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11.05.18

Blockchain Hype Exploited by the EPO and by Patent Law Firms to Wrongly Assert Free/Libre Software Can Coexist With Software Patents

Posted in Deception, Europe, Free/Libre Software, IBM, Microsoft, Patents, Red Hat at 12:48 am by Dr. Roy Schestowitz

Summary: Managing IP and ‘Software IP’ (IAM) among other think tanks of patent trolls and litigators continue to advance a toxic agenda while the EPO openly and endlessly promotes software patents under the guise of blockchain “innovation”

THE management of the USPTO has been receiving backlash recently. Blockchain, AI and other media buzz get used to grant software patents. A lot of people aren’t happy about it. Soon, to make matters potentially worse, IBM will take over Red Hat. IBM is a strong proponent of software patents.

Last week Red Hat’s McBride was quoted as saying: “we have been very single minded about patents – we don’t see any value in them other than the deterrent impact they have…”

But that does not deter patent trolls. In fact, it doesn’t really accomplish anything.

Will things improve/change for the better any time soon? That depends. In a sense, things improved a little when Microsoft left only its patent trolls to do the battles. Microsoft will not refrain from lobbying for software patents and it still pursues some of its own (there’s a new article right now about “virtual keyboard methods for Xbox and touch” — another patent from Microsoft).

The way we see it, there’s a battle between the litigation ‘industry’ (or ‘in-house’ legal teams at large corporations) and geeks who actually write code and make things. The former group is trying to justify its existence and for that there’s a constant need for litigation (like weapons makers rely on perpetual war/conflict).

“In-house counsel from confectionery, biopharmaceutical, telecommunications, technology, plastics and medical research companies explain how they’re measuring patent worth to find cost-saving wins,” this article from a site of the litigation ‘industry’ (Managing IP) wrote some days ago. Extortion “on a budget”? This is a truly sick ‘industry’ of litigation and threats and what “cost-saving wins” means is neither cost-saving nor a win.

“AMERICAS Thirteen practitioners from McKool Smith have established a litigation boutique called Reichman Jorgensen with offices in Silicon Valley, Atlanta and New York,” Managing IP wrote around the same time. These vultures and parasites call their extortion rackets “boutiques”; McKool Smith represents a lot of patent trolls.

It has meanwhile emerged that there’s another AIPLA echo chamber lobbying event. It calls for software patents because greedy lawyers want lots of frivolous lawsuits to profit from at geeks’ expense. Ellie Mertens (Managing IP) wrote:

The software patent eligibility situation in the US is “a really high fence” that requires some sparkle to pass while the European test is drier

The software patent eligibility situation in the US is “a really high fence,” said Sarah Knight of Talem IP in a panel at the AIPLA Annual Meeting last week, “when it should be just a threshold.”

Managing IP is on the same bandwagon; just look at who sponsors Managing IP. The same goes for IAM, which ran a pro-software patents event last week. In their own words: “First session of day at our #softwareIP event focusing on patentability of software globally with great panel comprising USPTO, Amadeus, Facebook, Alibaba, Lung Tin IP and Haseltine Lake [] Jean-Francois Cases of Amadeus – 10/15 years ago it was impossible to get a software patent granted in Japan, now it’s one of easiest jurisdictions. For us right now India is hardest place to get a software patent…”

More so than Europe.

The corrupt EPO has made software patents far too easy to get. Blockchain patents (software patents) are outside the scope of European patent law, but today’s EPO routinely ignores and violates the law anyway. Here is what the EPO wrote before the weekend: “#Blockchain technology is not without controversy. You can discuss patenting it with patent specialists and blockchain professionals at this #conference: http://bit.ly/EPOblockchain18 ”

The EPO is nowadays plagued with nepotism and rapidly-declining patent quality; its founding document (EPC), European authorities and the rule of law are routinely spat at. Even insiders notice. They write about it. They sign petitions.

Even outsides complain: “Dear @EPOorg – blockchains are not device, they’re not software. “𝘉𝘭𝘰𝘤𝘬𝘤𝘩𝘢𝘪𝘯” 𝘪𝘴 𝘢 𝘧𝘢𝘯𝘤𝘺 𝘸𝘰𝘳𝘥 𝘧𝘰𝘳 𝘢 𝘱𝘢𝘳𝘵𝘪𝘤𝘶𝘭𝘢𝘳 𝘴𝘶𝘣𝘴𝘦𝘵 (merkle trees) 𝘰𝘧 𝒑𝒖𝒓𝒆 𝒎𝒂𝒕𝒉! There’s no software involved, it doesn’t require computers. Pen & paper works too…”

Yes, blockchains aren’t exactly new; few people understand the underlying concepts and the EPO exploits that. Here again the EPO is promoting software patents ever so shamelessly. That’s just merkle trees: “What are the main challenges in patenting #blockchain & its applications? Experts will discuss that and their solutions at this event we’re co-hosting with @GoI_MeitY: http://bit.ly/indoeur pic.twitter.com/hZjqGCr4Sn”

The mentions of blockchains are endless at the EPO. Here again the EPO does it: “Are you involved in #patents and #blockchain developments? Then this is the event to attend!”

The management of the EPO does not understand blockchains (the people at the top are not scientists and they were selected for nepotism); it got a lot worse under António Campinos, who is merely a quieter version of Battistelli.

