Background reading: “I’m going to destroy Android, because it’s a stolen product. I’m willing to go thermonuclear war on this.” –Steve Jobs
“The term “just war” contains an internal contradiction. War is inherently unjust, and the great challenge of our time is how to deal with evil, tyranny, and oppression without killing huge numbers of people.”
–Howard Zinn, Terrorism and War (2002)
Summary: Putting in perspective the latest high-profile (in the press at least) lawsuits filed by a notorious troll, which this time around chose as its targets two patent aggressors that deserve no sympathy because of their own actions
WE occasionally hear about Apple patents at the EPO but cannot say much due to source protection needs. At the USPTO, by contrast, Apple patents have already attracted much criticism, and courts are invalidating some of these (sometimes it happens in Europe as well). The point of the matter is, Apple likes to collect a lot of patents and later it uses these to go after Android OEMs (actual lawsuits), having started with sabre-rattling against Palm prior to that.
Writing in his blog last week, Florian Müller said that the US Supreme Court may soon proceed to challenging yet another Apple case against the largest Android OEM (at least at the time the case was initiated). To quote:
Timing is often an interesting indication of a party’s priorities. Over these past seven years of Apple v. Android lawsuits (it all started with HTC in March 2010), Android companies–HTC more than anyone else–have often shown the behavior of stallers, at least when they were (as Samsung is here) on the defending end of a litigation (obviously not when they were asserting standard-essential patents themselves). Even parties that don’t intend to stall in the slightest (such as Oracle when enforcing its copyrights against Google) typically wait until the end of a filing deadline. It provides them with an opportunity to wait for further relevant developments (case law, public statements by key persons and entities, etc.). So I really am surprised here. Further remedies-related proceedings in that case are ongoing in district court, and a case management conference has just been postponed to next month. With a view to that conference, the Supreme Court is unlikely to make any decision either way in the meantime.
We certainly hope that Apple will decide to compete based on technical merits rather than patents and lawyers. We are not too optimistic about it, as this is essentially a sworn sort of legacy of Steve Jobs and it’s the only thing Apple has left because its market share is diminishing every year (ignore Apple’s “alternative facts” to that effect, focusing only in particular demographies).
“We certainly hope that Apple will decide to compete based on technical merits rather than patents and lawyers.”Apple-aligned Web sites, in the mean time, have the audacity to complain about patent aggression because the patent troll known as "Soverain" (we wrote about it quite frequently in the distant past) is back with vengeance and it is suing Apple. This patent troll isn’t as dead as some Apple fans thoughts/hoped, which is why they’re all complaining [1, 2, 3] in their ‘news’ sites (more like Apple advocacy sites). One of them said that “Soverain Software, a non-practicing entity that gained media attention for suing Newegg and other online retailers over “shopping cart” patents, on Thursday filed a complaint against Apple for alleged infringement of IP relating to internet-based services.”
Curious is the fact that Microsoft too is being sued by this patent troll, and moreover it uses a Microsoft case (Enfish v Microsoft) to justify its case, based on this coverage from IAM. To quote the relevant bits:
With the Supreme Court’s decision not to grant cert to Soverain’s appeal in early 2014, that appeared to be that for the company and its assertion campaign. Except this week Soverain’s patents were back in court as a new, Texas-based entity called Soverain IP filed suit against Microsoft and Apple, alleging that the Windows giant infringes on six patents while the iPhone creator infringes on four.
One of the patents — no. 5,708,780 — which was granted in 1998, has been litigated before and appears to be one of the online shopping-related grants that led to Soverain securing a $40 million settlement from Amazon in 2005. Notably, in its court filings this week, Soverain cites Enfish v Microsoft, one of several 2016 Federal Circuit decisions which are seen as providing key guidelines over the patentability of software, to back up its claim that the patent does not cover an abstract idea and is therefore valid.
We’re now faced with a hard choice; who to support, so to speak? The ugly patent troll or the two patent aggressors which have been attacking GNU/Linux using patents? Well, as the informal proverb/saying goes, in some wars both sides are evil. The only sure thing is, lawyers will profit from this. They always do, irrespective of who ‘wins’; to them, every lawsuit is a ‘win’ and they lobby their government accordingly.
“The only sure thing is, lawyers will profit from this.”Speaking of patent trolls such as the above, there is an ongoing EFF campaign against universities hoarding and then selling patents, i.e. taxpayers wasting money on patents that are handed to trolls who then attack these same taxpayers. Here is the EFF’s latest update on this:
Last year, EFF, along with our partner organizations, launched Reclaim Invention, a campaign to encourage universities across the country to commit to adopting patent policies that advance the public good. Reclaim Invention asks universities to focus on by bringing their inventions to the public, rather than selling or licensing them to patent assertion entities whose sole business model is threatening other innovators with patent lawsuits.
