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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Summary: Apple’s frivolous lawsuits against Android OEMs win the support not of technology companies (these actually oppose Apple’s actions) but of some “non-tech companies, high-profile designers and intellectual property associations”
A few days ago we mentioned Florian Müller‘s latest article on Samsung v Apple (or vice versa) — an article which he later corrected for errors (amici overlooked or simply not yet listed at the time). It turns out that Müller wasn’t far from the truth, however, as technology companies pretty much reject Apple’s position. Müller has since then continued to highlight Samsung matters such as this likely new IPO or Google’s antitrust worries in Korea [1, 2], the home of Samsung. “The South Korean government has delayed a decision on whether it will accept Google’s request to export South Korea’s detailed map data,” one of those articles says. “Less than 2 months to go until the Samsung v. Apple Supreme Court hearing on design patent damages,” he wrote about the case which involves patents granted by the USPTO in spite of their low quality (the EPO made similar mistakes under Battistelli).
“It turns out that Müller wasn’t far from the truth, however, as technology companies pretty much reject Apple’s position.”Not too long afterwards MIP published this article that says: “Ahead of a showdown over design patents at the Supreme Court in October, Samsung has received more support from US technology companies whereas Apple has received the backing of non-tech companies, high-profile designers and intellectual property associations” (i.e. not quite producing companies). Patently-O wrote about this as well, noting that Apple’s “visual design is critically important in the sales of complex products.” That’s just branding and hype (or compelling marketing), i.e. the bread and butter of Apple. Patent-granting should be a scientific process, entirely disconnected from hype or brand recognition. █
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Summary: Patents, especially software patents, continue to pose a threat to progress where innovation is a lot faster than in most scientific domains
SEVERAL years ago I developed software designed to help cars navigate. It was a research project funded by the EU. I did not pursue patents, nor did I look up any. In the USPTO — unlike in the EPO — ‘pure’ software patents exist (for now at least) and there are software patents on driving, not just on miniature computing systems that distract from the task of actually driving (the buzzword these days is “infotainment”).
“In our daily links we’ve recently included many news items about the dangers associated with autonomous cars (bugs, back doors, lack of human judgment and no communication — verbal or body gestures — with other drivers).”According to this news, “Google Self-Driving Car Director Chris Urmson Hits Exit Ramp To Pursue Other Projects,” which says a lot about market prospects. In our daily links we’ve recently included many news items about the dangers associated with autonomous cars (bugs, back doors, lack of human judgment and no communication — verbal or body gestures — with other drivers). If Google is having issues with this endeavor (as does Tesla reportedly), who would pursue moving from theory (or even from patents) to reality/practice? My project’s supervisor at the time worked part time for Google (primarily a university professor) and he too wasn’t optimistic about the work. It’s just a very hard task, not just because of lack of patents or anything like this. For similar reasons, voting should not be done by machines (there is extensive literature about the drawbacks) and patent examination cannot be done by machines (no matter what Battistelli and his clueless circle believe or hear from the opportunistic private sector looking for outsourcing).
According to a pro-software patents author, patents on “infotainment” are being pursued not so much by Google and Apple but by automakers. To quote one bit:
According to market research reports, the market for in-car infotainment systems is expected to rise from $14.4 billion in 2016 up to $35.2 billion in 2020.
Putting aside the fact that drivers should focus on driving rather than phonecalls and Internet browsing, it’s not entirely accurate to say that Google stays out of it because Google is pursing a lot of patents on things inside the car, including the driver (which Google hopes to replace with a machine). Cars that are entirely autonomous may be a distant dream, but partial mechanisation — like vocal/visual assistance while parking — is already here and there is nothing innovative about it (it’s actually extremely simple to implement).
