Summary: Software patents armament from a British company, charted concentration of the patent microcosm in the United States, and US-leaning patent trolls that prey on China
“CloudTrade Awarded US Patent for Its Proprietary Document Data Extraction Software,” says a press release that was widely circulated yesterday [1, 2, 3]. CloudTrade is British and is not a patent troll, but it sounds as though it has nothing to brag about except crappy (and creepy) software patents — those that PTAB and patent courts would likely trash immediately (if a petition or lawsuit gets filed).
Why is a British company pursuing software patents in the US? Has it not heard yet about the futility of such as exercise? Did it receive bad advice from patent practitioners? Previously, the firm bragged about “patented e-invoicing technology” and “patent-pending technology”. They went as far as Australia for software patents. Unless they intend to start suing competitors (sometimes threaten to sue unless competitive products are removed from the market or settlement money is paid out of court), we fail to see what CloudTrade is thinking here. Maybe too much Kool-Aid from the patent microcosm…
Published hours ago was also this analysis by Jason Rantanen, who put together some data to find out which places in the US have a disproportionate number of patent practitioners (lawyers, attorneys etc.) and it was preceded by the following text. It emphasises that it’s about utility patents, not software patents:
A question from two economist friends, Nicholas Ziebarth and Michael Andrews, got me interested in the geographic distribution of patent practitioners in the U.S. and any correlations with issued utility patents and populations. Using the January 8, 2017 list of patent practitioners from the USPTO, the PTO’s data on utility patents issued to inventors by state, and population estimations for 2016 (wikipedia), I put together the following figures. They show what one might expect: patents, population and patent attorneys exhibit high degrees of correlation, although there is some interesting variation. All the linear regressions are highly significant (p<0.001).
It would be interesting to see these methods applied to software patents. It is widely known by now that patent trolls are highly dependent on such patents and it would be interesting to see where Texas fits in an analogous chart (or set of charts).
It is also widely known and recognised that many patent trolls work at the behest of some large, practicing companies. By using a troll for litigation they don’t risk the defendant following suit with a reactionary lawsuit. IAM has a new example of this. It speaks of some entity called Via Licensing (Web site indicates it’s just a troll) and reveals who it’s working for, much like MPEG-LA. To quote:
Dolby-backed patent pool operator Via Licensing has announced some high profile new licensing agreements in Greater China over the past month, with Lenovo and Xiaomi having joined the pool covering AAC technology. A big factor in this apparent momentum is the fact that the pool has introduced a new alternative rate structure which codifies a discount for devices sold in developing markets. This effort to accommodate local market realities in countries like China also adds a welcome dose of transparency to the licensing market.
Terms like “licensing market” are misleading. Intermediaries or satellites or proxies are hardly a “market”. They are a parasite which mostly serves to exclude small players and emergent technologies (competition). █
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Summary: The latest examples of discussions about patent scope, courtesy of those looking to benefit financially by pushing such monopolies to the max
PATENT scope is key to success of a nation’s economy. Unrestricted scope is a recipe for disaster everywhere and it makes an economy less competitive at the international context/stage. One cautionary tale is the Eastern District of Texas, which we shall deal with separately when we write about patent trolls. After Alice (and possibly quite soon TC Heartland LLC) at SCOTUS a lot has changed for the better in the US. But it should not be taken for granted. Some people are trying to undo progress.
Joseph A. Capraro Jr., a Partner at Proskauer (the misleading cherry-pickers), is going to speak for patent maximalism at this upcoming event whose synopsis says: “Since the 2014 US Supreme Court decision on Alice Corp. v. CLS Bank, the U.S. Patent and Trademark Office (USPTO) has become much more strict when evaluating patent eligibility for certain types of computer-implemented inventions. The Alice decision severely affected software patent applications, such that the USPTO began issuing Section 101 rejections based upon Alice where no previous subject matter eligibility rejection had been raised–and the USPTO even withdrew allowances for some applications. The Alice decision created an alarming landscape for the larger patent world as well, calling into question the validity of many existing software-based patents.”
Patent law firms just can’t help promoting software patents. To them it’s just business, irrespective of the effect on sellers and buyers (of actual goods, not patents). At IAM, for example, the patent microcosm of India now bemoans the exclusion of patents on “computer-related inventions” — whatever that actually means. Software patents are not permitted in India and as the microcosm puts it:
The first step has clearly been borrowed from the first two steps established in the UK Aerotel v Macrossan case. Further, if the term ‘only’ is to be read as ‘solely’, the second step can be said to be based on step three of that case. However, step four of the Aerotel test was not considered; rather an entirely different step three pertaining solely to computer programs has been prescribed. This third step focuses only on “a contribution” made by novel hardware, without specifying the nature of the contribution expected.
Nothing associated with “computer programs” is patentable in India (nor should it be). This is what makes India’s patent system more effective and more in harmony with the local economy, which thrives in software development. Consider this new short post from Patently-O, which basically parrots a new paper about strength of patent systems. “G.Dolin is correct in many ways,” Patently-O says. “The major problem with his analysis is the way that he focuses solely on the patent system motivating individual inventors. Although such motivation exists, in the US and around the world, the patent system is primarily used by corporate entities with few inventors receiving substantial upside value of their inventions. Rather, as in Russia, invention is part of the job description of many engineers and those engineers usually receive only a token for their successes rather than a share of the resulting profits.”
