“My background is finance and accounting. As a socially conscious venture capitalist and philanthropist, I have a very good understanding of wealth management and philanthropy. I started my career in 1967 with the IRS as a specialist in taxation covering many areas of the tax law including the so-called legal loopholes to charitable giving. […] However, the Gates Buffet foundation grant is nothing more than a shell game in which control of assets for both Gates and Buffet remain the same. […] The only difference is that the accumulation of wealth by these two will be much more massive because they will no longer have to pay any taxes.”
The Gates and Buffet Foundation Shell Game
Summary: The Yorba Foundation is denied tax exemptions while the world’s biggest thief, who increases his wealth by lobbying and investing under the guise of ‘charity’, receives tax exemptions
THIS is a major story that, unlike some stories (e.g. the No-IP takeover scandal which we’ll cover soon), has not received sufficient press coverage. The other day in our daily links we included a link that my wife had found and was made rather furious by. We linked to the original just hours after it was published (in June) and it took days until some sites — small sites — covered it very briefly. Susan Linton said: “The top story in today’s Linux news is the IRS denial of nonprofit status for Open Source projects.”
This was hardly the top story. It didn’t receive much attention and it took days for it to get any press coverage at all. Here is what Boing Boing wrote only yesterday:
In a disturbing precedent, the Yorba Foundation, which makes apps for GNU/Linux, has had its nonprofit status application rejected by the IRS because some of projects may benefit for-profit entities.
Will Hill said that there is “[a]n interesting comment from a lawyer on the pluss“:
If ICANN can be a 501(c)(3), and pull in around $400,000,000 in 2013 while benefiting pretty much every intellectual property protection agent in the world, I don’t see how someone who produces code that they give away for free can be refused similar status.
Thankfully, this issue has been getting some more coverage in some technology news sites very recently [1,2], but nothing else as far as we can tell. Apparently it’s OK for an investment and Microsoft lobbying body to get tax exemptions (that’s Gates Foundation), but it is not okay for a bunch of programmers who work without a salary to receive tax-free donations. This is how US ‘justice’ works, apparently. Rich people pay next to nothing to their government and diligent poor people are portrayed as some kind of “parasites” and forced to pay part of the meager donations they receive to the government. █
Related/contextual items from the news:
Last year, as the IRS scandal blossomed over the IRS supposedly targeting “conservative” groups for extra attention concerning their non-profit status, we noted that the IRS had also been told to examine “open source software” projects more closely as well. We found that to be a bit disturbing — and it appears that for all that focus on the scandal, the IRS hasn’t quite given up on unfairly targeting open source projects. The Yorba Foundation, which makes a number of Linux apps for GNOME, has been trying to get declared a 501(c)(3) non-profit for over four years now… and just had that request rejected by the IRS for reasons that don’t make any sense at all. Basically, the IRS appears to argue that because there might be some “non-charitable” uses of the software, the Foundation doesn’t deserve non-profit status, which would make it exempt from certain taxes (and make donations tax deductible).
The IRS denied a proposal to grant 501(c)(3) status to Yorba, a nonprofit organization that develops open source software for the Linux desktop. In a blog post yesterday, Yorba spokesperson Jim Nelson disclosed the full text of the IRS rejection letter. He fears that IRS policy has evolved to broadly preclude nonprofit open source software developers from obtaining 501(c)(3) tax exemptions.
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Justice gone backwards
Photo from Reuters
Summary: A patent case in the United States gets sent from SCOTUS to CACF, showing a rather odd hierarchy of justice (top-to-bottom, back to notorious patent boosters)
THE Rader corruption and the impact on CAFC was mentioned here just weeks ago, noting that the Court had been put under mortal danger (some people call for its abandonment/abolishment). This is the court which was responsible for software patents in the United States, home of software patents (universally). According to this update from the EFF, CAFC may actually have a go at overriding SCOTUS. As the EFF put it: “The Ultramercial case has been bouncing around the federal courts for years. In 2010, a trial court held the patent invalid on the grounds it claimed an abstract idea. On appeal, the Federal Circuit reversed, finding the patent non-abstract because it “clearly require[s] specific application to the Internet and a cyber-market environment.” The Supreme Court then sent the case back to the Federal Circuit for reconsideration. In a remarkable decision by former Chief Judge Randall Rader, the lower court thumbed its nose at Supreme Court authority and upheld the patent for a second time. The defendants returned to the Supreme Court. EFF filed an amicus brief urging the Court to take the case and find the patent abstract.”
