Summary: In spite of the gradual death of software patents, those who profit from them maintain the illusion that everything is alright, IBM hoard them and attacks with them, law firms mislead small and vulnerable businesses to entice them into these worthless ‘assets’
A LOT of time has passed since we last covered the USPTO, but it doesn’t mean that it’s all good news. The other day, for example, we warned that a terrible person, Randall Rader, wants to become the Director of the USPTO (still a self-serving hopeful, in spite of the widely-covered scandals) and software patents, which have been stubbornly pushed forward by Mr. Rader, are now dying, more so — or a lot faster — since he got the boot (or resigned in disgrace from CAFC).
What’s Up is Down?
On a couple of occasions in recent days the article “Software Patents Get Struck Down After Alice” got bumped up. To quote one copy of this new article:
Many software-oriented patents are being struck down as a result of Alice and Section 101. Some people say this leaves legal departments with more budgets to sue competitors more than they have in the past.
This is bizarre ‘logic’ and facts do not support it. First of all, the demise of software patents has led to far fewer lawsuits, as has been repeatedly proven by several different data sources (we covered these). Secondly, if your existing patents (never mind new ones that are harder to be granted) are less potent, what is the point or motivation for suing?
One large firm that continues to be aggressive with software patents is IBM. It not only applies for a lot of patents but it also attacks with them (by “attack” we mean suing small rivals that can barely defend themselves, unlike the patent microcosm which describes invalidation of bogus patents as an “attack” — inverting the narrative).
As we noted here a month ago, IBM is now cloudwashing all sorts of dubious patents (trying to pass them off as novel using buzzwords like “cloud” — a word which in itself does not make them eligible). IBM is basically a thug company; it’s a company that collects these (hoarding) for the purpose of litigation and shakedown in bulk (Microsoft does the same thing and targets vulnerable companies like TomTom amid deep financial issues). IAM, which fancies litigation and bullying (proudly so), called it “Big Blue’s new groove” in its latest issue, but we just call it anything but “groove” or groovy. It’s despicable and it makes IBM look fiendish.
Citing the Gartner Group (a dubious firm), the following new article mentions patent trolls but calls them “NPEs”, just as it cloudwashes software patents. Have a look:
Cloud Computing: Software Patent Claims and the Risks to Service Availability
As the public cloud services market continues to mature and grow – up from $178bn in 2015 to $209bn in 2016 according to research company Gartner – the concentration of computing resources into cloud data centres is increasingly attracting the attention of NPEs as a target for patent litigation. At a time when data security and privacy risks are front of mind for cloud service providers (CSPs) and their users, the intellectual property (IP) risks to cloud service availability posed by NPE patent claims are rising up the business agenda.
NPEs (Non-Practising Entities) are businesses that assert patents through litigation to achieve revenues from alleged infringers without practising or commercialising the technology covered by the patents they hold. NPEs are uniquely well placed to monetise their patents at each stage of the litigation cycle. They have access to capital and all necessary forensic and legal resources; and an NPE doesn’t practise its patents so is immune to a counterclaim that a defendant might otherwise be able to bring against a competitor, or a cross-licence that the defendant could otherwise offer.
The term “cloud” is meaningless rubbish that alludes to particular server arrangements. It’s not a growing market; not necessarily; it’s just an exercise in rebranding and liars for hire (Gartner) exploit this kind of nonsense to make their false predictions a self-fulfilling prophecy (by merely redefining what “cloud” means as they go along). The second part alludes to “cross-licence”; this is what IBM is trying to accomplish, with a money flow going into IBM’s coffers without them lifting a finger. One might therefore start to describe IBM as somewhat of a large patent troll, akin in fact to Microsoft’s (more on that in a separate post, scheduled for later today).
Insulting the Intelligence of SMEs
It is troubling to see that IBM’s patent aggression is making a comeback (it’s not entirely new) and it’s saddening to see that using all sorts of buzzwords attorneys and their clients are hoping to receive new software patents. Marks & Clerk, a proponent of software patents (obviously, as they profit from it!), recently said that the EPO now makes it easier to get software patents (than at the USPTO). The other day the firm advised small companies to pursue patents and it alluded even to software patents. To quote the relevant part (with our remarks in square brackets]: “An invention doesn’t even need to be a product to be considered patentable [in other words, a troll too can pursue patents]. Many people think that software is unpatentable. That is incorrect [depends where]. If software achieves a technical effect and is new and inventive, it is patentable. The most famous example of a software patent is the patent that covers Google’s “Page Rank” algorithm (i.e. the algorithm which powers Google’s search engine and which transformed the company into a tech unicorn) [but that’s an old patent predating Alice]. You or your business might have developed exciting software which does something that no one else has thought of. A patent might be just what’s needed to convince investors that your concept is the “next big thing” or alternatively provide you with an asset that can be sold or licenced for additional revenue [or waste of money, paid to lawyers at Marks & Clerk who cannot even win a case over software patents].”