Now, thanks to Maryland State Delegate Jeff Waldstreicher, the project is taking a step forward. In February, Delegate Waldstreicher introduced H.B. 1357, a bill modeled on Reclaim Invention’s draft legislation, the Reclaim Invention Act.
The above has already attracted some high-profile support that we have come across in sites like Twitter.
This is (almost) the first time we hear about the “Reclaim Invention Act”, except when the EFF mentioned it at the end of last year. Other such “Acts” have not been heard from in a while (in effect they got abandoned); The Leahy-Smith America Invents Act did a lot of good; the above would too (if it ever materialises). █
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How long and how much more will it take for the Supreme Court to realise there is a profound issue in Texas?
Summary: The lack of justice in the American patent system, where trolls receive favourable treatment from particular judges and one bogus patent (now invalid) can earn a person over $45 million in ‘protection’ money, necessitates firm and decisive intervention from the US Supreme Court
Federal Circuit Once Again Overrules Mistakes by the Kangaroo Patent Court of Rodney Gilstrap in the Eastern District of Texas
Kangaroo courts are not monopolised by the EPO and the USPTO hasn’t a monopoly on bad patents, either (thankfully, the USPTO is actually improving and lowering the incentive for trolls). The US Supreme Court, together with CAFC below it, already do a fine job, further aided by PTAB (the appeals board) for quicker and cheaper determinations against bad patents.
When Apple celebrates the death of bad patents we too are happy, even if we are far from friends of Apple (we used to call for boycotts). Apple has just defeated Smartflash and there are a lot of articles about this, especially or initially in pro-Apple sites. Headlines include “Apple has $533m verdict against iTunes software patents thrown”, “Apple won’t have to pay $533 million to an iTunes patent troll”, “U.S. appeals court tosses patent verdict against Apple”, and “Apple tastes victory against Smartflash at Federal Circuit”.
“When Apple celebrates the death of bad patents we too are happy, even if we are far from friends of Apple (we used to call for boycotts).”“This ruling isn’t surprising,” one of the above articles states, “as US District Judge Rodney Gilstrap ordered a damages retrial, saying the jury’s view of Apple’s infringement might have been confused by his instructions on how properly to calculate royalties.”
But the pro-trolls Judge Rodney Gilstrap did not in fact dispute a liability. To him, it was just a matter of how much money would be paid. First to cover the news, as far as we were able to see, was Michael Loney of MIP. He wrote about it as early as yesterday, noting that CAFC had found yet another ruling from the notorious Eastern District of Texas to be bunk. “The Federal Circuit has found invalid three Smartflash patents,” he wrote, “reversing the Eastern District of Texas.”
Eolas Driven Out of the Eastern District of Texas
There is another important development down in Texas and Joe Mullin probably wrote the best report about it (Mullin is quite the expert in this domain). To quote Mullin:
Eolas Technologies, which has been called a “patent troll,” has continued to file against big companies, even after losing a landmark 2012 trial. But following an appeals court order (PDF) last week, Eolas will have to pursue its lawsuits in California—not its preferred patent hotspot of East Texas.
As of Friday, Eolas’ lawsuits against Google has been transferred to the Northern District of California. The move could reduce Eolas’ chances of winning a settlement or verdict since East Texas courts have been viewed by some as favoring patent holders. Similar lawsuits against Amazon and Wal-Mart remain in East Texas, for now.
Michael Loney wrote about it too, noting that CAFC is potentially moving trolls out of that notorious Eastern District of Texas (even before the Supreme Court rules on TC Heartland LLC v Kraft Foods Group Brands LLC). To quote:
Google’s request for a writ of mandamus to transfer a case brought by Eolas Technologies to the Northern District of California from the Eastern District of Texas has been granted, with the Federal Circuit citing “a clear abuse of discretion”
Eolas was mentioned here as far back as one decade ago and many more times since. It’s definitely a patent troll, but Mullin put the word “troll” (in the headline) and “patent troll” (in the body) within scare quotes, perhaps fearing legal action against the publisher (his employer).
