Alice stands firm.
Software patents are being invalidated en masse using Alice. Not to be confused with Alice the software.
Summary: Lobbyists of software patents, i.e. proponents of endless litigation and patent trolls, are attempting to convince the US Supreme Court (SCOTUS) to have another look at abstract patents and reconsider its position on cases like Alice Corp. v CLS Bank International
THE USPTO can grant as many software patents as it wants, but American courts reject these and litigation with such patents has become an unattractive, risky strategy. Even pursuing such patents in the first place may prove to be a waste of time and money, irrespective of the outcome at the patent office.
Earlier this week we spotted this press release about HEVC — certainly a massive software patents trap [1, 2] (evergreening). “This innovative product utilizes Beamr’s 29 granted patents and 18 pending patent applications to produce HEVC video encodes that are up to 50% smaller than Beamr’s market-leading HEVC software encoder, Beamr 5,” the press release stated. Wanna bet all of these patent applications, even if they got granted, would be thrown away by courts like the Court of Appeals for the Federal Circuit (CAFC), if not SCOTUS above it? This whole thing in an exercise in ‘thicketing’ — i.e. making up for the invalidity of patents by quantity rather than quality (to make legal challenges more lengthy and thus expensive). Microsoft does this quite a lot. It flings a large pile of lousy software patents at poor companies and demands that they settle (pay ‘protection’ money) or spend years in courtrooms (at the expense of millions of dollars, making settlement the cheaper option, securing the patents from much-needed scrutiny).
“Even pursuing such patents in the first place may prove to be a waste of time and money, irrespective of the outcome at the patent office.”The matter of fact is, software patents should no longer be issued by the USPTO. These contribute to extortion, not innovation. Only the law firms profit from that.
The other day we saw this new rant about Alice, courtesy of Matthew Schantz who profits from legal chaos. That’s just latest example of patent law firms promoting software patents and yearning for them. Watch the language of optimism and positivism: “Software patents have seen better times. The glory days of the 1980s and 1990s, after the U.S. Supreme Court held in Diamond v. Diehr (1981) that inventions implemented in software are not unpatentable just because they are implemented in software, continued long past the generalized expansion of patentable subject matter by the Court of Appeals for the Federal Circuit in State Street Bank v. Signature Financial Group (1998). But the Supreme Court shook the foundations of the software patent world in 2012 (Mayo v. Prometheus) and 2014 (Alice Corp. v. CLS Bank International), leaving business leaders (and their patent attorneys) to wonder whether — or even hope that — software patents were dead. While the U.S. Patent and Trademark Office and courts have struggled to find reasonable, “new normal” limits on software patents that are practical in application and justifiable under precedent, recent cases reflect a maturing of the law surrounding patents on software-implemented inventions.”
“The matter of fact is, software patents should no longer be issued by the USPTO.”That’s good. That’s very desirable. Just ask any software professional about it. These professionals do not want software patents, unlike those who pretend to speak on ‘their behalf’. Some of them repeatedly heckle PTAB and try to slow it down, for it invalidates a growing number of software patents these days (a lot more than courts do). Patently-O, one of the scarcely-closeted opponents of PTAB, only accentuates the negatives, not the positives, and then proceeds to looking into SCOTUS cases that have nothing whatsoever to do with software patents. The first of these says: “A newly filed petition for writ of certiorari offers a substantial challenge to the quick-look eligibility decisions that have been so popular among district courts. The challenge here is especially focused on no-evidence eligibility decisions that serve as a substitute for an obviousness determination.”
Again, he is hoping to slow down (or prevent) invalidation of bogus patents. The second of these says: “The Court affirmed that requirement in a non-patent case, Goodyear Tire & Rubber Co. v. Haeger (Apr. 18, 2017). In that case, Goodyear engaged in a years-long effort to hide key documents from the plaintiffs, who, not knowing of them, settled the case. When they sought sanctions, the district court awarded all of the litigation fees the plaintiff had incurred from the time when the scheme had begun: $2.7 million. It also held, conditionally, that $2 million was caused directly by the shenanigans.”
“Maybe we can urge some readers of ours to submit an amicus brief to explain why software patents are a bad idea and Alice already tackling the issue means that there’s no point revisiting the matter.”But this case isn’t even about patents. Why is Patently-O covering this?