That’s putting aside the fact that a small (practicing) firm’s chances of successfully suing a giant like IBM are slim, unless getting sued by IBM (in retaliation) is something it thinks it can afford. █
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Source: “Patent Office head to keep spot in Trump administration” (report from yesterday)
Summary: Commentary on the status quo in the Michelle Lee era and some examples of bias from the patent microcosm, as well as news regarding the NFL getting sued by the Kudelski Group
THE PAST couple of years have been very encouraging for patent reformers. Reformist transitions are occurring (except in the EPO and SIPO) which limit patent scope in lieu with public interest and those who make a living purely out of patents aren’t liking any of it. It has gotten so bad that they now insult the USPTO's Director, insult examiners, and even insult judges. What next? Will racist attack too become prevalent?
“Nothing seems to be going in favour of the patent microcosm these days, especially not high-profile cases.”National Law Review, a large publication which covers patents among many other things, has this new list of “Intellectual Property Cases to Watch in 2017″. Nothing in the list challenges Alice itself (a de facto ban on many is not most software patents) and number 2 in the list can be the end to most patent trolls. 2017 should be interesting, we believe, unless Trump makes a mess of it with SCOTUS nominations/appointments which go beyond filling Scalia’s empty seat (swapping one Republican bigot with another).
Watchtroll, still trying to recover from the ‘horrible’ news which is more of the same (patent reform), now complains about § 101 (related to Alice) broadening its scope to challenge yet more patents. Nothing seems to be going in favour of the patent microcosm these days, especially not high-profile cases. They know it and they desperately cherry-pick cases to make it look as though they are gaining ground.
“We hope that Director Lee will add some more judges to the PTAB.”Computer vision is my professional field of research. I used to write a lot more about patents in this area and why they oughtn’t be granted (it's all reducible to mathematics and can be conceptualised with pen and paper). Vision patents are generally patents that oughtn’t be granted, yet the USPTO has just let another one slip in. Someone should petition PTAB for an IPR (inter partes review), but PTAB is already overworked and arguably understaffed. We hope that Director Lee will add some more judges to the PTAB. This would help improve the image and value of US patents.
Writing about SCOTUS, Minter Ellison, a law firm, recalls the Alice moment, not mesmorising but mourning. “Approximately two years ago,” it says, “the US Supreme court in the Alice decision considered the in principle patentability of software patents. Since then, gaining US software patents has been very difficult. In 2016, the United States Court of Appeals for the Federal Circuit (the ‘Court’) has considered numerous appeals from district courts relating to patentable subject matter. This blog post discusses the two-step test from the Alice decision and how the test was applied by the Court in 2016, the developing trends for patentable subject matter in the US as it relates to software patents and the take-away messages for 2017.”
As can be expected from a firm that profits from software patenting, tips are offered therein for dodging or side-stepping the rules, thus sneaking software patents past examiners (until or unless courts/PTAB throw these way). Here is a similar new guide for getting business method patents past examiners, based on the latest eligibility guidelines:
About a week before the holidays, the U.S. Patent and Trademark Office quietly published a trio of new subject matter eligibility examples directed to the abstract idea exception to patentability. These are the latest in a series of examples provided by the USPTO to its examining corps, the series including previous examples published in December 2014, January 2015, and July 2015 (other USPTO publications include example claims directed to the law of nature and natural phenomenon exceptions). While the focus of this guidance is to educate examiners about how to determine whether pending claims are valid under 35 U.S.C. § 101, practitioners and patentees will find the examples to be helpful when considering how to draft and amend claims.
A lawyers’ portal, one which is even more overt, does very little to hide its bias as it gives tips for promoting and defending software patents in an age when they’re dying. “There are key concepts,” it says, “but no bright line rules on software patents. The best approach is to follow the common law, comparing and contrasting prior patent cases.”
The problem is, they’re typically cherry-picking only the cases which suit their agenda. It leads to bad advice, e.g. to clients or to readers of their so-called ‘analyses’. Trying to improve one’s chance of success is not in itself a problem; that’s what lawyers do. Some new advice like “importance of a prior art search” is better because it’s not about misleading examiners (or judges) but about ensuring one’s idea is really innovative and thus eligible.
“Software patents are a pain in the behind to a lot of producing (or productive) companies out there.”Sadly, not only patent law firms encourage the ‘tricking’ of examiners. IBM is doing that too (the former Director of the USPTO in fact came from IBM and is still being paid by IBM) and the corporate media fails to critically assess IBM's aggressive behaviour, to the point where even weeks later IBM is celebrated as some kind of champion, simply because it paints software patents as “cloud” (buzzword) or AI (an older buzzword).