Software patents, as in the above case, are bunk, but it’s very expensive (usually too expensive) going to court to show it (especially if there are appeals). This means that most defendants will silently fold and pay the Mafia (or troll) ‘protection’ money. Insistent and persistent aggressors or trolls, some of whom are well-funded, will just file more and more motions until the defendant — even if repeatedly deemed innocent — decides that it’s simply cheaper to settle. It means that wealth trumps justice and it can be exploited time after time, by simply choosing vulnerable litigation targets which are almost certainly going to buckle.
“Software patents, as in the above case, are bunk, but it’s very expensive (usually too expensive) going to court to show it (especially if there are appeals).”Speaking of software patents, this tweet says that “Salesforce tries to patent Records Management……quick take” (in an image).
Erich Spangenberg Turns Out to be a Patent ‘Fraud’
In the above cases we see deep-pocketed companies like Google and Apple fighting back, again and again, simply because they can afford it. So can smaller (but still very large companies) such as Newegg, which already spent millions of dollars on very few patent cases — and that’s just in legal fees!
According to Mullin’s other new report, mega-troll Erich Spangenberg went after Newegg and finally (belatedly) lost. That’s another software patent dead and we can expect more to come; it’s expensive to prove the invalidity. The USPTO should clean up this (its own) mess. PTAB helps towards that. Mullin wrote:
Patent-holding company TQP Development made millions claiming that it owned a breakthrough in Web encryption, even though most encryption experts had never heard of the company until it started a massive campaign of lawsuits. Yesterday, the company’s litigation campaign was brought to an end when a panel of appeals judges refused (PDF) to give TQP a second chance to collect on a jury verdict against Newegg.
The TQP patent was invented by Michael Jones, whose company Telequip briefly sold a kind of encrypted modem. The company sold about 30 models before the modem business went bust. Famed patent enforcer Erich Spangenberg bought the TQP patent in 2008 and began filing lawsuits, saying that the Jones patent actually entitled him to royalties on a basic form of SSL Internet encryption. Spangenberg and Jones ultimately made more than $45 million from the patent.
Will Spangenberg now refund the extortion money (more than $45 million), plus legal expenses? Or will this be another case of an invalid patent costing a fortune to countless companies, even though they were innocent all along because this patent was bogus?
We certainly hope that the Supreme Court is watching all these cases and will take them into account later this year when TC Heartland can become the new “patent killer” (precedent). █
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GNU/Linux-powered devices are habitually being targeted by artsy design patents, but might this end soon?
Summary: A company which often takes pride in designers rather than developers (art, not technical merit) may lose that leverage over the competition if its questionable patents are taken away by the Supremes
THE SCOTUS, in its current composition at least (many nominations and appointments by Democrats — a trend that is now changing), has handed down some important decisions on patents over the past half a decade and most of them were favourable to patent reformers. Reformist scope-oriented measures such as restriction if not elimination of software patents are just the tip of the iceberg; a few months ago we wrote about the Lexmark case.
“This time around it’s about the second California Apple v. Samsung case (the one that went to trial in 2014, resulting in a $119 million verdict).”
–Florian MüllerFlorian Müller scooped an important story the other day. “I tried to find media reports on Samsung’s new Apple v. Samsung Supreme Court petition,” he wrote, “and couldn’t find any, so maybe I scooped’em all” with the blog post “Samsung is now taking the second Apple v. Samsung patent case to the Supreme Court”. To quote: “The first Apple v. Samsung case went all the way up to the Supreme Court and has meanwhile gone all the way back to the Northern District of California to take a new look at the question of design patent damages. But the steps to the Supreme Court are like a revolving door for this huge commercial dispute: a new petition for writ of certiorari (request for Supreme Court review) is already in the making! This time around it’s about the second California Apple v. Samsung case (the one that went to trial in 2014, resulting in a $119 million verdict).”
Someone disputed the number, saying that “it’ll actually be the third. They had another petition denied on a very technical issue.”
Müller insisted, however, that “by “second case” I meant the second case filed by Apple against Samsung in U.S. district court…”
“If this is all that Apple has left in its future plans (suing competitors), then it doesn’t look particularly bright; nor does it look innovative…”Techrights had been sceptical of Apple for a long time, even before Apple began attacking Android with patents (there was sabre-rattling even before that, e.g. against Palm). Apple and its nonsensical patents never end. Our sources at the EPO indicate that it’s not different in Europe, but we cannot publicly share any further details on that (in order to protect sources). Watch this article from CNN, published just 6 days ago. “Apple often patents interesting hardware or futuristic iPhone designs that may never see the light of day,” it says. “But in its latest patent granted on Tuesday, Apple (AAPL, Tech30) describes something a little less innovative, and already wildly popular.”
