…Hardware (chipsets) and software alike, with dubious software patents that accompany them, have made phones incredibly expensive
Summary: By tackling the practices of Qualcomm and by dragging companies to court over ridiculous design patents (potential of blanket ban by the Supreme Court) Apple weakens the very business model it will need to rely on as its market diminishes, leaving it with nothing but patents
THE mobile market is worth a lot of money these days. The exact numbers depend on how it’s measured and what exactly gets included in the measure. But no doubt more and more people now turn to mobility. Many sales are made in it, both of devices and software (licensing). Apple’s sales are declining and many of the headlines we come across (when it comes to Apple at least) are about new patents and patent applications from Apple. Perhaps that’s just Apple’s vision/foresight of its future. It want to prey on OEMs that are actually shipping a lot of phones (Huawei for example). This is why Microsoft, for example, attacked Samsung in the courts — using software patents of course — and then virtually forced Samsung to become its vassal. It’s a strategy of coercion. A lot of patent battles are now focused/centered around the mobile market (connections, interfaces, touch-enabled devices, navigation and so on) as many companies try to turn a pile of patents into revenue without actually creating anything. Qualcomm is a good example of this.
“It’s a strategy of coercion.”Qualcomm's management seems growingly nervous about the antitrust action in various places as well as the lawsuits/complaints [1, 2], notably Apple‘s. The $815m BlackBerry arbitration, which was mentioned here the other day, gets a mention in patent maximalists’ sites and Florian Müller took note of it after we had sent him some links related to it. It seems possible, albeit it’s subjected to the Supreme Court’s instincts, that another Apple case against Android will reach the Supreme Court (SCOTUS). As Müller put it just before Easter (taking special note of the role of CCIA):
One organization that has previously supported Samsung against Apple, the Computer & Communications Industry Association (CCIA), appears to have decided not to get active again at this stage. But in case certiorari is granted, I wouldn’t be surprised to see CCIA get involved again. With respect to design patent damages, CCIA’s work was really great. But even CCIA may at some point experience such a thing as litigation fatigue: the Apple v. Samsung dispute is now six years old.
Samsung’s design patents-related petition was exceptional. It had tremendous support and, since it raised sort of a once-in-a-century type of issue, it was a slam dunk (to the extent that a cert petition can be a slam dunk at all, given overall stats). The fact that certain amici who supported Samsung on design patents aren’t on board this time doesn’t mean that the three issues raised last months aren’t also certworthy in their own ways and their own right.
We wrote about this case many times before and if it reaches SCOTUS, then we definitely expect the patents to be challenged and quite likely invalidated, as per the pattern of recent SCOTUS decisions on patents. If that happens, what will Apple be left with? Apple is the next Qualcomm. █
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A company stuck in the past with nothing but a pile of patents (like Nokia)
Summary: The days of Qualcomm’s cash cow (a bunch of standard essential patents) may be numbered, as US, EU and Korean authorities belatedly look at the company’s practices and Qualcomm already caves
Qualcomm’s de facto monopoly (in the patents sense), as we’ve covered here before [1, 2], means that people pay Qualcomm a lot of money even when they buy nothing from Qualcomm. In some sense, Qualcomm does in chipsets what Microsoft does in software. It demands ‘protection’ money from just about everyone and it also has patent trolls to help punish for ‘noncompliance’ with unreasonable demands.
“It demands ‘protection’ money from just about everyone and it also has patent trolls to help punish for ‘noncompliance’ with unreasonable demands.”Not too long ago Qualcomm came under fire from Apple, even though it had abused many other companies. Florian Müller had a peek at the latest documents and found Qualcomm claiming “credit for enabling Pokémon GO,” which is of course nonsense. To quote Müller:
As the number of pages (the original complaint was approx. 100 pages, now the answer and the counterclaims fill 140 pages) shows, this is a huge commercial litigation and threatens to turn into a battle of materiel. Both parties have enlisted multiple major law firms. The first surprise here is that Quinn Emanuel is among the three firms representing Qualcomm, given that Qualcomm’s filing (in paragraph 192 of the counterclaims part) accuses Samsung–another company QE is defending against Apple–of sharing (with Apple) “a common interest in diminishing Qualcomm’s ability to obtain fair value for its innovations” and trying “to avoid paying fair value for Qualcomm’s intellectual property and to impede Qualcomm’s licensing program.” I wonder how Samsung feels about its own lawyers not distancing themselves from such allegations…
Is Qualcomm trying to suck up to the Japanese and Korean regulators with this “Pokémon GO” fairy tale? As one Android-centric site put it, Qualcomm has “Big Trouble in Little Korea” and an Apple-centric site said that “[i]n a 134-page filing with the U.S. District Court for the Southern District of California, Qualcomm provides a point-by-point rundown of Apple’s January lawsuit, denying a total of 389 allegations.”