Like those who are using "China" and "Russia" to make their case for patent maximalism, here we have those who conveniently treat “Russia” (or “USSR”) as a model failure, then deduce from that all sorts of nonsense. Right now in China, which traditionally was quite lenient, the patent system is becoming overly aggressive and strict in the litigation sense while granting patents on everything under the sun. That itself is a recipe for disaster and it would quite likely damage the Chinese economy. It’s surprising that their economists fail to foresee the effect of all the patent trolls they have begun to attract.
Using “Russia” or “China” to make a case for patent maximalism is misleading. Likewise, telling India to adopt Westernised patent law is asking India to shoot itself in the foot. Patent systems are not constructed purely for the purpose of “creating jobs” like patent lawyers and judges. They are, at the core, intended to foster innovation and progress. Its sad to see Dennis Crouch, a Law Professor at the University of Missouri, resorting to that kind of stuff. █
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Because the patent office does not properly analyse patents, unlike PTAB judges
David Ruschke’s ‘official’ photo
Summary: The travesty of patent offices in the US and China, where the goal or the accomplishment is measured in terms of the number of patents rather than their quality
WHEN it comes to technology, the US, India, and China are among the world’s leaders if not the leaders. India, a software powerhouse, rejects software patents, whereas the US, which loses its dominance in this area, is attempting to use such patents in a desperate last-ditch effort at protectionism while using "China" as an excuse for patent maximalism (we’ll come to China in a bit).
“…one must distinguish between patents getting granted (by people who receive incentives to grant) and patents being found valid, e.g. by PTAB or the courts.”Yesterday we wrote about IBM patent propaganda in US corporate media. IAM, in its belated coverage about IBM, is opportunistically promoting the patent gold rush. “New grant stats show that companies still put a premium on US patents” says the headline, but it’s about IBM.
“IBM receiving the most US patents in a year has become as much a feature of the US patent system as the Supreme Court over-ruling the Court of Appeals for the Federal Circuit,” IAM says. Nice spin attempts. Just because the USPTO granted a lot of patents doesn’t mean that the courts would find them valid once challenged. MIP has also just piggybacked IBM, a software patents lobbyist, saying that “IBM held on to the top slot for the 24th consecutive year. Its 8,088 US patents granted in 2016 was up nearly 10% over 2015 and is the most any company has ever acquired in a calendar year.”
But how many of these would courts actually deem valid? Probably less than ever before. Here is an Indian angle on this ‘news’, trying to claim credit for this weaponisation of a patent aggressor.
“The only patent system which we consider to be worse than the USPTO is SIPO (China).”We remind readers not to be confused enough (or bamboozled) so as to conflate two things; one must distinguish between patents getting granted (by people who receive incentives to grant) and patents being found valid, e.g. by PTAB or the courts. “The presumption of validity also helped the patentee,” Patently-O wrote the other day about the case of Sonix Tech. v Publications Int’l. Well, courts must never ever presume validity at the USPTO (with patent application at 92% acceptance rate by some criteria). It remains somewhat of a mystery just how many of today’s software patents would actually be deemed valid; one can only estimate and judging by statistics from the PTAB and courts (extrapolation) one can envision hundreds of thousands of them being invalidated upon closer examination. That would certainly apply to many of IBM’s patents as well.
The only patent system which we consider to be worse than the USPTO is SIPO (China). If there were more polyglots out there who can write good English and read Mandarin fluently, we’d have more examples of totally rubbish SIPO patents.
IP Kat has just published a “Guest Post” by Yangjin Li. Titled “China’s Patent Boom”, the article embellishes the image of this garbage can of crappy patents. As one part puts it, naming the laughable number of applications:
Logically, one may have doubts about the quality of the massive applications. One can at least rest assured that all of the 1.1 million patent applications filed in 2015 will sooner or later be undergoing substantive examination. However, it raises questions about the SIPO’s examination capacity. As SIPO continues building its examination capacity to meet the rapidly growing demand, the workload and the skills of examiners, particularly those newly recruited examiners, may well influence the reliability of the examination.
Well, China is already becoming somewhat of a trolling hub. IAM is of course happy about it. Earlier this week it published “Licensors must understand that what is FRAND in US and EU may not be in China, says Xiaomi IP strategy chief”. Lenovo, which bought a pile of IBM’s business, is also mentioned:
As part of its programme to meet these, last week it signed a deal with Via Licensing that will give it the right to use the assets that form Via’s Advanced Audio Coding patent pool in its products worldwide. Like a similar deal done with Lenovo just before Christmas, Xiaomi’s agreement with Via was tailored to reflect what both parties understand to be the unique dynamics facing Chinese businesses operating in the mobile space.