They’re ignoring prior art and also neglecting the fact that software patents are a dying breed. If this is all that Apple has left in its future plans (suing competitors), then it doesn’t look particularly bright; nor does it look innovative…
We look forward to that (potentially second) SCOTUS case which might, due to Apple, spell doom for design patents, which are often similar to software patents (in the GUI sense).
Life Technologies Corp. v Promega Corp.
“We look forward to that (potentially second) SCOTUS case which might, due to Apple, spell doom for design patents, which are often similar to software patents (in the GUI sense).”SCOTUS rulings on patents actually made a lot of headlines this past week, but this did not involve software patents or anything like that. Mayer Brown LLP, for example, wrote about Life Technologies Corp. v Promega Corp. (at SCOTUS) in lawyers’ media. “In an effort to curb efforts to circumvent patent protection,” they said, “the Patent Act imposes liability for infringement on anyone who supplies “all or a substantial portion” of a patented invention’s components from the United States for combination overseas. 35 U.S.C. s 271(f)(1). The Federal Circuit had held that a single component—in this case, of a five-component test kit—could be sufficiently important to a patented invention to constitute “a substantial portion.””
“The Supreme Court has reversed the Federal Circuit in Life Tech v Promega, ruling that manufacture and exportation of a single component of a patented invention assembled in another country is not enough for infringement in the US. However, as a concurring opinion and observers note, the Supreme Court did not indicate how much more than one is enough,” MIP wrote.
“IAM is basically ranting about this ruling because SCOTUS didn’t rule for patent maximalists.”IAM, the lobby of the patent maximalists (disguised as press whilst lobbying/preaching), wrote: “Yet again #SCOTUS left #patent community in the dark on a key part of its latest ruling” (misinformation).
Well, by “patent community” they mean something like “hedge funds of the patent world”, not a community per se. And nobody is really left “in the the dark”; it’s just a dark day for patent maximalists.
IAM is basically ranting about this ruling because SCOTUS didn’t rule for patent maximalists. To quote their blog post about it:
Seven US Supreme Court justices issued their latest patent ruling yesterday in a case that may not have been awaited with the same level of expectancy as next month’s oral arguments in the venue selection case TC Heartland, but which nonetheless showed them sticking to form. As ever with this court it was a case of what wasn’t said as much as what was outlined in the decision.
The case in question, Life Technologies Corp v Promega Corp, involved the supply of a single infringing component manufactured in the US by Life Technologies but then shipped to the UK for assembly. Promega sued citing the Patent Act’s prohibition of the supply from the US of “all or a substantial portion of the components of a patent invention” for combination abroad.
As for Patently-O, it said about Life Technologies Corp. v Promega Corp. that “[i]n a largely-unanimous opinion, the Supreme Court has ruled that the “supply of a single component of a multicomponent invention for manufacture abroad does not give rise to §271(f)(1) liability.””
“Patent maximalism is good for nobody except those who make a living from nothing other than patents (no actual invention, production and so on).”“Writing for the court,” Patently-O added, “Justice Sotomayor found that the “substantial portion” should be seen as a quantitative requirement and that a single component is not sufficient.”
The very fact that sites like IAM are upset about it should say quite clearly that it’s a good and positive development. Patent maximalism is good for nobody except those who make a living from nothing other than patents (no actual invention, production and so on). █
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Apple has still not managed to convert its patents into a cash cow and a barrier to Android takeover
Summary: Apple and Samsung are still losing money in court (lawyers are paid ad infinitum) and the only firm that gets away with a lot of money is Qualcomm, Microsoft’s patent trolling notwithstanding
PATENTS in the area of mobile technology have become a hefty tax that raises the price of phones to incredible levels. Some of these patents — but not all — are software patents and many are standard-essential (SEPs), so they cannot be worked around. We recently wrote about this in the context of Qualcomm. “Apple may have paid Qualcomm approx. $40 per iPhone,” Florian Müller wrote the other day, and it “accounted for third of Qualcomm’s revenues…”
“If you consider some of it speculative, that’s fine, but someone has to do the job of trying to infer and deduce information even in the early stages of a dispute.”
–Florian MüllerThis became a blog post of his (after he had ranted on the subject)), in which he stated: “At the end of my previous post on Qualcomm’s business model I wrote I would follow up with an analysis of the economic magnitude of the various antitrust investigations and civil complaints concerning Qualcomm’s two mutually-reinforcing business areas, baseband processor chipsets and wireless standard-essential patent licensing. While it will probably take a while before a publicly-accessible court filing by either Qualcomm or Apple makes reference to a particular damages claim or royalty rate, some information is already available and I’ll take the liberty of connecting some dots. If you consider some of it speculative, that’s fine, but someone has to do the job of trying to infer and deduce information even in the early stages of a dispute.”
