a Canadian Lawyer (the real headline is “Ten reasons you need a Canadian patent”). This is an example of marketing/advertising in the form of an “article”. To quote from this — cough — article: “You may have heard that it’s not worthwhile to patent your company’s technology in Canada, with its smaller market, its conservative judicial remedies and its skepticism toward software-based patents.”
Well, recall i4i v Microsoft (Canadian company) and how things worked out [1, 2, 3, 4, 5]. They pretty much risked going out of business after wasting years in court bickering over software patents. They still have a Web site which is active (last news item was a week ago), but we have not seen them in the media for literally more than half a decade. Recently, another Canadian company chose to turn into a patent troll down in Texas. This failing company, falling back on its patents, is Blackberry. How has it worked out so far? Any better than Nokia, which is still arming patent trolls in pursuit of cash? A lot of these patents are totally worthless, more so after Alice (Nokia — or Symbian at the time — had a famous software patent case in the UK nearly a decade ago).
“A lot of these patents are totally worthless, more so after Alice (Nokia — or Symbian at the time — had a famous software patent case in the UK nearly a decade ago).”Lexology, a site for lawyers, has just reposted (verbatim) an analysis from Fenwick & West LLP. It’s an analysis which we mentioned and also cited here the other day, showing a trend of invalidation of software patents in the US. It’s not looking good for software patents and it’s not getting any better, irrespective of what patent law firms are trying to tell us (by blatantly selective coverage of events or overt cherry-picking).
Dealing with a particular CAFC case, a pro-software patents propaganda site (for a long time) says it’s “keenly awaited” (by the vultures maybe) and that it relates to Alice. Expect it to change nothing at all, even if it somehow ends up in favour of a software patent (like in Enfish). CAFC rules against software patents around 90% of the time, so there’s probably no more of Enfish in the pipeline. Two years and about 3 months after Alice it’s effectively the end of software patents in the United States. Wait and watch how patent law firms (and their media mouthpieces) continue to deny this, hoping to convince the readers (or clients) that all is “business as usual…”
“It’s not looking good for software patents and it’s not getting any better, irrespective of what patent law firms are trying to tell us (by blatantly selective coverage of events or overt cherry-picking)”When pro-software patents propaganda Web sites want to undermine the importance/relevance of Alice they typically resort to insulting those who apply Alice (even judges are insulted!). To quote IAM: “In December last year the Court of Appeals for the Federal Circuit heard oral arguments in McRO Inc., DBA Planet Blue v Bandai Namco Games America et al, a case that many, particularly in the software industry, hoped would bring some much needed clarity to the issue of subject matter eligibility.”
Nonsense. It has nothing to do with clarify, that’s just what lobbyists for software patents — people like David Kappos — like to say while they simply object to Alice and the Justices at the Supreme Court. Oh, the vanity!
To quote further from IAM: “As with any 101 case, in the McRO suit there’s not only the matter of the law but also of the Federal Circuit’s complicated relationship with the Supreme Court. A string of decisions from SCOTUS, which have reversed the lower court, has helped create much of the uncertainty around patent eligible subject matter. According to former CAFC Chief Judge, Paul Michel, the stark divisions that have clearly arisen between members of the judiciary, might be the reason for the delay in the McRO decision.”
“When pro-software patents propaganda Web sites want to undermine the importance/relevance of Alice they typically resort to insulting those who apply Alice (even judges are insulted!).”That’s another pattern of FUD we have come across. Proponents of software patents like to scandalise the status quo and pretend there is a fight — if not actually ignite one — between different divisions, courts, boards, etc. It’s typically a fictitious framing that seeks to discredit the system and shake/destablise Alice, making it seem too “controversial” a decision to refer to/cite as precedent.
These software patents proponents, usually patent law firms that never wrote any software, are actively trying to undermine the US Supreme Court. Shame on them for doing that. Watchtroll, with its big mouth, is attacking PTAB again (it won’t stop until they’re gone). They’re like a gang of hyenas. Writing about PTAB, MIP has two more articles on the latest trends. One is titled “Don’t Estop Me Now” and the latter is a subtle attempt to discredit PTAB by associating it with “patent trolls” (again, total fiction!). Making money by trashing patents granted in error by the USPTO (for quick monetary gains) does not make one a “patent troll” and it has nothing whatsoever to do with the definition of “patent troll”. Watch this headline, “Hedge funds and reverse patent trolls” (nothing to do with trolls).