The threat that SCOTUS will revisit Alice-type cases isn’t quite there, at least not yet. Watchtroll is trying to change this right now, by urging (in the form of amici) an escalation of a software patents case to SCOTUS. To quote: “BBiTV appeals from the Federal Circuit’s Rule 36 affirmance of two summary judgment decisions in which the district court found claims of U.S. Patent No. 7,631,336, entitled “Method for converting, navigating and displaying video content uploaded from the internet to a digital TV video-on-demand platform,” to be directed to the abstract idea of “using the same hierarchical ordering based on metadata to facilitate the display and locating of video content.” The following excerpts of the Petition set forth the issues presented and portions of BBiTV’s arguments. Amicus briefs in support of the Petition are due by May 15, 2017.”
Maybe we can urge some readers of ours to submit an amicus brief to explain why software patents are a bad idea and Alice already tackling the issue means that there’s no point revisiting the matter.
“Software patents are on the rocks in the United States, but this should not be taken for granted and we must never rest on our laurels knowing that the opposition, i.e. those who prey on software developers, try to overturn and cancel prior decisions.”We are no doubt going to see many more attempts like the above to crush Alice. There is in fact a whole "task force" now, led by IBM and its lobbyists (people like David Kappos), dedicated to doing just that.
Software patents are on the rocks in the United States, but this should not be taken for granted and we must never rest on our laurels knowing that the opposition, i.e. those who prey on software developers, try to overturn and cancel prior decisions. █
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…Hardware (chipsets) and software alike, with dubious software patents that accompany them, have made phones incredibly expensive
Summary: By tackling the practices of Qualcomm and by dragging companies to court over ridiculous design patents (potential of blanket ban by the Supreme Court) Apple weakens the very business model it will need to rely on as its market diminishes, leaving it with nothing but patents
THE mobile market is worth a lot of money these days. The exact numbers depend on how it’s measured and what exactly gets included in the measure. But no doubt more and more people now turn to mobility. Many sales are made in it, both of devices and software (licensing). Apple’s sales are declining and many of the headlines we come across (when it comes to Apple at least) are about new patents and patent applications from Apple. Perhaps that’s just Apple’s vision/foresight of its future. It want to prey on OEMs that are actually shipping a lot of phones (Huawei for example). This is why Microsoft, for example, attacked Samsung in the courts — using software patents of course — and then virtually forced Samsung to become its vassal. It’s a strategy of coercion. A lot of patent battles are now focused/centered around the mobile market (connections, interfaces, touch-enabled devices, navigation and so on) as many companies try to turn a pile of patents into revenue without actually creating anything. Qualcomm is a good example of this.
“It’s a strategy of coercion.”Qualcomm's management seems growingly nervous about the antitrust action in various places as well as the lawsuits/complaints [1, 2], notably Apple‘s. The $815m BlackBerry arbitration, which was mentioned here the other day, gets a mention in patent maximalists’ sites and Florian Müller took note of it after we had sent him some links related to it. It seems possible, albeit it’s subjected to the Supreme Court’s instincts, that another Apple case against Android will reach the Supreme Court (SCOTUS). As Müller put it just before Easter (taking special note of the role of CCIA):
One organization that has previously supported Samsung against Apple, the Computer & Communications Industry Association (CCIA), appears to have decided not to get active again at this stage. But in case certiorari is granted, I wouldn’t be surprised to see CCIA get involved again. With respect to design patent damages, CCIA’s work was really great. But even CCIA may at some point experience such a thing as litigation fatigue: the Apple v. Samsung dispute is now six years old.
Samsung’s design patents-related petition was exceptional. It had tremendous support and, since it raised sort of a once-in-a-century type of issue, it was a slam dunk (to the extent that a cert petition can be a slam dunk at all, given overall stats). The fact that certain amici who supported Samsung on design patents aren’t on board this time doesn’t mean that the three issues raised last months aren’t also certworthy in their own ways and their own right.