Software patents are a pain in the behind to a lot of producing (or productive) companies out there. IBM now attacks a lot of legitimate companies, including medium-sized ones. According to the latest news, even the NFL has found itself sued by such patents (plenty of press coverage this week, e.g. [1, 2, 3, 4, 5, 6, 7, 8]). Lawsuits are a symptom of disagreement over patents. They are far from the ideal outcome and they are desirable to nobody except patent lawyers. █
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While the corporate media celebrates IBM as though it’s some kind of ‘champion’ for hoarding patents that it then uses to attack companies which actually grow
Summary: Patent aggression and patent lobbying from IBM is a growing problem, especially now that patent lawsuits are on the decline and software patents are going away
Thomas F. Cotter, a Briggs and Morgan Professor of Law (from the University of Minnesota Law School) wrote about Mexico’s patent law, invoking some drool-dripping ‘IP’ academics (Mike Schuster in this case) who say that in “Mexico, patent damages must be 40% of public selling price of infringing products…”
“Under the new CEO, or so it would seem, IBM is back to the days of suing companies like Sun.”IBM’s patent chief, who keeps plotting and scheming to blackmail the whole industry using software patents, cited the above ‘IP’ academics and noted that: “Patent damages would seem to be (potentially) quite high…”
Remember that IBM is now suing various companies and shaking them down for patent payments. Under the new CEO, or so it would seem, IBM is back to the days of suing companies like Sun (Florian Müller once called them “International Bullying Machines”).
We remind readers that today’s IBM is nothing like the IBM of 5 or 10 years ago. The company is still manipulating the media and lobbying for software patents, much to the detriment of just about every software company. “A large % of US companies are software companies,” wrote this patent attorney the other day. “Their patent applications are being inordinately rejected at the USPTO.”
I told him that software patents are being used against the vast majority of software companies (small ones), basically destroying them. This is the kind of thing that IBM and other patent maximalists are promoting. They worry that their plot is coming to an end, especially due to Alice and PTAB. The number of patent cases in the US courts has gone down sharply (as of 2016′s end) and MIP puts it all in a table, explaining the numbers as follows:
A total of 4,580 district court cases were filed in 2016, down from 5,775 in 2015.
This is the lowest number of district court patent cases since 2011, when 3,899 cases were filed, according to Docket Navigator figures. That year was the last before the American Invents Act came into effect.
The average monthly number of cases in 2016 was 382, down from 481 in 2015, 418 in 2014, 508 in 2013 and 455 in 2012.
The fourth quarter of the year saw 1,170 cases filed, up from the 1,138 cases filed…
Looking at utility patents alone (not software patents), Patently-O gives an impression of growth, even charting the numbers along with faces of USPTO Directors. To quote Patently-O: “The chart below shows the number of utility patents granted each year for the past few decades. I have included images of PTO chiefs as well. Although only small view of PTO work-product, the dramatic shifts in the number of grants (all occurring while facing a large backlog of cases) helps highlight the importance of the role of PTO Director. You’ll note that more utility patents were issued in 2016 than any prior calendar year – 303,000. However, the rate-of-increase seen under Dir. Kappos is clearly gone.”
David Kappos, ‘formerly’ IBM (still paid by them, now paid to lobby for software patents), has been a terrible Director whose lobbying at the moment puts the patent office at the bottom of ethical standards and brings it into disrepute. The graph mentioned above (with animation) serves to show just how terrible Kappos was in the quality control sense. For IBM to still be paying him, especially for something as notorious as software patents and lobbying, is a terrible idea. █
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When so-called ‘cross-licensing’ with patent purchases (the latest Microsoft method) is actually a disguise/cover for patent settlement after extortion [1, 2, 3, 4]
Summary: The patent lust at IBM, which is suing if not just shaking down companies using software patents, earns plenty of puff pieces from the corporate media
THE notion that the greater the number of patents, the better — a notion so ludicrous that also fails to recognise the raison d’être of patents — is quite a disease. Some people would have us believe that because China created a patents production line in SIPO it's actually at a position of advantage. It’s false and it’s rather infantile to repeat such claims.
One new article, seemingly from an author who is not a fan of software patents (see the short part about it), says today that:
The best ratios I found (i.e., most patents per person) were in very rich Bedford, adjoining Manchester, and almost-as-rich Hollis, adjoining Nashua. Each town had slightly more than 2.7 patents per 1,000 people.
So keep that in mind when you hear people pointing to patent numbers as a reflection of the braininess of a community, state or country or a company or industry. Take it with a grain of salt.
It’s often just a reflection of which companies are based around that area. But some towns take it out of context and equate patents with innovation or wisdom. The above article came just shortly after a heap of IBM puff pieces. IBM, as our readers are probably aware of by now, bets its future and the whole farm — so to speak — on being more like a patent troll (patent enforcement and shakedown). It has already done that to Twitter, a much smaller company, and it keeps doing that to other Internet companies. “IBM scores a record 8,000 patents in 2016,” enthusiastically screams this headline from Dean Takahashi (or his editor), who just repeated the ‘official’ story as follows:
IBM has proven it is once again dominant in earning patents, as it closed the year with 8,088 U.S. patents granted to its investors in 2016. That’s the 24th consecutive year that the company has earned the most patents of any company.
The second-ranked company, Samsung, had 5,518 U.S. patents granted. About 2,700 of IBM’s 2016 patents covered inventions related to artificial intelligence, cognitive computing, and cloud computing. The patents covered a diverse range of technologies that also included cybersecurity and cognitive health.