“Is Qualcomm trying to suck up to the Japanese and Korean regulators with this “Pokémon GO” fairy tale?”What we have here are two patent bullies fighting one another and it’s clear that only law firms are guaranteed to win, as usual (parasites can’t lose).
Qualcomm to Pay BlackBerry
Meanwhile, as emerged in the news last night [1, 2, 3], Qualcomm will need to shell out a lot of money. BlackBerry, which has itself become akin to a patent troll (both directly and indirectly), expects to receive nearly a billion dollars from Qualcomm. “BlackBerry awarded $815 million in arbitration case against Qualcomm,” says a headline one reader sent to us about it. Might Qualcomm need to refund even greater amounts of money to other firms?
Florian Müller published another article earlier today, having watched this case rather closely. “Qualcomm does not want European and Korean antitrust proceedings to impact its FTC litigation,” says the headline. Like Intel and Microsoft, Qualcomm has come under incredible scrutiny in several continents and the effect can be devastating to a company that depends so much on patents rather than actual products. To quote Müller:
Qualcomm, which would have us believe we couldn’t even play Pokémon GO if not for its wireless technologies, is fighting a global, multi-front war against regulators, industry players and consumers (who are piggybacking on the FTC case in Northern California).
On one of those fronts, BlackBerry just won an arbitration award over $815 million. Unfortunately, arbitration is opaque, so the legal basis for this is unclear, other than BlackBerry having claimed to have paid too much in license fees during an unspecified past period. The kind of wrongdoing here is totally unclear, and we also don’t know what an appeals court would have decided. Still, the $815 million award, which is final and binding, has made BlackBerry’s share price soar by 12%. For the Canadian company, it’s a huge amount of money. For Qualcomm, it’s also a very significant amount, but the bigger problem is that every independent finding of Qualcomm having overcharged someone makes it harder for Qualcomm to convince the courts of law and the court of public opinion that it’s just being bullied by the likes of Apple and Samsung and that all those antitrust enforcers have all just been misled by sore losers in the marketplace and by evil companies denying Qualcomm a fair compensation for its innovations.
This concern is real. A joint case management statement filed yesterday by the FTC and Qualcomm–”joint” in terms of being a single document despite virtually zero convergence on substantive questions–in the Northern District of California shows that Qualcomm is indeed concerned about how the various parallel proceedings could influence each other.
The above already mentions the news about BlackBerry, which is important. Is Qualcomm on the run from regulators?
Unfair and Unreasonable
“Apple’s challenge to Qualcomm is already having a positive impact, which is why we said we would support Apple right from the start (in this case alone).”So-called standard essential patents (SEPs) or RAND or FRAND are a subject we’ve covered here many times before. Last night IP Kat said that “It ha[d] been a busy couple of weeks for standard essential patents (SEPs)… and now we have the European Commission’s roadmap on SEPs.”
“FRAND is already in DSM,” Benjamin Henrion explained, “don´t know what is the status of this directive…”
Well, if SEPs like Qualcomm’s lose their legitimacy, the effects would be enormous and also impact software companies. In China, based on what IAM said earlier today, the subject of SEPs and patent trolls that wield them (like Ericsson in Europe) is being brought up and scrutinised. To quote:
We’ve seen a major patent pool introduce a new royalty rate structure aimed at enticing more developing-market implementers to get involved, the first foreign NPE officially enter China through a joint venture agreement, and Apple directly challenging the licensing terms Qualcomm agreed on with Chinese regulators. And, of course, the Beijing IP Court issued the country’s first SEP-based injunction against Sony.
Apple’s challenge to Qualcomm is already having a positive impact, which is why we said we would support Apple right from the start (in this case alone). Companies like Qualcomm offer far too little to society but more importantly, they set a dangerous precedent to be exploited by all sorts of other companies and harm productive companies. █
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Related to the FRAND/RAND debates but currently focused on hardware
Summary: Regulatory agencies in the US (International/Federal Trade Commission) grapple with anticompetitive aspects of patents
IN PREVIOUS years we wrote a great deal about the ITC. It’s the US-centric agency (not “International” as its name conveniently and misleadingly suggests) that helps embargo rivals from abroad; it does so with patents as a tool/blunt instrument.