We expect China to take the United States’ place as the world’s capital of patent trolling. For such a curse and a liability to go somewhere else would certainly be of help to American businesses. They never benefited in any way from all that litigation; it’s the patent microcosm that benefited from these lawsuit and we all know at whose expense…
Love and Yoon have a new paper about patent trolls. Matt Levy wrote about it and mentioned the Eastern District of Texas “court’s reputation for plaintiff-friendly juries” — a fact disputed (in response to us) only by those inside that Texan system which actually advertises this bias.
Here is what Levy wrote:
Brian Love and James Yoon have a new paper out on the Eastern District of Texas and why patent assertion entities love it so much. The authors note that 90% of the patent cases in the Eastern District are filed by patent assertion entities. They look at several possible explanations, such as the speed of the court and the court’s reputation for plaintiff-friendly juries.
Love and Yoon also found that few cases have any connection to the Eastern District of Texas. Only about 18% of the cases in the Eastern District of Texas have any local link to the original inventor, original patent owner, or the first named defendant. By comparison, nearly 88% of the cases filed in the Northern District of California (which includes Silicon Valley) have such a local link to the district.
As we noted earlier this week, the Eastern District of Texas might soon die as the capital of patent trolls. If China takes its place, then good luck to China. It would devastate if not destroy the Chinese economy, more so than anything else, after it repeated the United States’ mistakes, including patent scope lenience…
Patents are a man-made concept, just like money (unlike bartering). Granting too many patents can have the same effect of printing too much money (hyper-inflation, making even a loaf of bread priced way out of reach). █
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Hiding behind fronts, attack dogs, and interest groups
Summary: A potpourri of reports about some of the world’s worst patent trolls and their highly damaging enablers/facilitators, including Microsoft which claims that it “loves Linux” whilst attacking it with patents by proxy
THE ISSUE associated with patents as a ‘pure’ business model, or patent trolling, is widely understood. Imagine a world where people profit from making nothing at all, just demanding money from (if not blackmailing) companies that make actual sales and have a source of income/revenue, namely customers that buy products.
More patent trolls news came from the trolls-funded IAM the other day. “According to a December 29th release,” it quoted, ““Fortress will have the sole discretion to make any and all decisions relating to the company’s patents and patent monetisation activities.” Inventergy has around 740 patent assets acquired from Nokia, Huawei and Panasonic in a series of three separate deals in the first half of 2014.”
Here again we see Nokia as trolls’ ammunition, just like at MOSAID (now known as Conversant, which pays IAM’s publisher). Speaking of MOSAID, which Boris Teksler is involved in (hopping between Microsoft-connected trolls), see this new list from IAM. The Editor in Chief of IAM gives him (yet again!) some special honour, without noting that his employer paid IAM (under the new name, Conversant). So much publicity for an aggressive firm (actually a patent troll) from IAM… one might begin to think that it’s coverage that money simply buys. Conversant is such an evil patent troll (working for Microsoft’s interests now) that it had to change its name and now it’s trying to improve its reputation with some puff pieces? And from who, from IAM? Watch this latest IAM revisionism about Xiaomi (yet again!), maybe for the third time in the past month alone. We already explained that Microsoft was extorting Xiaomi with patents, but IAM tells a sanitised, face-saving PR story for Microsoft:
Xiaomi – Who says the IP deals market is flat? During 2016, Chinese mobile manufacturer Xiaomi – not yet 10 years old – seemed to be on a one company mission to prove that this is far from the case. In January it emerged that it had got its hands on a suite of Broadcom patents while a month later came the news that it had acquired a significant portfolio of US assets from Intel. Both deals, though, were eclipsed by the ground-breaking transaction with Microsoft announced at the end of May – a win-win for both that exemplified the way that IP is now forming the bedrock of much wider co-operative agreements between operating companies. While all this was happening. Xiaomi was also incorporating Zhigu Holdings into its internal operation – a move that saw the aggregator’s president and chief operating officer Paul Lin become Xiaomi’s VP of IP strategy. That could well prove to be a masterstroke, with Lin having gained a great deal of deal-making experience at both Intellectual Ventures and Microsoft while based in the US. Like many young Chinese technology businesses, Xiaomi is running a significant patent deficit; but unlike many of them it has recognised it needs to be aggressive in doing something about this. To expand, it will not only have to develop its own IP, but must continue to be active and creative in bringing it in form third parties. With Lin enjoying enlightened support from the very top of the company, Xiaomi is set to become an even bigger patent player in 2017.
Notice the connection between “Intellectual Ventures and Microsoft” (in the above text). It’s a strong and well established connection, which we have been covering for nearly a decade now. Microsoft uses the world’s largest patent troll, which it itself created/funded, to attack Linux. It’s a common tactic where the troll is mostly/only a proxy.
Similarly, as mentioned here the other day, Faraday Future throws its patents at some shell company and this new article from TechDirt looks deeper at the anatomy of it:
That’s all interesting… but what’s amazing is that in all of these discussions about how Faraday Future “doesn’t own its intellectual property” absolutely no one seems to point out the fact that the company that everyone compares it to, Tesla, famously dumped all its patents into the public domain and told anyone to go ahead and use them. That seems like a relevant point to make in articles about this upstart competitor and its “intellectual property.” Of course, it’s possible that the articles could mean something else when it says “intellectual property” — such as trademarks — but it seems unlikely that the trademarks for a flailing company that is unlikely to ever get anything on the market are that valuable.