IAM wrote: “Amadeus’s Cases – in Europe our experience is that once an examiner has made up their mind on an application it’s very hard to change it…”

Examiners at the EPO simply lack the time to properly assess applications. We know it because they say so, usually anonymously.

Notice what the EPO wrote some days ago: “Elke von Brevern, PCT Expert at the EPO, and Richard Garvey, Key Account Manager at the EPO, will tell you how you yourself can make the PCT system more efficient. Join them in Washington…”

And Houston, Texas. Yes, also in Texas, where many law firms work with patent trolls. Notice what the EPO has turned into and who it’s attempting to appeal to. Where next? Dallas? This latest roundup from “Dallas Invents” contains a lot of software patents (also creepy ones like “Apparatus and method for deploying an implantable device within the body”).

Today’s EPO is very much on board with patent trolls’ agenda and IAM’s too. Citing Alibaba’s Roger Shang, IAM wrote about software patents again; “we don’t see a contradiction between open source and patents,” Shang is quoted as saying. That’s a lie.

Alibaba was also mentioned a few days ago in relation to patents on blockchains, not in China (where software patents are permitted) but in the US. “Alibaba Files Patent For Blockchain System,” says the headline. So these ridiculous software patents from China have spread to the West with Campinos and Iancu eager to allow software patents. From the article: “Chinese e-commerce conglomerate Alibaba has filed a patent application with the U.S. Patent and Trademark Office (USPTO) for a blockchain based system that allows a third party administrator to intervene in a smart contract in case of illegal activities. The USPTO published the patent application on October. 4, 2018.”

Alibaba Group is a big “client” to the USPTO, so we won’t be surprised to see such patent applications accepted. Doubling down on the lie above, days ago we saw a new article titled “10 Things to Know About The Intersection of Blockchain Technology, Open Source Software, and Patents”. Complete nonsense right from the get-go or the headline, courtesy of Sheppard Mullin Richter & Hampton LLP. Blockchain patents are fake patents that would be rejected by courts and these patents are clearly not compatible with the distribution model of Free/Open Source software. The article says: “This set of issues is important now because blockchain technology is on the verge of mainstream commercialization and much of it relies on open source software. As with any technology where there is rapid innovation, the number of patents being filed and obtained is increasing. The interplay between patents and open source is often confused. The recent changes to the scope of patentable subject matter under U. S. patent laws have created uncertainty over what is patentable. This is particularly true with respect to blockchain-based inventions and how innovations in this space are disrupting business processes.”

This is misleading because those things (what they call “blockchain-based inventions”) have always been around to some degree. Terminology may have changed, but like “cloud” there’s a hype explosion and it’s mostly associated with a word, not substance. These patent law firms are trying to destroy software development and they’re misleading people by saying software patents are OK if you say “blockchain”. Mind this days-old spammy press release, published under the headline “Can You Patent the Blockchain if it is Open Source?”

The actual text starts under “Why Businesses using Blockchain Technology are Filing for patents and Other Useful Info about Software Patents” (after that they merely promote their services). We’re assuming that they hope people may search the Web, perhaps searching for “Blockchain” and “Open Source”, then give them a call.

Here’s another new one: “10 Lessons On Blockchain And Open-Source Licenses”

So says Law 360‘s James Gatto and the patent ‘industry’ when they try to impose software patents on Free/Open source developers, mainly by using hype waves. “On their own,” Gatto says, “blockchain technology, open-source software and patents each present legal issues that are often complex and frequently misunderstood. When combined, the complexity and misunderstandings of these three topics are…”

The only real connection between these three is that a lot of code associated with blockchains is Free/libre software and companies try to take control by claiming monopolies on the algorithms — something which they should not do.

11.04.18

Software Patents Proponents Abound: IAM, IBM, Kappos, OIN and Microsoft

Posted in IBM, Microsoft, OIN, Patents at 2:07 pm by Dr. Roy Schestowitz

Summary: A roundup of lobbying for software patents and against Patent Trial and Appeal Board (PTAB) inter partes reviews (IPRs); the big players are still eager to strangle the whole domain with thousands of lawsuits, armies of lawyers, and tens of thousands of US patents of questionable quality/validity (enough to keep their rivals hobbling and fearing)

THE U.S. Patent and Trademark Office (USPTO) continues granting some software patents. And sure, not many or any of them have much of a chance in courts. Especially not high courts like SCOTUS or even the Federal Circuit. Just look at their track record.

“Over the past week there have also been reports about another Microsoft-funded patent troll suing almost all of Microsoft’s rivals in this space (security).”The patent trolls’ lobby, IAM, is trying hard to change that. Patent aggressors pay IAM for the effort and days ago they promoted software patents in an event called Software IP. Guess who opened the event: IBM, the new (soon to be confirmed) owner of Red Hat. Let that sink in for a moment. It’s actually not surprising as it’s consistent with IBM’s stance on the matter.