The US patent system seem to favour those with money (for more motions and appeals), not those with original ideas. It is a real problem. Watch how the USPTO, led by corporate masters like IBM, stops beneficial products from reaching their full potential:
We’ve seen this many times before, how patents can hold back very useful developments. Notice how 3D printing is suddenly a big thing? It’s not because of any new miraculous breakthroughs, but because some key patents finally started expiring, allowing real innovation to move forward. We saw something similar in the field of infrared grills, which were put on the… uh… back burner (sorry) until key patents expired. Derek now points us to a similar example.
This article goes on to showing how microwaves got retarded by patents, and there’s no exception here. Patents just tend to harm innovation and those who promote them (usually lawyers) do a great disservice to society.
One day the patent system (if it still exists in its current form) might actually be reshaped by people representative of society, not patent lawyers. █
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Summary: Continued discussion about the meaning of the US Supreme Court (SCOTUS) ruling and what it means to programmers all around the world, not just patent lawyers who seek to monopolise and tax software development
THE recent SCOTUS ruling on patents ended software patent scope where it reaches "abstract ideas" (whatever exactly it means, as no criteria were specified or even a test). The ruling left room for patent lawyers to exploit (pretending nothing has actually changed). We have demonstrated, based on dozens of analyses from patent lawyers, that lawyers’ responses are quite consistent, ensuring only that people still come to them to patent algorithms.
Here is another new analysis from Dykema Gossett PLLC, saying that “Litigants involved in current or future litigation over software patents will want to study the claims at issue to assess their vulnerability under the framework laid out in Alice Corp. While patent eligibility of any particular software claim will remain a case-by-case, fact specific inquiry, at least now there is some guidance by which to conduct that inquiry.”
“Basically, the corporate media is now a platform by which lawyers ‘report’ to the public on a decision in which they have vested interests.”Dr. Glyn Moody looks at the glass as half full, celebrating the fact that the SCOTUS is at least recognising that there are limits to software patents. He also, however, bemoans Europe moving in the opposite direction. To quote Moody: “I’ve written a number of times about the curse of the “as such” clause in Article 52 of the European Patent Convention, which has allowed software patents to creep in to Europe by the backdoor. In the US, which has a far more liberal attitude to patenting everything under the sun, there has been a cognate problem, whereby patent applications have been made on a abstract/trivial idea simply by appending “using a computer” to make it novel. At long last, the US Supreme Court has addressed this issue.”
“European Unitary Patent system will work means that there is no independent court to which appeals can be made – only an appeal court within the new patent system itself. That lack of an external check is an extremely dangerous feature – and one that the European Union may well come to regret.”
The European angle is interesting as the EU’s position on software patents has been gradually morphing/assimilating to the US position.
Here is America Online (AOL) giving a ‘report’ (not analysis) about the SCOTUS ruling. Guess who wrote it. That’s right, AOL treats ‘IP’ groups as journalists now, boosting their position, which is what we foresaw and worried about. The article begins with the following promotion: “Michael Gulliford is the Founder and Managing Principal of the Soryn IP Group,a new breed of patent management and advisory company that provides a host of patent-centric services to a select group of innovators.”
“The great majority of patent trolls use software patents, so rather than speak about stopping trolls we need to concentrate on patent scope.”Basically, the corporate media is now a platform by which lawyers ‘report’ to the public on a decision in which they have vested interests.
Here is an analysis from Davies Collison Cave, separate from the press (legal sites host these). It says: “To be eligible for a patent in the US, a computer implemented invention will probably now need to provide a technological improvement, solve a technical problem or effect some improvement in technology or a technical field. It will certainly need to involve more than simply implementing an abstract idea on a generic computer.