“These software patents proponents, usually patent law firms that never wrote any software, are actively trying to undermine the US Supreme Court.”To quote MIP: “A big story last year was the emergence of hedge funds and other entities using the Patent Trial and Appeal Board. While Kyle Bass is seeing his IPRs through to final decision, other entities are acting as reverse patent trolls, a phenomenon that is predicted to gather pace” (again, nothing to do with trolls and probably a good thing that will compel the USPTO to do its job properly).
Patent lawyers and their mouthpieces reject the term "patent troll" (denying such a problem exists, a lot like those denying global warming), but suddenly, when someone kills bad patents, then they adopt the term and call the actors that. How pathetic and self-serving. Fish & Richardson P.C., which represents patent trolls, pretends patent trolling is all just a myth (published almost a decade ago, but revisited now via Patent Buddy, who is a pro-software patents attorney). To quote the author from Fish & Richardson: “A new breed of companies has emerged, and they are being called patent trolls. A patent troll is a person or entity who acquires ownership of a patent without the intention of actually using it to produce a product. Instead, it licenses the technology to an entity that will incorporate the patent into a product, or it sues an entity it believes has already incorporated the technology in a product without permission. The government, corporate America, and the media are fervently acting against these trolls. New proposed legislation, a blizzard of Supreme Court cases involving trolls, and endless newspaper and magazine articles are all trumpeting the same story line: Patent trolls are bad for society and must be stopped.”
Well, that is very different from those who use IPRs at PTAB to correct the USPTO’s errors (spurious granting of patents). But this kind of distortion of terminology certainly would not bother those with dishonest agenda.
“Put another way, they’re protesting against PTAB because to them — the patent microcosm — less litigation would be a corporate disaster (litigation is their most expensive product, whether as defendants or plaintiffs).”AIA (Leahy-Smith America Invents Act) gave us PTAB, which demolishes software patents by the thousands, so now it’s considered “trolling” to apply quality control to patents and prevent these from going to court? Here is a new Bloomberg piece (titled “Five Years In: The AIA’s Effects on Patent Litigation (Perspective)”) in which it’s stated upfront that “The authors are IP lawyers at a large law firm.” The article is by Daniel Zeilberger, Michael Stramiello, Joseph Palys, and Naveen Modi from Paul Hastings LLP. Their conclusion is as follows: “AIA-created post-grant proceedings are changing the landscape of patent litigation. Complaints and declaratory judgment actions are down. Potential cost savings for accused infringers are huge. And PTAB outcomes historically disfavor patent owners, who have appeared willing to settle a large percentage of disputes. It remains to be seen whether these trends will continue as PTAB practice evolves, guided by an expanding body of caselaw and potential legislative tweaks.”
Put another way, they’re protesting against PTAB because to them — the patent microcosm — less litigation would be a corporate disaster (litigation is their most expensive product, whether as defendants or plaintiffs). They might actually have to find another job — one in which they produce something other than paperwork for monopoly and litigation. One thing we have noticed is, the authors of pro-software patenting pieces are sometimes choosing to write anonymously. Apparently they’re too shamed of their self-serving lies that they want to hide behind pseudonyms or no name/s at all.
Expect more attacks on PTAB (which needs to be defended from them) and expect a lot more attacks on Alice. These attacks typically come from patent bullies, their lobbyists, and their law firms. “A decade of court decisions has shaken the basis of patent law,” says this new article, sending across the message that this is terrible news when fewer cases go to court. To quote:
Earlier this summer, the U.S. Supreme Court made it easier for patent holders to seek larger damage awards when their patents are infringed.
For patent watchers, however, the high court’s ruling was only just the latest in a particularly active decade of major patent litigation.
Beginning in 2006, the Supreme Court ruled that holders who license their patents cannot win an injunction to stop third parties from infringing on their patent. That lawsuit, eBay v. MercExchange, L.L.C., changed the way patent lawsuits could be waged, altering incentives along the way.
