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07.08.18

Apple Has Far More to Lose Than to Gain From Patent Maximalism; Apple Needs to Fight for Patent Sanity

Posted in America, Apple, Patents, Samsung at 2:05 pm by Dr. Roy Schestowitz

Zeroclick, Uniloc, VirnetX, AVRS and many others can cost Apple billions in legal bills and settlements

Apple logo

Summary: It might be time for Apple to rethink its legal strategy; patents are costing the company a great deal of money and have yielded almost nothing for the company’s bottom line (unlike the company’s lawyers, perpetrators of this misguided strategy)

THE SUMMER HOLIDAYS are in full swing and many staff (e.g. EPO and USPTO examiners) likely enjoy a long break right now. In fact, journalists too slowed down; some are away. But it’s never a suitable time for them to stop the Apple hype. Whenever there’s some patent case involving Apple the corporate media suddenly bothers covering patent news (it otherwise doesn’t care because people don’t click on stories unless there’s some famous brand in the headline).

“Whenever there’s some patent case involving Apple the corporate media suddenly bothers covering patent news (it otherwise doesn’t care because people don’t click on stories unless there’s some famous brand in the headline).”This is a short roundup of Apple in patent news. This is far from the first time we point out the exceptional emphasis on Apple; we last mentioned it a few weeks (or 10 days) ago.

Chris Stokel-Walker’s article, “Forget Apple vs Samsung, an even bigger patent war has just begun,” is citing Florian Müller for the most part. Müller is correct and here’s the core thesis:

A tech giant like Samsung, Apple or IBM can register up to 5,000 patents every year – with engineers writing them “at a furious rate”, says Horace Dediu of Asymco, a mobile phone analyst. “IBM does this seriously. They just amass a huge arsenal of patents.” Apple alone has more than 75,000 patents and filed for over 2,200 more since the beginning of 2017. Samsung has filed for more than 10,000 patents in the last 18 months and in total has 1.2 million of them.

“My personal opinion is that this absolutely exorbitant number of patents you find in a phone shows that the hurdle for obtaining a patent is too low,” says Mueller. There should be more substantial investment behind every patent.

Crucially though, patents aren’t just important for protecting people’s inventions: they’re also a money-making tool. “Patents are one of these currencies that is always traded,” explains Dediu – or sold.

They are a tool used against opponents in a highly competitive industry. “If you have a patent, you can stop someone else shipping a product that contains that intellectual property,” says Dediu. “Generally, the rights are entirely held by the patent owner and those rights mean that an infringing product must be withdrawn from the market.”

The malicious use of patents to prevent competition rarely happens, but the sheer scale of the number of patents can stifle innovation. Mueller calls it a “patent thicket”. Companies can develop a new device or a new technology, then find themselves undone. “You inevitably – because there are so many of them – will be found to have infringed a patent,” he says. “That is a real problem for the industry.”

It’s not only Müller who calls it a “patent thicket”; it’s a widely-accepted legal term, albeit with the negative connotation it deserves, just like “patent tax”, “patent troll”, “royalty stacking” and so on. Euphemisms typically contain spurious and misleading words like “fair”, “reasonable” and “nondiscriminatory” (that’s FRAND). Either way, Apple is very aggressive with patents, but nowhere as aggressive as IBM and unlike IBM it also finds itself on the receiving end of a lot of lawsuits, including troll lawsuits (preying on the big ‘wallet’). This is why we habitually encourage Apple to join us in the fight against — not for — software patents. It certainly seems like quite a lot of software patents are being used against Apple, costing it billions of dollars in total.

“It’s not only Müller who calls it a “patent thicket”; it’s a widely-accepted legal term, albeit with the negative connotation it deserves, just like “patent tax”, “patent troll”, “royalty stacking” and so on.”The latest in Uniloc USA, Inc. et al v Apple Inc., as per Docket Navigator, is that “[t]he court granted defendant’s [Apple's] motion to strike plaintiff’s infringement contentions because plaintiff failed to sufficiently identify the accused instrumentalities.”

Uniloc is a major patent troll, just like VirnetX, which also preys on Apple and wants hundreds of millions of dollars.

In a Mac/Apple-oriented site, Joe Rossignol spoke of AVRS, which is not a classic patent troll but mostly software patents without an actual complete product, only litigation and “portfolio” (of patents). To quote Rossignol:

Arizona-based speech recognition technology company AVRS, short for Advanced Voice Recognition Systems, Inc., has filed a lawsuit against Apple this week, accusing the iPhone maker of infringing on one of its patents with its virtual assistant Siri, according to court documents obtained by MacRumors.

Those are software patents and the Patent Trial and Appeal Board (PTAB), if an inter partes review (IPR) was pursued, would likely cause them to perish. A few days ago a new example of this (patents on “Phonetic Symbol System”) was dealt with by the Federal Circuit (CAFC). “In a non-precedential decision,” Patently-O admitted, “the Federal Circuit has rejected George Wang’s pro se appeal — affirming the PTAB judgment that Wang’s claimed phonetic symbol system lacks eligibility under Section 101.”

“It certainly seems like quite a lot of software patents are being used against Apple, costing it billions of dollars in total.”Well, obviously. The patent system has become almost self-satirising and sites of patent maximalists are still cherry-picking slightly older (June) CAFC cases where mere dissent — not eventual judgment — gives hope to these maximalists.

And speaking of maximalists, the case of Zeroclick against Apple was brought up again at the end of last month. Patent Docs‘ patent maximalist Michael Borella belatedly catches up with Zeroclick, LLC v Apple Inc. (we have already mentioned Zeroclick in [1, 2, 3]), noting that “it is not uncommon for software inventions to be claimed as methods” (that’s purely semantics). To quote the details, which deal with § 112 rather than § 101:

Most software inventions are functional in nature. The focus is not on what the invention is so much as what it does. The same physical hardware can be programmed by way of software to carry out an infinite number of different operations. Thus, it is not uncommon for software inventions to be claimed as methods. But when such inventions are claimed from the point of view of hardware carrying out a method, the patentee runs the risk of the claims being interpreted under 35 U.S.C § 112(f) (pre-AIA § 112 paragraph 6) as being in “means-plus-function” form. This, of course, can effectively narrow the scope of the claims to embodiments disclosed in the specification and equivalents thereof. Also, such claims can be found invalid if the specification does not disclose sufficient structure to support the embodiments.