We have compiled a list of nearly 20 ‘news’ articles [1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17] about IBM claiming 8,000 so-called ‘inventions’ in a single year. Almost all these articles are from yesterday and they add no new information; they’re puff pieces void of any analysis. IBM got many of these patents probably by just calling old stuff “cloud” and “AI” (buzzwords). Is “AI” the new “on a machine”? And “cloud” the new “over the Internet”? When it comes to bamboozling patent examiners (so as to be granted software patents) there are all sorts of tricks, many of which boil down to semantics. IBM is nowadays firing a lot of employees, selling large portions of its physical products divisions to China (notably Lenovo). Is this the future of IBM then? Just ‘hiring’ patents, which it already uses to attack and extort far smaller companies? “Samsung Second & Google Fifth In 2016 Patent Race”, an Android news site said yesterday, so IBM isn’t alone among Linux-oriented firms when it comes to the patents gold rush. Samsung and Google, however, are not patent aggressors. Unlike the above IBM puff pieces, a writer in Fortune published “These Firms Won the Most Patents in 2016″ — a list that shows Microsoft falling down quite sharply. As a Microsoft propaganda site puts it, “Microsoft ranked 8th on the list of companies awarded with most patents in the US” (a lot lower than before).
Well, Microsoft is having issues. Software patents are getting more difficult to get, so it is not managing to keep up with patent filings. Financial issues are not helping either. In the coming years we expect IBM to become more and more like a patent troll whose actual products (if not jobs too) sailed away to China. █
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Those who have mastered monopolisation, not sharing, cannot be expected to behave as trusted partners
Part of the duopoly (with Visa)
Summary: Free/Open Source software in the currency and trading world promised to emancipate us from the yoke of banking conglomerates, but a gold rush for software patents threatens to jeopardise any meaningful change or progress
ANY company that built its presence/niche/empire on proprietary software sooner or later finds out that it is not sufficient in the face of competition that is based on sharing. Proprietary software is unable to compete with Free/Open Source software. Apple’s patent war on Android (Linux and Open Source), for example, is not new. We used to write a lot about it when it started (Apple v HTC) and Apple is gradually losing more and more of its battles (the higher up they do, the lesser the success rate, as the latest Supreme Court decision served to show — a decision to be discussed tomorrow). Even so-called ‘friends’ of GNU/Linux, Amazon for instance, are pursuing loads of software patents that are occasionally being used.
At the end of last year we gave new examples of software patents being used against Free/Open Source software in finance — the very topic which got this site started in the first place. Worrying about the same type of issues (the attack on Bitcoin/Blockchain [1, 2, 3]), yet another site wrote about it just before the year ended. To quote:
Creating a ‘Blockchain Industry:’ Patenting the Blockchain
Patent filings for blockchain technology have more than tripled since 2014; this spike includes patents filed by cryptocurrency exchanges such as Coinbase, payment processors like Mastercard, and banks like Goldman Sachs and the Bank of America.
According to a report conducted by law firm Reed Smith, the most popular areas for these patent applications are payment systems: both for traditional forms of money and for systems that will be used to trade cryptocurrencies or digital tokens. Mastercard, by way of example, recently filed four blockchain patents for separate steps along authenticating a transaction on the blockchain.
Given the behaviour of IBM as of late and its ambitions in this space (not to mention clients such as Goldman Sachs), it wouldn’t shock us if Big Blue too became not just a participant in the patent gold rush but also a serial patent bully (recall TurboHercules v IBM). This isn’t a wish but a growing concern; all that patent hoarding, as noted in a variety of Bitcoin-themed news site, will likely culminate in some legal wars and out-of-court settlements, leaving the same old oligopolies in tact. That’s just protectionism, not innovation. These patents are not trophies to them; they intend to use them one way or another (they’ll probably claim “defensively”). █
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They even organise events to push their agenda
Summary: The latest facts and figures about software patents, compared to the spinmeisters’ creed which they profit from (because they are in the litigation business)
atest [Section] 101 Statistics Show Improved Validity Prospects at Dist. Cts, Not CAFC or PTAB,” said a patent attorney the other day, reinforcing our response to Mullin's article (titled “These three 2016 [CAFC] cases gave new life to software patents”). The reality in the US right now is undeniably bad for software patents, which are being chopped at PTAB’s block and CAFC’s block. Patent maximalists are trying to pretend otherwise and we repeatedly rebut their arguments, only to see these arguments resurfacing over and over again, courtesy of the usual suspects. If the lies are repeated often enough, then maybe prospective applicants (or clients in need of legal representation) will actually believe them.
“The reality in the US right now is undeniably bad for software patents, which are being chopped at PTAB’s block and CAFC’s block.”The other day we saw this new article titled “Assessing USPTO’s Memo On Software Claim Patent Eligibility”; we keep wondering if USPTO officials will become as rational and realistic as US courts. Right now they just strive to rubberstamp whatever they can and those who pay the price for it are both plaintiffs and defendants; only patent law firms profit from it.
“This method of presentation involves storing and processing applications or parts of applications at a user’s local personal computer rather than at a remote server.”
