Bonum Certa Men Certa

The US Patent System: Where One Wastes Years in Court and Spends $8,000,000 in Lawyers' Fees Fighting a Bogus Patent

The US patent office has essentially externalised the costs to the public

Alice road



Summary: A roundup of news about software patents in the US and what they have led to, owing in part to the USPTO's declining patent quality (leaving others to clean up its mess)

THE ridiculously low standards of the USPTO come at a huge cost, albeit this cost is considered an externality by this greedy patent office. Unless this mess is sorted out soon, the US might have nothing left but large multinational corporations with tens of thousands of patents each, as opposed to agile startups with none.



Elliot Harmon says that this one particular software patent, which can possibly be demolished quite easily using Alice, has been used in the Eastern District of Texas and it's the "Stupid Patent of the Month" (as per the series of the EFF). To quote:

This month, a company called Voice2Text Innovations filed patent infringement lawsuits against two voice over Internet protocol (VoIP) services, Phone.com and Vitelity. Voice2Text has no website or any other information online; its sole asset appears to be US Patent No. 8,914,003—unsurprisingly, a patent on using voice recognition to convert a voicemail into a text message. Equally unsurprisingly, it’s filed those suits in the Eastern District of Texas, whose patent-troll-friendly practices we’ve thoroughly documented on this blog. The Voice2Text patent is so absurd that we had to honor it with our Stupid Patent of the Month award.


"Unless this mess is sorted out soon, the US might have nothing left but large multinational corporations with tens of thousands of patents each, as opposed to agile startups with none."In order to destroy such a patent one might need to spend quite a lot of money rather than settle. Consider this new story titled "Court Orders Plaintiff to Pay Defendants’ $8 Million in Attorney’s Fees in Patent Row". That's a lot of money; patent lawyers grossly overcharge and the system plays in their favour by inducing additional costs at many levels (e.g. appeals), thus favouring those with bigger budgets or deeper pockets, leaving small players vastly more vulnerable. To quote the concluding words: "This case illustrates that the courts will take strong action when faced with baseless claims, hidden or altered evidence, and misleading statements made to the court or opponents. It also serves as a strong reminder to consider your counsel carefully, and the advice that they provide, or a plaintiff may have to pay its own fees and those of the defendant, which in this case amounted to another $8 million."

This case may be the exception rather than the norm, but judging by NewEgg's decision to stand up to trolls, it often costs literally millions and there is no guarantee of the plaintiff -- upon loss -- bearing the cost of the defendant's (victim's) legal bills. NewEgg actually made history by managing to compel a patent troll to pay its victim's legal fees some months ago, owing to an unusual decision by the judge.

"NewEgg actually made history by managing to compel a patent troll to pay its victim's legal fees some months ago, owing to an unusual decision by the judge."Patently-O has just recommended Lynda J. Oswald's relatively new paper which criticises the term “strict liability” and whose abstract says: "In 1995, the Federal Circuit summarily attached the label of “strict liability” to direct patent infringement, even though that term does not appear in any U.S. Patent Act of the past two centuries. The catechism of “strict” direct patent infringement liability is now so well-engrained in patent doctrine that it is easy to lose sight of how recent the advent of this terminology is in the case law, and how troublesome application of this standard has proven, even to the Federal Circuit, which created it. The first patent act (1790) preceded the emergence of tort law as a distinct field of U.S. common law (mid-1800s) by a half-century or more, and the products liability explosion of the mid-twentieth century radically altered our understanding of strict liability. The implications of this forgotten timeline are profound. “Strict liability,” particularly in its modern formulation, is not a neutral, descriptive term. Rather, the term evokes social policy choices and balancing considerations that may be appropriate within the case law context of products liability or abnormally dangerous activities, but which are incongruous and inapposite in the statutory context of patent law. Deeming direct patent infringement to be a strict liability leads to two unanticipated and unwelcome effects. First, the adoption of the “strict liability” label for direct patent infringement liability improperly inflates the courts’ role in setting direct patent infringement liability standards and suggests — incorrectly — that patent liability is a case law construct, when in fact it is a statutory construct. Second, the “strict liability” label improperly shifts the focus of the patent infringement inquiry from the Patent Act’s protection of the plaintiff’s exclusive property interest in its patent right toward a value-laden examination of the social utility of the defendant’s conduct vis-à-vis the injury to the patent holder. Jettisoning the “strict liability” label for direct patent infringement would reframe the analysis and debate, moving direct patent infringement liability out of a policy framework and back toward its proper statutory setting."