We wrote about this case many times before and if it reaches SCOTUS, then we definitely expect the patents to be challenged and quite likely invalidated, as per the pattern of recent SCOTUS decisions on patents. If that happens, what will Apple be left with? Apple is the next Qualcomm. █
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Even Canadian and Chinese companies currently exploit the Eastern District of Texas (East Texas for short) for litigation
Summary: The temporary economic boost in East Texas — a boost that piggybacks an abusive practice sheltered and even encouraged by East Texas — may be about to end when SCOTUS Justices do the right thing and starve crooked courts that advertise plaintiff friendliness
EARLIER this year we wrote numerous posts that mentioned SCOTUS looking into laches [1, 2, 3, 4, 5]. In simple terms, the recent SCOTUS ruling sided with patent trolls in the sense that Justices let them use the clock against their victim/s. There have just been two new examples of analyses from legal firms 1, 2], reaffirming our concern that patent trolls got somewhat of a boost from the ‘Supremes’ (Justices). But having said that, this case is of far lower impact than TC Heartland — another SCOTUS case which will be decided some time soon.
“In simple terms, the recent SCOTUS ruling sided with patent trolls in the sense that Justices let them use the clock against their victim/s.”There is a lot of press coverage about it (in recent days we found [1, 2, 3, 4, 5, 6, 7]), but it’s mostly dominated by patent law firms, i.e. patent microcosm as opposed to industry, academics, journalists etc. We don’t have time to comment on each article individually (we last wrote about the subject a few days ago), but the overall message seems positive. It certainly looks like the end of patent trolls (at least in Texas) is imminent. Based on our readings, the oral arguments (e.g. questions) suggest an inclination to overturn the decision, i.e. ban venue shifting.
“Whenever it’s delivered — no matter if unanimous of not — we certainly hope it will be the end for East Texas as we know it.”One particular article, this one from Orrin Hatch (US Senator for Utah, the Republican party), received a special mention. “Hatch is right,” one person wrote. “Patent trolls are strangling innovators working to improve our society.”
Here are some portions from Wired‘s article, composed by Hatch:
To take TC Heartland as an example, the defendant corporation in the case, an Indiana-based manufacturer of zero-calorie sweeteners, was sued in Delaware even though it has no regular or established place of business in Delaware and is not even registered to do business in the state. Despite the defendant’s lack of connections, the court found that Delaware was a proper venue for the suit because a small percentage of the defendant’s sales—approximately 2 percent—were purchased by a customer in Arkansas and shipped to Delaware.
Savvy plaintiffs know that current rules allow them to bring suits virtually anywhere they want, so they seek out forums where they know judges are likely to give them an easier shake. One federal court in east Texas in particular has become infamous as a magnet for patent litigation because of its plaintiff-friendly rules and sympathetic juries.
In 2015, nearly 45 percent of all patent cases nationwide were filed in that one court. Nearly one-third of all patent cases nationwide were handled by a single judge on that court. This is forum-shopping in the extreme.
We lack the legal experience to estimate/tell when exactly a decision will be handed down, but better right than quickly. Whenever it’s delivered — no matter if unanimous of not — we certainly hope it will be the end for East Texas as we know it. █
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Judge Gilstrap alone may have already caused billions of dollars in damages to legitimate (practicing) companies
Summary: Courts of the Eastern District of Texas (EDTX or East Texas for short) might soon have to fold or resize, and the local economy adapt to accommodate something other than patent trolls and aggressors, based on words (questions) heard at the highest courtroom in the United States
MANY eyes are on SCOTUS this week, for it can seriously influence the USPTO as much as it influences the courts. Are patent trolls going to receive one final death blow (not entirely mortal, but enough to weed out most of them)? Two cases currently deal with it, one covered in IAM (with the expected bias, being IAM) and another by MIP yesterday. Behind a paywall, as usual, clues are given that the future of patent trolls in the US seems anything but promising. They might soon be more or less defanged, as their historical preference for East Texas can belatedly come to an end. Natalie Rahhal wrote about “[q]uestions from some Supreme Court justices in oral arguments in TC Heartland v Kraft,” saying that these “suggested a desire to overturn the Federal Circuit on patent venue.”