“Whether it was intentional or not, the US Supreme Court may have introduced into US law technical contribution requirements similar to those of European patent law.”
Yes, so the US is moving closer to EU patent law while EU patent law is moving closer to US patent law, which includes software patents. There seems to be some kind of dangerous convergence here. We need to fight hard to stop it.
Here is another new analysis from Stinson Leonard Street LLP (another patents firm):
Software patents vulnerable: use of a computer is “not enough”
This decision will likely be cheered by technology companies with patent portfolios directed to more sophisticated inventions that go beyond computer-implemented business methods. However, software patents directed to general business processes, such as those that involve the performance of well-known financial transactions on a computer, may be in jeopardy of being invalidated.
That basically sounds like the “as such” nonsense that we have in Europe and to some degree in New Zealand as well. This is not good. This might mean that spurious patent litigation (over software patents) can soon break out of places like the Eastern District of Texas, where stories like this one are being reported by the patent trolls-obsessed:
A controversial patent that has been used to wring millions of dollars in settlements from hundreds of companies is on the verge of getting shut down.
US Circuit Judge William Bryson, sitting “by designation” in the Eastern District of Texas, has found in a summary judgment ruling (PDF) that the patent, owned by TQP Development, is not infringed by the two defendants remaining in the case, Intuit Corp. and Hertz Corp. In a separate ruling (PDF), Bryson rejected Intuit’s arguments that the patent was invalid.
Notice the type of patents they are using. The great majority of patent trolls use software patents, so rather than speak about stopping trolls we need to concentrate on patent scope. Here is Steven W. Lundberg (highly vocal proponent of software patents [1, 2, 3]) boosting software patents again (as if nothing has changed) and several other patent boosters like Fenwick & West LLP and Stroock & Stroock & Lavan LLP. Perhaps they view all this as an opportunity (in the long run) to file their patents in yet more continents, making even more money by taking away from society and tying the hands of programmers.
Timothy B. Lee is a little more optimistic than us. He says that “the Supreme Court might kill software patents” and here is why:
Last week I argued that the Supreme Court’s widely anticipated ruling in the case of CLS v. Alice wasn’t the knockout blow software patent opponents had been hoping for. The Supreme Court struck down the specific patent at issue in the case, but it was vague about when, if ever, other software patents were allowed.
Reading commentary on the case has made me more convinced that software patent owners should be worried.
In a nutshell, the Supreme Court said two things: you can’t patent abstract ideas, and merely implementing an abstract idea on a generic computer isn’t enough to turn it into a patentable invention. The big question is: what’s an abstract idea?
The patents the Supreme Court struck down last week and in a 2010 case called Bilski v. Kappos were extremely abstract. In essence, both patents took an abstract business strategy — like holding money in escrow to prevent either party to a deal from backing out — and claimed the concept of implementing it on a computer. In both 2010 and 2014, the Supreme Court said that wasn’t enough for a patent.
Some software patent supporters, like former Patent Office director David Kappos, have concluded that the decision leaves most software patents unscathed. But the respected patent scholar Robert Merges, a software patent supporter himself, is not so sure.
David Kappos is not credible because he worked both for the patents-greedy USPTO and for IBM, one of the most aggressive patent-rattling companies and leading lobbyist for software patents, even in Europe. The argument we made some days ago is that all software patents are — by definition almost — abstract. Unless there is a working implementation to be patented, all that the application allude to are ideas, barely any function at all.