The other day MIP wrote about what we can expect from the ITC in 2017, citing what it called the “first antitrust claim for 25 years.” To quote:
Highlights at the International Trade Commission in 2016 included the most Section 337 investigations since 2011, the first live hearing for a decade and the first antitrust claim for 25 years. Michael Loney asks ITC practitioners what trends they expect in 2017
What we have come to expect from the ITC (see past writings) is servitude to US corporations that control the political platform/establishment and public discourse. Disdain for ITC ‘justice’ is something they have come to deserve. Remember all those antitrust cases (EU, Korea and more) against Intel, whose offences are plenty and include patent aggression (not to mention lobbying for software patents)? Well, based on this new report, Intel’s arch-rival “AMD filed a legal complaint against a number of companies accusing them of infringing its patents covering graphics processing technologies. The company requested the United States International Trade Commission (US ITC) to investigate the matter and, if the ITC finds in their favor, ban products based on chips that infringe on AMD’s intellectual property rights.”
“What we have come to expect from the ITC (see past writings) is servitude to US corporations that control the political platform/establishment and public discourse.”ITC again. Guess in whose favour it is likely to rule? Even if many of these patents are applicable to or are required by industry standards…
Andy Updegrove spent a long time writing about anticompetitive aspects of standards with patents in them. He now says that a “Court Rules Standards Incorporated by Reference into Laws Need not be Free”. To quote: “When standards developed by the private sector become laws, should anyone be able to download a copy for free? At first blush, the answer seems too obvious to debate. But yesterday, a U.S. district court held otherwise, saying that the developer of a standard that has been “incorporated by reference” (IBR) into a law continues to have the right to enforce its copyright. It also confirmed the right to charge a reasonable fee for an IBR standard.”
“This is a case and opportunity for the FTC to show it has teeth; it’s also a case by which to squash software patents abuse, as some of the patents at the centre of these shakedowns are Qualcomm’s software patents.”The subject is contentious and hotly-debated these days, in particular because of Qualcomm, which faces lawsuits, antitrust investigations and so on. MIP, noting the latest development in China (covered here two weeks ago), wrote last week that the “FTC charged Qualcomm with practicing unfair methods of competition under Section 5(a) of the Federal Trade Commission Act. Meanwhile, Apple has sued the telecommunications company for $1 billion worth of rebated royalty fees that Apple says Qualcomm is withholding. Other trade commissions, such as Korea’s, have investigated and ruled against Qualcomm’s practices, and Apple has additionally sued the company in China.”
This is a case and opportunity for the FTC to show it has teeth; it’s also a case by which to squash software patents abuse, as some of the patents at the centre of these shakedowns are Qualcomm’s software patents.
Are regulatory bodies like the FTC and ITC likely to recognise that for the world to advance and develop we need standards that are not usable by billionaire corporations alone? Are they competition facilitators or merely gatekeepers (wolves in sheep’s clothing)? █
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The role of Ericsson and the EPO’s PR agency is mentioned as well
Summary: Weaponisation of European companies for the sake of artificial elevation of prices (patent taxes) a growing issue for Free/Open Source software (FOSS) and those behind it are circulating money among themselves not for betterment of products but for the crippling of FOSS contenders
THE long if not endless war waged by Microsoft against GNU/Linux is far from over. This past week, e.g. in our daily links, we gave several examples of the latest assaults by Microsoft (Android antitrust, Linux booting restrictions, lobbying against freedom-respecting policies and more), aside from the patent angle. Microsoft sure knows what it’s doing and if Microsoft succeeds, Linux-powered products will lose their broad appeal due to removed (thanks to legal threats) features and artificially-elevated prices. In this post we shall focus on the patent aspects alone, as we so typically do in order to keep things simpler.
“Microsoft sure knows what it’s doing and if Microsoft succeeds, Linux-powered products will lose their broad appeal due to removed (thanks to legal threats) features and artificially-elevated prices.”Let’s start with the Microsoft-friendly advocacy site, IAM ‘magazine’. IAM’s innuendo-filled focus on China’s patent activity as of late [1, 2] finally culminates in China’s “misuse of competition law for protectionist policies,” as if the West never ever does this (it’s certainly the norm at the USPTO and ITC). IAM wants to make China’s system (patents, courts etc.) look unfair and unjust, as it did the other day too. China is apparently very mean because there’s bias there that’s hardly unique to China. Huawei is the one major Android OEM that Microsoft never managed to blackmail using patents (it reportedly did try over the years) and IAM now says that “Huawei attracts flak from Nokia, while adversary Samsung signs major deal with the Finnish company” (good cop, bad cop). It is obviously a loaded headline and IAM does not tell readers that Nokia’s patent troll, MOSAID (now Conversant), is paying IAM. What a farce of a ‘news’ site. MOSAID (fed with Nokia patents at Microsoft’s instruction) can be viewed as somewhat of an extension of these entities and after Microsoft effectively hijacked Nokia it’s taxing Google/Android (hence Linux) in a royalty stacking fashion. This happens right now not only in the Western world but also in Asia, albeit Huawei has been one of the very few exceptions (the Chinese government, which is connected to it, seems to have protected it). “Here’s Why Nokia Is About To Get More Money Out Of Its Patents” is a new article from Fortune (writing a lot about patents so far this month) which reminds us that Microsoft essentially turned Nokia into a patent aggressor. Put another way, Microsoft made Nokia yet another one of its (many) patent trolls that are openly against Android and Linux. “I booked http://nokiaplanp.com,” wrote Benjamin Henrion, but that was “years ago, I was right.” The P stands for Patents and it happened around the time people were making jokes about Nokia’s plans under Microsoft’s mole, Elop (there were nearly a dozen such plans with a different alphabetic letter for each).