As a crucial reminder, the Federal Circuit ruled in TC Heartland that it’s fine for trolls to carry on and last month Professor Dennis Crouch said that “TC Heartland doesn’t seem like a case the Supreme Court would hear simply to affirm” but rather to overturn. There is no level higher than SCOTUS, so if SCOTUS says no to East Texas, then it’s a big no. The corporate media obsesses over the effect on local businesses, rather than the effect on victimised companies which get dragged into Texan courts that are a sham. Employees lose their jobs over such lawsuits. Entire companies can collapse. The other day we shared the following video:
“Are patent trolls going to receive one final death blow (not entirely mortal, but enough to weed out most of them)?”Yesterday we wrote about LG resorting to the use of patent trolls for legal leverage — a truly despicable tactic conveniently overlooked by the English-speaking Korean media.
Elsevier, in the mean time, has published this new article titled “Standing Up to the Patent Troll, the Big Bad Wolf of the Patent World” and it’s not too flattering to trolls. To quote a part which advocates the America Invents Act:
Regardless of how you define the term “patent troll,” most people agree that such entities are bad news for our economy because they cost consumers and retailers billions of dollars each year. The patent troll is, for lack of a better analogy, the big bad wolf of the patent world, huffing and puffing by suing legitimate businesses for patent infringement. The question that remains is what can be done about them? More specifically, must one succumb to litigating a patent infringement lawsuit in federal court in order to defeat a patent troll? The short answer is, not always. Recently Congress, through its passage of the Leahy-Smith America Invents Act (“AIA”), provided alleged patent infringers with several tools to invalidate patents outside of U.S. district court litigation. Indeed, in many instances alleged patent infringers can challenge patents in the U.S. Patent and Trademark Office (“U.S. PTO”) using proceedings known as “post-grant proceedings.” Among other advantages, post-grant proceedings are typically less expensive and faster than district court litigation. And if the U.S. PTO invalidates one or more claims of a patent before a district court reaches its decision in a patent troll’s infringement litigation, the patent troll’s district court litigation is likely to end. While there is still much work to be done to solve the problem of patent trolls, Congress’ implementation of post-grant proceedings has restored some of the balance of power between patent trolls and those they allege infringe their patents.
The America Invents Act (AIA) has done so much to improve the US patent system and even invalidate a lot of software patents, thanks in part to Alice (SCOTUS). Patent maximalists are still licking their wounds over it and one of them asks questions like, “How Technical Must an Improvement be to Survive 101?” (via this proponent of software patents)
“Now we just need to stride forward or strive for the end of East Texas as the hotbed of patent trolls and then put an end to trolls once and for all.”That’s the wrong question to ask. 101 is about “abstract” or not, not “technical” (whatever that means) or not; perhaps the writer conflates that with something of the EPO. Either way, the writer says “[t]he technical nature of a claimed improvement is central to the evaluation of claims under 35 U.S.C. § 101. Two recent district court opinions illustrate that whether or not the claims describe an improvement in the functioning of a computer itself can be determinative.”
Well, district court opinions barely bear any weight compared to anything from CAFC and SCOTUS, which are both hostile towards software patents in general. Now we just need to stride forward or strive for the end of East Texas as the hotbed of patent trolls and then put an end to trolls once and for all. They are in no way promoting innovation; they suppress innovation. Many of them are being used as proxies of large corporations such as Microsoft in order to taunt and cause damage to their rivals. LG is just one example that we named earlier this week. █
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Finding balance between restrictions and collectively-beneficial liberalism
“The copyright laws attempt to strike a balance between protecting original works and stifling further creativity.” Bridgeport Music, Inc. v Dimension Films, opinion of the court (2004)
Summary: As the US Supreme Court (SCOTUS) starts delivering some decisions we take stock of what’s to come regarding patents
AS EXPECTED, the Justices at SCOTUS bring forth some new output for law firms to comb through before analyses/interpretations get published by the hundreds/thousands. First there was today’s decision on uniform copyrights (just covered in our latest daily links, under the copyright section, with three reports we’ve found within hours).
“To summarise, in the area of copyright the Justices sidle with the maximalisms, whereas in the area of patents it’s not quite as depressing.”Professor Crouch took note of the Lexmark case, which is still ongoing (orally). To quote a portion: “Truthfully, most of the oral arguments involve Justice Breyer explaining to other members of the court that Lexmark’s approach violate’s Lord Coke’s 300 year old maxims – “that’s been the kind of basic legal principle for an awfully long time.” Lexmark’s primary answer: “the common law changed a lot after Lord Coke.” In the two most recent IP Decisions by the Court – Star Athletica and SCA Hygiene – the majority ruled in favor of the IP rights-holder over Justice Breyer dissents in both cases.”