The whole story, and the ignoring of Tesla’s stance on patents… is just strange. It is true that sometimes failing companies hang onto their patents as a sort of last ditch effort to extract some return for their investors in a patent fire sale. But if you’ve reached that point, things have already gone way too far south to really matter. Tesla has shown that it can build a pretty damn successful company without relying on “intellectual property.” It seems that people should stop freaking out that Faraday Future may have dumped its patents into some offshore company, and focus on the company’s real problems — like the fact that its execs are racing out the door as fast as possible.
Remember that Microsoft has its own patent “assertion” (trolling) department/entity (they call it “Licensing”) and several more large companies now do something similar. Sites like IAM just call that NPEs.
“For NPEs,” (i.e. trolls) Florian Müller explained the other day, “it’s often actually desirable to make litigation more, not less, expensive. Speed and injunctive relief attract them.”
Yes, this is a truthful statement and it helps demonstrate how to mitigate/tackle the trolling epidemic if there was sufficient desire, just like limiting trolls’ movement/travel. Currently, in the Eastern District of Texas, where defendants haven’t much confidence in winning (not cheaply anyway), trolls are making a killing.
East Asia is rapidly becoming the breeding ground for the trolling epidemic, as we noted here before. The above from IAM is just one example of it, as is the IAM article titled “The signs suggest that IP monetisation activity is on the rise in Southeast Asia, says A*STAR tech transfer chief” (“IP monetisation” is a euphemism for trolling). Another new article is titled “$130 million patent claim against Apple in Shenzhen shows NPEs in China increasingly strident”. It sure looks as if SIPO has turned China into a cesspool of patent trolls. Who benefits from this? A few parasites, not ordinary Chinese people. To quote IAM, “GPNE’s Chinese assertion appears to have begun back in 2013 in the Shenzhen Intermediate People’s Court. The court’s database shows four lawsuits against Apple and associated companies at the trial stage. According to a report in China’s National Business Daily, the most recent hearing was in late November 2016; the same article also states that Apple has made three separate attempts to invalidate the asserted patent at SIPO’s Patent Reexamination Board, with all of these complaints being dismissed on appeal.”
Poor patent quality at SIPO, just like at USPTO before it, emboldens patent trolls. IAM is siding with the trolls, as usual, also in the case of Nokia against Apple — a case which it belatedly covers (Nokia has become like a patent troll which merely licenses the brand).
Writing about patent trolls in general, Wolf Greenfield & Sacks PC bemoans what happens in the US. “Over the course of the last decade,” it says, “the U.S. Supreme Court has issued a series of decisions making it more difficult for so-called non-practicing entities (NPEs)—companies that own and enforce patents but do not offer products or services covered by them—to extract value from their patents. The Court may now be ready to take a step in the other direction by removing the equitable defense of laches against patentees’ past damages claims—up to six years of damages in many cases. Oral arguments were heard in the landmark case of SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC on November 1, 2016, and a decision is expected later this term.”
“Patent Value” for patent trolls (ignore euphemisms like “NPEs”) is also mentioned in this article. We can’t help but feel like patent law firms — not just sites like IAM (which trolls are paying) — take the side of trolls. They don’t care about innovation, just litigation. They profit from that.
United for Patent Reform, a group that battles against patent trolls, wrote the other day that “Crowdfunding company @gustly won its case over a #PatentTroll after 2 years in court.” Here is part of the statement:
The patent lawsuit filed by AlphaCap claimed ownership over “online equity financing”. As with most other patent lawsuits, the case was brought in the Eastern District of Texas. This court is known as a patent troll haven and has benefitted economically from an assumed bias in favor of trolls.
So here again we have an example where legitimate companies are hit hard by trolls that make nothing at all, just lawsuits. “Wearable device company Fitbit has moved for termination of its ITC patent complaint against Jawbone, which is unhappy at suggestions about its financial stability,” MIP wrote the other day (a move which we covered in this older post of ours). As before, Fitbit makes shameless excuses, trying to portray itself as merciful after it attacked a rival, only to realise that its case is going nowhere fast and is only wasting its own (Fitbit’s) financial resources.
Fitbit, like many other companies, must have realised that certainty of winning patent cases has gone down. Moreover, Jawbone sued Fitbit in retaliation, causing quite a big (and expensive) headache to Fitbit. As Fitbit is not a patent troll (it has actual products that it sells) it’s not hard to sue it as well, thereby compelling it to reach a ‘ceasefire’.
Meanwhile, as even IAM cares to admit, litigation numbers are down sharply and patent trolls suffer a lot:
Unified Patents and RPX have both released their early numbers on new US patent litigation cases in 2016, confirming what we have known for some time: district court cases fell dramatically, with Unified putting the total number of filings at 4,382 – a drop of 24.8% year-on-year. That is the lowest volume of new cases since 2011 when the America Invents Act (AIA) came into effect and a change in joinder rules led to an immediate increase in the number of suits. According to Unified, disputes at the Patent Trial and Appeal Board (PTAB) saw a slight drop down to 1,723 from 1,793, although last year was still the second busiest on record.