[...]

“First, the mere fact that the disputed limitations incorporate functional language does not automatically convert the words into means for performing such functions.” Notably, many structural components or devices are named after the functions they perform.

“Second, the court’s analysis removed the terms from their context, which otherwise strongly suggests the plain and ordinary meaning of the terms.” Particularly, the terms “program” and “user interface code” were not used in the claim as nonce terms, but instead refer to “conventional graphical user interface programs or code, existing in prior art at the time of the inventions.” And as explained in the specifications, the claimed invention was an improvement to such interfaces and code.

“Third, and relatedly, the district court made no pertinent finding that compels the conclusion that a conventional graphical user interface program or code is used in common parlance as substitute for ‘means.’” The Federal Circuit suggested that use of a broader term, such as “module”, in place of “program” and “user interface code” would have likely have invoked § 112(f).

For these reasons, the Federal Circuit reversed the District Court and remanded the case for further proceedings.

Patents on graphical user interfaces don’t relate to § 101, as we noted earlier this year (on numerous occasions even), but they oughtn’t be granted because copyrights and trademarks already cover appearances. If Apple fought against patent maximalism, many of these nuisance lawsuits would likely stop.

The patent trolls’ lobby, IAM, expectedly worries that Qualcomm might lose key patents. And why? Because Apple does in fact reach out to PTAB, reaffirming the idea that technology companies need and support PTAB. IAM said that “the Apple v Qualcomm battle royale took on a new front in June as the iPhone giant turned to the Patent Trial and Appeal Board (PTAB) to try to invalidate several of its rival’s patents. It is the first time that Qualcomm, widely seen to have one of the more valuable patent portfolios in the mobile and semiconductor sectors, has seen its grants challenged at the PTAB and should Apple start successfully knocking out some of its adversary’s patent claims it would give the tech giant some helpful leverage in a dispute…”

“If Apple fought against patent maximalism, many of these nuisance lawsuits would likely stop.”Similar things have happened in Europe, as we covered here earlier this year. Will patent maximalists soon start demonising Apple too, calling it “anti-patent”? Well, the PTAB-bashing Watchtroll again covers news from 3 weeks ago, adding nothing new except its pro-patent trolls slant (“Apple Brings Patent Battle Against Qualcomm to PTAB With Six IPR Petitions on Four Patents”), having covered another Apple story with this propaganda headline. The said case showed that only lawyers win in patent disputes, but here they go saying that 7 years of fighting is actually “Proving Patent Litigation Doesn’t Hinder Consumer Access” (the term “consumer” is an insulting word for customer and features were actually removed from these phones as a result of the fighting, directly harming customers). Had Steve Jobs never declared a patent war on Android, Apple would likely be in the same position that it’s in right now, albeit with fewer lawyers, not many legal bills, and without negative press coverage (berating it for patent aggression).

06.28.18

Apple Loses Its Patent War Against Android and by Extension Against Linux

Posted in Apple, Courtroom, Google, Patents, Samsung at 3:08 am by Dr. Roy Schestowitz

“We’ve always been shameless about stealing great ideas.”

Steve Jobs

Judge Lucy Koh

Summary: The long battle that Steve Jobs embarked on nearly a decade ago (with his infamous term, going “thermonuclear”) reaches its end and Apple is nowhere near to what the now-deceased Jobs actually wanted because Android dominates the market and these lawsuits are profitable to nobody except law firms

BACK in 2010 we wrote a lot about Apple, particularly about its war on Android, which had begun with a ‘soft’ (vulnerable) target, HTC. Our interest in this case and subsequent cases (e.g. against Samsung) has since then dwindled, but we kept abreast of the more major developments.

“From a legal perspective this case isn’t as interesting as other cases, but the sums (so-called ‘damages’) are higher, so patent extremists were quick to boost it.”Apple and Samsung finally settle, but we weren’t sure if we should bother writing about this because it’s covered very widely already. Like everything “Apple”, when it comes to patents literally all the major papers cover it (while ignoring much more important patent news). That’s not exactly fine, but this is the world we live in and if some headline says “Apple”, then people are more likely to click on it (than a headline that says “§ 101″ or something equally vague to most people).

But really, how can we just ignore such news? The patent maximalists’ sites, e.g. Michael Loney’s, have begun covering it. “Apple and Samsung apparently just settled their patent dispute,” Mark Lemley wrote yesterday and soon thereafter came a lot of media coverage. Sites about patents wrote about it, albeit we can expect a lot more from them in days to come. From a legal perspective this case isn’t as interesting as other cases, but the sums (so-called ‘damages’) are higher, so patent extremists were quick to boost it. They wrote about it last night.

“Just remember that Apple started this dispute and was the bully all along.”So did technology news sites, Android sites, Apple sites, Android-centric news sites like this, corporate media and its “tech” branches (like CBS/CNET). They don’t say anything particularly special or insightful. In fact, the said truce is pretty secretive, so there’s not much that can be said with certainty. A blog post from someone who followed these battles closely for 8 years (Florian Müller) says/concludes with this: “Normally, those companies strike license deals, and when they wind up in court, they typically settle reasonably early. Somehow, it took them a lot longer in this case. And now either one of them has a dispute going that looks like it could become the next long-running one: Apple with Qualcomm, and Samsung with Huawei.”

“Only the lawyers gained from these cases (there was a string of them).”Just remember that Apple started this dispute and was the bully all along. Judge Koh made herself a name out of it. The media loves any case that says “Apple” on it. Müller added that “Judge Koh was quick and presumably overjoyous to grant the DISMISSAL sought by Apple and Samsung post-mediation: ORDER OF DISMISSAL. Signed by Judge Lucy H. Koh on 6/27/18.”

Koh has since then done other commendable things in her court.

For those wishing to read more details, try this article from Bloomberg:

The biggest patent battle of the modern technology world has finally come to an end after seven years.