"PTAB is increasingly being used to correct the USPTO's errors, but why not dig deep into the root of the problem and simply tackle the USPTO's unrestrained greed?"What's worth noting here is that a lot of the risk has been passed to defendants, not to plaintiffs, who often rely on poor quality examination by the USPTO (resulting in the grant of bogus patents). PTAB is increasingly being used to correct the USPTO's errors, but why not dig deep into the root of the problem and simply tackle the USPTO's unrestrained greed?

CAFC won't be coming to one's rescue after PTAB, according to one example just put forth by Patently-O. To quote Patently-O: "The Federal Circuit has denied en banc review of decisions in four inter partes review proceedings brought by Gnosis. Federal Circuit had previously affirmed the Patent Trial and Appeal Board’s IPR determination that the challenged Merck and SAMSF patent claims were invalid as obvious."

The relevance of this was ever more apparent when Bass gamed the value of companies by invalidating key patents -- a move which IAM now conflates with patent trolls by comparing Bass to trolls. Spangenberg is a patent troll, Bass invalidates patents. They have a very different modus operandi, but as IAM put it, the connection lies within a team-up: "Since teaming up with former IPNav CEO Erich Spangenberg to launch their first US inter partes review (IPR) in February last year – challenging a pharmaceutical dosage-related patent owned by Acorda Therapeutics – Kyle Bass has become one of the IP business world’s highest-profile players. Whether he should primarily be seen as antagonist, protagonist or the antihero somewhere in-between depends on your point of view. What is certain is that the validity actions being pursued by him and Spangenberg through their Coalition for Affordable Drugs – targeting patents belonging to pharmaceutical ‘originator’ companies – rocked the post-America Invents IP landscape."

"The USPTO's poor quality -- a trap which the EPO growingly falls into -- helps trolls, strategic predatory investors/hedge funds, and monopolists which do a disservice to innovation."What is worth noting here is that if the patents invalidated upon request by Bass were not granted by the USPTO in the first place, none of this would have happened. The USPTO's poor quality -- a trap which the EPO growingly falls into -- helps trolls, strategic predatory investors/hedge funds, and monopolists which do a disservice to innovation. Watch IBM's patent chief having the audacity this weekend to complain about the system which David Kappos from IBM made worse (in IBM's favour; IBM pays him now for lobbying), furthermore complaining about a system outside his own country (Australia) because it attempts to improve patent quality, as we noted yesterday.

Recent Techrights' Posts

Free Software Community/Volunteers Aren't Circus Animals of GAFAM, IBM, Canonical and So On...
Playing with people's lives for capital gain or "entertainment" isn't acceptable
 