The question now is whether the 2016 litigation drop was a blip or part of a longer-term trend. The last few years have seen sharp fluctuations in the number of cases with 2013, the busiest year on record, leading into a marked fall in 2014 as plaintiffs were seemingly turned off by the Supreme Court’s Alice decision and by the prospect of patent reform. So if that is repeated, we might expect to see the number of new cases rise again this year.
MIP takes into consideration an upcoming SCOTUS case (alluded to above), but it barely bothers to mention that this case would affect trolls the most. To quote what is not behind a paywall:
Natalie Rahhal speaks to former Federal Circuit Chief Judge Paul Michel and others to assess the potential impact of In re TC Heartland at the US Supreme Court. One outcome could be a sharp fall in filing in the Eastern District of Texas and an increase in a potentially under-resourced District of Delaware
In re TC Heartland is already shaping up to be one of the most important patent cases in the US this year. The Supreme Court on December 14 granted cert in the case, which will give the court an opportunity to revisit the case law and statute governing forum selection in patent infringement suits.
We look forward to the outcome of this case because the Justices, probably well before Trump introduces new ones, are expected to serve a blow to patent trolls. Today’s Justices tend to be sceptical on issues pertaining to patents maximalism. █
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Delhi Gate at night
Summary: India’s resilience in the face of incredible pressure to allow software patents is essential for the success of India’s growing software industry and more effort is needed to thwart corporate colonisation through patents in India itself
IT HAS BEEN a while since we last wrote about software patents in India. The subject is growingly important because a lot of the world’s software is nowadays being crafted in India, much in the same way that a lot of hardware is made in China.
According to today’s news, “India’s patent office has rejected an application by German telecom major T-Mobile International AG seeking a patent for an invention related to a method for optimising the operational times and cell exchange performances of mobile terminals.”
“Currently, India has a patent system that mostly helps foreign companies cement/impose their monopoly on a vast population.”“The rejection of T-Mobile’s patent is the latest in the growing number of software patents,” says the article. For nearly a decade now we have been showing how large multinational corporations such as BT, IBM, Microsoft and others have been pushing India (sometimes even shaming India) into the trap which is software patents. They are habitually helped by their patent lawyers in India, who gleefully join the lobbying efforts. These lawyers bamboozle fellow Indians on behalf of large corporations that pay their lawyers a lot of money. We urge Indians to reject and resist these terrible attempts to hobble India’s thriving software industry. Even some large Indian companies (such as Infosys) have already changed their mind.
Currently, India has a patent system that mostly helps foreign companies cement/impose their monopoly on a vast population. This has been accomplished in many disciplines except software and it would be wise for India to keep it that way. A further improvement would be to reassess patentability in other domains, such as those that impact generic medicine (India already done exceptionally well in this domain). Here is a new report from the Times of India that says “[a]round 80% of the more-than 43,000 domestic product and process patents have been secured by foreign entities – many of them global technology giants like Qualcomm, Samsung and Philips.”
“We urge Indians to reject and resist these terrible attempts to hobble India’s thriving software industry.”Notice Qualcomm in there. It is a highly abusive company whose patent practices are so cruel and notorious worldwide. Consider this new article from CCIA‘s Matt Levy. Read the second paragraph to see how Qualcomm — like Microsoft — is basically corrupting academia (showered with money in exchange for bias) in an effort to thwart saner patent policy:
If you’ve followed the patent reform debate, you’re probably familiar with Qualcomm. Qualcomm has literally spent millions opposing reform, including around $6 million lobbying in the first 3 quarters of 2016, millions on television and print ads, a lot of money given to law schools to fund sympathetic research, and on and on. It’s hard to blame the company, given that Qualcomm’s licensing segment netted about $6.5 billion in profit in fiscal year 2016. You can find that information, and more, in Qualcomm’s 10-K for 2016.
India would be wise to shape its patent law not based on what companies like Qualcomm and their patent law firms (can be Indian) are saying. India should listen to its engineers, programmers, etc. Too many times we find articles on the subject which are composed by lobbyists, large corporate executives, or law firm that strive to embellish their financial bottom line. Today in the Irish press there is this article about “start-ups” (i.e. small companies) which advises them — among other things — to pursue patents. It’s a waste of money; there are other things they should be doing with their money (limited budget) because unless a small company is merely a patent troll it will never manage to make much of these patents. They’re just worthless ‘trophies’, overshadowed by massive patent ‘warchests’/’arsenals’ like IBM’s or Microsoft’s. Counterattacks in the lawsuit sense mean that they’ll never become David in the David versus Goliath sense. They’ll go broke trying to become David. The article from the Irish Times mostly quotes “Fergal Brady [...] an examiner in the Irish Patents Office [who] says his role is to settle the issues of “What are you describing? Is it clear? Has it been done before?” when it comes to patent applications.”