“Cars that are entirely autonomous may be a distant dream, but partial mechanisation — like vocal/visual assistance while parking — is already here and there is nothing innovative about it (it’s actually extremely simple to implement).”Speaking of Google, in this new article Florian Müller says that “Google’s integration of Android into Chrome makes a third Android-Java copyright trial 100% inevitable,” even though APIs are not copyrightable (there was a ruling on that a few months back, but there were also patents thrown into the mix). He told me “[i]t’s not about ARC but about the full integration of the Android Marshmallow APIs into Chrome.” Well, as long as there is no copyright on APIs (as the latest judgment acknowledged), Oracle would just be wasting its money and become even less popular.
Regarding Apple-Android/Google (or Samsung being one OEM of several) disputes, Müller didn’t imagine that “Apple would entirely fail to garner support from companies” in its patent wars using design patents, but he later corrected his article and said: “An earlier version of this post was based on the (false) assumption that last week’s widely-reported amicus brief by 111 designers and design educators was the only amicus brief supporting Apple. This misperception was due to the delay with which both the court’s own website and the SCOTUSblog get updated. Actually, a total of 10 briefs were filed in support of Apple. Furthermore, the first version of this post noted an “artsy font” used on the title page of the designers’ brief. However, that font was only used in the version published on Apple’s website.” (links in the article)
These petty patent wars between Apple and Android OEMs are clearly far from over. Apple is losing market share to Android pretty rapidly, so it hopes to simply tax Android rather than beat it (artificially raising the price of Android, henceforth becoming a little more competitive). Well, such is the legacy of dumb patents on every stupid thing. Battistelli has proven to be totally clueless about Apple's patents at the EPO (these were found invalid in the courts after they had been granted by the Office). █
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And why EPO policies under Battistelli will emulate the worst aspects of the USPTO
Summary: The Government Accountability Office (GAO) explains that decline in patent quality in the US is responsible for a hostile environment which fosters litigation rather than innovation; BlackBerry the latest example of patent assertion firms (trolls) which would make phones ‘dumber’ (features like a mechanical keyboard removed or never added in the first place)
LAST month we wrote about GAO in relation to the EPO [1, 2], demonstrating that the US patent system has gone out of touch and increasingly disconnected from the raison d’être of patents.
A good but somewhat belated article from TechDirt covers this topic, citing the Government Accountability Office for support:
This shouldn’t be a surprise. All the way back in 2004, in Adam Jaffe’s and Josh Lerner’s excellent book about our dysfunctional patent system, Innovation and Its Discontents, one of the key problems they outlined with the system was the fact that there was strong incentives for patent examiners at the US Patent Office to approve shit patents. That’s because they were rewarded for how “productive” they were in terms of how many patent applications they completed processing. Now, you might think that shouldn’t encourage approvals — except that there’s no such thing as a true “final rejection” from the patent office (they have something called a final rejection, but it’s not — applicants can just make some changes and try again… forever). So rejecting a patent, inevitably, harms your productivity rates as an examiner. Approving a patent gets it off your plate and is considered “done.” Rejecting it means having to spend many more hours on that same patent when the inventor comes back to get another chance.
After Jaffe and Lerner made that criticism clear, it seemed like the Patent Office started to take the issue to heart and they actually started changing some of how examiners were rated. And, for a few years, it seemed like things were heading in the right direction. But then, once David Kappos took over, he noticed that a lot of patent holders were complaining that it took too long to get patents approved. Apparently ignoring all of the evidence that pushing examiners to review patents quickly ends up in disaster, Kappos put back in place an incentive structure to encourage examiners to approve more patents. He kept focusing on the need to get through the backlog and speed up the application process, rather than recognizing what a disaster it would be. Of course, some of us predicted it and were mocked in the comments by patent lawyers who insisted we were crazy to suggest that the USPTO would lower its standards.