People are kindly asked to remember what Microsoft did to Nokia as revisionism about it is quite routine nowadays. Not only Nokia engages in such behaviour; Ericsson does this too and it goes as far as south Asia, e.g. India. European patent trolls come to India even if there are no software patents in India and virtually no patent trolls either, as we mentioned here before. Well, Micromax was last mentioned here a couple of months ago in relation to patent trolls, primarily Ericsson’s (the equivalent of MOSAID/Conversant to Nokia) and here is a new blog post about it:
Ericsson has been going all out to enforce its Standard Essentials Patents (SEP) against several mobile phone companies, such as Micromax, Intex and Lava, among others, who are primarily selling mobile phones in India. The outcome of these law suits will no doubt play a significant role in defining the future of licensing and enforcement of SEP in India.
The latest in these law suits is an interim judgement by The High Court of Delhi in the matter between TELEFONKTIEBOLAGET LM ERICSSON (Ericsson) and LAVA INTERNATIONAL LTD (Lava). The interim judgement is in favour of Ericsson. More importantly, the judgement deals with various aspects of licensing and enforcement of SEP.
Ericsson keeps 'hiding' behind proxies that are patent trolls in order to shake down practicing companies. It’s hardly even covert like Microsoft’s scheme. Everyone knows that Ericsson is doing this. Standard-essential patents (SEPs) are used here (Nokia has many of these too) and speaking of which, the Kat who is the most pro-software patents (based on years of posting history) wrote about the EPO's PR firm the other day, noting its take on SEP holders. “The final speaker was Mark Bezant from FTI consulting,” she wrote. “He mentioned that he is amongst the FRAND experts in the pending UK case of Unwired Planet v Samsung and Huawei [last reported by IPKat here]. He noted the two key issues in FRAND disputes: (a) the obligations placed on the SEP holders, and (b) the appropriate level of royalty rates. After reminding the audience of some of the methods discussed by Garreth Wong, he mentioned particular issues that arise in practice, such as having to rely on outdated licences or inherently complicated agreements. With respect to the incremental method of calculating royalties, he noted the difficulty in understanding the exact value a single patent has added to a standard. The most common approach, he explained, is looking at established comparable rates and matching them to the situation at hand. Mr Bezant concluded that one must establish a number of factors before assessing whether a licence is FRAND, such as the validity of the patents, the number of declared essential patents, the number of essential patents confirmed by a court, and the qualitative assessment performed by experts on the patents.”
“Remember that there are practically no workarounds for SEPs (by definition) and FRAND is not compatible with FOSS.”It’s rather curious to see Battistelli’s PR firm (at the expense of the EPO) promoting a software patents loophole and patent aggression. Then again, they also promote the UPC and pay IAM, which incidentally gets paid by patent trolls also. It is a hostile world out there and it makes life hard for FOSS proponents. Remember that there are practically no workarounds for SEPs (by definition) and FRAND is not compatible with FOSS. █
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Summary: Free/Open Source software (FOSS) continues to be used as a cover for large corporations (like Google, IBM, NEC, Philips and Sony) to maintain a grip on patent pools and act as gatekeepers with software patents that they openwash (not even cross-license, as Oracle v Google serves to illustrate)
WE were never huge fans of OIN, which is why OIN’s CEO and PR people tried hard to convince us otherwise. I saw first-hand accounts where patent trolls were repelled by OIN, which didn’t quite seem to care (maybe because OIN cannot do anything at all about patent trolls, other than attempt to buy/harvest patents before they’re bought to be used offensively). OIN is basically the world’s biggest legitimiser of software patents. IBM, the main company behind OIN (recall its first head of operations, Jerry Rosenthal from IBM), is a patent bully and a notorious software patents proponent, so how can one honestly expect OIN to be part of a true solution? IBM is demonstrably part of many problems.
“IBM is demonstrably part of many problems.”According to this new article from Fortune, joining OIN makes one “a Patron of Open-Source Software” (what a ludicrous headline). To quote from the article: “It’s called the Open Invention Network, and its other members are Google, IBM, Red Hat rht , NEC nec-electronics , Philips phg , Sony sne , and SUSE (a unit of Britain’s Micro Focus). Fortune is the first to report Toyota’s startling move.
