When all else fails, throw patents at the competition (through trolls so as to avert counteraction)?
Image from BusinessKorea
Summary: With billions of dollars at stake (maybe over a trillion in the long run), the attempt to claw revenue using patents rather than actual sales has become complicated because of plurality of intermediaries, which Apple is trying to tackle with a new antitrust complaint
“In a major antitrust lawsuit Apple charged that Acacia is illegally breaking terms of patents acquired from Nokia,” according to The Street. This is pretty major news and definitely something that warrants a 2 AM article. Florian Müller has already produced a long blog post about it, accompanied by or coupled with the relevant documents.
“Readers can find details like a detailed history in our Wiki page about Acacia, including the hiring (by Acacia) of people from Microsoft and this troll’s repeated attacks on GNU/Linux.”As a reminder to our readers, Acacia is a Microsoft-connected troll. Readers can find details like a detailed history in our Wiki page about Acacia, including the hiring (by Acacia) of people from Microsoft and this troll’s repeated attacks on GNU/Linux.
“For a long time,” Müller wrote today, “I had hoped someone would finally do this. Last year I called out Nokia and others on their privateering ways, and it turned out that Nokia had industrialized the concept of privateering to a far greater extent than anyone else. My list of PAEs fed by Nokia contained all of the defendants in Apple’s antitrust suit–Acacia and Conversant (technically, Apple is also suing particular subsidiaries of those)–and more. That post prompted attempts by Ericsson and Nokia to explain away their privateering ways.”
Nokia‘s patents have also been passed to another anti-Linux/anti-Google troll called MOSAID (renamed “Conversant” since). These were, for a fact, passed at Microsoft’s instructions, as reported in the mainstream media at the time. There’s more on that in the Korean media. When it comes to patents, Nokia is still enslaved by or subservient to Microsoft.
“What does the future of dying mobile giants have in store then?”The full story isn’t just Apple hitting back at Nokia. “Breaking news,” Müller wrote later, “Nokia sues Apple in US and Europe over alleged patent infringement […] Venues: Eastern District of Texas, three German courts: Düsseldorf Mannheim Munich…”
Europe is a growing and increasingly attractive hub for patent parasites already, I’ve told Müller (who probably agreed). Germany and sometimes the UK (London) are favoured among those parasites (see Ericsson's troll choosing London for legal attacks — quite unprecedented a move for such an entity). “For the troll that Nokia is now,” Müller noted, “suing Apple in the ED of Texas is very appropriate. […] When Nokia was still making mobile devices, it had a predilection for the District of Delaware. Now: Eastern District of Texas. Times change…”
I told him that BlackBerry does the same thing now, having lost the market (to which Müller nodded with a retweet). We wrote about this earlier this week and earlier this year.
What does the future of dying mobile giants have in store then? Passage to trolls (the PAE type) that will tax everyone, everywhere? “Something big always seems to happen at Christmas in the patent market,” IAM wrote. “Remember the RPX Rockstar patents purchase a couple of years ago?”
Remember that IAM is partly funded by MOSAID/Conversant, i.e. part of the same ‘gang’. As for Rockstar, we wrote quite a few articles about it, e.g. [1, 2]. It’s like a front for Microsoft (Rockstar Consortium is a patent troll owned by Microsoft, Apple, BlackBerry, Ericsson, and Sony). As for RPX, it’s also a patent troll, with Microsoft having joined it 6 years ago.
“My list of PAEs fed by Nokia contained all of the defendants in Apple’s antitrust suit–Acacia and Conversant (technically, Apple is also suing particular subsidiaries of those)–and more.”
–Florian MüllerNina Milanov, an occasional EPO sceptic, told Müller, “I hope Apple sees it through. Every time you settle, to some extent the troll has won.”
“Last time Nokia sued Apple in Germany,” Müller responded, “it was extremely lucky. Key patents have expired. Will be more interesting this time around.”
If Apple gets to the bottom of all these satellite proxies that are patent trolls, it will be a good service not just to Apple but also to Android/Linux. iOS and Android command the market and all that the losers can do right now is attempt to tax those two. Even Oracle is trying to accomplish that. █
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Summary: A $399 million judgment against Android devices from Samsung, with potential implications for other Android OEMs, is rejected by SCOTUS
Excellent news came through AP several hours ago: “Supreme Court throws out $399 million judgment against Samsung in company’s patent dispute with Apple over iPhone design.”
There will certainly be plenty of coverage about this, including quite a lot of rants from Apple advocacy sites. Apple lost a design/UI patent case. It has actually lost quite a few cases against Samsung by now. Many other patents in this domain will be generally lost too, by means of precedence (how many patents out there are no longer valid?).
Here is what Professor Crouch, who followed this case pretty closely, had to say:
In a unanimous opinion authored by Justice Sotomayor, the Supreme Court has reversed the Federal Circuit in this important design patent damages case. Although the case offers hope for Samsung and others adjudged of infringing design patents, it offers no clarity as to the rule of law.
There is also this bit of news that’s covered a week late and says:
Apple v. Ameranth: Federal Circuit Partially Reverses PTAB and Finds All Claims for Electronic Menus Unpatentable
On November 29, 2016, in Apple Inc. v. Ameranth, Inc. 15-1703, the Federal Circuit affirmed the Patent Trial and Appeal Board (PTAB) findings of unpatentable independent claims in a Covered Business Method (CBM) review and reversed findings of patentable dependent claims under 35 U.S.C. § 101. On appeal, the Federal Circuit agreed with Apple that there was sufficient evidence to support the finding that dependent claims 3, 6-9, 11 and 13-16 of Ameranth’s U.S. Patent No. 6,982,733 (‘733 patent) were unpatentable as describing insignificant post-solution activities. Despite Ameranth arguing for a substantial evidence standard of review, the Federal Circuit applied a de novo review standard in its reversal of the PTAB’s decision.