“Brian Kuhn from @IBM delivers this year’s keynote address,” IAM declared. At around the same time David Kappos, who had worked for IBM before he became the Director of the USPTO (he’s now more like a lobbyist of IBM), got boosted by the front group misleadingly named “Innovation Alliance” (hint: it is not about innovation but litigation, it should be named accordingly but “Litigation Alliance” sounds bad). Kappos is a paid lobbyist for software patents — he is paid by patent powerhouses including IBM and Microsoft — both companies being feeders of patents trolls. Their tweet said: “Fmr. @USPTO Dir. Kappos and Judge Michel: Congress needs to pass legislation that redefines #patent eligibility standards to overrule recent #SupremeCourt decisions #PatentsMatter @MorningConsult https://morningconsult.com/opinions/supreme-court-patent-decisions-stifling-health-care-innovation/ …”

It’s basically that same old rant of theirs about SCOTUS. The “Innovation Alliance” then went on to bashing PTAB, which is consistent with the above agenda of lowering the patent bar. This anti-PTAB alliance, boosted by radicals who created anti-PTAB groups, is doing anything it can think of to slow down or obliterate PTAB. As we recently noted, however, based on the numbers, PTAB remains strong and “PTAB petition filing in the third quarter of this year was the highest since the second quarter of 2017,” according to Michael Loney’s latest tally.

Going back to IAM and its IBM-led (keynote) event, here they are writing about Northrop (to be mentioned later in the week in the misleading article from IAM, promoting abstract/bunk patents) [1, 2, 3, 4]: “Northrop – clearly given the amount of money we have in place we’re bullish on patents and software patents although still dealing with some unpredictability in the system [..] diligence process is definitely more robust when there are a lot of software patents in a portfolio [...] having diversity in your portfolio (such as in terms of geography) allows you to blunt some of the impact of Alice [...] I think the negative impact of Alice can be overplayed a bit. It got rid of some really bad patents and is cleaning up the system a little bit…”

A lot if not all software patents are not desirable to the software domain. At all. It isn’t as though there were programmers in that crowd though. It was an echo chamber of lawyers/attorneys. Someone called Pierantozzi is quoted/paraphrased as saying “there’s more confidence, less uncertainty [in software patents] especially in portfolios that are tied to technology…”

Keith Bergelt, a former US diplomat who worked in patent ‘monetisation’, was there too and he’s paraphrased as saying “having Microsoft as a licensee [in OIN] is symbolically important and it’s important for the entire community…”

If only they stopped feeding patent trolls — something OIN can do virtually nothing about. It’s worth reminding ourselves that Bergelt succeeds a person from IBM, who was the first head of OIN. In fact, OIN still is a very IBM-centric group.

A few days ago an article was published with the headline “Microsoft Wants to Make Peace with the Open Source Community” (then stop feeding patent trolls and financing firms that smear FOSS).

One Microsoft-connected patents troll that repeatedly attacked GNU/Linux firms (including Red Hat quite a few times) is still busy suing, based on this new report:

Cook Medical has won a successful dismissal of a patent infringement claim brought by Endotach, a subsidiary of Acacia Research Group.

Endotach’s appeal was dismissed by the US Court of Appeals for the Federal Circuit, which affirmed the US District Court for the Southern District of Indiana’s summary judgement that Endotech’s US patent (5,122,154) was invalid under section 102 of the US Patent Act.

Cook was originally sued by Endotach in 2012 at which point the patent had already expired.

[...]

The Supreme Court held that the equitable defence of laches no longer applied to cases where the alleged infringement occurred during the statutory period.

Over the past week there have also been reports about another Microsoft-funded patent troll suing almost all of Microsoft’s rivals in this space (security). As we noted before, there’s this press release and shallow press coverage. Exactly one month ago they got a patent back in play and they’re still as aggressive as ever while Microsoft carries on stockpiling new patents (examples in [1, 2]).

10.30.18

IBM- and Microsoft-Backed Patent Troll Strikes Again and IBM’s Lobbyist for Software Patents Has Just Defended Patent Trolls (Again)

Posted in GNU/Linux, IBM, Microsoft, OIN, Patents, Red Hat at 9:56 am by Dr. Roy Schestowitz

Related: IBM, IPO, AIPLA, ABA and Other Lobbying/Front Groups of the Patent Microcosm Are Trying to Change US Law for Software Patents

David Kappos as lobbyist

Summary: With IBM and Microsoft having lots of commonalities when it comes to patent policy and exploitation of the law (both employed similar people too, notably Marshall Phelps and David Kappos, former Director of the USPTO), concerns should be raised in light of the latest lawsuit from the patent troll they support

FORGET the nonsense about OIN and LOT Network; OIN does nothing to shield anyone from trolls or proxies, which Microsoft is leveraging to sell “Azure IP Advantage” [1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21]. It’s also difficult to forget Microsoft’s role in the SCO lawsuit, which is still ongoing (more than a decade and a half now) and primarily targets IBM.

“It is quite worrying to see IBM- and Microsoft-employed lobbyists publicly defending patent trolls on the very same day an IBM-armed and Microsoft-funded patent troll uses software patents for blackmail.”According to patent boosters, who took note of it pretty fast and linked to reports, patent troll Finjan, fueled by the new owner of Red Hat, backed and financed by Microsoft, filed another lawsuit. We had spotted the original press release within hours upon publication and it said this:

Finjan Holdings, Inc., (NASDAQ:FNJN), a cybersecurity company, today announced that — after nearly two years of good faith efforts to resolve a patent dispute with Fortinet, Inc. ( “Fortinet”) — its subsidiary Finjan, Inc. (“Finjan”) has filed a patent infringement lawsuit against Fortinet, Inc., a Delaware corporation with headquarters in Sunnyvale, California, in the U.S. District Court for the Northern District of California.