We’ve already covered this case before. MIP, in the mean time, takes note of the laches defence, writing this afternoon that “The Supreme Court rejected wholesale the Federal Circuit’s stance that laches be an available defence in patent law, in its SCA Hygiene v First Quality ruling” (we wrote about this last night).
“We certainly hope that in the coming days, weeks and months the Justices will recognise that for patent law to be respected and be seen as legitimate it needs to adhere to public interests and be limited to what is reasonable.”To summarise, in the area of copyright the Justices sidle with the copyright maximalisms, whereas in the area of patents it’s not quite as depressing. The likes of IAM and Watchtroll will no doubt write about that soon; IAM has just published this rant from a law firm, asserting that “Patent Trial and Appeal Board, state anti-troll laws and anti-patent Supreme Court and Federal Circuit decisions have eroded patent protection.”
No, these have improved patent quality — something we should all celebrate unless we make money by peddling patent feuds. We certainly hope that in the coming days, weeks and months the Justices will recognise that for patent law to be respected and be seen as legitimate it needs to adhere to public interests and be limited to what is reasonable. This means, among other things, that the ruling on TC Heartland (last update a couple of days ago) should be made against patent trolls infesting the Eastern District of Texas. █
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Insulting Justices/judges, like hitting them under the belt
Justice Breyer was pro-Alice or in favour of what’s now known as the Alice test that eliminates many software patents
Summary: The US Supreme Court (SCOTUS) is preparing to deliver some important decisions on cases with broad ramifications, e.g. for patent scope, and those who make money from patent feuds are attempting to alter the outcome (which would likely restrict patent scope even further, based on these Justices’ track record)
SOME of our earliest articles about SCOTUS were quite critical of it; the same goes for the USPTO. But nearly a decade has passed and the United States is nicely reforming the patent system, led by key decisions from SCOTUS (decisions such as Alice and Mayo).
“…nearly a decade has passed and the United States is nicely reforming the patent system, led by key decisions from SCOTUS (decisions such as Alice and Mayo).”There are some important and relevant (to us) cases coming from SCOTUS, possibly with new Justices joining quite soon (following the death of Scalia and the change of political party in power). A loosely-closeted patent maximalist (disguised as academic) seemed rather bothered about the upcoming decisions. He wrote a lot about them recently, noting for instance that “Justice Breyer dissented – arguing that “for more than a century courts with virtual unanimity have applied laches in patent damages cases” in order to fill an important gap in the statutory regime.” (regarding SCA Hygiene Prods. v First Quality Baby Prods)
He also wrote regarding the Lexmark case which we recently wrote about in light of the attacks on Justice Breyer. The patent maximalist quotes from this SCOTUS oral arguments
[PDF]: “If you look it the Alice case, for example, that obviously had tremendous implications…”
“There are some important and relevant (to us) cases coming from SCOTUS, possibly with new Justices joining quite soon (following the death of Scalia and the change of political party in power).”Yes, fantastic implications to software developers, albeit negative for patent trolls, patent lawyers etc. (in other words, people who produce nothing of use)
SCOTUS will likely rule for common sense yet again, as it so persistently did in the patents domain (the composition of Justices is still very similar). Here is Watchtroll attempting to influence the outcome by giving the platform to “an associate in Womble Carlyle’s Intellectual Property Transactions Group.” (i.e. patent microcosm).
No doubt there will be a lot of lobbying to that effect in the coming days, weeks, and beyond.
A great headline that we found earlier today said, “In Apple v. Samsung, SCOTUS Sided With Reason Over Rounded Corners”
“No doubt there will be a lot of lobbying to that effect in the coming days, weeks, and beyond.”There may be more such decisions (regarding Apple and Samsung) heading into SCOTUS, with nearly billions of dollars hanging in the balance (for this case alone, irrespective of impact it would have on other, future cases). To quote the article: “After almost five years of legal volleying, the U.S. Supreme Court finally issued a decision in the highly anticipated Apple v. Samsung design patent case late last year. On Tuesday, Dec. 5, the court delivered a unanimous decision in favor of Samsung, finding that damages for design patent infringement may be limited to revenues attributable to a component of an article of manufacture rather than profits from the entire article. While this is an important victory for startups and innovators—from global corporations to inventors toiling in garages—courts must still work to provide the guidance and clarity necessary to prevent bad actors from abusing the patent system to the detriment of innovation. And they have a new opportunity to do so: On Feb. 7, the U.S. Court of Appeals for the Federal Circuit took a significant step in that direction by remanding the Apple v. Samsung case to the Northern District of California court.”