Apple Inc. and Samsung Electronics Co. told a judge Wednesday they’d resolved the first filed but last remaining of the legal disputes that once spanned four continents. The string of lawsuits started in 2011 after Steve Jobs, Apple’s co-founder who died that year, threatened to go “thermonuclear” on rivals that used the Android operating system. The companies didn’t disclose the terms of the accord.

Only the lawyers gained from these cases (there was a string of them). Why did Samsung and Apple bother? Apple started this! It was an awful and now-notorious strategy of Steve Jobs, who even used words like “thermonuclear”. The supposed brilliance of this ‘genius’ was bad judgment and arrogance. The courts proved it.

06.20.18

The Eastern District of Texas is Where Asian Companies/Patents/Trolls Still Go After TC Heartland

Posted in America, Microsoft, Patents, Samsung at 1:06 am by Dr. Roy Schestowitz

Katana Silicon Technologies

Summary: Proxies of Longhorn IP and KAIST (Katana Silicon Technologies LLC and KAIST IP US LLC, respectively) roam Texas in pursuit of money of out nothing but patents and aggressive litigation; there’s also a Microsoft connection

THE decision on TC Heartland (SCOTUS) dealt with the venue at which companies operate and what this means for the venue of litigation (where patent lawsuits get filed). Weeks ago there were some new cases related to this, especially when it comes to foreign (non-US) companies from somewhere like South Korea or Taiwan. We wrote about that.

For those who haven’t been keeping track, KAIST has generally become a patent parasite masquerading as “education” or “research” (that’s how it’s known or recognised around Korea or Seoul, like CSIRO in Australia). Jacob Schindler of IAM (the patent trolls’ lobby) now celebrates litigation in the Eastern District of Texas by KAIST’s proxy in another country (KAIST IP US LLC). It’s a shell entity of an entity that produces nothing. This shell has won the case, but we certainly hope that Samsung will appeal this decision to the Federal Circuit, overriding the notorious biases of the Eastern District of Texas (biases which is openly advertises). As IAM makes clear, the Patent Trial and Appeal Board (PTAB) was already involved prior to this. From the summary (outside the paywall) it’s made apparent that a nontechnical jury decided on this technical case (we explained many times why such trials may be unsuitable for patents):

Last Friday, a jury in the Eastern District of Texas ordered Samsung Electronics to pay $400 million to the IP licensing arm of South Korea’s top technology university. KAIST IP US LLC, an affiliate of the Korea Advanced Institute of Science and Technology, saw its patent survive multiple IPRs and a dispute over its proper ownership en route to a courtroom victory over South Korea’s most prominent technology company. While US litigation watchers will be wary of a reversal on appeal, the big award signals that top Asian university IP owners like KAIST cannot be ignored.

We have meanwhile seen/come across yesterday’s article titled “Samsung Threatens U.S. Prosperity By Disregarding Intellectual-Property Rights” (this author apparently doesn’t know that Samsung has the most US patent grants per annum and held the same title at at the EPO in the past).

Anyway, what’s worthy about the above case is that a Korean entity used the US courts to go after another Korean entity, but only because it’s the Eastern District of Texas, which openly brags about being friendly towards plaintiffs, welcoming patent trolls such as Dominion Harbor with many Asian patents (almost expired).

It has meanwhile emerged, also based on the patent trolls’ lobby (IAM), that a Japanese company has had its patents passed to patent trolls. Guess where…

“Foxconn transfers former Sharp patents to Texas-based NPE,” said the tweet and the article said:

Longhorn IP, the Texas-based NPE, has launched its fifth portfolio, a collection of semiconductor patents originally owned by Sharp. The licensing company, run by Khaled Fekih-Romdhane and Chris Dubuc, is calling its new vehicle Katana Silicon Technologies LLC – a name hinting at the Japanese source of the patents, which USPTO assignment records reveal is Sharp.

Notice how Longhorn IP uses shells, as is so typical in Texas (Dominion Harbor does this as well). There’s a bit of a connection between those two; at the end of last year IAM said that “Dominion Harbor and Longhorn IP [had] both formed partnerships with Beijing East IP…”

The “Founder and Managing Member” of Longhorn IP/Katana Silicon Technologies LLC used to work for the Microsoft-connected Acacia, according to this page. Dominion Harbor receives the lion’s share of patents from the Microsoft-connected Intellectual Ventures. Guess where the other founder came from; he was “Licensing Program lead at Intellectual Ventures.”

06.12.18

Apple v Samsung Not Over, Hearing on a New Design Patent Trial Next Month

Posted in Apple, Patents, Samsung at 12:33 am by Dr. Roy Schestowitz

In Tokyo

Summary: Apple’s legal battles against phones that have Linux inside them simply aren’t ending; meanwhile, there’s more evidence that Apple would be wise to simply push for patent reforms, namely further restrictions on patent scope

APPLE’S legal battles against Android never seem to end. The USPTO granted questionable patents on rather trivial designs, causing a great deal of controversy. Yesterday the patent maximalists rushed to write about “Calculating design patent damages after Apple v Samsung,” but the case is far from over. Or so it seems based on reports like these [1, 2]. The latter says:

It turns out that $539 million is more than Samsung is willing to pay Apple after it was found to have infringed on several patents.

The trial over how much the chaebol was to pay in damages that ended two weeks ago after six years of overlapping litigation may restart in just two weeks. We’re learning through Law360 that Samsung has filed a post-trial motion that reiterated its case for why it should only pay $28 million instead.

The company said that Judge Lucy Koh’s instructions allowed the jury to not identify what the article of manufacture that each of three iPhone-related design patents applied to — for example, did the patent covering a colorful grid of icons apply to just the software component or the whole iPhone when it comes to potential lost sales Apple wants to claim?

[...]

Law360 reports that Apple may respond to the motion by June 21 and a hearing on a new trial will take place July 26.