“India would be wise to shape its patent law not based on what companies like Qualcomm and their patent law firms (can be Indian) are saying”Patent examiners are not the “bad guys” (or girls). They are just trying to make a living by scrutinising patent applications. However, at the EPO and at the USPTO, immense pressure has been put on examiners to make decisions too quickly, rendering them totally incapable of doing their job properly. To make matters worse, they are sometimes offered incentives to do their job leniently, either granting in error or rejecting applications in error, settling for low patent quality or diverting all the financial damage to courtrooms (externality). █
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EPs are becoming ever more useless (hence a waste of money) under Battistelli
Summary: To nobody’s surprise, the past half a decade saw accelerating demise in quality of European Patents (EPs) and it is the fault of Battistelli’s notorious policies
THE overpaid ‘king’ of the EPO (who keeps the salary he is giving to himself secret, like in a third world country) keeps rewarding himself and his protectors for leading the Office in a self-destructive path — a lethal trajectory that would leave nobody but them (the top-level management) well off financially. The have the economic tenacity of oligarchs that prey on states for profit. They need to be stopped before it’s too late (if it’s not too late already, as redundancies loom over the horizon).
Earlier this afternoon an article from Heise’s Christian Kirsch was published in German. An automated translation of the article tells us it’s much of the old stuff, i.e. not much new information. “Proceedings before the ILO may take up to ten years,” explains Kirsch and also “there are different opinions between the employees and Battistelli about the “improvement in productivity” that he has advanced in the EPO.” To quote the automated and unedited translation: “Visible the first time in 2011. At that time, were the President suggested that the employees from the surplus of the Office a bonus of 4,000 euros net pay. On the other hand, the employees’ representatives expressed their opinion: such a bonus signals that the goal is above all to grant many patents and consequently to generate a high fee. It is, however, essential to examine the applications thoroughly and to maintain the high standard of the EPO in the granting of patents.”
IP Kat‘s debunking of patent quality claims is cited also. To quote: “Auditors and patent attorneys, however, are skeptical about what Battistelli’s “productivity increase” is about, which should have amounted to about 14 percent in 2015. To interpret the figures according to the British Blogs IPKat considers out that the Office has resorted to “cherry-picking”…”
A lot of the rest deals with the spineless [cref 96056& chinchillas] of the Administrative Council, the attack on the independence of the appeal boards, attacks on SUEPO, and at the very end Brexit’s effect on the UPC (the automated translation there is too mangled to be comprehensible).
Looking across the Atlantic at the USPTO, things appear to have meanwhile improved. As Patently-O said after the new year had begun, patents continue to be challenged by PTAB, which is sort of an equivalent of the appeal boards in the EPO (though not exactly similar). One new article says about claims of temporal separation between two communications in a patent that a court stepped in and:
On remand, the PTAB will decide whether the prior art the claim elements as they are more narrowly defined.
Remember that PTAB did not even exist more than half a decade ago!
Battistelli’s vision of the EPO is akin to that of a registration office with minimal appeal opportunities. Because hey, who needs justice anyway? It’s not as though today’s EPO cares about justice. Not even of its own employees…
Another new article of Patently-O says:
The Supreme Court has in recent years routinely rejected the Federal Circuit’s rigid, cabined interpretations of the Patent Act. While no one knows what the future holds, today’s practitioner’s conduct may be judged by a more stringent standard than suggested in Therasense and proposed here. That has happened with eligibility, obviously. Given that the Supreme Court could hold that the Patent Act requires more than avoiding intentionally obtaining a patent that you know you shouldn’t get, and given that that interpretation will likely be applied to all issued patents, and given the USPTO’s statement that it hopes that the new definition will result in less disclosure, one can see a trap for the unwary practitioner. This may give practitioners a false sense of security.
By “practitioners” he means the patent microcosm, or the bunch of people who profit from patent maximalism without actually producing anything (other than paperwork).
And speaking of patent scope, today IAM correctly points out that China has become the land of patent chaos. Patent quality barely exists there and Battistelli seems to be emulating that. He wants a production/assembly line, not a patent office. It’s far too easy to just grant a patent on every piece of garbage and figment of imagination; it’s a lot harder to come up with real inventions and ensure that these — and these alone — get granted a patent, making a European Patent (EP) synonymous with somewhat of a trophy. Here is what IAM (patent maximalists) wrote:
Pro-plaintiff China – Not only does China handle more patent applications than anywhere else on earth, as well as more patent suits, but it is now also becoming one of the world’s most patent-friendly jurisdictions. This was a trend that accelerated during 2016, when it emerged that the Beijing IP court – one of three established in the country in 2014 (the others being in Shanghai and Guangzhou) – had handed foreign rights owners a 100% win rate in its first full year of operation. What’s more, unlike their counterparts in the US, the Chinese courts are willing and able to hand out injunctions, as the likes of Samsung and Apple discovered last year. Not everything in China’s patent garden is rosy – damages are low (though getting higher), enforcement of court decisions is often a problem and there are issues around protectionism – but for a country that has no strong patent tradition, China has come a long way very fast. And with manufacturing jobs moving to lower cost countries, the government’s push for an economy built on innovation is only likely to reinforce this trend. Perhaps the most significant confirmation of what is happening came at the end of the year when it was announced that Qualcomm had settled a high-stakes patent dispute with mobile manufacturer Meizu. This was an American company that had taken action against a flag-waving local business and, in the end, the latter concluded it could not win. That says a lot.