Things don’t look too promising for Apple in this CAFC case and another CAFC case, Ameranth, Inc. v. Agilsys, Inc., now gets covered in another site (it’s about PTAB). █
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Witness those truly innovative things — the work of pure genius! — which are rounded corners!
Summary: A quick roundup of recent articles/reports/analyses about Apple v Samsung, including the impending Supreme Court (SCOTUS) case
APPLE’S longstanding patent war with Samsung (or Android, having started to attack it more than 6 years ago) has become a high profile story and probably the leading example of patent litigation in recent times, with a lot of money at stake.
As expected, patent lawyers go ahead and push forth their fairly tales about patents being surrogates for “innovation” (the 1%’s protectionism), this time in relation to Apple and Samsung. To quote Patent Lawyer Magazine:
The recent and numerous cases opposing companies like Apple and Samsung or Google and Oracle highlight that, today, patents are defensive weapons as well as offensive weapons according to the strategy developed by the holder. Many companies notice lately this functional ambivalence of the patent, just as a patent-related dispute happen, like its violation by a counterfeiter party who reproduces without any authorization the protected invention.
If adopting a strategy of patent application may appear expensive in front of the strategy of the secret which consists in keeping the invention undisclosed, it must be clear that the patents ensure an effective legal protection of the inventions against potential counterfeiters and also permit to the innovative companies recouping their Research & Development costs as a patent owner will be able to negotiate royalties for license agreements signed with firms interested in the use of the patented technology.
That’s a rather misleading framing. If one actually considers which patents Apple is suing with/over, then one hasn’t any doubts; it’s not about innovation at all. Maybe it’s about “first to file” or something along those lines. We have covered these patents many times over the years.
As should become apparent pretty soon — because certainly corporate media will be all over it — Apple’s patent war against Samsung will be discussed at SCOTUS, with design patenting as a whole coming under scrutiny. Here is an overview of some more cases to be discussed by SCOTUS:
Constitutional Challenge to Inter Partes Review: Although the Constitutional issues in Cooper v. Lee and MCM v. HP were law-professor-interesting, they were not substantial enough for certiorari. The Supreme Court has now denied the Cooper and MCM petitions — leaving the IPR regime unchanged. Although Cooper v. Square is still pending, its chances are slight. The Supreme Court has also denied certiorari in Encyclopaedia Britannica (malpractice), Gnosis (appellate review), and GeoTag (case-or-controversy).
A new 101 Challenge: In its first conference of the term, the Supreme Court denied all of the pending petitions regarding patent eligibility. However, Trading Technologies has filed a new petition asking whether a new card game is categorically unpatentable so long as it uses a standard deck (rather than a novel deck) of cards. My post on the case asks: Does the Patent Statute Cabin-in the Abstract Idea Exception? That question references Section 100 of the Patent Act that expressly allows for the patenting of new use of a known manufacture.
Extra Territoriality of Trade Secrecy Law: On the trade secrecy front, Sino Legend has petitioned to review the Federal Circuit’s affirmance of the International Trade Commision’s ban on Legend’s importation of rubber resins used for tire production. The underlying bad-act was a trade secret misappropriation that occurred in China and the question on appeal asks: Whether Section 337(a)(1)(A) permits the ITC to adjudicate claims regarding trade secret misappropriation alleged to have occurred outside the United States. A Chinese court looked at the same case and found no misappropriation.
Design Patent Damages: Oral arguments were held earlier this week in Samsung v. Apple. During the arguments, all parties agreed that (1) the statute does not allow for apportionment of damages but rather requires profit disgorgement; (2) the article-of-manufacture from which profits can be calculated may be a component of the product sold to consumers; and (3) the determination of what counts as the article-of-manufacture is a question of fact to be determined by the jury. The only dispute then was on the factors that a jury should be considered and when the “inside gears” of a product should ever be included in the calculation.
The fourth paragraph is about Apple (design patents, not software patents) and the second paragraph speaks of a Section 101 challenge, which isn’t yet likely to happen. Alice is likely to stay here for a long time to come. The focus of the above cases, or the framing that Patently-O has chosen, is ITC. The I in ITC stands for “international” — surely a misleading label. It’s like calling the KGB “international” because it goes (or went) abroad in order to get its way for its home country. The ITC is to US corporations what the FSB is to Russia’s government (or the Kremlin) and we should recognise that there’s nothing “international” about it. It’s not the UN. Now that the patent battles target Asian companies like Samsung IAM likes to obsess about the subject. This patent trolls-funded site wishes us to believe that patent tax that makes phones worse (removed features to avert risk of lawsuits) and more expensive is a desirable aspect. Phones from Samsung almost literally explode and all that IAM can think about is patents, patents, and more patents.
Over at MIP there has been more coverage of the above patent case of Apple v Samsung. Florian Müller foresees more action in this domain (not involving only design patents but much more).
Little attention is being paid to Apple’s practices or tradition of tax evasion with patents as a financial instrument. It continues to happen in Ireland where Apple has a notorious tax-dodging operation and pro-Apple sites touch on the subject yet don’t quite get to the bottom of it (“Apple Moves $9B Worth of iTunes Intellectual Property To Ireland”). Remember what we wrote about Patent Boxes earlier this year.