“Formed in 2005, OIN’s mission is to protect and encourage the collaborative development and use of open-source software, like the Linux operating system, which can be freely copied, altered, and distributed, and which no one person or company owns. OIN pursues a variety of strategies aimed at protecting the users and developers of such software against the threat of patent suits by proprietary software manufacturers, like Microsoft and Apple. Such suits, if successful, could deny users the freedoms that make open-source software desirable.
“That Toyota would now join the group reflects the growing importance that software is playing in cars, and the growing number of automakers who believe that open-source software is the best approach to providing many of the needed solutions for its vehicles. Open-source champions say such software is cheaper, more flexible, and of higher quality, because it benefits from the pooled resources of collaborative input.”
Toyota, a very close Microsoft partner (probably more so than any other vehicles maker), claims to have joined OIN, but what good will that do for FOSS? Nothing. Toyota is not even a software company. It’s about as relevant to FOSS as that openwashing campaign from Tesla (and later Panasonic). Total nonsense. It’s about as helpful to FOSS as RAND is and speaking of RAND (or FRAND), this new article from IP Watch speaks about FRAND in relation to Europe, where the term FRAND is typically a Trojan horse (or surrogate) for software patents in Europe.
“Toyota, a very close Microsoft partner (probably more so than any other vehicles maker), claims to have joined OIN, but what good will that do for FOSS?”Going back to OIN, it has done virtually nothing so far to protect FOSS. It’s like bogus insurance plan which does not actually work or cover anything (no matter the circumstances). Where is OIN every time Microsoft blackmails Linux/Android OEMs? Speaking of which, Professor Crouch has this new article about insurance based on patents (or copyright, trademark, and trade secret). He says that “Hammond’s insurance company USLI had refused to indemnify Hammond based in-part upon the intellectual property exclusion found in the policy that specifically excluded coverage for any “loss, cost, or expense . . . [a]rising out of any infringement of copyright, patent, trademark, trade secret or other intellectual property rights.” Agreeing, the court particularly found that the basis for TCA’s attorney fee requests stemmed from the Pennsylvania Uniform Trade Secrets Act as well as the Copyright Act – even though no intellectual property infringement claim had been asserted in the underlying case.”
Look what we have come to. With misnomers like “intellectual property”, which compare ideas to “property” and ascribe physical attributes to them (like insurance traditionally did, covering for damage caused to physical things), no wonder the media says joining OIN is becoming “a Patron of Open-Source Software” (FOSS inherently rejects the notion of patron or owner, except in the copyright assignment sense).
“Fortune is the first to report Toyota’s startling move,” its author wrote, but in reality Fortune is the media partner to peddle Toyota’s marketing/propaganda, along with OIN’s agenda. █
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FRAND (in a standard) or “on a device” loophole
Summary: While the United States distances itself from patent maximalism and moves further away from software patenting, the issue is still unresolved in Europe, which traditionally rejected such patent applications upfront
SOFTWARE patents are certainly a dying breed of patents in the United States, especially after Alice. Those who deny these trends are typically lobbyists of the software patents interest groups/profiteers. This report which was authored by Charles Bieneman, says that even the Court of Appeals for the Federal Circuit (CAFC), originator of software patents in the United States, walks back on the issue and “Maintains Unpredictability of the Law of Patent-Eligibility”. To quote Bieneman: “The Federal Circuit vacated a summary judgment of invalidity under 35 U.S.C. § 101 after disagreeing with a district court that claims of U.S. Patent No. 7,604,929 were “directed to a patent-ineligible law of nature–that hepatocytes [liver cells] are capable of surviving multiple freeze-thaw cycles–and that the patented process lacks the requisite inventive concept.” Rapid Litigation Management, Ltd. V. Cellzdirect, Inc., No. 2015-1570 (Fed. Cir. July 5, 2016). Reading this case for broader lessons on Section 101 validity – as I read all cases that implement the Mayo/Alice patent-eligibility test – the main lesson to be drawn here is that outcomes under Section 101 remain highly situational. Patent-eligibility determinations, even more than other questions of patent law, frustratingly depend on the context of the litigation, specific words that may or may not be included in a patent claim, and, let’s be honest, the particular judge or judges hearing the case.”
“The courts which actually count and are not known for corruption quite unequivocally reject software patents.”At the CAFC, as noted here many times before, trial misconduct is common. It’s a corrupt process. Consider the recent BASCOM case which is still mentioned in the news this week. SCOTUS, which bypasses CAFC, continues to reject challenges to Alice, e.g. the Sequenom case — a subject which was also revisited earlier this week. The courts which actually count and are not known for corruption quite unequivocally reject software patents.