Finjan filed the Complaint (Case No. 3:18-cv-06555), on October 26, 2018, and alleges that Fortinet’s products and services infringed or are infringing at least nine of Finjan’s U.S. patents. Specifically, Finjan asserts that Fortinet’s FortiGate, FortiManager, FortiAnalyzer, FortiSiem, FortiSandbox, FortiMail, FortiWeb, FortiCache and FortiClient technologies, including Fortinet Security Fabric Platform products infringe U.S. Patent Nos. 6,154,844; 6,965,968; 7,058,822; 7,418,731; 7,647,633; 7,975,305; 8,079,086; 8,225,408; and 8,677,494 (collectively “the Asserted Patents”). Finjan is seeking, among other things, a jury trial, past damages not less than a reasonable royalty, enhanced damages for willful, wanton and deliberate infringement, and reasonable attorneys’ fees and costs for infringement of each of the Asserted Patents. Additionally, Finjan is seeking preliminary and permanent injunctive relief against Fortinet and those in privity with them, from infringing and inducing the infringement of the ‘968, ‘822, ‘731, ‘633, ‘305, and ‘408 Patents.

These are software patents. So the same month that Microsoft said it had reached patent “truce” with GNU/Linux its patent troll Finjan is filing yet another lawsuit against Microsoft’s rivals. It’s as if nothing at all has changed except Microsoft’s lies embedded all over the media (something about “protecting Linux” and “open-sourcing patents).

Meanwhile, the lobbyist David Kappos (sponsored by Microsoft and IBM after he had run the USPTO) is promoting software patents and patent trolls (like Microsoft’s and arguably IBM). He uses the euphemism non-practicing entities (NPEs) and published this article yesterday in what’s likely the largest site on the topic, saying:

The recipe for swinging the pendulum of patent law towards weaker patent rights is simple: Start with a generous warning about the scourge of low quality patents, stir in a skosh of fear mongering regarding non-practicing entities (NPEs) asserting those patents, then apply heat with predictions of lost jobs and threats to innovation, publicize in a blog, speech or article, and there you have it!

Just like the Trump-appointed Director Iancu he seems to be denying there’s a problem. Earlier this month Iancu came under a lot of fire, especially from front groups of technology firms large and small, after he had insinuated that patent trolls aren’t a problem or don’t even exist (they’re a ‘fiction’ or ‘fake news’). It is quite worrying to see IBM- and Microsoft-employed lobbyists publicly defending patent trolls on the very same day an IBM-armed and Microsoft-funded patent troll uses software patents for blackmail. Need we add that on the same day IBM also announced that it bought or agreed to buy all of Red Hat’s ‘defensive’ patents, which include software patents? The Federal Circuit typically finds that those patents are invalid (if the case reaches that far, at great expense to the defendant).

10.21.18

More ‘Blockchain’ Nonsense in Pursuit of Bogus, Nonsensical Software Patents

Posted in IBM, Microsoft, Patents at 12:36 pm by Dr. Roy Schestowitz

The chaining of software developers

Man chained

Summary: The U.S. Patent and Trademark Office (USPTO) is still granting abstract software patents because words like “blockchain” get mentioned in the applications; companies that do this hope to shield themselves from disruptive technology and possibly facilitate future patent blackmail

BOTH the EPO and USPTO have piggybacked the blockchain hype; they are chaining together a bunch of buzzwords like “AI” and “4IR” to come up with excuses to grant software patents in Europe and even in the US, in defiance of 35 U.S.C. § 101. We wrote a couple of articles about this very recently [1, 2] and Mastercard's role was last mentioned earlier this year (also in prior years).

Big banks are entrapping the market with bogus, abstract software patents whose likely purpose is to fence away disruptive technology, by means of lawsuits or threats thereof. A few days ago Stephen O’Neal wrote:

On October 9, American financial services giant Mastercard was granted a patent for a method to partition a blockchain so that it can store multiple transaction types and formats. The filing published by the U.S. Patent and Trademark Office (USPTO) reveals the details of the new system — not the first of the kind for Mastercard.

Why are such abstract patents being granted? More of that same hype we wrote about before?

Not only big banks are doing this; large technology companies have been doing the same thing, notably IBM. There was this article about it (crossposted in other sites) which spoke about it as follows:

The adoption of blockchain technology is slowly taking shape across a multitude of industries. At the forefront of the amalgamation of payment systems and logistics is US tech giant International Business Machines Corporation (IBM), which has established itself as a leader in terms of blockchain-based products and offerings.

The latest developments aim at the logistics sector – but IBM has been keen on blockchain for over 5 years that reveals a slow and steady approach to the adoption of enterprise-scale blockchain solutions.

If you have an Internet company or merely a Web site, then just remember that IBM has a long and well-documented history of blackmailing such companies/sites under the false pretense of ‘invention’ (rather, having a large pile of bogus software patents). They just wait until the target has enough money. It’s an ambush. What we have here is patent bully and software patents lobbyist carrying on patenting software, knowing these bogus software patents won’t be tested in court (they can be used for blackmail instead).

As another new article makes clear, IBM isn’t alone (Microsoft is in this too, as usual). Proprietary software giants strap patent barbwire — even if those are bunk software patents — to entrap and demolish rivals. These are like submarine patents.