Joseph Robinson & Robert Schaffer (over at Watchtroll) write about a related case (a different Apple v Samsung). It is apparent that this site is growingly concerned about yet another case reaffirming the death of software patents in the US. Apple has more than one case against Samsung; there are software patents at stake as well, hence the relevance to us. Watchtroll is still opposing patent reform and uses the terminology of anonymous Twitter accounts that taunt us, e.g. “Efficient Infringement”. What a cesspool Watchtroll has become…
Going back to Müller, here is what he recently wrote about both Apple v Samsung cases that are high profile:
Was it just a coincidence that the Federal Circuit made a decision on an Apple petition for a rehearing about eight months after the original decision and just days before the design patents hearing in the top U.S. court? It may very well have been. But when there are already other oddities (such as the decision not to invite further briefing from the parties and hold a rehearing), it’s not impossible that there is a hidden message or agenda.
The Federal Circuit decision certainly gives Apple leverage. Limited leverage, though: the relatively most valuable one of the three patents on which Apple had prevailed at the spring 2014 trial has expired and the most iconic one, slide-to-unlock, is about as valuable in the age of Touch ID and comparable technologies as an ISDN or floppy disk patent.
“Experts Urge Supreme Court To Take A Bite Out Of Apple’s Patent Win Over Samsung,” said this recent report, stating: “As two of the world’s largest consumer electronics companies face off at the Supreme Court Tuesday, experts in legal, patent, technology and consumer advocacy fields are urging the Supreme Court to overturn a ruling in the smartphone war between Apple and Samsung that awarded the iPhone maker the total profit of patent-infringing Galaxy devices.”
Matt Levy wrote about this also [1, 2]. That was 2.5 weeks ago when he pulished some thoughts about “A Funny Thing [That] Happened on the Way to the Court” and to quote:
A funny thing happened on the way to the Supreme Court in yesterday’s Samsung v. Apple design patent dispute. The high court was expected to review the lower court’s award of the entire profits made for 11 different smartphone models — just under $400 million.
Unexpectedly, some time before the argument Apple had agreed to concede that the “article of manufacture” didn’t have to be the entire product sold. That is, Apple agreed with Samsung and the government that the answer to the question that the Court had agreed to decide is “Yes.”
Will design patents not be challenged even by Samsung after all? IAM (wshfully) thinks there may be alignment on the horizon. To quote: “For the last couple of years it has been apparent that the smartphone wars that have raged in US courts since 2009 have been reaching their final skirmishes. Peace deals between the likes of Microsoft and Google and Apple and Google, have brought many of the battles to an end. Except, that is, for what has probably been the most significant confrontation – Apple v Samsung.”
There’s no “Microsoft and Google” “peace deal”; Microsoft continues to attack Android OEMs with patents and it was Microsoft that initiated antitrust action against Android in Europe. Microsoft is a malicious firm that would lie to anyone, anytime.
Joe Mullin asked: “How much punishment is appropriate when it comes to design patents?”
MIP’s coverage at the time spoke of the arguments and Patently-O offered a “view from inside the courtroom”. It said:
At oral argument, Samsung informed the Court that it was dropping its “causation argument” (i.e., that § 289 must be read in light of background causation principles from general tort law) and wanted to focus on its “article of manufacture” argument (i.e., its argument that a successful design patentee should be entitled to the “total profit” from the “article of manufacture” but that the relevant article should be determined mainly by looking at whether the patent claims a whole design or only part).
We eagerly await rulings against Apple in both cases, one involving software patents and another design patents, which in this case closely resemble software patents in multiple ways/aspects. What’s at stake here isn’t just the price of Samsung phones but the financial viability of Android (Linux-based) phones in general. █
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Summary: A quick look at various new articles of interest (about software patents) and what can be deduced from them, especially now that software patents are the primary barrier to Free/Libre Open Source software adoption
THE previous post spoke about misleading coverage which would have us believe there’s a software patents rebound in the US. There is none of that, it’s just wishful thinking.
According to this new Slashdot post, linking to a report already mentioned in our daily links, in spite of the huge number of payment technology software patents being crushed (about 90% of them!), Accenture (somewhat of an evil and manipulative Microsoft ‘proxy’ in the UK) rushes for software patents in that area. As we noted here a few months ago, patents in this area are a growing cause for concern because they can undermine innovation. Things like Bitcoin and even Free/Libre Open Source software are affected profoundly. It’s not necessarily companies like Accenture and Microsoft that sue, but Microsoft has many patent trolls out there. Those trolls are no longer just a problem in the US; even in east Asia’s markets they are a growing problem or an epidemic (patent trolls spread there and there are new reports to that effect from publications that deny the existence of patent trolls).
Speaking of patent trolls, Joe Mullin has this new article about the latest moves from Mr. Horn. He summarised that as “Company backed by Nokia, Sony, and MPEG-LA gets a $3M verdict.” MPEG-LA is a massive obstruction to Free/Libre Open Source software, for reasons we covered here many times over the years.
“MPEG-LA is a massive obstruction to Free/Libre Open Source software, for reasons we covered here many times over the years.”Times are rough for those who develop software whenever software patents maintain some potency and patent trolls have an incentive to sue, not just to threaten. According to last week’s post from Patently-O the “patent act authorizes district court to award enhanced damages.” But only if you actually read patents, so don’t. Willful infringement can induce further penalties. To quote Patently-O regarding Halo [1, 2]:
The patent act authorizes district court to award enhanced damages. 35 U.S.C. 284 (“the court may increase the damages up to three times the amount found or assessed”). In Halo v. Pulse, the Supreme Court held that the statute grants district courts discretion in awarding enhanced damages – although noting that the punitive damages should ordinarily be limited to egregious infringement – “typified by willful infringement.” In rejecting the Federal Circuit’s Seagate test, the Court held proof of “subjective willfulness” is sufficient to prove egregious infringement. “The subjective willfulness of a patent infringer, intentional or knowing, may warrant enhanced damages, without regard to whether his infringement was objectively reckless.” Halo at 1933. As with other punitive damage regimes – proof sufficient for an award does not necessitate such an award. In patent cases, punitive damages remain within the discretion of the district court even after sufficient evidence establish the egregious behavior.