Running This Site Mostly a Joyful Activity
The real problem or the thing that we need to cancel is this "Cancel Culture"
Australia Has Finally Joined the "4% Club" (ChromeOS+GNU/Linux)
statCounter stats
Debian as a Hazardous Workplace Where No Accountability Exists (Nor Salaries)
systematic exploitation of skilled developers by free 'riders' (or freeloaders) like Google, IBM, and Microsoft
Clownflare Isn't Free and Its CEO Openly Boasted They'd Start Charging Everyone to Offset the Considerable Losses (It's a Trap, It's Just Bait)
Clownflare has collapsed
Apple Delivered Very Disappointing Results, Said It Would Buy Its Own Shares (Nobody Will Check This), Company's Debt Now Exceeds Its Monetary Assets
US debt is now 99.98 trillion dollars
FSFE Still Boasts About Working Underage People for No Pay
without even paying them
IRC Proceedings: Saturday, May 04, 2024
IRC logs for Saturday, May 04, 2024
Over at Tux Machines...
GNU/Linux news for the past day
The Persecution of Richard Stallman
WebM version of a new video
Molly de Blanc has been terminated, Magdalen Berns' knockout punch and the Wizard of Oz
Reprinted with permission from disguised.work
[Meme] IBM's Idea of Sharing (to IBM)
the so-called founder of IBM worshiped and saluted Adolf Hitler himself
Neil McGovern & Debian: GNOME and Mollygate
Reprinted with permission from disguised.work
[Meme] People Who Don't Write Code Demanding the Removal of Those Who Do
She has blue hair and she sleeps with the Debian Project Leader
Jaminy Prabaharan & Debian: the GSoC admin who failed GSoC
Reprinted with permission from disguised.work
Jonathan Carter, Matthew Miller & Debian, Fedora: Community, Cult, Fraud
Reprinted with permission from disguised.work
Techrights This May
We strive to keep it lean and fast
Links 04/05/2024: Attacks on Workers and the Press
Links for the day
Gemini Links 04/05/2024: Abstractions in Development Considered Harmful
Links for the day
Links 04/05/2024: Tesla a "Tech-Bubble", YouTube Ads When Pausing
Links for the day
[Meme] The Cancer Culture
Mission accomplished?
Germany Transitioning to GNU/Linux
Why aren't more German federal states following the footsteps of Schleswig-Holstein?
IRC Proceedings: Friday, May 03, 2024
IRC logs for Friday, May 03, 2024
Over at Tux Machines...
GNU/Linux news for the past day
Alexander Wirt, Bucha executions & Debian political prisoners
Reprinted with permission from disguised.work
Links 03/05/2024: Clownflare Collapses and China Deploys Homegrown Aircraft Carrier
Links for the day
IBM's Decision to Acquire HashiCorp is Bad News for Red Hat
IBM acquired functionality that it had already acquired before
Apparently Mass Layoffs at Microsoft Again (Late Friday), Meaning Mass Layoffs Every Month This Year Including May
not familiar with the source site though
Gemini Links 03/05/2024: Diaspora Still Alive and Fight Against Fake News
Links for the day
[Meme] Reserving Scorn for Those Who Expose the Misconduct
they like to frame truth-tellers as 'harassers'
Why the Articles From Daniel Pocock (FSFE, Fedora, Debian Etc. Insider) Still Matter a Lot
Revisionism will try to suggest that "it's not true" or "not true anymore" or "it's old anyway"...
Links 03/05/2024: Canada Euthanising Its Poor and Disabled, Call for Julian Assange's Freedom
Links for the day
Dashamir Hoxha & Debian harassment
Reprinted with permission from disguised.work
Maria Glukhova, Dmitry Bogatov & Debian Russia, Google, debian-private leaks
Reprinted with permission from disguised.work
Who really owns Debian: Ubuntu or Google?
Reprinted with permission from disguised.work
Keeping Computers at the Hands of Their Owners
There's a reason why this site's name (or introduction) does not obsess over trademarks and such
In May 2024 (So Far) statCounter's Measure of Linux 'Market Share' is Back at 7% (ChromeOS Included)
for several months in a row ChromeOS (that would be Chromebooks) is growing
Links 03/05/2024: Microsoft Shutting Down Xbox 360 Store and the 360 Marketplace
Links for the day
Evidence: Ireland, European Parliament 2024 election interference, fake news, Wikipedia, Google, WIPO, FSFE & Debian
Reprinted with permission from Daniel Pocock
Enforcing the Debian Social Contract with Uncensored.Deb.Ian.Community
Reprinted with permission from Daniel Pocock
Gemini Links 03/05/2024: Antenna Needs Your Gemlog, a Look at Gemini Get
Links for the day
IRC Proceedings: Thursday, May 02, 2024
IRC logs for Thursday, May 02, 2024
Over at Tux Machines...
GNU/Linux news for the past day