–PatentDocsAs a side note — although an important note nonetheless — we can’t help but notice that IBM keeps trying to corrupt the system though its former Director, who had worked for IBM beforehand. IBM definitely used to be a (GNU/)Linux friend. Now it’s just an Apple promoter/pusher and a malicious patent aggressor. Yes, IBM has been rather busy going after small companies using software patents. Some of these companies, seeing what a menace IBM is becoming, belatedly turn to PTAB in an effort to invalidate these patents of IBM. Here is one report about IBM’s software patent that will quite likely be invalidated: “The ’967 patent relates to a method for presenting applications in an interactive service featuring steps for generating screen displays of the service applications at the reception systems of the respective users. This method of presentation involves storing and processing applications or parts of applications at a user’s local personal computer rather than at a remote server. This helps avoid possible server bandwidth issues that can be caused by the server being required to serve too much data to multiple users simultaneously. The ’967 patent lists many applications that can take advantage of this method of presentation, including games, news, weather, movie reviews, banking, investments, home shopping, messaging, and advertising.”
This is pretty trivial. It’s akin to caching.
Now watch what David Kappos is cited as saying again. “US is losing the innovation war,” he is quoted by IBM as saying, “to China” (where IBM finds buyers for its failing business units, notably Lenovo).
“Kappos is a paid lobbyist,” Benjamin Henrion noted, “working for patent trolls such as Microsoft or IBM.”
“IBM’s Schecter would know,” I replied, as “he’s IBM’s patent chief ^_^ so [he] has the ‘receipts’…”
What we have here is IBM citing as ‘proof’ a former IBM staff who is now an IBM-funded lobbyist for software patents. Look how dirty (as in dirty play) these people are…
And as if the greater the number of patents, the better… who would be foolish enough to actually believe this?!
“China pushing for software patents,” Henrion noted in relation to another Schecter tweet, “apparatus claims relating to software can contain both hardware and “program” components…” (links to “China Files A Million Patents In A Year, As Government Plans To Increase Patentability Of Software”)
“Kappos is a paid lobbyist working for patent trolls such as Microsoft or IBM…”
–Benjamin HenrionChina is their new bogeyman. One of these people added: “But USA keeps working on UN-patentability of software. What’s wrong with this picture?”
Nothing is wrong with this picture. It’s a good decision. End software patents, end patent trolls.
“China is plain wrong on this,” Henrion wrote, separately noting (to Marietje Schaake regarding software patents in Europe) that it’s “like the unitary patent lie that it won’t affect software development.”
On a final note, worth seeing is this rant from Watchtroll and 'gang' about end of software patenting (or demise thereof). “Stepping Back from the Cliff: The Year Congress Didn’t Cave to the Anti-Patent Lobby” says the title. They’re currently taking stock of a terrible year for them [1, 2] — a year which saw the demise of patent trolls. Watchtroll continues to attack PTAB for doing its job and we can’t help wondering why IBM’s Schecter treats this like some kind of ambassador for his cause. Does IBM really want to be so closely associated with Watchtroll, who even resorts to attacking judges?
For a more balanced summary of recent events, see “Year in Review: The Top-Five Legal Developments of 2016″ (posted days ago). It has a section about software patents.
“…anti patent trolling would be better, even if trolling is considered pejorative.”
–Benjamin HenrionThose who are against software patents, notably people who actually write software, are not “anti-patent” as Watchtroll tries to put it. In fact, as Henrion put it, “anti-patent is a gross and blunt exaggeration here. […] anti patent trolling would be better, even if trolling is considered pejorative.”
Patent trolls, in the majority of cases, rely on software patents. Take the latter away to get rid of the former. █
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Steering policy in exchange for money, having acquired contacts and connections
Source: David Kappos interview with Intellectual Property Magazine (2010), modified by us
Summary: IBM, David Kappos, Watchtroll and the rest of this software patents bunch as seen in the news and in forums this past week and half (policy-shaping echo chambers disguised as debates or “roundtables”)
THE FORMER Director of the USPTO, David Kappos, came from IBM, one of the biggest patent bullies out there and also a worldwide lobbyist for software patents. It’s therefore hardly surprising that after his career at the USPTO Kappos continues to promote all the worst aspects of a patent system. A lot of the current mess, including the very low success rate of patent lawsuits, can be attributed to this fool. How did he even get this job? Maybe some connections in high places and pressure on Obama or something…
“A lot of the current mess, including the very low success rate of patent lawsuits, can be attributed to this fool.”Three years ago we said that the USPTO's software patents "roundtable" was rigged and last week we saw a similarly-rigged USPTO "roundtable" where no software developers were even present. It hardly ever gets any more farcical than this.
A few days ago we wrote about other new lobbying events that try to compel Congress to change the law in favour of software patents, in accordance with patent maximalists' Christmas wish list. The so-called IPWatchdog conference (we call it “Watchtroll”) was truly a disgrace because again it’s a case of patent law firms speaking about — not for — inventors. These firms want to gain at inventors’ expense. Remember that Watchtroll is to patent news what Brietbart is to world news; its founder is a blowhard who habitually insults judges and smears PTAB with sexual connotations. Watchtroll tries to meddle in patent law by truly despicable strategies and for self gain, not for scholarly purposes or anything like that.