“eBay substantially changed the world of patent litigation by limiting almost every verdict solely to monetary damages,” Robert W. Morris and Michael R. Jones, attorneys at Eckert Seamans Cherin & Mellott L.L.C., wrote in March.
“The effect is harshest on individuals and smaller businesses that depend on the value of intellectual property for their livelihoods; these are the same inventors that have, for decades, produced many of our greatest technological advances,” MCM argues.
That last part promotes a myth, unless they speak of patent trolls. Those who benefit the most from the status quo are patent bullies like IBM and the only small entities to also benefit (as a side effect) are trolls, not startups that actually produce things.
“We hope that more people will recognise the problem with software patents and react accordingly.”In the area of militarism, arms manufacturers (or war contractors) have taken over the system and became a burden (or a parasite) inside it. The same goes for the area of patent, but the products are patents and lawsuits rather than weapons and wars. We hope that more people will recognise the problem with software patents and react accordingly. █
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Distracting from the accusations
Summary: The USPTO is found to have been burning taxpayers’ money and the patent microcosm, which profits from this entire sort of ‘racket’, is trying to defend or belittle these findings
THE USPTO has been dealt a serious blow which we mentioned here very briefly the other day (billing fraud, similar to what's alleged to be happening at the EPO).
It is no surprise that examiner misconduct and fraud is defended by IAM ‘magazine’, but having followed their sources we are left worried. Here is what IAM wrote to excuse/dismiss it all (the headline is “accusations against USPTO staff may have less meat than reported”):
But according to Matt Levy, patent counsel with the Computer Communications Industry Association (CCIA), the numbers from the OIG’s report should be put in context. Earlier this week, in a letter to the editor of the Washington Post, Levy claimed that the report exaggerated the scope of the problem. When broken down, he calculates that the waste amounts to an average of six minutes per examiner at the USPTO (he went into further detail in an IP Watchdog post here).
I reached out to Levy for a little more detail on his reasons for writing the letter. Here’s his response: “It seemed pretty clear that the OIG was making the problem look far worse than it was. I’ve written about the GAO’s report on quality, and I’ve been hopeful that it would garner some attention. Unfortunately, the scandal that the IG’s report created seemed likely to suck up all the oxygen. My goal was to bring a little perspective and, hopefully, help focus the conversation back on patent quality.”
Most patent owners would probably agree with Levy. That isn’t to denigrate the latest findings of the OIG but the more fundamental problem for the US patent system is the quality of the grants that it makes. That was certainly one of the main findings of IAM’s most recent benchmarking survey which was elaborated on by a more recent piece of research by Colleen Chien of Santa Clara University
Putting aside that last paragraph which is IAM's self-promotion (of propaganda), watch who they’re using to support their position. Remember which companies are behind CCIA, never mind Watchtroll (IP Watchdog) and other USPTO friends/buddies. It’s like a sort of coverup attempt because a lot of the above piggybacks Matt Levy from CCIA. It is a man whose wife works for the USPTO, i.e. his household receives a salary from the USPTO — something that should probably be mentioned (he personally asked me not to mention this again, but it’s hard given these circumstances and given that Levy gave away this potential conflict of interest himself, in his own blog). Watch what he wrote in response to the original piece (filed under “opinions”). His wife works for the USPTO, yet he does not disclose this in his letter to the editor (regarding the USPTO). How is one supposed to simply ignore this? The echo chamber in defense of fraud isn’t something that’s a minor detail that can be trivially overlooked. Found via this tweet are some vicious attacks on Florian Müller for bringing up the issue. A former IP Kat writer is slamming him for stating the obvious and he responds with: “Doesn’t matter due to fee diversion. Ultimately it is taxpayers’ money anyway.” Patent law firms too are against taxpayers now [1, 2, 3, 4]? Or implicitly in defense of billing fraud? How would that make them look? It is hard to explain to the patent microcosm its unwanted role (as it relates to practicing developers) [1, 2], but Müller did try and at the end he wrote a summary of his position as follows [1, 2, 3, 4]: “Some patent folks are being too emotional about USPTO fee diversion to think things through correctly. Let’s enlighten them now: Question was: if employees steal from USPTO, are taxpayers the ultimate victims? Yes. There are 2 independent ways to prove this. First, every $ less that the USPTO can send to Treasury (fee diversion) is a $ more that taxpayers have to contribute to pay for something. Second, fee diversion goes both ways: if theft contributed to a USPTO deficit, taxpayers would have to close the gap.”