Speaking of China, Tian Lu reviews a book of Qiao Yongzhong. “Many experts in China, including Dr. Qiao,” Lu explains, “feel no smugness with the huge patent filing numbers.”
It’s just a big heap of garbage. The EPO seems to be heading in the same direction, unlike the USPTO, owing in part to SCOTUS with the above-mentioned rulings.
For Europe to be competitive we must ensure that European authorities recognise the colossal damage Battistelli is causing and belatedly step in. █
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South Korea typically finds a healthy balance on patents, from which the country benefits (economy and innovation)
Seoul Plaza, South Korea
Summary: An outline of recent stories about patents, where patent quality is key, reflecting upon the population’s interests rather than the interests of few very powerful corporations
THE NEW YEAR IS ABOUT to start and we are eager to see governments all across the world recognising that patents have gone too far if examiners are granting millions of them. Techrights was never an anti-patent site; rather, it was pro-patent quality. We need to limit patent scope so as to ensure that the practical (or economic) impact of patents benefits society at large. The former Chief Economist of the EPO spoke about it earlier this winter.
“We need to limit patent scope so as to ensure that the practical (or economic) impact of patents benefits society at large.”Florian Müller has this new article about a Korean antitrust ruling. We have been writing about rulings of this kind for nearly a decade (going back to the Korean ruling on monopolistic Intel) and 3 months ago we wrote about Microsoft's latest patents controversy in Korea. We remind readers that Korea’s official position is that software is not patentable (different from Japan’s and China’s policy).
“I wish to point out,” Müller wrote, “that ACT is generally very IPR owner-friendly, but when it comes to FRAND licensing of standard-essential patents, its positions are pretty consistent with mine. An organization that takes similar positions on FRAND (and of which Google is a member) is the Brussels-based Fair Standards Alliance. Presumably the reason the FSA hasn’t spoken out on the Korean ruling yet is simply that people in Brussels tend to be on vacation this week (to a far greater extent than in the U.S.).”
“For the record, Florian Müller assured me he had been in no way associated with (or paid by) Microsoft for several years now.”As we noted earlier this year, the Fair Standards Alliance is rather mysterious, but the same cannot be said about ACT. I politely told Müller it’s worth pointing out that Association for Competitive Technology (ACT) is a Microsoft front group with decades of history (going back to the nineties, under another name and acronym). We have exchanged some messages about that [1, 2, 3, 4]. For the record, Florian Müller assured me he had been in no way associated with (or paid by) Microsoft for several years now. A lot of what we wrote about Florian Müller is no longer relevant/applicable as he left behind his Microsoft work and has no intention to do that again. Some people will never forgive him for that, but I have. I believe that he’s not “up for sale” now that he leads a team of “app” developers, hence not dependent on contracts from companies like Oracle, either.
“Just updated post on antitrust ruling against Qualcomm with link to unofficial translation of KFTC press release,” he added, after he mostly focused on ACT’s message. Here is a report we found about the news earlier this week:
A South Korean regulator said it would fine Qualcomm Inc. about $853 million for alleged antitrust violations, the highest such penalty handed to an individual company here, as the U.S. chip maker faces global scrutiny over its patent-licensing business.
A lot of people later discussed the relevance of this to the situation in China, where Qualcomm’s shakedown efforts have only met very limited success.
The Reinhold Cohn Group, writing this new article (“China may become more liberal towards business method and software related patents”), reminds us that China has gone bonkers with patent scope. SIPO now copies/emulates the mistakes of the USPTO and it already becomes a patent trolls’ heaven. It’s beneficial to nobody. “On 27 October 2016,” as the law firm put it, “the State Intellectual Property Office of China (SIPO) published, for comments by the public, proposed draft revisions to its current Examination Guidelines for examining software-related inventions. In the draft revised Guidelines SIPO goes one step further, as, in addition to granting patents on software-related inventions that solve a technical problem, is willing to allow patents for data carriers, and, in some cases, even for business methods.”
“SIPO now copies/emulates the mistakes of the USPTO and it already becomes a patent trolls’ heaven.”So basically they want to be the garbage dump of failed patent applications, or the equivalent of scholarly journals that almost blindly accept every submitted paper (and are hence worthless and have no following). We are gratified to see the USPTO departing from this lunacy left (having been accentuated) by David Kappos. Incidentally, some LLC (usually trolls) turns out to have sued the USPTO for last year’s long outage; it has just lost the case*.
Jasper L. Tran, writing in the Iowa Law Review, has just published “Abstracting About “Abstract Idea”” — a short paper in which he tackles the classification of some patents as “abstract”. Also today, an article titled “Software patent eligibility in Canada: IP year in review” was published but then deleted, maybe by accident. █
* To quote Pharma Patents Blog: “On December 2, 2016, Judge O’Grady of the U.S. District Court for the Eastern District of Virginia granted the USPTO’s motion to dismiss the complaint brought by Elm 3DS Innovations, LLC over the “holidays” declared December 22-24, 2015 when the USPTO experienced a power outage that impacted its electronic filing systems. The decision may leave other stakeholders wondering whether Elm was not the best party to challenge the USPTO’s action, or whether the action is simply unreviewable under the APA.”