Another interesting article from Patently-O speaks about obviousness and prior art, along the lines stating that:
In response to being sued for patent infringement, Apple filed for inter partes reexamination of ClassCo’s Patent No. 6,970,695. That litigation (originally filed in 2011) has been stayed pending the resolution here. Although the patent had survived a prior reexamination, this time the Examiner rejected the majority of the patent claims as obvious; the PTAB affirmed those rejections; and the Federal Circuit has now re-affirmed.
The patent relates to a “caller announcement” system that uses a phone’s speaker (rather than screen or separate speaker) to announce caller identity information. The system includes a “memory storage” that stores identify information being announced.
The examiner identified the prior art as U.S. Patent No. 4,894,861 (Fujioka) that teaches all of the claimed elements (of representative claim 2) except for use of the phone’s regular audio speaker (rather than a separate speaker) to announce a caller’s identity (claimed as the “audio transducer”). A second prior art reference was then identified as U.S. Patent No. 5,199,064 (Gulick) that taught the use of the audio transducer for providing a variety of call related alerts.
What’s interesting here is that Apple, which uses software patents against rivals (including against Linux/Android), suddenly fancies invalidating one. Had there been no software patents, none of this mess would be necessary. Moreover, no money would flow into the pockets of patent law firms at the expense of developers and people who purchase products. █
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Summary: Microsoft-connected patent trolls like Larry Horn’s MobileMedia are still attacking Microsoft rivals and Microsoft wants more money from Korea, after it attacked Linux with software patents over there (notably Samsung and LG)
“US Pat RE39231,” wrote a patent attorney, eventually meant that “Apple Must Pat MobileMedia $3M for Infringing this Patent” (MobileMedia is not as real company and we wrote about it before, in relation to MPEG-LA and Larry Horn; we wrote about him in [1, 2]).
How many people out there know that MPEG-LA is a patent troll whose head himself is/was a patent troll? Not many people know this. Horn relies on dishonest lawyers from Proskauer Rose and sues Apple, which itself is part of MPEG-LA (we already took note of how bizarre this is).
Well, “Apple loses ringtone infringement case to Nokia and Sony’s patent troll firm,” according to the headline of this report. To quote: “Apple has been ordered to pony up $3 million in damages by a Delaware judge for infringing the patent of a firm partially owned by Sony and Nokia. The case, which has been running since way back in 2010, saw MobileMedia Ideas originally accuse Apple on 16 counts of patent infringement. Six years and plenty of court activity later, the original claim has been whittled down to just one patent pertaining to iPhone ringer alerts, for which MobileMedia has been awarded a tidy sum of money.”
A patent troll connected to Nokia — a legacy of Microsoft entryism and subsequent passage of patents to trolls like MOSAID — is somewhat of a pattern we’ve seen a lot of recently. Android too is being targeted by these trolls.
“MobileMedia Ideas just won a Delaware trial against Apple over a former Sony patent,” Florian Müller wrote about it. “May file further lawsuit now over iPhone 4S and later.”
Tom O’Reilly from Mobile Media Ideas is advertising for this patent troll. He passed around the press release “MobileMedia Ideas Wins Trial against Apple” and it said:
(CHEVY CHASE, MD, US – 21 September 2016) – MobileMedia Ideas LLC is pleased to announce that the US District Court for the District of Delaware today found MobileMedia Ideas’ “polite-ignore” patent (Re 39,231) for mobile phone call silencing valid and infringed by the iPhone 3G, 3GS and 4 and awarded $3M in damages. The case did not include the iPhone 4S, 5/5C/5S and 6/6 Plus on which there may be further proceedings. The patent was filed in 1994 by Sony Corporation, a pioneer in the development of mobile and other consumer electronics technology, and is now part of the patent portfolio licensed by MobileMedia Ideas.
MobileMedia Ideas President and CEO Larry Horn said, “We thank the jury for its service and hard work. This case could have been avoided by the taking of a license, however. MobileMedia Ideas’ business model is based on offering reasonable licenses to a valuable portfolio of important inventions widely practiced across a broad array of mobile phone and other portable products. We still welcome Apple to respect intellectual property developed by others with the taking of a license.”
MobileMedia Ideas was represented by a team of litigators at Proskauer Rose led by Steve Bauer and Kim Mottley of the Boston office.
In relation to an article/report mentioned here earlier this week, there is now an important update. Coming from the Korea Times, it says that the tax authority is likely to reject Microsoft’s appeal for refund of tax. To quote the opening parts:
The South Korean tax authority is expected to reject an appeal by U.S. software giant Microsoft Corp. to refund 634 billion won ($575.7 million) in a withholding tax, according to the tax authority and industry sources Thursday.
Microsoft filed complaints last month against the National Tax Service (NTS), seeking a refund of the withholding taxes paid by Samsung Electronics Co. to the NTS for using the software giant’s patents.
When will Microsoft pay the tax it has evaded? Above the law, still? A lot of the above sum comes from Linux-powered devices (we wrote about this many times before).