“Slamming the watchdog isn’t easy (shooting the messenger which is independent) and if nefarious tactics are used to belittle the problem itself, what does that tell us about the accused (collectively) or their spouses?”I have exchanged quite a few E-mails about this subject since (Müller expressed some views) and it’s saddening to hear that patent law firms implicitly threaten alienation in retaliation for stating of the obvious. By doing so they probably risk only isolating themselves even further, turning software developers like myself and Müller into a foe.
For those who want to hear opinions from sites not run by software developers, consider reading “Patent office employees steal millions from American taxpayers”. To quote: “A new report from an independent watchdog found that employees of the Patent and Trademark office billed the government (AKA, the taxpayers) for 300,000 hours they never worked, costing the American people $18.2 million.
“Many employees work from home, and the report found numerous instances of time logged without any work being completed.
“The amount of wasted man-hours that could have been spent reducing the patent backlog is astounding, not to mention the millions of taxpayer dollars that were wasted paying employees for work they were not doing,” House Judiciary Committee Chairman Bob Goodlatte (R-Va.) told the Washington Post.”
Working from home for the USPTO is something which Levy’s wife has been doing. It’s a shame that he did not disclose that in his letter of response to this piece from August 31st (“Patent office workers bilked the government of millions by playing hooky, watchdog finds”).
Slamming the watchdog isn’t easy (shooting the messenger which is independent) and if nefarious tactics are used to belittle the problem itself, what does that tell us about the accused (collectively) or their spouses? █
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“Look! Dead dolphins!” (how the patent microcosm tries to frame the demise of bad patents)
Summary: With the Patent Trial and Appeal Board (PTAB, part of AIA), the International Trade Commission (ITC), the Court of Appeals for the Federal Circuit (CAFC) and even the Supreme Court (SCOTUS) showing disdain for software patents time is running out for patent examiners and lower courts that still pretend such patents sometimes have merit
THE USPTO‘s examiners now face the challenge of PTAB. It’s professionally embarrassing to be proven to have granted patents in error, so the examiners cannot simply ignore Alice, not any longer. “On USPTO Oversight,” Patently-O wrote yesterday: “I am generally in favor of additional Congressional oversight of the U.S. Patent & Trademark Office – this is especially true because members of the House and Senate Judiciary Committees tend to be smart, well informed, and act with intention to improve the patent system.* Although partisan politics do come into play, much of the focus tends to be on real issues and real solutions. The oversight process forces additional USPTO transparency and is the standard mechanism for getting information from Executive Agencies. On this point, I will note that the information exchange is often done in the background lead-up to the actual hearing — thus, although a hearing might not be too exciting or informative, the associated deadlines force the new communications.”
We are overwhelmingly in favour of having oversight affecting examiners at every patent office, as otherwise the profit motive takes over and quality control is virtually abolished (until the late and expensive stage which is a lawsuit in the court/s). Management of every patent office too needs to be subjected to scrutiny. The USPTO’s former Director, for example, has become somewhat of a lobbying giant, disgracing not only the Office but the entire system (he is now lobbying on behalf of large corporations in favour of software patents and against Alice, i.e. against a Supreme Court‘s ruling).
“Management of every patent office too needs to be subjected to scrutiny.”According to Mr. Loney from New York, “143 PTAB petitions [were] filed in August, down from 157 in July and 2016 high of 176 in June. Monthly average for year now 140.8 petitions.” Here is his full analysis (partly behind paywall), showing that PTAB activity has been increasing over the years, throwing out a lot of software patents (which courts would throw out anyway). As time goes on it ought to become apparent also to holders of such patents (not just their rivals) that these patents are worthless piles of paper and not even PTAB will be needed to prove it, let alone the courts. “The number of Patent Trial and Appeal Board petitions filed in August was slightly above 2016 average,” Loney wrote. “The month also saw notable Federal Circuit decisions on common sense, motions to amend and claim construction [...] The 143 Patent Trial and Appeal Board petitions (PTAB) filed in August was down from 157 in July and the 2016 high of 176 in June. The monthly average for the year is now 140.8 petitions.”