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Scare tactics and vengefulness from the Patent Maximalists’ Lobby
Summary: The growing embrace of “China” as the convenient bogeyman for those who oppose patent reform and wish to see a resurgence of patent chaos, from which they personally profit at victims’ expense
THE USPTO may be in self-perpetuating denial about it, but software patents are a dying breed in the US as courts don’t tolerate them. The EPO, in the mean time, moves in the opposite direction, but we’ll leave the EPO out of this post’s scope.
Unhappy With Insufficient Number of Lawsuits and Collateral Damage
Paul Morinville, a prominent opposer of patent reform in the US (and part of Watchtroll’s ilk), whines that “PTAB procedures are now invalidating nearly 90% of all patents they evaluate.” Yes, so what? Alice and other cases are pretty clear about it and PTAB, unlike patent examiners, is not being pressured to just bless every patent in the name of “production” or “success” (again, a growing problem at today’s EPO).
Morinville picks on Google (large company as his latest scapegoat) and some of his online friends already heckle me for pointing that out. To quote his article: “Over the next decade, the Supreme Court would eliminate injunctive relief and then for all intents and purposes, invalidate their patents first under Bilski and then under Alice. The courts also changed the way claims were written, thus invalidating thousands of patents retroactively. The America Invents Act’s PTAB procedures are now invalidating nearly 90% of all patents they evaluate. The courts also radically reduced damages for patent infringement.”
That’s good. But wait until Morinville brings up the bogeyman again — the same bogeyman that David Kappos has been summoning recently.
Let’s Envy China
“With China strengthening its patent system,” Morinville says, in probably the most ludicrous part of the whole article. China is actually weakening patents by granting almost everything that comes through SIPO’s doors, causing a patent hyper-inflation and an epidemic of trolling. How is that desirable to anyone but the patent microcosm? These anti-AIA think tanks and lobbyists (like Morinville), who want more lawsuits and more litigation, continue to infest the Web and a lot of them congregate around Watchtroll these days. This pattern of China-blaming or China-shaming mirrors what the Democratic Party in the US has been doing with Russia as of late.
Watchtroll wants the USPTO and the courts to start another race to the bottom and give/approve patents on everything, just like SIPO in China. One might call it “the litigation lobby” — for all it want is more and more lawsuits (which the lobby profits from). Watch another new Watchtroll article, this time by Steve Brachmann, the henchman of Quinn. So people who don’t even develop anything insist that “China” is the threat and that “Chinese patent guidelines” are a threat to the US rather than to China itself.
What kind of post-truth nonsense have we sunk to here?
Watchtroll, in another new article, says “Keep it Cordial” while Quinn attacks everyone who does not agree with him, even judges (see the image at the top).
What a nasty Web site this is. For IBM’s patent chief to occasionally link to it probably takes some guts because it says a lot about IBM, which has gone rogue (even IBM employees now protest/object to the management over that infamous Trump fawning).
China’s Growing Trolls Epidemic
China’s situation with regards to patents is not good. As we have been pointing out since the summer, SIPO grants far too many patents, including software patents. “This is especially true for software patents where the scope of patent protection is rather vague,” says this new article from China, which also mentions Xiaomi, a company that got trolled through India, as we noted before. To quote the relevant part:
As Chinese smartphone brands work to carve out a spot in the major-league global smartphone industry, they are increasingly being dragged into an international patent war with foreign tech firms.
The latest case saw San Francisco-based audio tech firm Dolby Laboratories lodge a lawsuit against Chinese smartphone companies Oppo and Vivo in India, accusing them of infringing on its patented technology. Back in 2014, Chinese tech firm Xiaomi was barred from selling phones in India after Sweden-based Ericsson filed a complaint with an India court alleging patent infringement.
The Ericsson-Microsoft patent trolls strategy (using trolls as proxies) was mentioned here twice this month [1, 2] and Xiaomi is again being mentioned by the Microsoft Windows-powered IAM (with other Microsoft connections). It is again embellishing Microsoft's patent extortion against Linux as follows:
The May agreement between Microsoft and Xiaomi was undoubtedly the IP deal of the year and it was also an excellent example of how patents can play a role in broader commercial agreements. Under the terms of the deal, Xiaomi undertook to pre-load Microsoft products on to more of its mobile devices, the two sides agreed to a cross-licence and the US software giant transferred 1,500 patent assets to the Chinese company. The transaction provides an excellent foundation for Xiaomi as it looks to grow its business in the US and for Microsoft as it continues its penetration of the Chinese market.
This is misleading. All we have here is patent extortion by Microsoft against Linux, even in China where the government of China took a strong stance against it (even leaking a list of Microsoft patents that are secretly being sued to blackmail Chinese companies like ZTE). We believe that Huawei, the world’s leading Android OEM these days, is still able to resist Microsoft’s Mafia-like tactics. Microsoft repeatedly failed to sign a patent deal.
The bottom line is, China has become a dangerous place patents-wise. Is that desirable to anyone but the patent microcosm? Of course not. █
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