What it boils down to is this; if a judge was competent enough to tell the difference between pseudo code, programming, UML etc. (which is unlikely, especially in clueless, biased and corrupt courts like CAFC), then every software patent would be deemed “abstract”, hence invalid. To construct a legally-cohesive argument along those lines might require a lawyer. Are there any “good” patent lawyers out there? █
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Randall R. Rader: The corrupt judge who ran CAFC until the scandal which ultimately led to his resignation
Photo from Reuters
Summary: The Court of Appeals for the Federal Circuit (CAFC) is in trouble after its extent of misconduct was revealed, not just because rulings are repeatedly incorrect but also because its chiefs are corrupt (in bed with patent lawyers)
The United States should gradually if not instantaneously revoke CAFC’s power amid revelations of misconduct and errors. CAFC almost always gets its rulings wrong, based on the judgment of courts above it, notably SCOTUS. Perhaps it’s time to just shut shut down the CAFC. The disgrace which is ‘judge’ Rader has finally stepped down, so there’s no better time to end CAFC. He had conflicts of interest and did great damage to patent policy. He encouraged the perception of corruption in the courtroom. Rader was just one of several because not a single judge ruled incorrectly on cases that involve patents. Rader is raider, taking away from programmers and giving to monopolies and their patent lawyers. Ars Technica wrote about his “ethical breach”:
US Circuit Judge Randall Rader, who was just weeks ago the top patent judge in the nation, has announced he will step down, following an admission that he made an ethical “lapse” when he sent an e-mail praising an attorney who appears frequently before his court.
From 2010 until two weeks ago, Rader served as Chief Judge on the US Court of Appeals for the Federal Circuit, which hears all patent appeals and interprets most of the nation’s patent laws. The Washington, DC-based court is frequently the final arbiter in some of the highest-stakes technology battles in the world.
Here is more from the corporate press, which said: “The ex-chief judge of the top U.S. patent court will retire at the end of June, after acknowledging that an email he sent raised questions about his judicial ethics because it praised an attorney who appears before the court.”
Shut it down. Now is the time. This court has been the target of a coup and it cannot restore trust.
There’s no lack of stories about the harms of software patents. Here is the recent report titled “Divorcees Brawl Over Time Warner-Acquired Software Patents” and alluding in part to software patents, here is an article which speaks of a “Nightmare”. An Australian lawyers’ Web site seems to be turning its back on software patents not because they’re not something that patent lawyers want but because they have apparently become less profitable (harder to uphold in Australia). To quote: “A new unfavourable examination practice by the Australian Patent Office for software patents precipitated two separate appeals to the Federal Court of Australia, which resulted in the two decisions Research Affiliates LLC v Commissioner of Patents  FCA 71 (“Research Affiliates”), and RPL Central Pty Ltd v Commissioner of Patents  FCA 871 (“RPL”). The two decisions are, on the face of it, contradictory. The patent office favours Research Affiliates, which imposes strict limits on the patentability of software. RPL does not impose the strict limits of Research Affiliates. Both decisions have been appealed to the Full Court.”
In the US, patent policy is written by corporations and their lobbyists or moles (companies like Microsoft and IBM). Until not so long ago an IBM lawyer who is a software patents proponent controlled the USPTO (that’s David Kappos). He ensured that the USPTO sought only to increase its own income (and patent lawyers’) by expanding scope and in his new article in the plutocrats’ press (Forbes) he pretends that it’s about prosperity for the US economy. This is complete nonsense. It’s the very opposite of the truth, unless by “American economy” Kappos means “the 1%” (of which he is a part).
If the USPTO cannot be abolished, then its facilitator (a corruptible court like CAFC which let it patent software) should be eliminated, leaving the SCOTUS to make baby steps towards the solution (or towards justice, which SCOTUS is not exactly famous for, either). █
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Many patents killed in a fire
Summary: The US Supreme Court has just ruled a lot of software patents “invalid” (by generalisation), raising hopes that things are improving
WE are exceedingly delighted to learn that the Supreme Court (SCOTUS) ruled against software patents. Before lots of law firms (patent lawyers) issue their revisionist ‘articles’ on why it doesn’t change anything let’s look at what happened.
SCOTUS has, without exception among the Justices, decided that some software patents are too vague to merit a win in court. Essentially, they’re rendered toothless, by precedence. It is possible that hundreds of thousands of software patents have just been rendered dead. Since SCOTUS is the top court, not even the software patents-friendly CAFC can reverse this decision. As one good writer (patent matters expert) put is: “The most-anticipated patent decision from this Supreme Court term was published today. The decision involves finance-related software patents that were being used against CLS Bank, a key part of the global financial infrastructure.”