Up-to-date statistics regarding software patent invalidations in the courts of the United States (mostly lower ones, i.e. friendlier to plaintiffs than CAFC) got published last night. “June, July and August showed an uptick in the number Section 101 decisions from April and May, the majority of these being motions to dismiss and judgments on the pleadings,” the expert notes (he has been tracking this closely for years). “The rates of invalidity holdings continue to be steady: 70% overall, and 66.3% in the district courts. Success on motions on the pleadings is up to 68.1%. We’ve recently started tracking ITC proceedings as well, as shown above in the last row. Three of the five holdings of invalidity recorded above involved direct competitors and counterparties, Fitbit and Jawbone. In March 2016, Fitbit invalidated Jawbone’s fitness tracking patents in an ITC proceeding brought by Jawbone (ITC 337-TA-963). In July, Jawbone returned the favor and successfully invalidated Fitbit’s patents (ITC 337-TA-973); the ITC judge in the latter decision even relied upon Fitbit’s arguments that it made in its own motion against Jawbone.”
“That seems like wonderful news, but sites of patent law firms portray that as terrible news (to them it is).”We previously covered these rulings from the ITC, which certainly seems to be software patents-hostile. According to this new article, “above 90 percent” of patents on payment technologies (such patents are a subset of software patents) are dead/dying. Thanks to Alice! “Since Alice,” says the article, “the reject rate for patents for payment technologies is above 90 percent. This is a development that many contend has been crippling the innovation in this space. However, one company CardinalCommerce has secured one, and according to many lawyers, if someone can manage to get an e-commerce patent in this environment, it is worth a lot.”
That seems like wonderful news, but sites of patent law firms portray that as terrible news (to them it is).
Here is a new paid-for article, published in MIP by the patent industry last night. Having seen MIP becoming somewhat of a Battistelli/EPO platform, we worry they’re going to do more of those “Sponsored posts” (at least this time there’s disclosure). This one particular article speaks of telematics patents post-Alice and says “the patentability of such inventions could be impacted by the Supreme Court’s 2014 decision in Alice Corp Pty v CLS Bank Int’l, because inventions that arguably can be performed by humans are not patent-eligible subject matter under 35 USC § 101 (134 S Ct 2347, 2354-55 (2014)).”
Well, so be it. These patents should never have been granted in the first place. If patents (applications) never get granted, then they cannot be used for litigation or even for shakedowns, where the accused fears having to go to court not because of the outcome but because of the legal fees, obviously prohibitive unless one works for a large company. █
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Those who play with fire (software patents) die in a fire
Summary: Raniere needs to pay $1.1 million (legal fees of the defendants) in a patent lawsuit which he himself initiated, only to find that his software patents are a worthless pile of papers
EARLIER this year we noted that Jericho Systems threatened a resurgence of software patents at a time of sunset for them (they’re dropping like flies these days). “Jericho could be the next Alice,” Benjamin Henrion noted, pointing at “No. 15-1502 (Eligibility of Patent No. 8,560,836 under Section 101 – Abstract Idea)” though we very much doubt it will ever reach SCOTUS as Jericho Systems might hope. In fact, this latest SCOTUS roundup from Patently-O (published earlier today) suggests there will be no more tests regarding software patents. “Three eligibility cases are pending before the Supreme Court,” says the site. “Of these, the most interesting is likely Genetic Tech v. Merial.” As we noted yesterday, there is also one case regarding the eligibility of design patents. Still, nothing that can refute/annul Alice or even the Bilski case. What does it all mean? Well, expect a lot more software patents, once properly challenged, to die in a fire.