Patent maximalists like Kappos, as it turns out based on his new article at Watchdog, support this kind of horrible Watchtroll think tank. In Kappos’ own words:
Recent changes to the U.S. patent system — emanating from both Congress and the courts — have pushed U.S. investment money overseas. To China, to be exact.
In his closing remarks to a recent Inventing America and IPWatchdog conference on dangers to the innovation economy, former U.S. Patent and Trademark Office director David Kappos said that in 2015, patent filings in China exceeded those of the next 20 countries.
What’s noteworthy about this article is that here we have an IBM-funded former USPTO Director (now lobbyist for IBM) promoting software patents and then getting promoted by IBM’s patent chief, Manny Schecter. To quote the alarmist, “Kappos: investments moving overseas in response to state of U.S. #patent law” (untrue).
We wonder when IBM will realise that it’s a bad idea to pay a former USPTO official (who had worked for IBM beforehand) to be a software patents lobbyist. Institutional corruption is definitely what this is; that’s a textbook example of it. Now that he is out of his lucrative job he converts influence and connections into money, on behalf of billionaires. It’s a bit like revolving doors, except there is no direct affiliation (he operates via a proxy).
“If former officials are up for sale and they are meddling in the affairs of the Office, then it’s a classic case of “pay to play” and unless we call out the culprits they will continue uninterrupted.”As Benjamin Henrion put it, “this is propaganda at best.”
Well, Schecter and IBM ought to know this because they are the ones who paid for this propaganda. They are still paying Kappos.
“Kappos is a lobbyist who needs lessons in basic economy,” Henrion continued. “R&D done in China, good sold in the US” (indeed and moreover China is fast becoming a den of patent trolling).
The US patent system still suffers from a high level of corruption due to this man. If former officials are up for sale and they are meddling in the affairs of the Office, then it’s a classic case of “pay to play” and unless we call out the culprits they will continue uninterrupted. █
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Summary: An outline of one week’s news regarding software patents in the United States, with special emphasis placed on key foes and allies of GNU/Linux
The Lobby for Software Patents
THE USPTO can no longer grant software patents as routinely as it used to and some people are upset about it. These people, however, do not develop software.
“Sen Chris Coons,” according to this tweet, says that “Eroding patent protections for software and medical advances imperils American R&D, learning, health, and innovation,” but this coming from guy who never wrote a single line of code in his entire life does not mean much. Maybe he’s just funded by some large company that is pursuing software patents (like IBM and Microsoft). Moreover, with Watchtroll branding on the podium (see the photo), we assume that Chris Coons came there to serve patent maximalists, who have grown quite loud recently. Benjamin Henrion responded by saying that “software patents shifts R&D budgets to P&L.” (patents and litigation)
We are troubled to see the voices of the patent microcosm growing even louder in the wake of Trump’s election win. They want change and they want this change to harm software developers so that they can profit from (or tax) actual producers. IBM, we might add, is a growing part of the problem. Does IBM even realise to what degree it alienates the Free software development community by advocating software patents all the time? Does IBM truly realise that it aligns itself with patent extremists that insult judges and push for software patents based on self-serving lies? Does it care? Does IBM realise that by paying the former Director of the USPTO it participates in institutional corruption? And again, does it care? By lobbying to annul the Supreme Court’s decision and elevate less than a handful of Appeals Court (CAFC) decisions these people reveal their true face and selfish interests, which happen to harm every software developer around the world. It harms developers of both proprietary and Free/Open Source software.
CAFC on Software Patenting
Speaking of the Appeals Court, also published (albeit behind paywall) is this article titled “Appeals Court Casts Doubts on Smartflash’s Patent Win Over Apple” (we mentioned this before). “Two judges signaled the patents claim ineligible subject matter under Section 101 of the Patent Act,” says the summary. This article is mirrored here (also behind paywall). Section 101 certainly gets taken into account by CAFC, but patent law firms like Finnegan continue pushing the envelop on lies that software patents still have teeth in the US. It’s that usual cherry-picking of CAFC cases. Baker Botts LLP has just done the same thing. Don’t fall for it. In the vast majority of cases, including in 2016, CAFC rules against software patents and Section 101 remains very strong an argument against software patents. Watch this new docket report that says:
The court denied defendant’s motion for summary judgment of invalidity on the ground that plaintiffs’ call center telecommunications patents encompassed unpatentable subject matter because the motion obscured patents’ complexity with reductionist simplicity.
The recurring theme here was covered in almost a hundred Techrights articles. It definitely seems as though software patents aren’t coming back any time soon (if ever), but the patent microcosm sure is trying to accomplish that.
IBM and Conservative Think Tanks
Adam Mossoff, who works for a Conservative think tank and has a history of rather aggressive patent views (we covered these in [1, 2, 3]), is trying to shame Congress into pushing for reinstatement of software patents, based on misinformation. “Today,” he summarised it, “Congress should save software again by expressly confirming that it is a patentable technological invention.”