We quit following these cases (at least closely) a very long time ago because they never seem to end. It has been nearly 8 years since Apple officially began its patent war on Android and nowadays there are newer cases like Zeroclick v Apple — a case which involves GUIs (similar to designs) and has a notorious patent troll watching in the shadows. We wrote about that 9 days ago and it was mentioned again later on (by Watchtroll), then again yesterday. To quote:

Zeroclick, LLC sued Apple Inc. in the U.S. District Court for the Northern District of California, asserting claims 2 and 52 of U.S. Patent No. 7,818,691 and claim 19 of U.S. Patent No. 8,549,443. The district court found the asserted claims invoked means-plus-function by using terms for which the specifications of the patents did not disclose sufficient structure, which rendered the claims indefinite. In a decision authored by Judge Hughes, the Federal Circuit determined the district court failed to undertake the appropriate inquiry and make related factual findings to support its conclusion that the asserted claims recited means-plus function terms. See Zeroclick, LLC v. Apple Inc., No. 2017-1267, 2018 (Fed. Cir. June 1, 2018) (Before Reyna, Taranto, and Hughes, J.) (Opinion for the court, Hughes, J.)

Apple would be wise to join the fight against software patents, but we doubt that’s going to happen. Meanwhile we’ll continue to watch as the above cases unfold.

06.10.18

Everyone Talks About Apple’s Notorious Design Patents But Not About ‘Abstract’ European Patents Used Against Apple and Linux

Posted in Apple, Europe, GNU/Linux, Patents, Samsung at 3:18 am by Dr. Roy Schestowitz

A ‘Battistelli era’ patent

EP2954737

Summary: What corporate media and the ‘mainstream’ speak of in relation to Apple and what more ‘niche’ bloggers pay attention to, serving to highlight a decline in patent quality at the European Patent Office (EPO)

LAST weekend we wrote about Zeroclick, LLC v Apple, Inc. We took note of the relation to a very malicious patent troll, Erich Spangenberg. Days later Watchtrolll wrote about this case as well, adding virtually no new information.

But Apple remains in headlines (about patents) mostly because of its own battles against Android (and by extension Linux). Professor Michael Risch’s analysis of Apple v Samsung is only days old and it speaks of the massive “damages” of ~$533,000,000. Risch’s views:

I’ve done a few interviews about the latest Apple v. Samsung design patent jury verdict, but journalistic space means I only get a couple sentences in. So, I thought I would lay out a couple points I see as important. We’ll see if they hold up as predictions.

There’s been a lot written about the case, so I won’t rehash the epic story. Here’s the short version. The design patent law affords the winning plaintiff all of the profits on the infringing article of manufacture. The Supreme Court ruled (reversing about 100 years of opposite practice) that the article of manufacture could be less than the entire accused device for sale. Because the original jury instructions did not consider this, the Court remanded for a determination of what the infringing article of manufacture was in this case (the design patents covered the shape of the phone and the default screen). The Federal Circuit remanded, and the District Court decided that, yes, in fact, the original jury instructions were defective and ordered a retrial of damages.

The District Court adopted the Solicitor General’s suggested test to determine what the article of manufacture was, determined that under that test it was a disputed fact question, and sent it to the jury. Apple asked for $1 billion. Samsung asked for $28 million. The jury awarded $533 million, which is more than $100 million more than the damages were before the Supreme Court ruled.

Josh Landau (CCIA) too wrote about these design patents, probably for the dozenth time or so. “Comments from Samsung Jurors Drive Home The Flaws In Design Patents,” Landau argued.

Flawed Logic

The logic of the jury’s verdict also requires a different result than profits on the entire device.

Even if we assume, contrary to both good policy and established case law, that profits on the components that produce the icon grid are available, those components still aren’t the whole phone. The cellular hardware, for example, is not involved in producing a display (after all, Apple’s iPod Touch produced a similar display without any cellular functionality), but is still part of Samsung’s total costs and profits. For that matter, the external casing isn’t required in order to produce the grid of icons.

If the article of manufacture is defined by the hardware required to produce the icon grid, then it’s also defined as something other than the entire phone.

Flawed Results

It all comes back to a single problem. The design patent total profits rule produces tests that are incoherent and impossible to apply when design patents are available for small pieces of complex, multi-component products. The total profits rule of § 289 simply doesn’t make sense in these situations.

We’re very disappointed to see Apple stooping to ‘Microsoft levels’ and 7-8 years ago we called for an Apple boycott (this made it into sites like Slashdot at the time). Has much changed since? Other than Steve Jobs’ death?

Well, sometimes we openly support Apple’s patent battles, e.g. against Qualcomm. As we explained before, if Apple wins this dispute, it will be good for phones that have Linux in them as well.

As it turns out, Qualcomm now uses a software patent granted by the EPO. To quote Florian Müller:

In 10 minutes: #Qualcomm v. #Apple #patent infringement trial in Mannheim, Germany. Patent-in-suit: EP2954737 on a „power tracker for multiple transmit signals sent simultaneously“.

He later added:

After Judge Dr. Kircher of the Mannheim Regional Court expressed serious doubts about the validity of #Qualcomm‘s EP2954737, QCOM felt forced to stipulate, with #Apple, to a stay of this case pending the EPO‘s decision (in a year or so) on Apple and #Intel‘s opposition. https://twitter.com/fosspatents/status/1003968003413815298 …

On why it’s a software patent:

Yet another software patent: “the functions described may be implemented in hardware, software, firmware, or any combination thereof. If implemented in software, the functions may be stored on or transmitted over as one or more instructions or code on a readable medium”

Well, software patents like these have plagued the EPO, not just the USPTO. We doubt any of that will change under António Campinos; it’s like the EPO goes in the very opposite direction of the US (where the Federal Circuit and Patent Trial and Appeal Board invalidate software patents en masse).

Müller later put it together in a blog post [via], having watched this dispute for quite some time. To quote:

Four months back, Qualcomm’s lead counsel in the German Qualcomm v. Apple cases, Quinn Emanuel’s Dr. Marcus Grosch, hoped to obtain a Germany-wide patent injunction against Apple this summer. The related case (one of various patent infringement claims Qualcomm has brought against Apple in Germany) went to trial this afternoon, and it’s unlikely that anything, if ever, will happen in that particular matter before the summer of 2019.

The patent-in-suit, EP2954737 on a “power tracker for multiple transmit signals sent simultaneously,” is under massive pressure because of Apple and Intel’s opposition to its recent grant. Of the four prior art references cited, Alcatel Lucent’s European patent application EP2442440A1 poses the greatest–though not the only–threat to Qualcomm’s patent.