A separate post of his deals with Apple’s case against Samsung getting “back to where things started” — an issue that Professor Dennis Crouch too has covered as follows:
In a non-precedential decision, the Federal Circuit has remanded this design patent damages dispute back to the district court reconsideration. The basic question is whether the patented “article of manufacture” (which serves as the basis for profit disgorgment) should be the entire article sold to consumers or some component of that whole. A patentee would obviously prefer the whole-article basis because it would result in a greater total-profit award. In Samsung Elecs. Co. v. Apple Inc., 137 S. Ct. 429 (2016), the Supreme Court held that the statute is broad enough to encompass either the entire-article or simply a component. However, the Court refused to provide any guidance as to how to determine the appropriate basis in any particular case (including this case involving Apple’s iPhone design patents).
There have been some reports about this in the press. It shows that half a decade later Apple is still not making much progress in its patent war against Android (only the lawyers are winning). Apple is now relying on fake news to keep up appearances and give an illusion of growth. █
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Qualcomm still one of the worst companies and most lethal patent aggressors out there…
Summary: OEMs that actually manufacture/sell phones rather than slap a patent fine on them need to (re)group around Apple and help ensure that the patent thicket is removed (or made a lot thinner)
“No One Should Listen to Qualcomm About Patents,” Matt Levy wrote yesterday, having pushed for patent reform for a number of years, striving to improve patent quality at the USPTO and put an end to patent trolling (which would be an outcome of the former, as there’s a direct correlation). To quote Levy:
Why No One Should Listen to Qualcomm About Patents
Qualcomm is a major opponent, perhaps the strongest opponent, of patent litigation reform. It’s becoming pretty obvious why. A few weeks ago, the Korean Fair Trade Commission went after Qualcomm for its anti-competitive licensing practices. This time, it’s the U.S. Federal Trade Commission going after Qualcomm for its licensing practices.
With the FTC complaint, we find a little bit more about Qualcomm’s practices. For example, we learn why requiring companies to take a separate patent license in order to purchase chips is abusive. Normally, the purchase of the chips would be enough without a license, because, under the first sale and patent exhaustion doctrines, a seller automatically gives a license to the purchaser for any of the seller’s relevant patents.
Qualcomm, however, forces its customers to take a separate patent license that entitles Qualcomm to a percentage of the price of the entire device that uses its chips. That is, a smartphone manufacturer has to pay Qualcomm a percentage of the price of the entire phone for each phone sold, in addition to paying for the chips. That’s essentially extortion.
On the other side of the debate we have trolls- and aggressors-friendly sites like IAM, which is actually funded by them. Watch this:
Barnett’s work is particularly timely given the spate of lawsuits that have recently been brought against Qualcomm by, among others, the Federal Trade Commission (FTC) and Apple, over the chipmaker’s FRAND licensing. Those cases frame the argument around a dominant patent owner and technology supplier abusing its position to block out competitors and extract licences from manufacturers.
Qualcomm will no doubt counter with a robust defence; but, as Barnett’s research shows, like many licensors the company is on the wrong side of a set of theories that continue to shape much of the licensing narrative in the US.
So even those whom we expect to be very sympathetic to Qualcomm appear to have lost hope. Florian Müller has meanwhile told me that “one day that U.S. Apple v. Qualcomm case will go to the appeals court and Android OEMs will file pro-Apple amicus briefs” (it’s one rare situation where Apple and Android have a common cause and we believe that, inadvertently, Apple helps Android OEMs too in this case).
“So it sounds as though Apple takes its fight against Qualcomm even further.”Going back to IAM (which seems to believe readers care patent applicants at SIPO, in spite of the appalling patent quality), here is a recent translation/interpretation of reports that are typically published in Mandarin alone. “According to media reports,” IAM says, “Apple lodged two separate complaints against Qualcomm with the Beijing IP Court. One alleges violations of China’s Antimonopoly Law, to the tune of 1 billion yuan ($145 million). The other is a challenge to the chipmaker’s licensing practices, which are described as “unfair and unreasonable”. The new move comes on the heels of a similar suit in the United States by Apple, that itself followed the FTC complaint covered in this blog last week. Qualcomm has dismissed Apple’s actions as a meritless effort to pay less for the technology it uses.”