If anything, software patents caused a lot of damage. But then again, judging by Mossoff’s paymaster, reliance on facts is almost a sin. Look where they stand on issues such as climate change.
“But this essential technology in our modern innovation economy is at risk,” Henrion quotes him as saying, responding with “yeah copyright replaced by patent trolls…”
Another person responded with “and look at the Patent Troll mess Software Patents has left us in…”
Exactly. Mossoff, as we pointed out here in the past, became a voice of patent trolls and the patent microcosm. He’s not a software developer and he merely ‘hijacks’ the voice of those who are with a nonsensical headline like “Congress Saved Software in 1980, and It Should Do It Again Today” (in a neo-Conservative Web site, of course).
This article seems to be one among several. The patent microcosm wants software patents back, unlike actual developers. Watchtroll is pressuring Congress on this subject also, most recently with yesterday’s headline (yes, a Sunday!) “Congress Can Save Software Patents by Repeating One of Its Successes”.
It’s just a bunch of mumbo-jumbo urging Congress to reinstate software patents and some of this mumbo-jumbo is promoted by IBM’s patent chief. Patent trolls proponents like Adam Mossoff are intentionally conflating software with software patents (one destroys the other) and then some IBM lawyers deems it cite-worthy? How stupid does IBM want to look here? It’s only going to harm the company’s relations with developers.
Google Against Software Patents, Unlike Microsoft
Contrast this with the following new article from Allen Lo, who is deputy general counsel for patents at Google. He published “Protecting Alice protects patent quality and technological innovation” and said in it:
The goal of the patent system, as set forth in the Constitution, is to promote the progress of the “useful arts,” which has always been understood to mean technological progress. Here at Google, we are proud of the many ground-breaking software inventions by our engineers that have allowed us to file a growing number of high-quality patents and establish a strong and valuable portfolio.
While Google and many other tech companies invest many billions of dollars in research and development (R&D) to make these inventions – and these patents – possible, not all software patents issued by the Patent and Trademark Office (PTO) are of high quality. A series of roundtables recently convened by the PTO in Alexandria, Va.; Stanford University; and other locations around the country explored one of the most important tools for improving the quality of software patents and ensuring that only worthy patents are approved.
That tool arises from the unanimous 2014 Supreme Court decision in Alice Corp. v. CLS Bank International, which established that software patent claims that recite a financial arrangement or broadly describe a function performed “on a computer” or “on the internet” are not eligible to be patented. Before Alice, applicants were obtaining patents from the PTO that were not based on any technical contribution or innovation, often not even providing an explanation of how they expected to achieve a result beyond stating that it would be done “on a computer.” Case law and PTO practices had swung too far toward allowing these low-quality claims to remain unchallenged, and a course correction was needed.
So we’ve covered IBM, Google, and what about Microsoft? Well, Microsoft is in the same boat as IBM when it comes to software patents and its patents have just survived CAFC’s scrutiny, based on this new report that says:
Microsoft has survived an appeal against a lower court decision that it didn’t infringe patents belonging to Impulse Technology.
Yesterday, December 8, the US Court of Appeals for the Federal Circuit affirmed the ruling of the US District Court for the District of Delaware, granting Microsoft’s motion for summary judgment.
In 2011, Impulse sued Microsoft, alleging infringement of 15 claims of the asserted patents: US patent numbers 6,308,565; 6,430,997; 6,765,726; 6,876,496; 7,359,121; and 7,791,808.
Inverting the Narrative
Truth be said, large companies don’t mind the patent mess because they can afford to pay the legal fees and this whole mess harms small companies the most. Here is a 15-page PDF of a paper by Professor Lemley et al in which it’s said (by Patently-O) that “patent litigation outcomes vary according to the identity of the patentee” or to quote Patently-O‘s summary: “The sales market for patent rights continues to vex analysts – especially in terms of valuation. In their Patently-O Patent Law Journal article, Professor Mark Lemley teams up with the Richardson Oliver Group to provide some amount of further guidance.”
It’s no secret that there is gross discrimination in patent systems, even in the EPO.
Part of the patent microcosm, or pushers for software patents (Bilski Blog), chose to distort the narrative of software patents (for large businesses, in bulk) and instead went with this narrative which would have us read about the “little guys”:
From the beginning my application was rejected, and continues to be rejected, under Section 101, even though we have recently overcome all of the prior art rejections. As a result, I have become something of an accidental student of patent eligibility and as such was very interested in attending the USPTO’s Patent Subject Matter Eligibility Roundtable I on November 14, 2016. Prior to the roundtable, I had assumed that my application was something of an outlier, that there was something wrong with it and that was why it had been rejected. At the roundtable I learned that “it’s not me, it’s you” applies not just to exes but to the patent system as well.