Those who believe that Microsoft has changed surely aren’t paying attention to what it does through patent trolls, through Nokia (which Microsoft demanded should pass patents to trolls), and in various distant countries like Korea. Microsoft just became a little more covert in its war against Linux. █
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“Called “patent sharks”, they bought dormant agricultural patents and then sued farmers who were unknowingly using protected technology. This brass knuckles tactic outraged rural activists and led to the same calls for sweeping patent reform that we hear now.” —Gerard N. Magliocca, Blackberries and Barnyards: Patent Trolls and the Perils of Innovation
Summary: The unwanted elements of the patent system (as it stands at present) illuminated by very recent news and patent court cases
WE sometimes worry that our growing focus on the EPO has distracted somewhat from the patent quality problems at the USPTO. We spend an enormous amount of time looking into patent news from all around the world and occasionally something catches our eye that needs a quick comment but not a comprehensive rebuttal. Herein we lay out some recent patent news, with or without further comment.
“Patents cannot be used defensively, only as means of retaliation (M.A.D.) so that both sides suffer and only lawyers win (they profit from patent wars irrespective of the outcome).”When it comes to patents, rules vary wildly depending on the country. Here we have Switzerland-based site praising its own country on patents, but it’s only part of the story because for a rich country to have a lot of patents makes a lot of fiscal sense, for reasons we explained last month. The Swiss patent system and the role of Switzerland in the EPO requires taking into account Switzerland’s rather unique economy.
According to the patents-centric media, Judge Koh, probably best known in recent years for her involvement in Apple and Samsung trials, is still going strong. “The Senate Judiciary Committee on Thursday voted 13-7 to approve the nomination of U.S. District Judge Lucy Koh to the Ninth Circuit,” says this report.
One article, this one coming from a niche Web site, wrongly assumes that ‘app’ (buzzword, usually meaning software for mobile devices) development requires patents. If you develop a mobile ‘app’ and waste time/effort worrying about patents on software, then you’re probably doing it wrong and wasting resources. Patents cannot be used defensively, only as means of retaliation (M.A.D.) so that both sides suffer and only lawyers win (they profit from patent wars irrespective of the outcome). Deterrence using patents does not exist when trolls are involved.
“Microsoft had extorted HTC using patents as well; HTC chose to settle to avoid legal action and potential embargoes.”“Apple Was Hit with a $22M Verdict for Infringing an Acacia Patent,” wrote a patent attorney the other day. Acacia is a Microsoft-connected patent troll. As for Apple, when it sued HTC 6 years ago it showed that it too was quite a patent bully. “According to the complaint,” says another new report, HTC is being sued again and “the plaintiff [Infogation] alleges that Infogation Corp. suffered damages to its business from having its patent infringed. The plaintiff holds HTC Corp. and HTC America Inc. responsible because the defendants allegedly manufacture and distribute mobile phones containing software that infringes the plaintiff’s patents.”
They just can’t leave HTC alone, can they? Microsoft had extorted HTC using patents as well; HTC chose to settle to avoid legal action and potential embargoes. Speaking of embargoes (or injunctions), another example of the ITC being exploited for embargoes (using patent allegations before even a proper trial) can be seen in this new press release. So much for promoting innovation, eh? Promoting racketeering maybe… Microsoft has used the ITC for embargoes using patents for nearly a decade now.
“What’s a Patent Worth?”
“Patents are a lot like financial bubbles and are also an instrument of tax evasion some of the time.”That’s the headline of this article which says: “When a technology business fails, and the flesh of the going concern is stripped away, often the only thing that remains is a paper skeleton of potentially valuable patents. In 2011, Nortel Networks’ patent portfolio of wireless technology patents sold for $4.5 billion. A few years later in 2013, Kodak’s portfolio of digital imaging patents brought in $525 million. Now, Yahoo’s patent portfolio of nearly 3,000 patents is on the block, and experts estimate that it could sell for $1 billion. While “expert” valuations are not always accurate, (Nortel’s portfolio was initially valued at $1 billion, and Kodak’s portfolio was initially valued at $2.2-2.6 million; see http://spectrum.ieee.org/at-work/innovation/the-lowballing-of-kodaks-patent-portfolio) the estimates for Yahoo’s portfolio work out to more than $300,000 per patent, well in excess of the cost of acquisition.”
As we explained before, Yahoo’s patents are mostly software patents, thus they’re pretty worthless right now (after Alice).
Patents are a lot like financial bubbles and are also an instrument of tax evasion some of the time.
Hartig Drug Co. v Senju Pharmaceutical Co.
“Microsoft does this a lot to vendors that sell GNU/Linux, Chrome OS, and Android devices. It’s a form of extortion, depending on how it’s done and how severe the threats are, quality of patents (if disclosed) aside.”A patent maximalism site said about a fortnight ago: “Perhaps one of the most influential first year law school classes for the task of learning how to “think like a lawyer” is civil procedure. Particularly when the professor is bold enough to engage students on the intricacies of the topic, its intricacies can make for a challenging final exam. These experiences should come to mind for many antitrust lawyers when considering the Third Circuit’s decision in Hartig Drug Co. v. Senju Pharmaceutical Co., where the Court applied subject matter jurisdiction principles to reverse a District Court’s dismissal of Hartig’s antitrust allegations on the pleadings.”
Notice the antitrust element of it. It’s quite common when it comes to patent monopolies.
Asetek v AVC
“Patent lawyers say we need to respect patents, but they sure don’t respect copyrights some of the time.”This recent coverage of a case involving patents on cooling systems is also noteworthy. To quote: “The Asetek patents cover liquid cooling systems used to cool integrated circuits (such as those on a computer). Over the past several years, Asetek has sued several competitors for infringing the patents including CoolIT and Cooler Master. In 2014, Asetek sent AVC a letter accusing the company of infringing — however the letter mistakenly accuesd AVC of manufacturing the Liqmax 120s (it does not). After some letters back-and-forth, Asetek eventually sent a letter that it “believes that AVC is likely selling other infringing products in the United States.” After an unsuccessful meeting, AVC filed its declaratory judgment action. The question is whether these facts are sufficient to show an actual controversy between the parties.”