So it sounds as though Apple takes its fight against Qualcomm even further. This would, once again, be beneficial to Android OEMs, and not just Chinese ones. Remember that some of these Qualcomm patents are software patents.
“Nokia, in spite of returning to Linux and Android, represents a threat to Android OEMs in the patent sense.”At the same time Apple continues fighting back against Nokia, which became very aggressive just before Christmas. See these new reports [1, 2, 3, 4] about the ITC investigating Nokia’s patent claims against Apple. The ITC is not unbiased (typically favours US companies, as one might expect), so we suspect it will favour Apple (US) over Nokia (Finland). Nokia, in spite of returning to Linux and Android, represents a threat to Android OEMs in the patent sense. The same is true for BlackBerry.
In other news about Apple, the “Federal Circuit Invalidates Ameranth’s Menu Software Patents as Unpatentable Abstract Ideas,” so there is growing hope that Qualcomm’s and Nokia’s software patents too will be thrown aside, leaving only patents on physical things. To quote the latest report:
The Federal Circuit’s recent decision in Apple, Inc. v. Ameranth, Inc. highlights the potential impact of characterization of recited features as conventional, routine, generic, or known in the field without further discussion of an innovation that goes beyond these features. Employing the two-step analytical framework of Mayo/Alice to evaluate subject matter eligibility under 35 U.S.C. § 101, the Federal Circuit affirmed in part and reversed in part Patent Trial and Appeal Board (“Board”) determinations in Covered Business Method (“CBM”) reviews regarding the patentability of U.S. Patent Nos. 6,384,850 (“’850 patent”), 6,871,325 (“’325 patent”), and 6,982,733 (“’733 patent”).
Remember that software patents die 70-80% of the time at the Federal Circuit (CAFC) and PTAB is widely supported/honoured by CAFC.
CAFC, however, will be the subject of our next post. █
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Summary: The US patent system is becoming ever more hostile towards patent trolls, owing in part to reforms introduced under Michelle Lee’s tenure, but people are still not certain that she will maintain her job and continue to fix the system
THE phones that are being made in east Asia are attracting many patent parasites and patent trolls, as we last noted yesterday. The same goes for tablets, wristbands, watches etc. albeit their overall worth (or market size) is relatively small. Qualcomm has been one among the top parasites in this area (harming both Android OEMs and Apple) and its behaviour is belatedly getting the attention of the FTC, not too long after it published a study about PAEs (a sort/type of patent trolls). The corporate media including Reuters is still writing about it:
Apple files $1 billion lawsuit against chip supplier Qualcomm
Apple Inc filed a $1 billion lawsuit against supplier Qualcomm Inc on Friday, days after the U.S. government filed a lawsuit that accused the chip maker of resorting to anticompetitive tactics to maintain a monopoly over a key semiconductor in mobile phones.
Qualcomm is a major supplier to both Apple and Samsung Electronics Co Ltd for “modem” chips that help phones connect to wireless networks. The two companies together accounted for 40 percent of Qualcomm’s $23.5 billion in revenue in its most recent fiscal year.
IAM’s slant on the news wants us to think that Trump is going to change it all, even though there are no indications of any imminent changes at the USPTO. The article starts as follows:
After an investigation lasting more than two years, the Federal Trade Commission filed a complaint against Qualcomm on Tuesday over what it alleges are the chipmaker’s anti-competitive practices in the supply of its baseband processors and the licensing of its patent portfolio. The lawsuit, which was filed in the Northern District of California, is the latest example of Qualcomm’s licensing practices being placed under the microscope by regulators around the world.
The FTC’s case is framed around three main points: first, that Qualcomm adopted a “no licence, no chips” policy, whereby it refused to sell its chips to those companies that declined to take a licence to its patent portfolio; second, that the tech giant refused to license its competitors; and, finally, that Qualcomm put in place a deal with Apple in which the iPhone maker was precluded from sourcing baseband processors from competitors from 2011 to 2016.
IAM then veers off into seemingly irrelevant spin involving Trump. According to this short update, confusion over the vocation of the USPTO remains. To quote Patently-O:
Folks are having fun today with Federal Government web page conversions.
We still do not have confirmation that Michelle Lee will stay-on as Under Secretary of Commerce for Intellectual Property and USPTO Director. The newly updated COMMERCE.GOV website shows the position vacant while other positions remain filled.
It should all be figured out by Monday.
Lee’s roots in east Asia and Trump’s rhetoric against China (unlike Taiwan, which he uses as a sort of provocative weapon where he also has business investment) is something which we mentioned before in relation to this. As mentioned by many people before, Trump’s appointments are predominantly white, male, straight, and old (sometimes also corrupt). Someone like Rader seems like he fits the bill.