“Big hitters like IBM, Microsoft, Oracle and others,” said this article a few days ago, “have stepped up technology investments in the past 18 months, largely through R&D labs and participation in open source software bodies including the Linux Foundation’s Hyperledger project…”

Remember that the Linux Foundation is not against software patents; it’s into the OIN approach. The problem, however, is that it doesn’t guarantee peace or cooperation, except perhaps among sponsors of the Linux Foundation (i.e. very large companies with seats on the Board).

MIT and the Prior Art Archive Perpetuate Existing Problems

Posted in America, Apple, GNU/Linux, Google, IBM, Microsoft, OIN, Patents at 11:37 am by Dr. Roy Schestowitz

There’s a reason why similar initiatives perished in the past

Strata Center MIT
Strata Center MIT

Summary: Large companies with many tens of thousands of patents (each) would have us believe that broadening access/reach of prior art (e.g. to patent examiners) would solve the issues; This may very well work for these large companies, but it overlooks the broader picture

COMPANIES like Apple, Microsoft and IBM — large companies that cross-license among themselves — don’t fear the USPTO or even patents in general (not even the EPO where they have a lot patents of their own). The patent system has, with few exceptions, served them well. It protects them. It’s a form of protectionism.

20 years after its foundation Google has already joined this ‘club’; instead of reforming things Google is adapting and so does Red Hat. To companies like these, which use GNU/Linux extensively, OIN and the likes of it represent a solution. Google backs LOT Network, which is similar.

Recently, together with a bunch of other large companies (Cisco, Dell, Intel, AT&T, Amazon, Microsoft, and Salesforce are named below), Google pushed the “Prior Art Archive”; MIT’s self-promotional new piece about it gives a rather foggy idea; it even quotes MIT staff and no critics/sceptics. It doesn't help much when they focus on prior art rather than patent scope and obviousness (among other things). To quote MIT’s own site:

Two years later, a company applies for a patent on your invention. Once the application is granted, the company not only begins profiting from your device, but launches a lawsuit against you, the inventor, for infringing their patent.

This is the danger faced by researchers and developers alike, because the limits of existing content repositories means it is often a struggle for patent examiners to find what they call prior art — evidence that an invention is already known — relating to an application. That means that some applications that should be rejected are wrongly approved.

[...]

Cisco has already uploaded 165,000 documents into the archive, and a number of companies have committed to take part in the initiative, including Dell, Intel, AT&T, Amazon, Microsoft, and Salesforce. Google has also assisted the project with classification technology that will be used in the system.

As we explained earlier this month, this serves to distract from other efforts and put examination efforts in the hands of the public, essentially outsourcing or crowdsourcing the work (for corporate gain). When examiners use the archive they may get a false sense of search exhausion.

10.07.18

The Era of Fake Patents (or Software Patents) is Upon Us

Posted in America, Europe, IBM, Patents at 10:55 pm by Dr. Roy Schestowitz

The fast lane for abstract patents disguised as "AI" and other hype waves

Bahnhof

Summary: The ‘patent lust’ which prevails in profit-driven patent offices is backfiring; many granted patents turn out to be ‘fake’ if not just worthless as courts reject them based on/citing underlying laws

THE EPO and USPTO have both decided to engage in shameless promotion of software patents using buzzwords like “AI”. We’ve written about it more than a dozen times before, including last weekend. As recently as a day ago Patent Docs promoted this “Webinar on Patenting Machine Learning and AI Innovations” (“AI Innovations” as in algorithms). This is in the US, but under António Campinos (as President of the EPO) similar tricks are used and similar events are being organised, even by the Office itself. They actively encourage applicants to say “AI” while compelling examiners to grant “AI” patents. It’s all about granting as many patents as possible, no matter what the EPC says. Over the weekend El Peruano reported that Campinos had gone to Peru. Not because Peru has lots and lots of European Patents (EPs). Last year 3 EPs were granted to Peru and the year prior just a single one. The EPO may be trying to change that by lowering the bar. It won’t work, however, as the more patents they grant, the less these will be worth. They devalue them and merely dilute the patent pool. They fail to heed the warning from the US or even from China.

“…the more patents they grant, the less these will be worth. They devalue them and merely dilute the patent pool.”As we’ve mentioned the other day/week, China’s patent examination lenience nowadays backfires. They even allow software patents (explicitly so) and this ushered in an epidemic of patent trolls. Glyn Moody explains the reality of low-quality patents and what they accomplish in practice (waste and lack of productivity) in view of China:

Most Chinese Patents Are Being Discarded By Their Owners Because They Are Not Worth The Maintenance Fees To Keep Them

[...]

The discard rate varies according to the patent type. China issues patents for three different categories: invention, utility model and design. Invention patents are “classical” patents, and require a notable breakthrough of some kind, at least in theory. A design patent could be just the shape of a product, while a utility model would include something as minor as sliding to unlock a smartphone. According to the Bloomberg article, 91% of design patents granted in 2013 had been discarded because people stopped paying to maintain them, while 61% of utility patents lapsed within five years. Even the relatively rigorous invention patents saw 37% dumped, compared to around 15% of US patents that were not maintained after five years.

This latest news usefully confirms that the simplistic equation “more patents = more innovation” is false, as Techdirt has been warning for years. It also suggests that China still has some way to go before it can match the West in real inventiveness, rather than the sham kind based purely on meaningless patent statistics.