We have been trying to figure out where a Justice Gorsuch (if appointed, not just nominated) would stand on patents, but it’s still too much of a mystery [1, 2]. We have not yet seen any indication — except perhaps this — that Trump is going change course and attempt to reverse/undo the progress made. █
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Summary: An outline of the latest news from the Court of Appeals for the Federal Circuit (CAFC), the Eastern District of Texas (EDTX), and proponents of software patents, who are growing ever more desperate in the wake of Alice
THE death of software patents (in the US) is habitually and even casually being denied by those who have made a lot of money from them, notably law firms.
Clearly, in the patent microcosm’s press (like Texas Lawyer in this case), the term “most popular” means popular among trolls and lawyers. Watch this new article titled “EDTX’s Rodney Gilstrap Is Still America’s Most Popular Patent Judge” (EDTX is the Eastern District of Texas).
“Clearly, in the patent microcosm’s press (like Texas Lawyer in this case), the term “most popular” means popular among trolls and lawyers.”The article as a whole is behind a paywall, but the summary states: “While patent infringement filings are down both nationally and in Texas according to a recent report, there’s still no question who the King of America’s patent docket is: U.S. District Judge Rodney Gilstrap of Marshall.”
King of the trolls maybe, now that the father of patent trolling is dead. The Eastern District of Texas and Judge Gilstrap are a farce; as we pointed out a few days ago, the Supreme Court should act fast against both, essentially by moving cases out of this “rocket docket” of patent trolls, starving the demand for kangaroo patent courts.
Writing about the latest twist in the Smartflash case, a site that promotes software patents mentioned how the Eastern District of Texas was once again overruled by CAFC. To quote:
The Federal Circuit has reversed Eastern District of Texas Judge Gilstrap’s denial of a post-trial motion for a judgment of patent-ineligibility under 35 U.S.C. § 101 of three patents directed to accessing and storing payment data. Smartflash, LLC v. Apple, Inc., No. 2016-1059 (Fed. Cir . March 1, 2017). Chief Judge Prost, writing for a panel that included Judges Newman and Lourie, saved Apple from a jury verdict that claims of U.S. Patent Nos. 7,334,720; 8,118,221; and 8,336,772 were valid and infringed.
The patent microcosm, including the above site, continues to bemoan the death of yet more software patents. Here is one of the latest examples, “Data Back-Up Claims Held Patent-Ineligible under Alice,” and to quote:
As a plethora of cases demonstrates, no matter how separate the patent-eligibility is from the question of prior art in practice, the reality is that the analyses go hand-in-hand. So when drafting patent applications think hard about whether you can state a technical solution to a technical problem. And if you can state a technical problem and solution, do it, as clearly as you can.
A District Court meanwhile throws away yet more software patents that have nothing innovative in them. Why did the USPTO grant these in the first place? Watchtroll says that the defendant “argued that both of TAGI’s patents are directed at unpatentable subject matter under 35 U.S.C. Section 101. In response, the court applied the now familiar two-step standard Alice/Mayo test for distinguishing patents claiming abstract ideas and laws of nature.”
“…Alice is here to stay and the Supreme Court has taken no other case that can reverse Alice.”As usual, they ruled against these patents, as they do in the significant majority of the cases (most of the time) nowadays. Watchtroll, as expected, continues to moan about death of so many software patents (calling the software “revolutionary”), but maybe these people should just move on and get another (real) job, not lobbying for software patents and fooling developers into pursuing patents that are a waste of money.
The funniest headline we have come across? A clickbait headline from boosters software patents, asking “Goodbye Alice?”