It will be interesting to see what happens this coming week and we shall watch it closely.
There are meanwhile some developments in the patent world that are worth noting. In Taiwan, for example, according to this new article, invalidity of a patent can have a ripple effect. “In patent infringement civil lawsuits,” it says, “the accused party cannot only claim invalidity of the patent with the civil court, but can also initiate a cancellation action with the Taiwan Intellectual Property Office (TIPO) for the invalidation of the patent. Such a two-track mechanism may lead to a difference of opinion between the civil court and TIPO.”
A lot of US patents are being invalidated these days,
“Visually negligible” is another type of subject which is being explored. We covered it earlier this month.
Right now we are eager to see an unambiguous confirmation of Lee’s (re)appointment. █
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Image credit: Kudelski Group
Summary: The patent thicket which pervades everything that is used by billions of people, mobile technology in particular, can be traced back to a lot of non-practicing parasites (or patent trolls)
THE MOBILE market is one of the most trolls-infested markets these days. It has been like this for at least half a decade. There is a lot of money at stake and trolls are hoping to grab some of it without lifting a finger.
Never forget that Nokia was a top Linux contributor before Microsoft moved in for the kill and undermined everything Nokia was doing. Nowadays Nokia is acting more like a patent troll and the “Nokia” brand is just being licensed for some small — if not minuscule — level of income.
According to IAM, Nokia’s and Ericsson’s trolling affairs are now somewhat overlapping. To quote:
Huawei’s SEP licensing drive turns into clash of the telecom titans as Ericsson steps in with Nokia
Last week, NSN and T-Mobile – a US subsidiary of Deutsche Telekom – filed five petitions for inter partes review of multiple claims of four SEPs that Huawei asserted against the latter in East Texas in January 2016. The Chinese company claims that it filed these lawsuits after T-Mobile failed to respond satisfactorily to its requests to take a licence for telecoms equipment allegedly infringing on the patents, after first contacting it on the matter back in mid-2014.
In July last year, Huawei followed up its January infringement suits with another East Texas complaint against T-Mobile. This time, it requested that the court issue a declaratory judgment to the effect that it complied with its FRAND obligations in the licensing offers it had made to T-Mobile.
Another factor at play here is the global patent cross-licensing deal Ericsson signed with Huawei at around the same time that the Chinese company initiated its actions against T-Mobile.
Huawei is now the leading Android OEM and the leading OEM in the whole area in general. Samsung, in the mean time (the former leader), is cozying up to a deal with a troll. Only earlier today we wrote about the Kudelski Group, which is becoming a patent troll (it wasn’t historically) and is now being run by one, a thug from Intellectual Ventures. As IAM puts it (it’s portrayed as a partnership rather than a shake-down):
Led by senior vice president Joe Chernesky – a former Intellectual Ventures licensing executive – the Swiss company’s OpenTV subsidiary has engaged in an extensive patent licensing campaign, signing deals with the likes of AOL, Apple, Disney, Google, Netflix, Verizon and Yahoo over the past couple of years; while just this week, OpenTV filed another lawsuit in the Eastern District of Texas against NFL Enterprises, the commercial arm of American football’s National Football League, alleging patent infringement. In August last year, it signed a licensing agreement with RPX, in return for an upfront payment and a future transfer of patents from the defensive aggregator.
Kudelski has made a big name for itself in the patent and technology licensing space – and having a strong relationship with it could prove especially beneficial for Samsung, if and when it begins to mine more value from its own IP portfolio.
Notice the role of RPX in there.
Why are so many firms out there trying to make income out of patents rather than actual products? BlackBerry too has begun doing such stuff, resorting to litigation in Texas. Legislation alone can put a stop to it.
“Qualcomm is one of the worst patent troll[s],” Benjamin Henrion wrote about this news regarding Qualcomm:
Qualcomm’s Alleged “No License, No Chips” Policy Gets it into Trouble with the FTC
Qualcomm is the leader in baseband processors used for cellular communications in smartphones and other products, and one way the company has become a leader is by leveraging its patents, by either forcing customer to first “purchase a license to standard-essential patents, including elevated royalties that the customer must pay when using a competitor’s processor”, “refusing to license its cellular standard-essential patents to competitors”, or “entering exclusivity dealing arrangements” with companies such as Apple. At least that’s according to a complaint brought by the Federal Trade Commission (FTC) in the US that accuses Qualcomm of maintaining a monopoly and using unfair methods of competition, violating the company’s commitment to license on a FRAND (fair, reasonable and non-discriminatory) basis .