So this can formally become a lawsuit pretty soon, unless money is coughed out in pre-trial settlement. This too often turns out to be of an antitrust nature. Microsoft does this a lot to vendors that sell GNU/Linux, Chrome OS, and Android devices. It’s a form of extortion, depending on how it’s done and how severe the threats are, quality of patents (if disclosed) aside.
Stryker v Zimmer
Earlier this month we found some coverage of the case at MIP which explained: “The Federal Circuit has affirmed the jury’s finding of wilful infringement but vacated and remanded the district court’s award of treble damages, in its Stryker v Zimmer decision”
“Patent lawyers are so dishonest about so-called innovation, so why not plagiarise too?”We wrote about Stryker/Halo in the past. “The jury awarded Striker [sic] $70 million in lost profits,” explains another site. “On appeal,” it added, “the Federal Circuit affirmed as to infringement, validity and damages. [...] Most of the new Stryker opinion involves a recitation of the Federal Circuit’s previous opinion affirming the district court as to infringement and validity. The last three pages, however, deal with the § 284 enhancement issue on remand. What’s interesting is that the Federal Circuit is maintaining its bifurcated approach to enhancement of damages, first requiring a predicate willfulness determination followed by the judge’s discretionary determination of whether and how much to enhance damages. This is essentially the same process as before. See i4i Ltd. Partnership v. Microsoft Corp., 598 F.3d 831 (2010). Pre-Halo, the second step of the process (the district judge’s determination of whether and how much to enhance damages) was a totality-of-the circumstances analysis that was reviewed for abuse of discretion (i.e.: basically the same as the court required in Halo). Id. The Federal Circuit’s post-Halo approach to enhancement involves the same two steps, with the exception that the willfulness determination itself is guided by the holding in Halo rather than requiring the two-element objective/subjective determination of Halo. (The enhancement determination is too, but it’s hard to see much difference there.) Under Halo, the subjective component alone can be enough to establish willfulness.”
This was very good news for patent trolls. It still is.
Patent Lawyers and Plagiarism
“It sure looks as though patent trolling is a ‘thing’ in east Asia right now…”Patent lawyers say we need to respect patents, but they sure don’t respect copyrights some of the time. There is even plagiarism reported and potentially a lawsuit to provide evidence of it. “This creates some very interesting problems for lawyers,” said a patents pundit, “and calls to my mind the case a few years ago where a patent prosecutor was sued for using language from a patent in a specification for another client. I’m not a copyright lawyer, and so just raise this case for you to think.”
Patent lawyers are so dishonest about so-called innovation, so why not plagiarise too? Another article by Dennis Crouch speaks of patent malpractice today. It’s part of an outline of upcoming SCOTUS cases. To quote the introduction:
The Supreme Court will begin granting and denying petitions in early October. Meanwhile, several new petitions are now on file. Last week I wrote about the TC Heartland case as a mechanism for limiting venue. Without any good reason, the Federal Circuit overruled a 1957 Supreme Court case that had strictly limited patent venue as spelled out in the patent venue statute 1400(b). See VE Holdings (explaining its overruling of Fourco Glass). A result of VE Holdings is the expansive venue availability that facilitated the rise of E.D. Texas as the most popular patent venue. TC Heartland simply asks the Supreme Court reassert its Fourco holding – something that could almost be done with a one-line opinion: “REVERSED. See Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222 (1957).” The best arguments for the Federal Circuit’s approach are (1) the reasoning of Fourco itself is a bit dodgy; and (2) VE Holdings is well settled doctrine (decided 26 years ago) and Congress has revised the statutory provisions several times without amending. As a side note, several members of Congress have suggested they will act legislatively if SCOTUS fails to act.
Two new petitions (Grunenthal v. Teva and Purdue v. Epic) stem from the same Federal Circuit OxyContin case and focus on anticipation and obviousness respectively. Grunenthal v. Teva questions how ‘inherently’ operates for anticipation purposes. Purdue suggests that – despite the final sentence of Section 103, that the actual circumstances of the invention should be available to help prove non-obviousness (but still not be available to prove obviousness). Another new petition includes the BPCIA case Apotex v. Amgen that serves as a complement to the pending Sandoz case questioning the requirements and benefits of providing notice of commercial marketing.
USPTO is Getting Sued Again
“What they mean by “monetisation” is shakedown or a gentle form of blackmail.”Last week we wrote about fraud at the USPTO, or examiners defrauding taxpayers as Florian Müller and others chose to frame it. According to this article, the USPTO has another embarrassment to cope with. To quote: “In Hyatt v. USPTO, Civ. No. 16-1490 (D.Nevada, Filed June 22, 2016), Hyatt asks for injunctive relief to stop the PTO from repeatedly ‘reopening prosecution’ in his cases and consequently shielding the cases from judicial review by either the PTAB or Article III courts. Hyatt is experiencing the common reality of examiners reopening prosecution once an appeal brief is filed.”
The Ts: Patent Tax and Trolls
“Well, patents on corn oil extraction are deemed invalid by a court, probably because the USPTO just issues a patent for every piece of paper that comes in, leaving courts to clean up their mess.”In recent weeks we wrote about what had happened in east Asia, where patent trolling is becoming an epidemic. It sure looks as though patent trolling is a ‘thing’ in east Asia right now and here is IAM writing about a new non-practicing entity (IAM would never use the T word). To quote: “Just over a month since display maker Sharp came under the formal control of Hon Hai Precision Industry (Foxconn), big changes to its IP operations are already in the offing. Nikkei Asian Review reported on Tuesday that the Japanese company’s IP function would be hived off into a separate IP management company on October 3rd, with one goal being to create more value from Sharp’s massive global patent portfolio. Speaking exclusively to IAM, Foxconn IP chief YP Jou confirmed how the responsibilities for the Sharp portfolio will be divided within the sprawling Foxconn IP apparatus, and revealed the team’s priority when it comes to monetisation.”