Here is the response from Red Hat’s site, an Android-hostile site, a Linux-friendly site, and from the FSF, which says “more work needed to end software patents for good”. There was a lot of coverage in the corporate media too, including [1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22] and the message is quite uniform. Not even lawyers’ sites can deny the truth here. They will surely try later. We have done an extensive media survey and the media is as unanimous about this as the SCOTUS is. Here is the response from TechDirt, which sheds light on why it’s not enough. To quote the headline: “Supreme Court Rejects Software Patents On Performing Generic Functions; Pretends That Lots Of Other Software Must Be Patentable” (lawyers are going to have a day field around the latter part).
This is clearly not the end of software patents, but it’s a good start. Let’s enjoy this small victory while it lasts. A future patent case can be escalated to SCOTUS again, shedding doubt on this decision. It doesn’t happen quite so often though (In Re Bilski was half a decade ago). █
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Summary: The US is not even trying to truly reform patent policy and Europe is preparing to ‘import’ (through globalisation/treaties/etc.) this atrocious policy, based on new reports in the British press
WE shall slowly return to covering patent issues, for they are certainly becoming a huge subject again, especially in light of renewed Apple lawsuits/aggression, corruption in the courtrooms (blindly favouring al patents), and distraction by the media (we covered all three just two days ago), not to mention software patents (and patent trolls) in Europe becoming a huge issue because EU patents may soon follow US criteria for acceptance. “New EU rules have been created which allow the judgments of new unified patent courts (UPCs) to have legal effect from early 2015,” says The Register. This is great news for trolls and also for patent lawyers who wish to see patent scope expanding.
Mr. Mark Bohannon (Red Hat lobbyist) has written a couple of articles in the past week. In them, Bohannon focuses on trolls (not the real issue) and also expresses little or no hope for imminent change in the US patent system. To quote: “Late last month, as you’ve likely read by now, the US Senate Judiciary Committee (SJC) abruptly pulled consideration of a legislative patent reform package from consideration. For this year, at least, the prospect of addressing abusive patent litigation through Congressional action is on ice.
“The move by the Committee disappointed, even outraged, a broad coalition working for legislative reform.
“Reaction came not just from many in the technology and Internet innovation sector, which have been at the forefront of reform efforts. Consumer and civil society groups (EFF, Engine Advocacy, Public Knowledge) voiced deep concern.
“Reflecting the wide swath of the US economy that is affected by abusive patent litigation, the view of many in the mainstream of American business was that the SJC “chose special interests over jobs on main street.” Retailers noted that “withdrawing the patent reform bill is a victory for patent trolls.” They were joined by restaurant owners, home builders, credit unions, hotels and lodges, the gaming industry, and the online travel industry, just to name a few.”
The problem, however, is not “abusive patent litigation”, it is patent scope. It sure seems like even if a patent reform was passed in the US, it would be beneficial to large corporations but hardly help the public. In other words, not only is there no sign of improvement in the US; even if the said reforms were to pass, not much would have changed. The real solutions are totally off the table. This system is inherently rigged, probably beyond repair, which is why we started focusing on limiting its reach (e.g. to Europe) rather than fixing it before it spreads. █
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Summary: Efforts to improve the patent system focus not on the real issue/s with patents but instead on phantom issues that help protect the interests of large corporations
According to some new statistics, the sordid mess of patent lawsuits is getting more serious, still. “That’s not a surprise,” insists the article. “Statistics from Lex Machina show that 2013 set a new record for new patent lawsuits. All those legal threats are giving new urgency to the patent reform debate.”
As usual, the straw man which is “patent trolls” takes all the blame, even through some entities — including universities — are selling patents to trolls. Watch the boosters of software patents using the straw man (Boston University is not directly a troll for example, so we know that not trolls are the sole issue). Blaming “trolls” is still the large corporations’ approach for diverting all attention to small offenders, using them as scapegoats while large corporations misuse patents themselves. The issue is the offence itself, not the scale of the offender.
When patents are granted on computer programs and video games (which are abstract) it should be clear that patent scope is the main problem. When new programs are introduced by the USPTO to increase the number of patents it should be clear what the source of trouble really is. Patent lawyers take sides and encourage software patents because there is money to be made from it.
