EARLY in the month we wrote a variety of articles about Intellectual Ventures v Symantec, which was an important CAFC-level case that may have spelled the doom/end of software patents in the US. Today we bring together and present a potpourri of coverage related to this.
Mayer lays out the First Amendment argument against patentability of certain subjects, noting that limits on the subject matter of patents are meant to protect free expression. Under U.S. law, 35 U.S.C ۤ 101 (section 101) lays out the scope of patentable subject matter. In analysing this section, courts have carved out certain subjects as being outside the scope of patentability so as to protect freedom of expression. In particular, abstract ideas and mental process have been found too threatening to the free exchange of ideas to permit them to be locked up in patents. After outlining the basics, Mayer goes on to state that "Most of the First Amendment concerns associated with patent protection could be avoided if this court were willing to acknowledge that Alice sounded the death knell for software patents."
It's not time to break out the champagne just yet, but opponents of software patents might have cause to be hopeful. There's now a federal judge that openly agrees with them.
This isn't just any judge, but a judge sitting on the Court of Appeals for the Federal Circuit (CAFC), which hears all patent appeals. He's also not some bright-eyed newcomer to patent law. He was appointed to the Federal Circuit in 1987, where he was Chief Judge from 1997-2004.
On Friday, CAFC ruled that three patents Intellectual Ventures was attempting to use against Trend Micro and Symantec were invalid as they didn't describe anything patentable. Although the ruling was pretty much business-as-usual and wasn't unexpected, a concurring opinion by Judge Haldane Mayer went into uncharted waters. Alice Corporation versus CLS Bank International, he said, ended software patents.
"Alice" was the 2014 case in which the Supreme Court ruled that an abstract idea that "does no more than require a generic computer to perform generic computer functions" is not patentable. At the time of the ruling, many thought it would seem to invalidate almost all software patents, except that the Supreme Court bent over backwards to say otherwise within the ruling.
Judge Mayer spent 13 pages addressing software patent issues on several different fronts. For starters, he said they pose a First Amendment problem. “Patents, which function as government-sanctioned monopolies, invade core First Amendment rights when they are allowed to obstruct the essential channels of scientific, economic, and political discourse."
It's the free speech issues that led him to the conclusion that "Alice," in effect, outlawed most if not all such patents. "Most of the First Amendment concerns associated with patent protection could be avoided if this court were willing to acknowledge that Alice sounded the death knell for software patents," he wrote.
The Federal Circuit recently decided a case concerning three patents owned by Intellectual Ventures I LLC (“IV”). Intellectual Ventures I LLC v. Symantec Corp., Case Nos. 2015-1769, 2015-1770, 2015-1771 (Fed. Cir. Sept. 30, 2016). The district court had invalidated U.S. Patent Nos. 6,460,050 (‘050) and 6,073,142 (‘142) and found that Claim 7 of U.S. Patent No. 5,987,610 (‘610) was patent eligible. The district court had also found that Symantec Corp. (“Symantec”) infringed Claim 7 of the ‘610 patent, leading to an $8 million judgment. On appeal, the Federal Circuit held that all three patents were patent-ineligible under 35 U.S.C. €§ 101.
The US Court of Appeals for the Federal Circuit has affirmed the Patent Trial and Appeal Board’s (PTAB) decision to reject a patent application centring on an influenza drug.
Relenza (zanamivir) is a treatment for infection by an influenza virus, and was invented by Constantin Efthymiopoulos, who had applied for a patent relating to methods of administering the drug through inhalation.
One of the rejected claims states that zanamivir should be administered by inhalation through the mouth alone.
In Affinity Labs of Texas, LLC v. DirecTV, LLC, Nos. 2015-1845-48 (Fed. Cir. Sept. 23, 2016), the Federal Circuit affirmed a district court order granting a motion to dismiss, holding that the asserted patent, directed to wireless streaming of regional broadcast signals to cell phones located outside the service region, was invalid based on lack of patentable subject matter.
In applying the first step of Mayo/Alice—determining whether the claim is directed to a patent ineligible concept (i.e., abstract idea)—the Court held the claimed invention was an abstract idea and “entirely functional in nature.” The Court found that missing from the claims was how to implement out-of-region broadcasting on a cell phone, and the specification was similarly deficient and in fact underscored the abstract nature of the invention.