Europe, on the other hand, risks going in the very opposite direction.
According to last week’s blog post from Cambridge Wireless Blog (based in the UK), “not all software is patentable, and never has been. But this is generally true: not everything is patentable. As straightforward examples, you cannot patent a piece of art, or a book, or a theme or story for a book, say. These are regarded as “non-technical”. Likewise, you cannot patent a pure business method, again in essence because they are regarded as “non-technical” and for policy reasons. You also cannot patent “scientific theories” or “mathematical methods”, again essentially for policy reasons: no-one should be allowed to patent what is already “out there”, waiting for humans to uncover it.”
“”fluffy” software is not patentable but “hard” software is,” Benjamin Henrion noted about the premise of the above. “There is no such thing as hard software,” he added. This is perhaps where the EPO loophole comes into play. If one pretends that the software is tied or combined with a device, then suddenly the software is deemed patentable. Another loophole for software patenting in Europe has been FRAND. We wrote about this for nearly a decade. FRAND has been a vector of software patents injection into standards, even where software patents are not at all valid. “FRAND And The Clash Of Industries,” an article published earlier today, says the following:
They use open source licenses to handle the copyrights and patents, community governance to handle trademarks and other patents and public benefit entities to protect everyone from everyone else. Each participant in the collaboration works at their own expense in order to achieve a shared outcome that benefits all, including themselves. When they create an enhancement, fix a defect, participate in a design, they are not “working for free” or “donating their work” so much as they are “participating in co-development”. It’s a new way to leverage IP for greater benefit than directly monetising its scarcity.
But that’s not the case in markets where collaboration happens at the level of specifications and de jure standards rather than code and de facto standards, such as the telecommunications industry. Decades of comfort with SEPs and FRAND terms have resulted in a heavy investment in patents licensed in such a way that they create mutually-assured control. Telecommunications standards are so heavily encumbered with SEPs that patent pools and cross-licensing have become the norm. That in turn has created a barrier to newcomers that has made the telecommunications industry a cartel of giants.
That cartel of giants now sees its mesh of complex physical technologies coming to a lifecycle point where software dominates. The rise of apps and smart devices for the user and of software-defined and implemented infrastructure for operators, means that there is more and more of an incentive to move in to the computer and software technology markets. This in turn has created an impetus to adopt the working practices of that industry, which notably today means collaboration over shared implementation rather than just over mutually essential specifications. As a result, they seek to introduce open source into their business.
So will we create a new opportunity with regulations like EIF, or allow an existing industry to hobble another as the two collide? That’s the real question about FRAND terms for SEPs. Trying to force-fit FRAND into open source by mistakenly asserting it’s just a matter of compliance is sure to fail. Despite the name, FRAND is always discriminatory.
It is sad that so many years down the line, nearly a decade after Microsoft lobbied via groups like the Business Software Alliance, this subject remains unaddressed and FRAND remains a big barrier, even in Europe. There is much work to be done in Europe, even if the US gradually ends the era of software patenting. █
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Whose public service is this and why are European politicians allowing software patents?
Summary: More patent trolling in Europe (using software patents, as usual) and another disappointing move from the European Commission which serves to reinforce software patents deep inside public services, in effect overriding Europe’s policy on patent scope due to lobbying from proprietary software giants from abroad
“Trolls at the gates,” Francisco warned the other day. “Unitary patent is coming.” Francisco happens to have warned about the EPO and UPC for quite some time now and he is not alone (we gave examples of that). The President of the FFII, Benjamin, has just said “this is what is waiting us if nobody moves their ass on the Unitary Patent.”
“As we have noted here for a number of years, Germany is undoubtedly the worst in Europe when it comes to software patenting and this latest bit of news seems to reinforce this trend.”This was said in response to Jan Wildeboer, who works for Red Hat in Germany (Europe’s capital of software patenting) after years of activism against software patents (he is spending a lot less time fighting for this cause nowadays). “Patent troll forces Flickr to deactivate mobile upload in Germany,” Wildeboer warned. As we have noted here for a number of years, Germany is undoubtedly the worst in Europe when it comes to software patenting and this latest bit of news seems to reinforce this trend. I can’t help but wonder if upload tools in my own self-hosted albums are infringing too. Recently in the United States some very small and weak entities, such as family businesses, got sued/blackmailed by a patent troll over photo albums they had online. We wrote some articles about it earlier this year.
As Benjamin put it, “as long as those Patent Courts stays in Germany, I am fine. Problem is with the Unitary Patent.” Well, some of these patent trolls have begun coming to the UK. They use software patents, too. To quote the page from Flickr, “patent litigation is a tremendous drain on the global economy, and Yahoo has been a vocal proponent for years in the United States to restore balance to patent litigation by encouraging innovation and discouraging abuse.