Haha, that’s a good one. No, Alice is here to stay and the Supreme Court has taken no other case that can reverse Alice. Here is what the article says, citing front group IPO (which has this new IBM-led campaign to shoot down Alice):
A recent proposal by the Intellectual Property Owners Association (IPO) to amend 35 U.S.C. § 101 could bring positive change to applicants attempting to acquire patent rights for computer implemented inventions in the US.
The proposal comes after court decisions such as Alice Corp Pty v CLS Bank Int’l (2012) (Alice Corp) blurred the lines between patentability and obviousness, requiring an assessment of the “inventive concept” to be performed when evaluating subject matter eligibility of an application, and resulting in a significant number of computer-related inventions being found invalid for lack of patentable subject matter.
What’s wrong with that? It’s about time. Ask actual software developers if they ever wanted software patents to begin with. They never did. Now that software patents are ebbing away so do patent trolls, which the Supreme Court might soon throw out of the Eastern District of Texas.
“Now that software patents are ebbing away so do patent trolls, which the Supreme Court might soon throw out of the Eastern District of Texas.”Recently, the “Federal Circuit ruled that companies who receive patent demand letters from trolls can’t sue them in their home district,” Daniel Nazer wrote for the EFF. One must remember the close correlation between software patents, patent trolls, and the Eastern District of Texas. If even the lower courts sometimes deny the Eastern District of Texas access to everyone’s alleged grievances, then we might not even have to wait until TC Heartland. However, to quote Nazer, the Federal Circuit has not exactly been consistent, at least not yet (consistency will likely come after the Supreme Court issues a ruling on TC Heartland, some time later this year):
If a patent troll threatens your company, can you go to your nearest federal court and ask for a ruling that the patent is invalid or that you aren’t infringing it? According to the Federal Circuit (the court that hears all patent appeals), the answer to this question is usually no. The court has a special rule for patent owners that demand letters cannot create jurisdiction. EFF, together with Public Knowledge, recently filed a friend-of-the-court brief asking for this rule to be overturned. But in a decision this week, the Federal Circuit reached the right result for the accused infringer in the case, but left its bad law largely in place.
Second, in a case called Red Wing Shoe, the Federal Circuit ruled that companies who receive patent demand letters from trolls can’t sue them in their home district to get a determination the patent is invalid or not-infringed. As others have noted, the Federal Circuit has “gone to great lengths to deny jurisdiction over patentees sending demand letters from afar.”
We eagerly await the decision on TC Heartland, we very much welcome CAFC decisions in favour of PTAB findings (a topic to be covered in our next post), we need to guard PTAB from the patent microcosm, and last but not least ensure Michelle Lee keeps her job in spite of a vicious witch-hunt against her [1, 2, 3, 4]. █
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How long and how much more will it take for the Supreme Court to realise there is a profound issue in Texas?
Summary: The lack of justice in the American patent system, where trolls receive favourable treatment from particular judges and one bogus patent (now invalid) can earn a person over $45 million in ‘protection’ money, necessitates firm and decisive intervention from the US Supreme Court
Federal Circuit Once Again Overrules Mistakes by the Kangaroo Patent Court of Rodney Gilstrap in the Eastern District of Texas
Kangaroo courts are not monopolised by the EPO and the USPTO hasn’t a monopoly on bad patents, either (thankfully, the USPTO is actually improving and lowering the incentive for trolls). The US Supreme Court, together with CAFC below it, already do a fine job, further aided by PTAB (the appeals board) for quicker and cheaper determinations against bad patents.
When Apple celebrates the death of bad patents we too are happy, even if we are far from friends of Apple (we used to call for boycotts). Apple has just defeated Smartflash and there are a lot of articles about this, especially or initially in pro-Apple sites. Headlines include “Apple has $533m verdict against iTunes software patents thrown”, “Apple won’t have to pay $533 million to an iTunes patent troll”, “U.S. appeals court tosses patent verdict against Apple”, and “Apple tastes victory against Smartflash at Federal Circuit”.
“When Apple celebrates the death of bad patents we too are happy, even if we are far from friends of Apple (we used to call for boycotts).”“This ruling isn’t surprising,” one of the above articles states, “as US District Judge Rodney Gilstrap ordered a damages retrial, saying the jury’s view of Apple’s infringement might have been confused by his instructions on how properly to calculate royalties.”