A lot of these patents are not even worth the paper they’re put on. We found it rather amusing how Watchtroll (Gene Quinn and Steve Brachmann) responded to the seminal report. It’s just amusing to see Watchtroll trying to defend China’s patent maximalism, which led to a lot of fake patents. They sometimes think it’s not OK for China to do it, yet highly desirable when the USPTO does it? “On Wednesday, September 26th,” they said, “business news publication Bloomberg published an article providing data analysis on Chinese patent applications to claim that, while China receives more patent applications than any country, “most are worthless.” Although the data supports the fact that a large number of Chinese design and utility patent applications are abandoned, the article misses the larger point that such an attrition rate is a natural result of China’s attempts to build a thriving patent system over a long period of time.”

“A lot of these patents are not even worth the paper they’re put on.”As we’ve said over the past couple of years, China probably foresaw trade wars and therefore aspired to create the impression of domestic innovation, even if by rushing to patent lots of trivial things; the proportion of Chinese patents in the US and Europe remains notably small (smaller than South Korea’s and a lot smaller than Japan’s). In our view, a lot of what China does in the area of patenting, domestically at least, can be dubbed ‘fake’. They try to fake growth in the same way Battistelli did at the EPO.

We’d like to present similar examples from the US, based on the past week’s news. IBM, for instance, is still pursing bogus software patents while lobbying through IPO for such fake patents. Here’s a news report titled “IBM Granted US Patent for Blockchain Security System”; it’s about last Tuesday:

On Tuesday (October 2), it was revealed by the US Patent and Trademark Office (USPTO) that the tech giant had been granted a patent for a blockchain solution to detect security breaches in a network.

The documents, which were first filed last September, state that breaches are detectable with its blockchain technology by connecting multiple monitors in a chain configuration in a shared log.

That’s just software; if tested more properly, it would almost certainly be invalidated, e.g. by PTAB or a court. So we can presume/assume the above patent to be ‘fake’.

Watchtroll asks, “Is the Presumption of Validity Dead in Substitute Claims Issued as a Result of Motions to Amend After PTAB Proceedings?”

No, it’s “dead” due to patent maximalists like Watchtroll that pushed fake patents into the US patent office. They discredit the very concept of patents.

“That’s just software; if tested more properly, it would almost certainly be invalidated, e.g. by PTAB or a court.”Meanwhile, ZitoVault too is patenting software on the face of it. The USPTO plays along even though such patents are bunk, bogus. There’s this puff piece and press release [1, 2] about it. Did Ian Barker from BetaNews decide to become a PR buddy to ZitoVault or does he voluntarily promote bogus software patents for them? It says “ZitoVault Granted Patent for Prediction of Impending Security Threats Using Behavioral Analysis” (purely algorithmic).

We’re still undecided as to whether this too, Maxta’s press release in Business Wire (a press releases site), refers to an abstract patent that should be rendered invalid/bunk based on Section 101 (it’s definitely abstract based on their press release, maybe not the patent itself).

How about Webomates paying to brag (in a press release) about software patents that are likely bunk and would be rejected by courts? “In addition to the granted US patent number #20180239688,” it says, “Webomates already has three more patents pending. It is evident that the innovation process is just starting to catch speed in Webomates.”

“The USPTO plays along even though such patents are bunk, bogus.”But what if all these patents turn out to be invalid under Section 101? Similiarly, why does Compuverde pay for a press release about software patents that are likely bunk and would be rejected by courts? This was spread through several sites/wires [1, 2] and we fail to see how that’s not invalid as per Section 101 (35 U.S.C. § 101 to be precise). Only days ago we saw a high-profile case in which AlphaCap not only lost its case (patent invalid under Section 101) but was asked to pay the legal fees of the accused. This was covered here several times before (it’s an Eastern District of Texas case) and Michael Borella belatedly speaks of CAFC’s take on 35 U.S.C. § 285 (Section 285). It was initially invoked successfully, which means that as the case was “exceptional” (exceptionally bad) the bully in the Eastern District of Texas will be penalised severely:

Almost two years ago, we covered a dispute in the Southern District of New York (which began in the Eastern District of Texas) involving plaintiff AlphaCap, a non-practicing entity [troll] that aggressively asserted its patents against a number of targets, including Gust. In short, when Gust didn’t quickly settle, AlphaCap offered to dismiss its claims. But Gust wanted AlphaCap to pay its attorneys’ fees or assign AlphaCap the patents. After some back-and-forth between the parties, the District Court dismissed the case but awarded Gust attorneys’ fees under 35 U.S.C. § 285. Gutride Safier LLP, attorneys for AlphaCap, were held jointly and severally liable for these fees and costs under 28 U.S.C. § 1927.

Notably, the District Court stated that the case was “exceptional” under § 285 because the Supreme Court’s Alice Corp. v. CLS Bank Int’l opinion “gave AlphaCap clear notice that the AlphaCap Patents could not survive scrutiny under 35 U.S.C. § 101.” The basis of this conclusion was that “the claims were directed to crowdfunding, a fundamental economic concept and way of organizing human activity, and that this was an abstract idea.” The District Court further held that “the claims did not include an inventive concept sufficient to render the abstract ideas patent eligible under Alice.”