Some large companies act no different from so-called trolls and the use of the term “troll” just mostly refers to scale these days. Trend Micro acted like a troll some years ago and now it receives a taste of its own poison. Consider this new article that says a “Delaware federal judge on Tuesday refused a request by Symantec Corp. and Trend Micro Inc. to partially delay two trials over a nonpracticing entity’s claims they flouted four anti-virus software patents, saying the requests came too late since trial dates had already been set.” (source)
According to Red Hat’s staff, new legislation only tackles trolls. To quote: “Patent reform may have stalled this year at the federal level, but patent trolls may soon find their actions curtailed by a number of patent abuse litigation laws that have been passed or are pending in over twenty U.S. states.
“Last year, the state of Vermont passed a law aimed at preventing “bad faith assertions of patent infringement.” The law targets the practice of sending demand letters with very little, if any information regarding the patent supposedly infringed and would require the asserting entity to provide the patent number, name and address of the company alleging infringement, and other details regarding the nature of the complaint. It is a common tactic for patent trolls, sometimes called “patent assertion entities” or “non-practicing entities” to send letters with very vague information alleging patent infringement to other businesses, both large and small, in the hopes of extorting a settlement from them to avoid a nuisance lawsuit.”
Not only trolls are doing this. Much bigger entities are doing the same thing, so this strategy would not bear fruit. Here is an example of this strategy in action: “When Santa Barbara startup FindTheBest (FTB) was sued by a patent troll called Lumen View last year, it vowed to fight back rather than pay up the $50,000 licensing fee Lumen was asking for. Company CEO Kevin O’Connor made it personal, pledging $1 million of his own money to fight the legal battle.”
The entity might be forced to pay the legal fees, but it does not address the issue of litigation by non-trolls. Here is another example. The reason we stopped focusing on patent issues some months ago is that the press gave up focusing on the real issue, focusing instead on the whole “trolls” distraction. Even Red Hat has become part of this problem.
Everyone recognises that there is a problem with the patent system, but the only voice which counts (corporations) as far as corporate press goes steers everyone away from the real solution. █
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Summary: In patent law, just like in most other areas of law, ‘reforms’ achieve nothing except reinforce the status quo
BOGUS ‘reforms’ are common vehicles for ‘normalising’ what’s already in place; such is the case with the NSA ‘reform’ that has been branded “Freedom”. Newspeak triumphs again.
The ‘Freedom’ Act basically stamps (for approval) what was lumped on top of ‘Patriot’ Act in the same way that patent ‘reforms’ in the US (also named along the lines of “invent” or “innovation”) basically authorise patent trolling and do nothing to limit patent scope, which expanded over time.
Years ago we cited reports that Intellectual Ventures, the world’s largest patent troll (which is highly connected to Microsoft), spent millions lobbying the US government along with Bill Gates. They don’t want anything to change. Now we know that patent trolls continue getting their way in Congress because money — not logic — drives US policy. To quote a long new report: “Trial lawyers are heavy donors to Democratic politicians, including Reid. A Washington Post article on Reid’s fundraising during his 2010 campaign noted big-money fundraisers taking place at a Florida trial lawyer’s home, as well as one held in California by the top securities class-action law firm, now named Robins Geller Rudman & Dowd.”
Another report from the same site shows how hard it has become to challenge patent trolls in the US:
Judge: FindTheBest can’t use anti-extortion law against a patent troll
Last year, consumer search website FindTheBest tried to use an anti-extortion law to fight back against Lumen View Technology, a patent troll that attacked it with a “matchmaking” patent. While FindTheBest was able to knock out Lumen’s patent in short order, its lawsuit based on the Racketeering Influenced and Corrupt Organizations (RICO) Act came to an end this week.
The judge’s opinion recounts some of the facts that led up to the RICO case, such as Lumen’s attorney, Damian Wasserbauer, accusing FindTheBest CEO Kevin O’Connor of committing a “hate crime” for using the term “patent troll” against one of Lumen’s owners.
Basically, not only patent law is flawed in the US; it’s now expanding to copyright in the sense that APIs are deemed copyright-able. █
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