But the pro-trolls Judge Rodney Gilstrap did not in fact dispute a liability. To him, it was just a matter of how much money would be paid. First to cover the news, as far as we were able to see, was Michael Loney of MIP. He wrote about it as early as yesterday, noting that CAFC had found yet another ruling from the notorious Eastern District of Texas to be bunk. “The Federal Circuit has found invalid three Smartflash patents,” he wrote, “reversing the Eastern District of Texas.”
Eolas Driven Out of the Eastern District of Texas
There is another important development down in Texas and Joe Mullin probably wrote the best report about it (Mullin is quite the expert in this domain). To quote Mullin:
Eolas Technologies, which has been called a “patent troll,” has continued to file against big companies, even after losing a landmark 2012 trial. But following an appeals court order (PDF) last week, Eolas will have to pursue its lawsuits in California—not its preferred patent hotspot of East Texas.
As of Friday, Eolas’ lawsuits against Google has been transferred to the Northern District of California. The move could reduce Eolas’ chances of winning a settlement or verdict since East Texas courts have been viewed by some as favoring patent holders. Similar lawsuits against Amazon and Wal-Mart remain in East Texas, for now.
Michael Loney wrote about it too, noting that CAFC is potentially moving trolls out of that notorious Eastern District of Texas (even before the Supreme Court rules on TC Heartland LLC v Kraft Foods Group Brands LLC). To quote:
Google’s request for a writ of mandamus to transfer a case brought by Eolas Technologies to the Northern District of California from the Eastern District of Texas has been granted, with the Federal Circuit citing “a clear abuse of discretion”
Eolas was mentioned here as far back as one decade ago and many more times since. It’s definitely a patent troll, but Mullin put the word “troll” (in the headline) and “patent troll” (in the body) within scare quotes, perhaps fearing legal action against the publisher (his employer).
Software patents, as in the above case, are bunk, but it’s very expensive (usually too expensive) going to court to show it (especially if there are appeals). This means that most defendants will silently fold and pay the Mafia (or troll) ‘protection’ money. Insistent and persistent aggressors or trolls, some of whom are well-funded, will just file more and more motions until the defendant — even if repeatedly deemed innocent — decides that it’s simply cheaper to settle. It means that wealth trumps justice and it can be exploited time after time, by simply choosing vulnerable litigation targets which are almost certainly going to buckle.
“Software patents, as in the above case, are bunk, but it’s very expensive (usually too expensive) going to court to show it (especially if there are appeals).”Speaking of software patents, this tweet says that “Salesforce tries to patent Records Management……quick take” (in an image).
Erich Spangenberg Turns Out to be a Patent ‘Fraud’
In the above cases we see deep-pocketed companies like Google and Apple fighting back, again and again, simply because they can afford it. So can smaller (but still very large companies) such as Newegg, which already spent millions of dollars on very few patent cases — and that’s just in legal fees!
According to Mullin’s other new report, mega-troll Erich Spangenberg went after Newegg and finally (belatedly) lost. That’s another software patent dead and we can expect more to come; it’s expensive to prove the invalidity. The USPTO should clean up this (its own) mess. PTAB helps towards that. Mullin wrote:
Patent-holding company TQP Development made millions claiming that it owned a breakthrough in Web encryption, even though most encryption experts had never heard of the company until it started a massive campaign of lawsuits. Yesterday, the company’s litigation campaign was brought to an end when a panel of appeals judges refused (PDF) to give TQP a second chance to collect on a jury verdict against Newegg.
The TQP patent was invented by Michael Jones, whose company Telequip briefly sold a kind of encrypted modem. The company sold about 30 models before the modem business went bust. Famed patent enforcer Erich Spangenberg bought the TQP patent in 2008 and began filing lawsuits, saying that the Jones patent actually entitled him to royalties on a basic form of SSL Internet encryption. Spangenberg and Jones ultimately made more than $45 million from the patent.
Will Spangenberg now refund the extortion money (more than $45 million), plus legal expenses? Or will this be another case of an invalid patent costing a fortune to countless companies, even though they were innocent all along because this patent was bogus?
We certainly hope that the Supreme Court is watching all these cases and will take them into account later this year when TC Heartland can become the new “patent killer” (precedent). █
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