Why did the EPO foolishly grant such a patent? In the US, in the meantime, software patents are being invalidated and yesterday Müller gave a new example:

Yesterday the United States Patent and Trademark Office had bad news for a particularly broad member of Twitter’s key patent family, U.S. Patent No. 9,088,532 on a “device[-]independent message disribution platform.” As I reported in March, the ’532 patent is being reexamined based on a patent application by independent Indian inventor Yogesh Rathod as well as a couple of other prior art references. The reexamination requested related to claims 1-3, 8, 9, 13-15, 17, 20, and 21, all of which are being reexamined. In a (first) Office communication since opening the reexamination proceedings, the USPTO has held all of the reexamined claims invalid, challenging Twitter to persuade the examiner that its patent claims should be upheld.

Prior art rather than Section 101 (or similar) was cited here, but still… it’s a testament or evidence of the fact that the US improves patent quality, whereas Europe moves in the opposite direction under Battistelli’s crooked leadership.

06.02.18

US Antitrust Official Makan Delrahim Encourages Parasitic Patent Behaviour — Not Just Embargoes — in the Phones Domain and Beyond

Posted in America, Antitrust, Apple, Asia, Patents, RAND, Samsung at 8:47 am by Dr. Roy Schestowitz

The lawyers might like it, but it’s bad for the customers (fewer choices, more expensive overall)

ZTE

Summary: US antitrust authorities and the European Commission have been speaking a lot lately about FRAND/SEP and SPCs; will they institute policies which benefit the monopolies or the market at large?

WE HAVE ALWAYS PREFERRED not to deal with politics but with purely technical matters, but when it comes to patent law it seems like politics are inevitable. The EPO, for example, is run by a crooked politician and the USPTO is connected directly to the government. See Makan Delrahim's history just before Trump put him in his current position; Trump put yet another rogue lobbyist (“swamp” is what he calls it) in charge and it hurts actual science and technology. Before Iancu was nominated and appointed by Trump his firm had worked for Trump too. That’s politics.

Makan Delrahim’s policies were mentioned by Richard Lloyd just before the weekend. It was about standard essential patents (SEPs). There was a discussion about it in Europe (FRAND/SEP and SPCs) because of the European Commission’s latest announcement (relegated to our daily links) and here’s what Lloyd wrote about a new letter:

A group of advocacy groups with close ties to the high-tech, automotive and retail industries have released a new paper calling into question several of the policy positions staked out by US antitrust chief Makan Delrahim regarding the application of antitrust law to the licensing of standard essential patents (SEPs). The paper follows a letter, signed by 77 former government officials and academics sent to Delrahim last week which also questioned several of the comments that the head of the Department of Justice’s antitrust division has made since he was appointed last September.

We already wrote several posts bemoaning Delrahim’s policies, which seem to be influenced not by national interests but few private interests.

Speaking of politics, ZTE has been everywhere in the news lately; it isn’t all about patents, but the patents angle/aspect does get brought up on occasions, sometimes in relation to these lawsuits in Texas, which is becoming widely known for little but patent trolls and patent lawsuits. From a new report about it:

Despite the fact that its devices were recently banned in America, Chinese smartphone maker ZTE is now facing a patent infringement lawsuit in the US.

A Northern Texas US District Court judge recently denied the company’s motion to dismiss a patent infringement case filed by a Texas-based mobile software developer.

Seven Networks has alleged that ZTE’s firmware uses seven of its own patents regarding battery management, data transfers and notifications. The software developer’s complaint alleges that the ZTE Blade smartphone as well as its other devices, use parts of all seven patents to manage their battery life and handle notifications and data transfers.

[...]

ZTE has decided to halt production until the ban is lifted and its lawsuit with Seven Networks will likely complicate matters further.

As The Register put it (adding some politics), “ZTE can’t buy chips from America – but can still get sued for patent infringement in the US” (this is the headline).

Chinese phone maker ZTE will have to face a patent infringement lawsuit in the US, despite its handsets being effectively barred from sale in America.

On Wednesday a Northern Texas US District Court judge tossed the Chinese company’s motion to dismiss a patent infringement case filed by a Texas-based mobile software developer.

Seven Networks has alleged that ZTE’s firmware borrows from seven patents it holds regarding data transfers, battery management, and notifications.

Why would ZTE even wish to participate in the US market? ZTE and other Chinese companies have been the subject of a political smear campaign lately*. The same has been happening in Europe, especially in the UK.

Going back to the patent maximalist/lobbyist Richard Lloyd, he caught up with something we had covered regarding Panasonic. It’s feeding patent trolls in spite of all the openwashing. It’s likely that the trolls will soon go after companies like ZTE, suing perhaps through Texas (this has become common among Canadian patent trolls). Quoting Lloyd:

WiLAN has acquired a portfolio of patents from Panasonic in the latest in a long line of patent transfers between the Japanese tech giant and the Canadian NPE. The portfolio contains 34 patent families comprising 96 grants worldwide. It relates to security camera surveillance technologies, including camera systems used in retail, other commercial buildings and smart home applications. The transfer follows another transaction between the two in January which related to semiconductor memory technologies used in Dynamic Random Access Memory (DRAM) and NAND Flash Memory.

Nobody benefits from it; they artificially elevate the price of phones, which basically come with a ‘trolls tax’ attached.

As Samsung and Apple recently came to accept, this is mostly beneficial to patent lawyers. IAM named Samsung as the winner in Apple v Samsung, but the truth is that neither company won. Only their legal departments gained, as usual.

Well, having uploaded the relevant PDF, which can be found in Scribd [PDF], Florian Müller wrote that “Apple, Samsung trying to put patent dispute behind them through mediation” and to quote:

After last week’s Apple v. Samsung damages verdict (largely over design patents) in the Northern District of California, counsel for both parties told Judge Koh that they were both willing to put an end to their long-running dispute, which started with a complaint filed by Apple in April 2011 and quickly escalated into a global dispute with filings in ten countries.

[...]