This case could have a significant impact for tech companies and startups if courts continue to take the Alice ruling to mean that software patents are null. So, what might this mean for the future of the tech industry? Brett Schuman, a partner in Goodwin’s IP Litigation Group, and an expert in patent law for startup and emerging growth companies, spoke to Inside Counsel about these questions and other Intellectual Property issues.
Should someone be able to get a monopoly on concepts for software? What if those concepts cover the basic pieces of something as important as the Internet? These are the type of questions constantly debated in the software industry, the patent office and the courts. What is generally overlooked, however, is the very real impact that software patents can have on freedom of expression. The Internet as a software platform is the largest channel of free expression in existence today. So the question we all need to consider now is how much do software patents restrain the rights protected under the First Amendment.
The Internet isn’t a single, uniform system. Rather, it’s a massive, collaboratively created platform, a large part of which is based on open software. It relies on multiple people and companies developing numerous pieces of software that must communicate with each other to work. Because patents allow a single person or company to exclude everyone else, a patent monopolizing basic Internet functionality causes enormous damage to the core of how the Internet is built and functions - the very thing that enables the Internet as a medium for expression on such a huge scale. Both Congress and the courts have recognized this kind of tension and accounted for it in the context of copyright and trademark law. Unfortunately, U.S. patent law has few built-in protections to ensure that patent monopolies do not overreach and restrict free expression.
Last week, achieving this critical balance between patents and free expression hit a crucial milestone. Judge Mayer in the Federal Circuit (the US court that hears patent appeals cases) wrote in a concurring opinion that patents directed at software running on generic computers can violate the First Amendment by creating barriers to communication, discourse, and the exchange of ideas online. In his opinion, he recognized that software and the Internet are widely-used, basic tools for expression. Mayer went further to declare that they are “essential channels of scientific, economic, and political discourse.”
In the past few months, the Federal Circuit reversed a two-year trend of overturning software patents by publishing three decisions that outlined various parameters in which software can be eligible for patenting. In those decisions (described in previous IP Spotlight posts published here and here) the court cautioned that not all improvements in computer-related technology are inherently abstract. It also said that when assessing patent-eligibility, one must be careful to not use patent-eligibility to invalidate a claim when the real issue with the claim is obviousness.
At this point, software patents still stand in the United States. The reasoning of the primary and concurring opinion, however, is likely to be picked up by other courts, potentially reducing (or eliminating, over time) the enforceability of software patents. Since I'm not a legal scholar, I'm not going to comment on the overall likelihood of software patents becoming less than useful. Instead, what I'd like to think through is what the reaction of the network engineering world might be.
To answer this, I have scraped the names of the original assignees for each of the U.S. patents in the portfolio from patent records (see annotated patents list). The analysis shows that nearly 500 of IV’s patents originally belonged to universities, including state schools (see Figure 1 and university-derived patents list).
As we’ve detailed on many occasions, forum shopping is rampant in patent litigation. Last year, almost 45% of all patent cases were heard in the Eastern District of Texas, a sparsely populated region of Texas probably more well-known as the birthplace of George Foreman than for any technological industry. EFF, along with Public Knowledge, has filed an amicus brief in TC Heartland v. Kraft, urging the Supreme Court to hear a case that could end forum shopping in patent cases.
The case is one of statutory interpretation. Prior to 1990, the Supreme Court had long held that in patent cases, the statute found at 28 U.S.C. €§ 1400 controlled where a patent case could be filed. However, in 1990 in a case called VE Holding, the Federal Circuit held that a small technical amendment to another venue statute—28 U.S.C. €§ 1391—effectively overruled this long line of cases. VE Holding, together with another case called Beverly Hills Fan, means that companies that sold products nationwide can be sued in any federal court in the country on charges of patent infringement, regardless of how tenuous the connection to that court. TC Heartland first asked the Court of Appeals for the Federal Circuit to revisit its law. EFF also supported TC Heartland at that court. The Federal Circuit declined the invitation.
Patent Trolls Undermine Open Access
This Open Access Week, the global open access community has a lot to celebrate. Hundreds of universities around the world have adopted open access policies asking faculty to publish their research in open access journals or archive them in open repositories. A few years ago, open access publishing was barely recognized on the fringes of science; now, it’s mainstream. Three years after the White House’s groundbreaking open access memo, we may be on the verge of passing an open access law.