“Patent troll forces Flickr to deactivate mobile upload in Germany…”
–Jan Wildeboer“Unfortunately, as of today, our Flickr users in Germany are the victims of abuse in the patent litigation system. In recent months, Yahoo and several other major US tech companies were sued in Germany by TLI Comms, a company that does not practice the patent at issue, but rather asserts it against others for financial gain — sometimes referred to as a “patent troll.” TLI Comms has accused Yahoo of infringing its European patent (EP 0814611 B1) by providing users the ability to upload photos and videos to our servers via the Flickr mobile web page or the Flickr mobile apps. TLI has asserted similar claims against a number of other major US tech companies. As of today, a German court has enjoined Yahoo from providing the upload feature of the Flickr mobile web page and mobile apps to our users in Germany.”
How long before other European nations suffer the same ‘castration’ of features? It might only be a matter of time. Bear the UPC in mind.
“European Commission kills FLOSS with FRAND patents,” Benjamin warned in a separate note after Glyn Moody, who had written articles on this subject earlier this year (we covered these), alerted followers to the fact that the “EU Commission confirms that it is abandoning open source to market forces – http://europa.eu/rapid/press-release_MEMO-16-1963_en.htm”
Benjamin thought “market forces” are better off called “dark forces” and another opposer of software patents said “the EU are creating these standards & they cannot be used in Free Software?”
Dr. Moody responded with “very; but they care more about big business that likes FRAND” (a topic often covered here for nearly a decade).
As Benjamin noted, “patents means free software becomes proprietary. That’s what the GPL said in 1991 already.”
“EU Commission confirms that it is abandoning open source to market forces…”
–Glyn MoodyIf there is no freedom to redistribute the program, then it’s not Free software anymore. “The reference implementations can be whatever,” Benjamin noted, but “patent holders can still tax any other implementation of the standard.”
As I noted in response to the above (twice even) the EU/European Commission is a Microsoft shop that failed to move away from Microsoft and even failed to investigate Microsoft’s OOXML abuses as it had promised to do so (giving a false sense of hope to antagonists). Whose EU Commission is this and why are we still implicitly endorsing software patents, in spite of the EPC and the 2005 directive? █
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Corruption and greed have become embedded in this whole system
Composition of [1, 2, 3, 4]
Summary: A critique of some patent injustices and the reasons why scientists are sacrificed for the benefit of revenue-maximising managers and their lawyers/lobbyists
Cory Doctorow, citing his EFF colleague, says what an Australian Commission has found regarding software patents. It’s strongly against them. It’s a subject which we covered here before [1, 2]. “The report,” Doctorow writes, “which was commissioned in part to investigation the codification of fair use in Australian copyright law, condemns virtually the whole edifice of Australian IP law. It calls for shorter copyright terms, more flexibility for copyright users, stricter criteria for granting patents, tightened rules and shorter terms for software and business-method patents, and more.”
“It seems as though each time there is evidence-based research into this subject the outcome says software patents are bad.”The EFF’s post says they “wrote about a discredited industry report that spread misinformation about the supposed costs of Australia adopting fair use into its copyright law. That document, commissioned by media and entertainment giants, had been written in anticipation of a recommendation for the adoption of fair use by the Australian Productivity Commission, a government agency tasked with improving Australia’s capacity for production and innovation.”
Further down it says: “Restricting the availability of patents for software and business method inventions, which are an impediment to further innovation. As regards software, the Commission notes that software development cycles of around 5 years are far shorter than the 20 year term of protection granted by patents, and that other incentives for software development (among them copyright) also exist.”
It seems as though each time there is evidence-based research into this subject the outcome says software patents are bad. Europe came to the same conclusion a very long time ago, but the EPO conveniently (for its own gain) ignores the law. There is now a new software patents loophole in the EU, as Dr. Glyn Moody showed last month. Yesterday he had more to say about that:
A couple of weeks ago, I wrote about a disturbing aspect of the European Commission’s proposed Digital Single Market: the fact that “ICT standardisation requires a balanced IPR [intellectual property rights] policy, based on FRAND licensing terms.” That’s a problem, because FRAND licensing is inherently incompatible with open source.
As well as generating a fair amount of interest here on Ars, the article seems to have provoked some discussions in the wider open source community, and inside the European Commission too. Given that interest, and the absolutely key nature of this issue, I thought it would be worth exploring it a little more deeply, not least because there have been some important developments in the last two weeks, including a way for Ars readers to help stop open source being locked out of EU standards.
First, it’s probably a good idea to summarise why FRAND, which stands for “fair, reasonable, and non-discriminatory,” is a problem for open source. Put at its simplest, licensing terms can be totally fair, quite reasonable, and absolutely non-discriminatory and yet impossible to implement in free software.