What’s furthermore unclear (and no one may know at this stage) is whether the parties will try to resolve both California cases (the one that went to re-retrial in May, and a second one that turned into a roller coaster) or just the first one.

High-profile smartphone disputes between handset and platform makers (unlike litigation brought by non-practicing entities or increasingly-”trollified” former phone makers such as Nokia and Ericsson) haven’t recently resulted in license agreements. Instead, parties just dropped pending cases but reserved all options for bringing new complaints anytime, with some license agreements–or covenants not to sue–of extremely limited scope possibly having been part of some of those confidential deals. I would expect the same if Apple and Samsung finally called a truce. Apple obviously isn’t going to extend a design patent license to Samsung; the result might involve a license (or a convenant not to sue with the practical effect of a license) to a few software patents, though some have expired and others have been worked around. But by and large the question is just whether Apple will withdraw any pending claims. And, even if this works out now at long last, no one knows when hostilities might flare up again.

Müller speaks of “non-practicing entities or increasingly-”trollified” former phone makers such as Nokia and Ericsson,” but he might as well add Blackberry with Apple at its heels.

All these lawsuits sure fascinate patent lawyers because these make them richer. But at whose expense? We would be better off without all these legal battles. Can Delrahim, a lawyer himself, ever understand that?
____
* In addition to this, Microsoft blackmails ZTE and others. It’s suing or threatening to sue using patents just because they use Linux and Free/libre Open Source software.

05.27.18

The Way Things Are Going in the Eastern District of Texas and Other US District Courts, South Korean Companies Might as Well Exit the US Like They Exit China

Posted in Apple, Courtroom, Patents, Samsung at 2:44 pm by Dr. Roy Schestowitz

Patents on designs (controversially granted by the USPTO) are self-discrediting anyway

Judge Lucy Koh

Summary: Apple and Samsung conclude another major patent battle (after 7 years of chaos, taking up a lot of Judge Lucy Koh’s time), but many patent battles remain, which means that lawyers at both companies receive salaries which otherwise engineers would have gotten

THE Apple and Samsung patent battles are so long and boring that we’ve almost entirely quit covering them. When Apple started attacking Android with patents (Apple v HTC) we still wrote a lot about it.

Just because it’s Apple, the firm which champions hype and fantasy, the media in the US is sickly obsessed with it and it has been covering the case like it’s the only one that really matters. We’re assuming that our readers already saw the news elsewhere. If not, here are some articles [1, 2, 3, 4, 5, 6, 7, 8, 9]. “Samsung argued it should pay only $28 million for infringement,” one article notes, rather than have the patents questioned (this trial wasn’t about the patents but the “damages” — a bizarre misnomer but an official/formal legal term).

“The fact is that Samsung won the smartphone wars back in 2012,” IAM claimed in “The smartphone wars were a triumph for Samsung, a defeat for Apple, but everybody won” (the editor published this a few hours ago).

Notice how even some pro-Apple news sites thought that Apple would lose. Ben Lovejoy wrote in 9 to 5 Mac:

The Apple versus Samsung patent trial that began in 2011 returned to court last week. Closing arguments were made on Friday, and it’s now up to a jury to decide whether the damages awarded to Apple will be increased, decreased or remain unchanged.

My expectation is that Apple will lose the case – and I’ll define ‘lose’ in a moment – and that, actually, that would be the right result …

But no, not really… because only lawyers won. It’s more like an internal fight within the companies rather than between them. The legal team is trying to make itself relevant and help itself expand. At whose expense? Likely the technical workers, who would rather add features than remove features to avert potential infringement.

This truly sickening, wasteful battle (7 years of court battles with judges and lawyers involved) should serve as a reminder; two companies wrestle themselves to death and only the lawyers enjoy the duel (they profit from it regardless of who wins which motion/s).

Three days ago, i.e. shortly after the decision, USA Today wrote: “Samsung must pay about $533.3 million for infringing on design patents. The jury said Samsung owes Apple an additional $5.3 million for infringing on utility patents.”

Florian Müller, who had followed this super-closely, stayed up until very late at night (or woke up as early as summer’s dark hours) to write about the outcome and these design patents. To quote some bits:

A cartoon showing Homer Simpson using an iPhone may indeed have had an impact on a high-profile smartphone patent dispute as the screen design patent it relates to apparently accounts for approximately half a billion dollars in design patent damages. After three days and a half of deliberation, the re-retrial jury in the first Apple v. Samsung case in the Northern District of California awarded Apple a total of approximately $538.6 million in damages from Samsung (related to some old phones–mostly the first two generations of the Galaxy S), $533.3 million of which relate to design patents and $5.3 million to utility (i.e., technical) patents. Here’s the verdict form (this post continues below the document)…

[...]

The jury had asked two questions, and both questions showed they were really struggling with determining the relevant article of manufacture (AoM). If the jury had determined that the design patents in question covered only certain components (casing and screen), the amount would have been in the tens–not hundreds–of millions of dollars, but given that Apple was seeking more than $1 billion, the jury would probably have been inclined (in that hypothetical scenario) to award substantially more than the amount Samsung described as reasonable (less than $30 million). At the same time, given that juries often come down somewhere in the middle, a billion-dollar award was a possibility, but far less probable than the combination of agreeing with Apple on the AoM but with Samsung on most or all of its deductions.

[...]

According to media reports, Apple reiterated how much value it attaches to design, and Samsung is now going to consider its options. Those options are post-trial motions and, possibly, another appeal.

When patent trials are done or decided by juries the impact is catastrophic. As CCIA put it the next day:

Yesterday, after almost four days of deliberation, the Apple v. Samsung jury decided Samsung owed Apple over $500 million of Samsung’s profits.

Faced with an artificial and unsound test, the jurors struggled to understand just what they were supposed to do.

Ultimately, the jurors awarded Apple profits on the entire Samsung device for Apple’s icon grid patent. One juror is reported to have explained that the article of manufacture for the icon grid patent “was the whole phone because you need the phone to see it.” If Microsoft Solitaire (with cards originally designed by Apple’s own expert witness) had an infringing design, all of a sudden the entire computer is at risk—without a processor, display, memory, and hard drive, there’s no way to display the cards. That logic creates real risks for the computing industry and for new industries like smart home and IoT products.