The few speakers at the roundtable who did advocate on behalf of us “little guys” often mentioned how the “direct costs” negatively impacted micro-entities, focusing on the need for examiners to avoid using “blanket statements,” to be specific in their responses, and carefully ensure the law is being properly interpreted and applied on a case by case basis. As a solo entrepreneur, I couldn’t agree more with the need to “get it right the first time,” as this would substantially reduce direct costs for us. My impression is that the examiner’s first instinct is often to reject without any substantive reason, hoping we’ll simply abandon the process altogether, or better yet, pay the ever increasing, exorbitant fees (for me) involved in requests for continued examinations and the appeals process.
This thing which the USPTO called “roundtable” was just an echo chamber. See our article about it and then see this article from Scott Graham of The Recorder (behind paywall). To quote the outline: “A discussion Monday at Stanford University was an opportunity for big tech companies, entrepreneurs, bar associations and academics to hash out the impact of ‘Alice’ and other developments in patent eligibilty.”
This was cited by IBM’s Manny Schecter (IBM is still dissatisfied because there is no software patents certainty and IBM attacks small companies using software patents). There was “no software developer around the table,” Henrion told IBM’s Manny Schecter, “how broken is that?”
Well, this whole “roundtable” was nonsense, or an exercise in fake transparency, giving the illusion of public participation in decision-making while excluding the main stakeholders (who actually produce something).
“If you write code,” I told Manny in relation to this tweet of his, “maybe you’ll understand it’s mumbo-jumbo buzzwords” (he wrote “Abstract? Technological? Concrete? Practical application? Exactly. From #patent perspective these simply cannot be defined precisely.”)
Henrion added, “Tangible?”
All those silly words are so often used by non-developers who try to convince us developers that software patents are desirable.
The Trolls’ Lobby
Witness how Watchtroll’s site wants to crush patent reform and harm actual producers of software etc. The title says “Advice for the Trump Administration and New Congress: Protect Bayh-Dole and Restore the Patent System” and it’s more like the above pattern of lobbying, which we are seeing more of these days.
Not too long ago Watchtroll called reformers “Patent infringer lobby”, leading people in the patent microcosm to saying stuff like: “Patent infringer lobby pushes Trump to aggressively pursue “patent reform” https://lnkd.in/fasm8pZ Time to call out deliberate infringers.”
Well, time to call out Watchtroll who didn’t write any code, doesn’t know how programs work, yet lobbies for software patents.
“Nice bullshit spin on the issue,” wrote a technical person (Raphaël Jacquot) about the above. Henrion wrote, “restore software patents and patent trolling.”
Good for the patent microcosm after all, and we know at whose expense…
Speaking of trolls, Blumberg who used to work for for the world’s largest patent troll, Microsoft’s patent troll that’s connected to Ray Niro (who is now dead), is quoted by IAM as saying: “In our view, Germany is the new Eastern District of Texas. That’s the venue that gives us the most concern.”
Blumberg is now working in Lenovo, which is believed to have colluded with Microsoft to block GNU/Linux (they denied this after actually admitting this).
Concerns about Germany becoming another/new Eastern District of Texas are real because of the UPC ambitions, which will thankfully never reach London. Alexander Esslinger (a.k.a. Patently German) wrote about the above quote: “Really ? At least of owners of SEP’s it is not so easy to get an injunction in Germany based on interpretation of ECJ Huawei-ZTE…”
“Is that a bad thing,” I asked him. He later responded to that, but one must remember whose side he is on. He’s not interested in a sane patent system but a system from which he profits more. Like Bastian Best, who spreads misinformation (biased by omission; fails to mention those ~80% of CAFC cases that send software patents down the sewer), he wants more patent litigation in Germany so that he can profit from that. IAM is on the same side as them and it’s eager for everyone to celebrate patent trolling that’s coming from the Far East. Here is the latest example of that: “Barely a week after KAIST sued several major tech companies in what appeared to be the first ever patent infringement action initiated by an Asian university in the United States, another Korean educational institution has launched its own assertion campaign in the Northern Districty of California.”
Remember that these are non-producing entities that are funded by public money.
Citing Microsoft and its massive patent troll (Intellectual Ventures), IAM also pretends that lowering patent quality is a good thing:
Perhaps the most striking thing was how quickly some of China’s major tech companies have become sophisticated IP players. Xiaomi’s progress in particular has been remarkable and with former IV IP executive Paul Lin on board, the company has one of the most experienced operators in the local monetisation market.
Xiaomi’s deal with Microsoft, announced in May this year, was in the spotlight on day 1 as Lin joined the software giant’s Micky Minhas to dissect one of the leading IP-driven transactions of 2016. As part of that agreement Microsoft sold the Chinese company 1,500 patents, giving Xiaomi a much-needed boost to its portfolio as it weighs up expansion into the US. For all that conditions are widely seen to have deteriorated for many patent owners in the US, the deal shows that American assets will always remain a crucial part of any company’s IP strategy be it focused on freedom to operate or monetisation.
Xiaomi’s patent settlement with Microsoft was an attack on Linux and on Free software, as we explained at the time. Given China’s approach towards software patents (the opposite of what the US is doing), we’re not too shocked to see this happening, but that does not mean we have given up, either. █
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