For example, a patentholder might think they are being super-kind by requiring a per-copy licence payment of just €0.001. And for traditional software, that might indeed be generous. But consider what happens with open source code, which by definition can be copied and shared freely as many times as you like. Since there is no way of knowing how many copies have been made, it’s impossible to pay even that “reasonable” €0.001 per copy. The only licensing fee that works in this context is zero—and even then, it’s not guaranteed that the licence will be compatible with free software. For example, there may be some other limitations on use, which aren’t allowed for open source.
What is needed is not just “royalty-free” licensing, but “restriction-free.”
The other case concerns the open source giant Red Hat, and how it settled a patent dispute with a company called Firestar. What is remarkable about this deal is that Red Hat not only acquired a licence for itself, it obtained it for everyone else in the open source community, upstream and downstream from Red Hat. In other words, it effectively took out a patent licence for the open source world.
Again, some have pointed to this as an example that proves that paying patent licences is perfectly compatible with open source; and once more, that’s not true. First, this solution was only possible because Firestar agreed to provide this blanket licence for the open source community: the fact that it had never been done before shows how exceptional that was. For companies that offer FRAND licensing, there is no reason at all why they would have to follow Firestar’s example.
“This is IAM doing its usual routine trying to urge companies — even in China — to pursue more and more patents/patenting obsession.”It is not too shocking that lobbyists for software patents get their way in spite of what scientists and programmers are saying. The lobbyists never grow tired and they are backed by wealthy corporations like IBM. There is now a push for new taxes in the embedded Linux space (increasingly characterised using the silly buzzword, “IoT”). “If demand for connected devices does prove durable,” IAM wrote, “then Chinese appliance makers could be big winners – and so could patent licensors. But the big Chinese players are likely not finished spending money to beef up their patent positions in the hopes of easing their royalty burdens.” This is IAM doing its usual routine trying to urge companies — even in China — to pursue more and more patents/patenting obsession. In Europe they encourage companies to pursue patents even in domains that are out of reach, e.g. software, as in the US patent system it is growingly a challenge (inevitably, they cannot just snub the courts eternally). This new article from Robert Sachs says: “On May 4, the USPTO issued a new memorandum for patent examiners, “Formulating a Subject Matter Eligibility Rejection and Evaluating the Applicant’s Response to a Subject Matter Eligibility Rejection” (“Examiner Instructions”) along with a new set of five example claims, this time in the life sciences and chemistry arts. The Examiner Instructions are a positive step forward in refining the examination process, but leave open many questions.”
A notoriously corrupt court, CAFC, is where software patents came from in the first place (several decades ago) and it has just been brought up by Patently-O in relation to the Patent Act. “The Federal Circuit created the rule of automatic assignment through agreement without any basis in the Patent Act,” Patently-O says and to quote some bits: “The core problem is that the court has ignored the Erie doctrine. Under the Supreme Court’s 1937 decision in Erie v. Tompkins, a federal court ruling on a matter of state law under its diversity jurisdiction must apply the law of the state from which the dispute arose. Which state law to apply is a matter of choice of law principles. What the federal court cannot do is create its own federal common law in lieu of the state statutory or common law. As the Court affirmed in Butner v. United States, 440 U.S. 48 (1979), the Erie doctrine applies to a court’s supplemental jurisdiction over state law claims attendant to a federal question. By creating its own federal common law of contracts, the Federal Circuit reveals a fundamental error in its understanding of the federal court system. [...] The case of conflicting patent assignments bears some similarity to the law on intangible future interests in creditor-debtor law. Both entail rights in property that has yet to come into being. The main lesson from creditor-debtor law, which is largely a matter of state law, is that many interests are implicated and therefore simple rules are not satisfactory. The Federal Circuit has arguably adopted too simple and misguided a rule in the Filmtec. The Supreme Court has confounded the error in the Stanford decision by ignoring the issue of automatic assignments. One way to correct course is by granting Shukh’s petition for certiori and restore the proper balance between federal patent law and state commercial law.”
“We regret to say that a lot of laws, practices, policies etc. around patents are still corrosive and this is caused by systemic corruption.”This may seem like an injustice because it is. A lot of patent law in the US is completely unhinged from sanity, evidence, facts, and justice. The other day we wrote about how NASA had hoarded a lot of patents; it should not have patents at all (taxpayers pay NASA to explore space, not to acquire patent monopolies) and it gets worse when NASA gives these to private hands and sells them to trolls. Yesterday we found 31 articles about NASA’s latest patent PR, but not a single decent article which actually put claims to scrutiny and did an actual investigation [1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31].
We regret to say that a lot of laws, practices, policies etc. around patents are still corrosive and this is caused by systemic corruption. Many countries are negatively affected by this. █
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