Here is the latest from Florian Müller about this subject:
FTC sues Qualcomm over antitrust violation; Apple may buy baseband chipsets from other suppliers
I’m not surprised that Qualcomm’s stock is tanking. This antitrust action is huge. Basically, what the FTC is saying is that Qualcomm is leveraging its monopolies (some in the form of patent rights and others due to the market position of its baseband processors) in ways that enable it to charge several times more for its standard-essential wireless patents than market prices and that its “no license-no chips” policy threatens to force the last remaining competitors, such as Intel, out of the market.
In other, lesser-covered news, Apple has been sued again for patent infringement. “The complaint filed by Seatoun Media,” says a site for lawyers, “centers around a patent entitled “Point to point voice message processor, method and recording/playback device,” this patent describes a “voice message processor” which can send messages between users of the POS system.”
It’s becoming increasingly hard to compete in the mobile market without a heap of patents. What it means is higher price (artificially inflated) of phones. █
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Summary: An overview of some very recent news regarding the highest court in the United States, which has been dealing with cases that can determine the fate of Free/Open Source software in an age of patent uncertainty and patent thickets surrounding mobility
SEVERAL days ago we became aware of “Apple’s motion for a permanent injunction against Samsung for infringing upon three software patents.”
This has been covered by quite a few Apple-leaning sites and mainstream news sites, e.g. [1, 2, 3, 4]. This article by Dennis Crouch of Patently-O said:
In a one-paragraph order, the Federal Circuit has vacated its prior design patent damages determination in Samsung v. Apple following the Supreme Court’s 2016 reversal. The appeal is reinstated, and new briefs will now be filed. (Federal Circuit Docket No. 14-1335).
Apple’s design patents cover various ornamental designs applied to the iPhone and infringing Samsung Galaxy devices. Samsung was found to infringe because it “sells … [an] article of manufacture to which such design … has been applied.” 35 U.S.C. 289. The statute calls for for the infringer to be “liable to the owner [of the patent] to the extent of his total profits.” In its original decision, the Federal Circuit held that “total profits” referred to Samsung’s total profits on its infringing phones – i.e., total profits associated with the article of manufacture to which the design has been applied.
The US Supreme Court was recently mentioned in relation to other cases. It will take on patents of reasonably large companies. “Today,” Patently-O wrote last week, “the Supreme Court granted certiorari in two dueling petitions involving the Federal Circuit’s 2015 interpretation of the Biologics Price Competition and Innovation Act of 2009.”
This was also covered by Natalie Rahhal in New York. She said that the “dispute between Amgen and Sandoz over aspects of the so-called patent dance outlined in the Biologics Price Competition and Innovation Act was granted cert by the US Supreme Court” (SCOTUS).
“If patents are supposed to be in the interest of the public, then why deny ill people access to treatment which they can afford?”Writing from New York, again in relation to a SCOTUS, “Natalie Rahhal analyses the arguments of the amicus briefs filed in Lee v Tam, ahead of oral arguments in the case involving disparaging trade marks at the US Supreme Court on January 18,” according to this from MIP. This is not about patents, but the oral argument is imminent (2 days from now).
Looking outside the US for high-profile cases, there is also this case of Fujifilm v AbbVie (UK), which several sites have covered this month [1, 2] because “[g]eneric companies can seek court declarations that their own products are old or obvious in patent law terms under certain circumstances, the England & Wales Court of Appeal has ruled,” to quote MIP.
In Canada, the Supreme Court might soon hear this case where AstraZeneca is attempting to block generics. To quote MIP again: “The court on November heard arguments in AstraZeneca Canada v Apotex. The case involves AstraZeneca Canada’s patent for Nexium (Esomeprazole), a pharmaceutical product used to treat gastroesophageal reflux disease. AstraZeneca attempted to block Apotex from bringing a generic drug to the market. The Federal Court found that the promised utility of Nexium had not been adequately proven at the time of filing. AstaZeneca appealed to the Supreme Court.”
“2017 promises to be rather interesting, especially because later this week Trump gets inaugurated and he can thereafter cause a lot of damage to patent reform.”Suffice to say, we support generic medicine. If patents are supposed to be in the interest of the public, then why deny ill people access to treatment which they can afford?
2017 promises to be rather interesting, especially because later this week Trump gets inaugurated and he can thereafter cause a lot of damage to patent reform. His policies and appointments tend to serve the richest people, not ill and poor people. █
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