What they mean by “monetisation” is shakedown or a gentle form of blackmail. Speaking of so-called ‘monetisation’, this new report says that “[f]ive big holders of cellular patents, including Qualcomm Inc., are joining an effort proposed by Ericsson AB to jointly license patents in an emerging field called the Internet of Things.”
“Some person with an MBA spreads some myths about patents right now, as if companies just can’t do without them.”Here comes the patent tax to surveillance of all Things (IoT). “Qualcomm has long derived a chunk of their revenue from licensing,” said this one person, “so this isn’t a big change for them.”
Qualcomm also came under heavy regulatory scrutiny for it. Watch what IAM wrote about this. These guys are looking at the surveillance of all Things (IoT) only from the point of view of patents; yes, patents alone.
Patents on Corny Stuff
“Unless we get engineers to enter the political systems, we’ll continue to have lawyers with their lawyer buddies from college writing laws, including patent laws.”Well, patents on corn oil extraction are deemed invalid by a court, probably because the USPTO just issues a patent for every piece of paper that comes in, leaving courts to clean up their mess. This new press release says that “GreenShift Corporation (OTCQB: GERS) provided an update regarding the ongoing patent infringement action involving GreenShift’s subsidiary, GS CleanTech Corporation (“CleanTech”), and its corn oil extraction patents.”
Corporate Domination of IP [sic] Law
Some person with an MBA spreads some myths about patents right now, as if companies just can’t do without them. Watch the corporate sob story: “It’s clear the current system is working for no one except those who want money for nothing. America’s inventive spirit has been the lifeblood of our economic growth for generations, moving us from horse-drawn carriages to electric cars in just over a century. Missteps by the courts, Congress, and the Patent Office have threatened to drive that underground, unwittingly rewarding a few large corporations happy to profit off the work of others at no cost to themselves. That’s not the American way.”
“…TPP threatens to spread software patents almost everywhere. It is a truly villainous back room deal and it should be crushed.”What he is trying to say is that people accused of infringement “want money for nothing” and that it’s the “American way” to give large companies monopolies, so as to prevent others from competing. He advocates protectionism, not an American way. Unless we get engineers to enter the political systems, we’ll continue to have lawyers with their lawyer buddies from college writing laws, including patent laws. It’s the sad truth. Here is another new lawyers’ congregation (EPIP) where they speak ‘on behalf’ of inventors, developers etc. Notice the “IP” in the event’s name. The notion of so-called ‘IP’ (an umbrella for several totally separate things) helps mislead people into equating patents with copyrights and secrets; this event wasn’t about patents as it covered other aspects of so-called ‘IP’ (an umbrella for several totally separate things) and when people say “IP” we should always ask them to be specific. IP means nothing; copyrights, trademarks, patents and trade secrets do. Here is how EPIP started: “The plenary session kicked off with Professor Rochelle Dreyfuss highlighting the expansion of trade secrets protection globally, and the worrying potential unintended consequences. There are increasing concerns that trade secrets and economic espionage law in the US is being used to racially profile researchers. (Interesting coverage on the targeting of Chinese-American researchers here.) Dreyfuss discussed the potential negative impact of non-compete clauses on innovation, employees and economic growth. She argued that criminalisation related to trade secrets generates an especially strong chilling effect as high-tech workers are unwilling to risk incarceration. Dreyfuss also observed that TPP (Trans Pacific Partnership) does not create a minimum trade secrets standard, and is trying to express a new norm that information shouldn’t be free.”
Just to remind readers, TPP threatens to spread software patents almost everywhere. It is a truly villainous back room deal and it should be crushed. █
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Quality of patents causes markets to prosper or contrariwise perish
Giving aggressors like Microsoft sacks of patents to breed Mafia-like behaviour, not healthy competition
Summary: Revisiting the EPO’s vision of poor patent examination and the effect of discriminatory granting practices, favouring patent bullies such as Microsoft (which actively attacks Linux using low-quality and usually pure software patents)
“A skilled patent attorney working with a qualified searcher could cobble together a colorable obviousness argument against the vast majority of issued patent claims,” says a new article from Patently-O. Not to mention “abstract” criteria, prior art and so on. “Part of the difficulty for patentees,” continues the article, “stem from the the billions of prior art references available via increasingly effective search tools. Even when an invention results from a ‘flash of genius,’ patent law typically back-fills extensive knowledge for the obviousness analysis – even when that knowledge was not actually available at the time of the invention. The larger difficulty though is likely the large number of hard-to-pin-down facts such as the motivations, common sense, and level of creativity of a person having ordinary skill in the art.”
“In the case of large companies like Microsoft, mountains of patents (granted in bulk by the EPO]) can be used to compel companies to pay up without even a trial.”If the EPO replaces examiners with algorithms, things will exacerbate further and patents get granted incorrectly, leading to an ocean of frivolous lawsuits. In the case of large companies like Microsoft, mountains of patents (granted in bulk by the EPO) can be used to compel companies to pay up without even a trial. Recall the Microsoft v TomTom case. Picking on small companies is Microsoft’s thing; it doesn’t sue Google.
The above reminds us of the danger of poor patent quality as well as streamlining grants, which is what Battistelli’s EPO has in effect done for Microsoft (and evidence we showed for that led to legal threats from the EPO). They — like the USPTO — in effect facilitate patent racketeering by Microsoft.