Again and again, we’ve seen how making the results of scientific research available to everyone is good for innovation. Innovators should be able to use and build upon the most up-to-date scientific research, regardless of whether they have the budgets and institutional connections necessary to access expensive journal subscriptions and academic databases—particularly when that research was paid for with public funds.
Help slow the drag with patent venue reform
As our country and North Carolina look to accelerate the growth of our economy and expand its reach to all citizens, one issue has been a continuing drag: abusive patent litigation.
One prevalent tactic of abusers is to haul companies into virtually any district court in the United States, including those far away and those in locations that have nothing to do with where you do business.
Under current patent law, infringement suits can be brought in courts with no or little connection to the parties in the litigation. “Patent trolls” use this weakness in the system to select the courts well-known for their friendliness to patent suits.
For most of these patent trolls, their court of choice is the Eastern District Court of Texas (EDTX), which has been the No. 1 venue for bringing patent suits for nearly a decade. The EDTX saw 44 percent of all patent infringement cases filed in the entire U.S. in 2015, with one judge overseeing more than a quarter of all cases – twice as many as the next most active patent judge.
As a home-grown, global company headquartered in North Carolina that has been recognized as one of the world’s most innovative companies, Red Hat has repeatedly been forced into court in the EDTX. We have no office there; we do no business from there. The patent litigation abusers have minimal contact there, sometimes just a small office. But they go for a leg up in that district, given its reputation.
Red Hat and other companies have tried to move cases to where we can get a fair hearing, but the rules to change venue don’t easily allow that. We believe patent infringement suits, just as other types of suits, should be heard in judicial districts that have a reasonable connection to the dispute.
From a policy perspective, the case is seen as a vehicle for defendants who do not like being sued in the Eastern District of Texas and into more venues perceived as more defendant friendly.
A group of 50+ law and economics professors led by Mark Lemley, Colleen Chien, Brian Love, and Arti Rai have filed an important brief in support of the TC Heartland petition that I have copied below. Their position is (1) the Federal Circuit has erred on interpreting the law; and (2) the permissive venue result has fueled many of the problems of our patent system.
It's getting easier than ever for defendants to win fees in patent cases, especially against "non-practicing entities" with no products. But don't tell that to pop stars Justin Timberlake and Britney Spears.
The two celebrities and their respective production companies were sued by an entity called Large Audience Displays Systems, LLC (or LADS for short) back in 2009.
The patent-holder who came after them is Darrell Metcalf, the inventor of US Patent No. 6,669,346, which describes a way of displaying video images on massive, arced screens. Metcalf, who lives in California, set up an East Texas LLC called Large Audience Display Systems (or LADS for short) back in 2009, then sued the pop stars in that venue, along with the LA Lakers and the band Pussycat Dolls.
The case was transferred to California in 2011. The judge promptly put the case on hold at the defendants' request, while the patents were under reexamination at the US Patent Office. Ultimately, the office rejected all the patent claims.
These days, it seems like software patents are falling down right and left. Hundreds of them have been invalidated by US federal judges since the Supreme Court's 2014 Alice Corp v. CLS Bank. decision, and more patent-holders are getting sanctioned for their behavior in court. The economics of the patent-trolling business are changing in fundamental ways, and lawsuits are down.
It's tempting to think the whole mess is going to dry up and blow away—but the lawsuits coming from companies like Bartonfalls LLC show that some patent lawyers are going to keep on partying like it's 2009. Bartonfalls is a shell company formed in the patent hotspot of East Texas, and it sued 14 big media companies on October 11 over US Patent No. 7,917,922.
Meet America's Most Prolific Patent Troll
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So if you send notifications telling customers that their orders have been filled, S&T will sue you for $25,000. Why? Because they claim to have patented this idea if it's done via some kind of computer network. In all this time, however, the patent has never been tested in court. It's never been worth anyone's time.
This. Is. Ridiculous. If you call your customer on the phone, it's fine. If you send them an email, you'll get sued. It's hard to conceive of anything stupider.
America’s Biggest Filer of Patent Suits Wants You to Know It Invented Shipping Notification
Like almost every online retailer, Spice Jungle LLC emails tracking numbers to customers when they place orders. That’s why the small firm was dumbfounded when it received a demand to pay $25,000 for the right to do so.