Another death has just been reported for several software patents, demonstrating that holders of such patents oughtn’t bother with software patents (neither application nor litigation). It’s not just a waste of money but it can cause tremendous financial damage to oneself, as this latest story illustrates. Raniere basically sued two large companies and now he needs to pay them a fortune (over a million bucks for an individual, putting aside his own legal bills). In other words, rather than them being the victims it is him who is the victim of his own reckless actions. It’s him who will pay the price for suing with software patents that are not even patent-eligible. This story has been covered by WIPR (behind a time-sensitive paywall). Yesterday it said that “Microsoft and telecoms company AT&T have been granted more than $1.1 million in attorneys’ fees after succeeding in a patent suit against an inventor. Keith Raniere had claimed that the companies had infringed his software patents in February last year. The patents concerned were US numbers 6,373,936; 6,819,752; 7,215,752; 7,391,856; and 7,844,041. The order was filed at the US District Court for the Northern District of Texas, Dallas Division, on September 2.”
This case shows that holders of software patents can be (self-)bankrupted if they choose to sue using software patents post-Alice. Also behind paywalls today we found this report from Law 360. It says that “A Texas judge Friday granted Microsoft Corp. and AT&T Inc. attorneys’ fees after the companies defeated an inventor’s suit claiming infringement of his software patents, saying the man’s litigation conduct “demonstrates a pattern of obfuscation and bad faith.”
“Keith Raniere filed suit against AT&T and Microsoft in February 2015, asserting the technology giants infringed upon five patents that he owned for technology covering network conferencing systems. (Credit: AP) In her 13-page ruling, U.S. District Judge Barbara M.G. Lynn determined the cases filed by plaintiff Keith Raniere…”
This happened in Texas, so it is a major warning sign to a lot of patent trolls. “Hopefully many more judgements like this to come,” an activist against software patents told me yesterday. Another person, one who is making excuses for the rocket docket of patent trolls (Texas), said “it depends on who owns the #swpats – if owned by corporate entity better chance they will survive & flourish – #patentdeform” (always brandishing the hashtag “#patentdeform” as if cracking down on patent troll is a horrible things).
So, as expected, a major win for opponents of software patents and more excuses from their proponents, like Daniel Henry in this case (his Twitter activity suggests he’s likely part of the patent litigation industry).
Not many sites have written about this case (at least not yet*) and software patent propagandists like IAM are just shedding tears for parasites that elevate the price of phones without actually making any (patent assertion firms). Well, next week they’re running a Webinar titled “Readying a Patent Portfolio for Sale: What You Need to Know to Be Successful” (often sold to trolls or patent assertion firms) and yesterday they noted that the “Beijing-based patent buying fund Ruichuan – the closest thing that China looked to have to an SPF – has recently gone private, after Zhigu, the firm that managed it, was absorbed into the IP department at consumer tech company Xiaomi.” SPF is a Sovereign Patent Fund and it typically achieves little more than enrichment of parasitic elements like patent lawyers — the same sort of people who bemoan the demise of software patents. █
* They typically keep intentionally quiet when there’s bad news for them, instead cheering and shouting for weeks if not months when there’s good news for them (like Enfish). That’s the propaganda pattern of deception by omission or selective coverage.
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Turning a blind eye to the highest court in the United States is unwise
Blind leading the blind
Summary: An update regarding the sordid state of patents on software in the US, where one has to rely on examiners and/or judges ignoring the US Supreme Court in order to have these granted/upheld
Software patents have always been the primary topic here. Longtime readers can attest to that. Thankfully, after Alice (2014), no imminent resurgence of software patents is expected, at least not in the near future. Several months ago when it was predicted that the SCOTUS (US Supreme Court) would deal with low-quality design patents of Apple we noted that no SCOTUS case was bound to reconsider the patentability of software. There wasn’t even another Bilski in the pipeline.
“Thankfully, after Alice (2014), no imminent resurgence of software patents is expected, at least not in the near future.”According to this new SCOTUS preview from Patently-O, only design patents would be questioned. Nothing would change when it comes to software patents, at least not at SCOTUS. To quote Patently-O: “When the Supreme Court’s October 2016 Term begins in a few weeks, its first patent hearing will be the design patent damages case of Samsung v. Apple. In Samsung, the Court asks: Where a design patent is applied to only a component of a product, should an award of infringer’s profits be limited to those profits attributable to the component? The statute at issue – 35 U.S.C. § 289 – indicates that, someone who (without license) “applies” the patented design (or colorable imitation thereof) to an article of manufacture, “shall be liable to the owner to the extent of his total profit.” Up to now, courts have repeatedly held that the “profits” are profits associated with the product (i.e., the article of manufacture) being sold, but Samsung is asking that the profits be limited only to components of the product closely associated with the patented design. Although Apple’s position is supported by both the text and history and is the approach easiest to calculate, I expect that many on the Court will be drawn to the potential unjust outcomes of that approach. Apple wins in a 4-4 split. Oral arguments are set for October 11, 2016.”