Of course, an academic study a few years ago found that was absolutely happening and now, to make the point even clearer, the Government Accountability Office, which tends to do really fantastic work, has written a report that agrees. It blames the Patent Office’s focus on rapidly approving patents for the flood of low quality patents and the resulting patent trolling epidemic…
Noting that last part about a “trolling epidemic” (to the point where 90% of all technology lawsuits are filed by trolls), we wish to highlight the correlation between abstract software patents and software patent trolls. Since half a decade ago we have highlighted the strong correlation between patent trolls and software patents, so had the USPTO stopped granting patents on software, a lot of this “trolling epidemic” would go away almost entirely. It would not be a viable business model for reasons we explained here repeatedly over the years. Given an extraordinary number of patents granted to BlackBerry (far too many to be deemed high quality), this is relevant to the past week’s news. BlackBerry, which is rapidly becoming a troll (or PAE) down in Texas [1, 2], has generated more and more headlines in recent days, e.g. [1, 2, 3, 4, 5, 6]. “Blackberry is now a troll,” wrote Benjamin Henrion (FFII). “Too bad NTP did not kill them 10 years ago.”
BlackBerry is one among many such companies. Apple, for example, having totally lost the plot to Android in India (where Android is now estimated to have 97% of the market; see daily links for details), is suing endlessly. Is there another Apple-Samsung patent war in the making? As one site notes right now: “Samsung filed a patent for a smartwatch with a detachable strap. Detachable band straps are already there. So, what’s the big deal? Their new smartwatch looks like the Apple’s iWatch. Now, that’s a big deal.
“Samsung is not eyeing another patent war with Apple, hopefully, they aren’t. Because, the last time when they did it, they had to suffer for it. A California court had ordered Samsung to pay 548 million dollars.”
“It would mean that phones must have features and parts removed from them.”Apple has been suing Android OEMs for more than 6 years, starting with HTC. We expect BlackBerry to do the same thing pretty soon. Does that mean more innovation? Quite the contrary. It would mean that phones must have features and parts removed from them. █
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Even East Texas, which advertises itself as plaintiff- and troll-friendly, might not tolerate software patents for much longer
Summary: Examining some of the latest software patents that make this week’s headlines and what we can learn from these
SOFTWARE patents are dying in the US, owing largely to § 101 (post-Alice). Patent lawyers, as expected, are in denial about it (misleading customers in order to maintain demand) and there is a new article today/this week about § 101 analysis. Mentioned therein is a “conclusion that the claims at issue fail to meet the standard for patent eligibility under § 101.”
“The significance of this outcome is that once again (as before) we see software patents — once challenged enough, scrutinised properly and reassessed sufficiently — falling short.”The de facto ban on “abstract” software patents (that ought to cover all software patents) does not deter everyone, especially not deep-pocketed companies which simply hoard thousands (if not tens of thousands of patents) and then cross-license or shake down companies in bulk. According to dozens of news reports from yesterday (e.g. [1, 2, 3]), Amazon continues to patent software (this patent for audio surveillance) and today we learn that Disney tries patenting foot surveillance in parks. Talk about lack of ethics… Amazon has pushed software patents as far as Europe in spite of the clear exclusions.
As we mentioned here briefly at the start of this week, VirnetX's software patent attack on Apple is falling short, as does the stock of VirnetX [1, 2, 3, 4, 5, 6]. VirnetX is a patent troll whose existence (or worth) is little more than software patents, so the loss of the case (or at least a $625,000,000 award) was big news yesterday [1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15], not just in Apple-centric sites.
The significance of this outcome is that once again (as before) we see software patents — once challenged enough, scrutinised properly and reassessed sufficiently — falling short. Time to leave East Texas for a balanced venue? It’s probably a waste of time (and money) trying to assert these patents in a court of law, especially against large companies that can afford to withstand/endure lots of motions and appeals. That’s why the main victims of software patents (and patent trolls) are small businesses; they would often settle rather than risk the high cost of never-ending legal proceedings. The SCO case has gone on for 13 years because IBM can afford this and SCO, whose only remaining existence is this one case, goes to the grave (well past bankruptcy) in a desperate effort to extract some money (much like VirnetX).█
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