AlphaCap’s epic § 285 debacle was also covered by Watchtoll shortly afterwards (albeit in relation to the Southern District of New York):

The Federal Circuit recently reversed a decision of the Southern District of New York holding Gutride Safier LLP (“Gutride”), a firm representing the plaintiffs, AlphaCap Ventures, LLC (“AlphaCap”), jointly and severally liable for all expenses including attorneys’ fees and costs incurred by the defendant, Gust, Inc. (“Gust”) in a patent infringement suit. The district court found the case exceptional under 35 U.S.C. § 285 because, during litigation, the Supreme Court issued the Alicedecision which gave clear notice that AlphaCap’s patents directed toward crowdfunding were unpatentable under § 101. The district court further concluded Gutride was jointly and severally liable for Gust’s attorneys’ fees under 28 U.S.C. § 1927 because of its unwillingness to settle pursuant to Gust’s terms despite knowing Alice doomed the claims and its statement that the case was “not worth litigating.” See Gust, Inc. v. AlphaCap Ventures, LLC, No. 2017-2414 (Fed. Cir. Sept. 28, 2018) (Before Wallach, Linn, and Hughes, J.) (Opinion for the court, Linn, J.)

Therein lies the danger of actually asserting fake patents. They oughtn’t be granted in the first place.

“The moral of the story is, patent offices need to think carefully whether granting fake patents will be worth it.”David Hricik wrote about it several days ago, remarking on what worries the patent bullies’ ‘industry’ (litigation pipeline) quite a lot. What really scares them is the prospect they will need to compensate the victim of their bullying. To quote:

As I’ve written, district courts are beginning to hold that if a case is exceptional under 285, fees can be imposed on, not just the losing patentee or infringer, but its lawyers (and principals). I’ve written before that I have grave doubts this is permitted by the statutory text, and some courts so hold, but others are interpreting 285 to allow for it. (If an opposing party seeks to shift fees onto you under 285 consider the conflicts that it creates, as discussed in my prior posts.)

[...]

The opinion provides an interesting possible way to, perhaps, deal with the chilling effect that Octane Fitness creates on lawyer advocacy while reasonably allocating liability. These clauses will be scrutinized closely, and I’m not certain they would be accepted in every jurisdiction.

It was bad enough when the USPTO granted patents it knew would not withstand the scrutiny of the courts. How about when these patents cost the awarded party not only legal costs of its own litigation but also the accused’s (defendant’s)? What good is a patent system like this?

The moral of the story is, patent offices need to think carefully whether granting fake patents will be worth it. They groom themselves for their own demise by doing so.

10.04.18

Microsoft’s Patent Trolls Are Alive and Well, Seeding Destruction Among Microsoft’s Competition

Posted in IBM, Microsoft, Novell, Patents at 5:48 am by Dr. Roy Schestowitz

Mono with teeth

Summary: Richard Lloyd shows that Intellectual Ventures continues to distribute its patents, sometimes to patent trolls from Texas (e.g. Dominion Harbor) and sometimes to others; Finjan, another Microsoft-funded troll, is fighting to salvage its software patents while suing Microsoft’s rivals in the security space

THE ABUSES of the EPO are only outweighed in severity by the protection racket of Microsoft; the latest incarnation of this protection racket of Microsoft is known as "IP Advantage". To receive ‘protection’ from Microsoft and its trolls one needs to pay monthly rental fees to Microsoft (Azure), even if one is a GNU/Linux user. Microsoft did something similar a decade ago with Novell. Back then too the marketing term “Advantage” was (mis)used spuriously.

“Microsoft did something similar a decade ago with Novell. Back then too the marketing term “Advantage” was (mis)used spuriously.”The phenomenon known as patent trolls has waned in the US, but it is not gone. Trolls’ booster Richard Lloyd (IAM) won’t say it in these words, but the trolls he covers (and loves, as some pay his salary) are losing hope, money, and morale. The US is finally nailing them.

Based on the latest update from Dallas (Texas), the USPTO continues to grant fake patents or software patents by the bucketloads (and Iancu makes these things worse). Some of these patents get granted to trolls and Microsoft’s patent troll Intellectual Ventures is imploding, having already passed thousands of its patents to other trolls in Texas. As Lloyd has just put it:

Intellectual Ventures is in the process of selling its third Invention Investment Fund, in a further indication of how the giant NPE is scaling back its business. IAM understands that the buyer is Micron. The sale has been confirmed to IAM by three separate sources, with a fourth identifying the US-based semiconductor giant as the buyer. IV declined to comment for this story.

For the iconic [sic] NPE, the sale is another step in its disposal programme which has ramped up significantly in recent years as it looks to whittle down a portfolio that at one point totalled over 35,000 individual patents. It is also a reflection of how much the climate has changed for IV’s investors – which for the third fund included Microsoft and Sony – with suggestions that several have become increasingly uncomfortable with a monetisation strategy based around assertion.

[...]

For its part, as well as upping its rate of disposals, Intellectual Ventures has also seen a significant amount of flux among its senior leadership with Van Arsdale, a key player in many recent deals, announcing last month that he is leaving the business.

While many in the patent community will seize on this latest news as another sign of IV’s decline, with a portfolio that still makes it one of the largest patent owners in the US and many of the assets being sold to assertion entities, it remains a potent force for now.

They also still target, sometimes with lawsuits, Microsoft’s competition.