We previously explained why design patents are similar if not overlapping software patents (the user interface angle in particular). We therefore hope that Apple will lose this case — a case which we wrote about nearly half a dozen times so far this year.
“When it comes to software patents, empirical evidence typically shows that their existence harms innovation and causes more harm than good.”“Professors Feldman and Lemley are well-known for their skepticism about the current form of the patent system,” wrote Neil Wilkof yesterday in IP Kat. It’s not a bad post and here is what it says about the seminal/cited paper: “The authors make a basic distinction between ex ante and ex post with respect to technology transfer and licensing. A significant amount of meaningful technology transfer is “ex ante”, namely it takes place before the patent issues, and sometimes even before it is filed. To the contrary, licensing demands and litigation leading to payment for freedom to operate, occurs “ex post”, after the patent is issued, sometimes long after grant. Even in the life sciences field, where one might expect more evidence that technology transfer would be taking place, the authors found that the “modal license” was primarily for payment for freedom to operate rather than technological transfer of the underlying technology.”
When it comes to software patents, empirical evidence typically shows that their existence harms innovation and causes more harm than good. “Despite Alice,” Benjamin Henrion wrote yesterday, “specialized patents courts keeps issuing software patents in the US” (known issue), but as long as the Supreme Court repudiates such nonsense we’re probably OK in the long run. Upon appeals, e.g. to CAFC (a bit pricey), software patents almost always die. Lower courts need to heed the warning and stop ignoring policies imposed (or handed down) from above.
“Suffice to say, “open source software” as the above names it (Free/libre software) is not compatible with software patents.”Dropbox, according to this page, has “4 new DROPBOX patent applications,” to quote Fresh Patents. They are pursuing software patents (the titles suggest so) on all sorts of basic Web operations. Will USPTO examiners be negligent enough to grant in spite of prior art and Alice? We shall see. One sure thing is, the courts (the higher, the better) won’t tolerate these.
We recently wrote about Blockstream making a patent pledge despite having no patents. This new report suggests that Blockchain technology faces patent-related problems. To quote IP Watch: “Blockchains, such as the well-known bitcoin, are not yet well-defined but are creating a lot of hype, speakers at a 23 August Intellectual Property Owners’ Association webinar said. Two things are clear so far, they said: the technology is in its infancy, and there are lots of unresolved questions about what is patentable and how IP laws intersect with the mostly open source software used in the systems.”
“If the Supreme Court was to be respected rather than ignored for convenience (or maximisation of profit), there would no longer be trials over software patents, let alone new grants of software patents.”Suffice to say, “open source software” as the above names it (Free/libre software) is not compatible with software patents. Neither are APIs (lesser form of “open source”), yet according to this new patent survey, there are more than 23,414 API patents. To quote D-Zone: “After looking through the 23,414 API related patents from between 2005 and present day from 4,283 companies, it is clear that the API patent game will be all about which companies decide to litigate using their “intellectual property.” There is definitely a lot of education that could occur across all industries where these patents will be put to work, and hopefully we can see some reforms at the USPTO regarding how important it is to the economy that the APIs themselves to remain open and reusable, but I think that ultimately the world of API patents will be hammered out in courts across the United States, and other countries around the world.”
Oracle now claims copyrights on APIs, in a case which involves a mixture of software patents and copyrights inherited from Sun upon acquisition. We hope that readers are able to see just how profound an impact all these efforts to apply ‘IP’ to code can have. When can developers go back to coding in peace? Well, hopefully when all courts and patent examiners pay attention to Alice and apply the corresponding test. If the Supreme Court was to be respected rather than ignored for convenience (or maximisation of profit), there would no longer be trials over software patents, let alone new grants of software patents. █
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