What a mess. So even the mere design of something can have someone — anyone — liable for infringement of patents. Even a mere part of something.

Is Apple happy about the precedent here? It would be damaging to everyone.

Going back nearly a month ago, Watchtroll suddenly recalls that old case against Siri — a case brought forth by an “Israeli camera startup” that becomes a serial litigator. Many news outlet reported on it at the start of this month (because it’s about Apple). “One of the patents added was not even granted until January 2018,” says one of those reports.

Guess whose side Watchtroll takes:

On April 30th, Tel Aviv, Israel-based camera tech developer Corephotonics filed a complaint alleging patent infringement against Cupertino, CA-based consumer tech giant Apple Inc. (NASDAQ:AAPL) in the Northern District of California. This lawsuit comes months after Corephotonics filed a patent infringement suit against Apple last November, also in Northern California, with both suits alleging that Apple copied Corephotonics’ patented technology after Apple had allegedly expressed interest in a business relationship with the Israeli tech startup.

This sounds similar to the i4i v Microsoft situation (going about a decade back).

Samsung too is on the receiving end of such ‘nuisance’ lawsuits. Even in Texas. Apple’s arch-rival is being sued in the Eastern District of Texas, home of patent trolls. Who by? The Korea Advanced Institute of Science and Technology (KAIST). There’s no escaping Korean patent aggressors then, not even in the US. Docket Navigator wrote about the latest twist in Kaist IP US LLC v Samsung Electronics Co., Ltd. et al as follows:

The court granted plaintiff’s motion to exclude the testimony of defendants’ technical expert regarding defendants’ enablement and written description theories as irrelevant.

Docket Navigator also wrote about Plastic Omnium Advanced Innovation and Research v Donghee America, Inc. et al, but this one is less relevant to us albeit a similar new example because a motion to exclude. To quote: “The court denied defendant’s motion to exclude the testimony of plaintiff’s damages expert regarding a reasonable royalty rate because his reliance on an unaccepted proposal was sufficiently reliable.”

KAIST is a curious case of Korean patent aggression, which is rare. We wrote quite a lot about it in recent years and IAM wrote about it as recently as a few days ago. To quote the summary:

An affiliate of a top South Korean tech university, the Korea Advanced Institute of Science and Technology (KAIST), is currently locked in a US patent litigation battle with Qualcomm, GlobalFoundries and Samsung. A recent flap over the ownership of the underlying right reveals the missed opportunities that led to KAIST monetising the right, and underlines why universities in the country are changing their approach to patenting. KAIST IP US LLC, a university monetisation vehicle, filed the lawsuit in late 2016 accusing the three global chipmakers of infringing a single patent. The case was accompanied by a parallel complaint in South Korea.

KAIST is the exception rather than the norm in South Korea. Korean companies generally do not sue much; they do get sued, usually abroad, e.g. in China and in the US (this led LG to even withdrawing from the Chinese market). If Apple keeps suing like it does (always in the US), will it even be worth it for Samsung to still operate there? For the time being, owing to Samsung’s relatively high market share, the answer is probably yes, but for how long? Quite a few Chinese firms have begun moving out of the US, either because of US policies or lack of demand (partly the fault of the media).

05.20.18

In Apple v Samsung Patents That Should Never Have Been Granted May Result in a Billion Dollars in ‘Damages’

Posted in Apple, Courtroom, Patents, Samsung at 8:05 pm by Dr. Roy Schestowitz

Merely damages the credibility of the USPTO if anything…

11 Cool, Funny or Just Plain Strange Patents for Back to School
Reference: 11 Cool, Funny or Just Plain Strange Patents for Back to School

Summary: A roundup of news about Apple and its patent cases (especially Apple v Samsung), including Intel’s role trying to intervene in Qualcomm v Apple

HERE in this Web site we prefer to focus on topics/angles which ought to be covered by mainstream media but never/rarely are. The Apple v Samsung trial is generally being covered quite a lot by big publishers, e.g. “Apple v Samsung Poses Threat Beyond Just Tech” and other new headlines/reports [1, 2, 3, 4, 5, 6]. It is already being mentioned quite heavily in social control media, probably because Apple is involved. Not many patent cases manage to attract quite as much public interest. We remarked on it a few times earlier this month. As Wall Street media put it last week, “Apple Wants $1 Billion From Samsung at Smartphone Retrial” (retrial after nearly a decade of fighting).

Apple has taken patent maximalism/lunacy to new heights in California. It’s seeking billions in ‘damages’ over a simple shape of something. To quote one report:

Apple Inc. is seeking about $1 billion from Samsung Electronics Co. in another go-round stemming from a long-running smartphone patent-infringement dispute.

Jurors at the retrial before before U.S. District Judge Lucy Koh in San Jose, California, learned at the outset that the South Korean company infringed three of Apple’s design patents and two utility patents. Their sole job, Apple lawyer Bill Lee said, is to determine what damages Apple can collect.

Damages? What damages? As Josh Landau (CCIA) put it 5 days ago:

The design patent total profits rule of § 289 was created in an era when awards of profits were common and where complex multi-component products like we have today were uncommon. (Obviously, the concept of a computing device with an ecosystem of third-party app developers wasn’t even within the realm of imagination when § 289 was written.)

In fact, § 289 was created as a reaction to a decision about carpet decorations. A customer might seek out and buy a carpet just because of the design. But for most products today, that simply isn’t the case.

In order to avoid the kind of perverse results I’ve described, the article of manufacture for an icon or GUI should be interpreted as the software, not the device it runs on. And even if that change were made, Congress should still consider revisiting the total profits rule. A single infringing icon that’s a small part of a complex operating system shouldn’t entitle a patent owner to the total profits on the whole operating system—no matter how iconic it might be.

Patents on designs are a clear misfit; copyright and trademark laws cover designs. There’s this new blog post at IP Kat about industrial designs in Mexico with subheadings like “New concepts for industrial design examination” and “New regime for the validity of designs” (they aren’t talking about patents!).

Going back to Landau, the following day he published “Smartphones, Diapers, and Design Patents” — a post in which he mentioned Microsoft v Corel analysis by Sarah Burstein. She is a proponent of such patents. She wrote about it years ago.