Meanwhile, the Microsoft-backed and Microsoft-financed patent troll Finjan (last covered here yesterday) is trying to salvage its fake patents and here’s a new press release that they’ve paid to distribute through expensive wires to investors (there are actually shareholders willing to invest in trolls still). It’s about a Patent Trial and Appeal Board (PTAB) inter partes review (IPR):

Finjan Holdings, Inc. (NASDAQ:FNJN), and its subsidiary, Finjan, Inc. (“Finjan”), today announced that the USPTO, Patent Trial and Appeal Board (“PTAB”) entered a decision on appeal (Appeal 2018-007444) in favor of Finjan, and reversed Examiner’s rejection of certain challenged claims of U.S. Patent No. 8,015,182 (the “’182 Patent”) on reexamination.

Based on 35 U.S.C. § 101 at the U.S. Patent and Trademark Office (USPTO) many of Finjan’s patents are fake patents; Finjan is really afraid of them being tested. The Federal Circuit already squashed many of them (except one) and if Finjan is left with no patents it would be rendered worthless and maybe declare bankruptcy (at long last). Of course Finjan can always just ask other Microsoft trolls to sell it some new patents; Finjan got some dubious patents from IBM last year and Finjan has since then ramped its legal assault on Microsoft’s rivals.

Patent troll Uniloc was paid by Microsoft after long legal battles and nowadays it constantly goes after Apple, wishing for another pot of gold. Unified Patents fired back (files IPRs) and Apple continues to antagonise, resulting in another lawsuit as AppleInsider has just reported: (it happened yesterday)

Patent troll Uniloc returned to form on Wednesday after a months-long hiatus from lobbing allegations against Apple, this time challenging the company’s AirDrop file sharing technology with a 2006 Philips patent.

We pity the people who still believe or suddenly believe that Microsoft has changed. If anything, it has only changed for the worse; it’s more subtle in its attacks and is nowadays attacking less directly and infiltrating organisations it wishes to destroy. That’s what they must mean by the “new Microsoft”.

10.03.18

Today’s IBM is Acting Like a Patent Troll and Arming Active Patent Trolls, Just Like Microsoft Does

Posted in IBM, Microsoft, Patents at 5:51 am by Dr. Roy Schestowitz

Finjan is suing again

A coffee pot

Summary: IBM and entities that are connected to it (and to Microsoft) are suing the whole industry using dubious software patents; they rely on out-of-court settlements to prevent the patents from actually being tested (as tests typically invalidate these)

ARMED to the teeth with dubious software patents in large quantities (the USPTO granted these with minimal scrutiny), IBM mimics the model of Microsoft, having employed Marshall Phelps, the man who turned both companies into patent bullies and took pride in it. Forbes gave Phelps a whole blog; it also gave whole blogs to literal patent trolls.

“…IBM mimics the model of Microsoft, having employed Marshall Phelps, the man who turned both companies into patent bullies and took pride in it.”IBM’s patent bullying is counter-productive; there have been calls for boycott over it (even from Free/Open Source software people), whereas lawyers rejoiced because all they want is litigation. The more, the merrier.

As it turned out earlier this week, based on press releases and press coverage [1, 2, 3], Groupon basically surrendered and agreed to pay IBM loads of money without an actual trial that tests the patents at hand:

Groupon has managed to secure a money-off deal in its court battle with IBM over e-commerce patents.

The pair have agreed to settle the dispute, with the e-voucher biz set to pay $57m to IBM, knocking almost a third off the price tag granted by a court this summer.

In July, a jury ruled that Groupon had wilfully infringed four of IBM’s e-commerce patents and awarded the firm some $83m – about half the $167m Big Blue had initially sought.

However, Groupon indicated at the time that it would consider seeking a reduction, or appealing the decision, and today’s agreement suggests it did so with some success.

The lawsuit, filed in 2016, alleged that Groupon had infringed four of IBM’s e-commerce patents, some of which date back to the 1980s for the firm’s pre-internet Prodigy online communication service.

Yes, IBM uses old software patents for blackmail. Acting like Microsoft (more or less), IBM quit pretending to be a legitimate technology company. Groupon is only one among many companies that IBM is shaking down; we found out about Groupon only because there was a refusal and subsequently a lawsuit. Yesterday we saw nothing but shallow coverage about it [1, 2]; no doubt patent maximalists are going to celebrate this in days/weeks to come.

“It might be interesting to see to what degree — if any — Finjan relies on the patents it got from IBM.”IBM wishes to be thought of as “science” and “wisdom” (Watson is pure PR/marketing), but in reality today’s IBM applies for truly ridiculous patents while lobbying for software patents and engaging in blackmail rather than sales.

To make matters even worse, IBM extends its patents to notorious patent trolls like Finjan; sponsored/backed by Microsoft and armed by IBM last year, Finjan has just announced another lawsuit, this time in Delaware for a change because it's displacing Texas according to fairly recent data.

Finjan Holdings, Inc. (NASDAQ:FNJN), a cybersecurity company, today announced that — after more than two years of good faith efforts to resolve a patent dispute with Rapid7, Inc. and Rapid7 LLC (collectively, “Rapid7″) — its subsidiary Finjan, Inc. (“Finjan”) has filed a patent infringement lawsuit against Rapid7, a Delaware corporation with headquarters in Boston, Massachusetts, in the U.S. District Court for the District of Delaware (“Delaware”).

So this Microsoft patent troll does the only thing it ever does; it’s suing (trolling) Microsoft rivals again. It might be interesting to see to what degree — if any — Finjan relies on the patents it got from IBM. They’re a leveraging/bargaining card at the very least.

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