“They — like the USPTO — in effect facilitate patent racketeering by Microsoft.”Watch this new article titled “Primetime: Microsoft’s Android Cross Patent Dealings”. That’s misleading because it's not cross-licensing, it's a patent settlement (in bundling form) and it’s essentially a patent shakedown without even a trial and without an opportunity to properly assess the quality (and thus in/validity) of patents. The article says that “to press on this advantage, Microsoft does need to sign into more cross licensing or similar patent deals with manufacturers. Given Microsoft’s patent portfolio and how useful this will be to those manufacturers wishing to break into the North American market, such as Xiaomi, we may be seeing more of these arrangements in the coming months. The alternative might be Microsoft suing any manufacturer that tries to sell devices into a patent-friendly market.”
But again, these are not cross-licensing deals, these are patent shakedowns. One might even call this extortion or racketeering, even though Microsoft is too well-connected to face court charges brought forth by the government.
It is worth noting that many of Microsoft’s patents — those which it uses to shake down Android players (OEMs) — are not even valid anymore (if properly scrutinised), but there are so many of them that it would cost a fortune to demonstrate it to the court. It’s a numbers game, quantity rather than quality. It’s cheaper to just settle and let Microsoft continue to wield software patents like a weapon, even post-Alice. PTAB cannot take a request to review hundreds of patents from just one single company because it’s already overburdened by a growing number of reviews (IPRs).
Speaking of patent aggressors, there is this new software patent from Facebook (the usual, see our Facebook wiki page). These are oftentimes surveillance patents, but this time is’s about languages, at a time of increased competition with Google. Facebook's growing stockpile of patents is a real problem (Facebook has a history of going aggressive with them) and The Next Web says that “the US patent office issued 6,789 patents. Each patent adds a little something new to the human knowledge base. As we cannot list all six thousand, the PatentYogi team has selected the five most interesting patents.” How many of these are software patents that oughtn’t have been granted? How many of these will be toothless some time in the near future?
Patently-O says “The number of pending Ex Parte appeals continue to drop. Great work PTO.” There are other statistics of interest, based on PDFs from the USPTO (like this one). Patently-O claims they suggest that: “Design patent applications expected to reach 40,000 for FY2016 – up from under 30,000 in FY2010. The PTO is working to improve design patent prosecution speed – current wait of more than a year for a first office action.”
Well, the Office may have granted 40,000 patents on designs, but once reassessed the Office may need to throw them all away, on a per-request basis (post-Apple v Samsung at SCOTUS). Granting again for the sake of granting? Until the next Alice happens?
Patent quality control is the principal pillar of true and potent patent offices, otherwise they would be just archives of untested claims (a registration/filing system). █
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Rounded corners? Apple’s invention!
Summary: Apple’s insistence that designs should be patentable could prove to be collectively expensive, as patent trolls would then use a possible SCOTUS nod to launch litigation campaigns
TROLLS, or patent sharks, typically use software patents, but what if they also had design patents at their disposal?
Apple‘s war on Android, which manifested itself in a now-settled case against HTC and later in a long patent war against Samsung, may prove to be counterproductive now that Apple attracts patent trolls like VirnetX, to which it might be forced to pay billions of dollars. A pro-software patents site now says that “Apple will also be an even richer target for the new breed of design patent trolls” if it wins its case against Samsung/Android (over design patents). To quote this new article:
On October 11, 2016, the Supreme Court will hear Samsung’s appeal of the Federal Circuit’s affirmation of the jury’s damage award to Apple of Samsung’s “total profits” on sales of the infringing smartphones even though it had only infringed Apple’s design of the iPhone’s outer shell. In upholding the “total profits” award, the Federal Circuit determined that it was bound to uphold the jury’s award by the “explicit” and “clear” statutory language relating to design patent infringement damages.
The importance of the Supreme Court’s ultimate ruling here is underscored by the numerous amicus curiae briefs filed (27 at last count). With over 205 billion in cash reserves at last count, Apple certainly doesn’t “need” the full nine-figure damage award. And, given the far reaching implications of this case, Apple may live to regret its aggressive pursuit of “total profits” for design patent infringement by finding itself battling design patent holders seeking to recover Apple’s total device profits for infringement of even a minor design feature. Apple will also be an even richer target for the new breed of design patent trolls already surfacing based, at least in part, on Apple’s success in this case. Clearly it is time for Congress to step in and amend Section 289 to add apportionment language.
No wonder technology companies are overwhelmingly supportive of Samsung in this case — a high-profile case over design patents.
In other news, Vera Ranieri from the EFF has this new update about one of their high-profile cases against patent trolls. Ranieri writes:
There has been significant activity relating to cases and patent infringement claims made by Shipping & Transit, LLC, formerly known as ArrivalStar. Shipping & Transit, who we’ve written about on numerous occasions, is currently one of the most prolific patent trolls in the country. Lex Machina data indicates that, since January 1, 2016, Shipping & Transit has been named in almost 100 cases. This post provides an update on some of the most important developments in these cases.
In many Shipping & Transit cases, Shipping & Transit has alleged that retailers allowing their customers to track packages sent by USPS infringe various claims of patents owned by Shipping & Transit, despite previously suing (and settling with) USPS. EFF represents a company that Shipping & Transit accused of infringing four patents.
The above is a timely and good example. It demonstrates not just of the harms of patent trolls but also the harms of software patents, which in the large majority of cases rely on them. If Apple made design patents stronger, with affirmation from the Supreme Court (SCOTUS), the damage would be enormous.
Apple is on the wrong side of history. █
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