Landau alludes to diapers and says:

Apple v. Samsung is obviously about high tech smartphones. Other recent design patent cases have focused on high tech products as well—both the Nikola v. Tesla case Patent Progress covered recently and the Microsoft v. Corel case that Prof. Sarah Burstein described over on Patently-O deal with high tech products.

[...]

Similarly, in a design patent case involving diapers, you have a printed outside layer—and then all the technology on the inside. Is the article of manufacture the entire diaper, or the printed outside layer? And how do you distinguish that from the Apple v. Samsung case?

The truth of the matter is — as we have been arguing for a number of years — patents on designs are too bizarre a concept. Watchtroll now promotes the nuisance patent litigation against Tesla (over mere shape/curves of a truck). Patent maximalists typically like any patents, irrespective of how broad they are. That just means more litigation, hence more business for them.

“The truth of the matter is — as we have been arguing for a number of years — patents on designs are too bizarre a concept.”There is another patent battle going on which involves Apple. But it’s not about design patents and it has nothing whatsoever to do with Samsung. As Florian Müller put it the other day: “While waiting for a tire change, I get to watch another #Qualcomm v. #Apple #patent infringement hearing at the Munich I Regional Court. Some chipset in some Apple products allegedly infringes on a manufacturing patent. Intel joined Apple in challenging the patent. More to follow [] Breaking News: Qualcomm employee just told the Munich I Regional Court today (at a #patent infringement hearing relating to the A10 chip) that Apple recently canceled a settlement meeting on short notice. Next meeting not scheduled yet.”

Müller then wrote a blog post about it:

While Apple is seeking north of $1 billion in damages from Samsung in the ongoing jury re-retrial in the Northern District of California, its earth-spanning dispute with Qualcomm continued today in the Munich I Regional Court with a first hearing (the primary objective of which is roughly comparable to that of a Markman hearing in a U.S. patent infringement case). Qualcomm alleges that the iPhone 7 and 7 Plus infringe its EP1199750 on a “post[-]passivation interconnection scheme on top of [an] IC chip.”

I’ll start with the most interesting piece of information I gleaned there. A Qualcomm employee–presumably an in-house lawyer, but I don’t know his name and title–responded to Presiding Judge Dr. Zigann’s question about the state of settlement discussions. According to Qualcomm, the parties had scheduled a meeting that would have taken place recently, but Apple canceled on short notice, and no new meeting has been agreed upon yet.

Qualcomm has long exploited SEP to tax pretty much every large company that sells chips (or products with chips inside them) — a subject which does not seem to bother Delrahim, unlike a long list or big bunch of “former government officials and professors” as Müller put it (Dennis Crouch covered this around the same time).

“Patent maximalists typically like any patents, irrespective of how broad they are. That just means more litigation, hence more business for them.”It’s worth noting that Intel sides with Apple here; Intel also lobbies for software patents and days ago Michael Proksch from Intel Standards Group was quoted as saying that they they invest $100 million annually in a 50,000-strong patent portfolio.

Intel has in fact filed/fired another patent missile:

Intel has filed for a declaratory judgment of non-infringement against small semiconductor licensing business Tela Innovations, in another dispute that shows how assertion activity is continuing to pick up in the chip sector. This spat has a particularly interesting edge to it given that Intel was an early investor in Tela and the two companies have a covenant not to sue (CNTS) dating back to May 2007. That covenant is still in effect and according to Intel’s filing “covers Tela patents claiming priority during the term of the CNTS”

A CNTS has all sorts of other names associated with it. Tela is actually new to us. It seems to be rather obscure, more or less like many patent trolls, but its Web site does not come across as that. There’s more to them than their patents.

“Imagine lots of patent lawsuits over shapes of cars or components around/inside the car.”Where does this all end up? Where do such large companies (Intel, Qualcomm, Apple and Samsung) position themselves in the market? Who will pay for the legal battles if not customers that nowadays pay about $1,000 for a phone? The shape of things — pardon the pun — ain’t so great.

According to yesterday’s latest update from Müller, Homer Simpson may sway the big trial, which is a jury trial:

It would have been preferable to give the Apple v. Samsung design patent damages re-retrial jury in San Jose (Northern District of California) a chance to render a verdict before the weekend. In that case, jurors might have put an end to this disruption of their lives. But the way things worked out, they’re now going to think about what position to take on Monday morning when official deliberations begin. In the meantime, they’re not allowed to talk to anyone about the case or to take a look at any media reports (whether some jurors do so anyway is another question, but they’re not supposed to).

As in the previous trials in this case, and as I mentioned a few days ago, Apple’s lawyers portrayed Samsung as an intentional infringer, an unrepentant copyist, with Samsung being barred from presenting some evidence that could have shed a different kind of light on that question.

The holdings that (i) Samsung infringed those three design patents (a long time ago) and (ii) that those patents are valid are “law of the case” and the re-retrial jury must presume both to be the case. It is worth noting, however, that courts in other jurisdictions looked at international equivalents of those intellectual property rights (and at devices from the same generation of Android-based Samsung products) and reached rather different conclusions. But things are the way they are for the purposes of this U.S. case, so the focus is just on damages, and the single most important question in this regard is what “article of manufacture” a disgorgement of Samsung’s profits should be based on: the entire device (which was considered a foregone conclusion in previous trials, but the Supreme Court and, previously, the United States Department of Justice disagreed with Judge Koh, the United States Court of Appeals for the Federal Circuit, and Judge Lucy H. Koh) or one or more components?

[...]

The world outside that San Jose courtroom overwhelmingly prefers a component-based damages determination. This InsideSources article on the problems that an excessive damages amount in the Apple v. Samsung case could cause tech and non-tech companies alike is a good example. But jurors won’t have the benefit of such information on the wider ramifications of what they’re required to decide.

“What has patent maximalism wrought?”We have always argued that jury trials, especially for technical matters, are inadequate. It is rather odd that such trials are even being considered in this domain. If Apple gets its way, a lot of industries will be impacted. Imagine lots of patent lawsuits over shapes of cars or components around/inside the car.

What has patent maximalism wrought?

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