Summary: Litigation figures are down, rejection rates of software patents remain high, and only spin (e.g. cherry-picking) or constant lobbying can save those who used to profit from software patents

THE USPTO had granted a lot of software patents before Alice (it happened almost exactly 3 years ago) and it also continues to grant some. But courts are not tolerating these and this impacts the confidence level of companies that pondered suing with such patents. Later tonight we will focus on anti-Alice motions, but first, in the interests of chronology, let's look at some recent developments related to software patents.

"Patents on MP3 Format Due to Expire" said a headline today. Actually, that mischaracterises somewhat what has just happened (we wrote about it several times this month). Still, it could be worse! We've just seen literally dozens of articles like these [1, 2, 3, 4] (on a Sunday!), claiming very wrongly that MP3 is "dead"... simply because patents expired. Fact-checking not needed anymore? It's obvious that only the patents are dead (expired); that does not mean the format is dead. If anything, it's now legally safer to use and it might spread more broadly as a result. We can't help but wonder if dozens of headlines today (we saw a similar one about a week ago) claiming that MP3 now "dead" are part of a plan (or PR strategy) to move us all to newer, PATENTED formats (evergreening). "Vinyl has outlived the MP3" says one headline, but who said MP3 is dead? It's not. To quote the better among these otherwise-terrible articles:

MP3 took off in the late 90s as the digital music format. It then proceeded to slaughter the CD, and launch the file sharing revolution as well. It’s a proud format that has roots stretching all the way back to the early 1980s, when the possibility of sending music over ISDN lines was first considered. Now the patents on it are beginning to expire and its licencing program has been terminated.

[...]

However, now that more of the relevant patents are expiring, you can now expect MP3 support to be baked into more software. It may be more than a little late, with more advanced audio formats beginning to take over, but it’s great to know that Fedora, for one, is starting to include MP3 support with their releases.

Yes, so if anything, MP3 might now spread even further and faster. It's not dead. What's dead are the horrible software patent which harmed the adoption of MP3. One has to wonder if at least some of these patents could be invalidated using Alice. We'll never know now, will we?

Pressing on, watch IAM using the "IoT" hype as an excuse for creating new patent thickets with software patents in them (same tricks are used elsewhere, by patenting software as "AI", "cloud" etc.) and here are the participants:

Qualcomm is also in second place on quantity - though its 2,880 assets lag far behind the Samsung total. LG, Huawei and Intel round out the top five in a top 20 list that also features some of the world’s other largest patent owners, such as ZTE, Ericsson, Philips, IBM and Microsoft.

So here we have yet another thicket of patents, most of which are likely not eligible under Alice (or Section 101). But good luck asking PTAB to review thousands of patents in one fell swoop!

We are disappointed but not surprised to see the patent microcosm virtually ignoring RecogniCorp LLC v Nintendo -- a precedential CAFC decision that can invalidate a lot of software patents. Ten days later Watchtroll finally mentioned it by stating:

RecogniCorp, LLC v. Nintendo Co., (Fed. Cir. Apr. 28, 2017) (Before Lourie, Reyna, and Stoll, J.) (Opinion for the court, Reyna, J.) The Federal Circuit affirmed the district court’s decision that RecogniCorp’s patent claims are directed to an abstract idea, and do not contain an inventive concept sufficient to make them patent-eligible under 35 U.S.C. § 101.

Why has so much of the patent microcosm ignored it or brushed it under the rug? Obviously they just hope that this precedential decision will simply go away.

It is looking very grim for software patents, as even vocal proponents of software patents admit. See this new article which states:

Functional language often cannot be avoided in software patent claims. But there is functional claiming and then there is simply claiming functionality. This claim was written well before the 2010 Bilski decision –who knew then that claiming purely functionality was likely to be a problem, as long as the claimed functionality was novel and non-obvious? Well, today we have a reminder that, as much as possible draft your claims to recite not just the “what” of the invention, but the “how.”

No matter how they formulate their patents, even trying to bypass Alice, their software patents remain pretty worthless.

In the past few days alone the loudest proponents of software patents took note of newer cases where software patents dropped like flies.

• "FDC loses §101 at PTAB bc all electronic financial transaction innovations r just "fundamental economic practices"" (link to decision here)



• "IBM takes hit-another random "new grounds" 101 rejection at PTAB: https://e-foia.uspto.gov/Foia/RetrievePdf?system=BPAI&flNm=fd2017002605-05-09-2017-1 … bc humans can mentally compute confidence vals" (link to decision here)



• "typical PTAB nonsense: IBM overcomes Examiner error on prior art, but told § 101 bars eligibility https://e-foia.uspto.gov/Foia/RetrievePdf?system=BPAI&flNm=fd2015003358-05-08-2017-1 …" (link to decision here)

Sensing anger and frustration? It's not "random" (the above), it is very much consistent with the ruling of the Supreme Court. Funny how they refuse to acknowledge this...

"101 is the first filter," Benjamin Henrion reponded to the above. "No need to go further."

Watch this new IAM headline: "Alice blow means Asian university’s pioneering US patent enforcement drive may be over just months after it began"

No, Alice is not a "blow" but a blessing. But IAM's bias (servitude to patent trolls) is showing again. Here is the relevant part:

A Northern California district court has granted a motion to dismiss a patent infringement case brought by an affiliate of Seoul-based Sungkyunkwan University after finding one of the asserted claims invalid. The court’s decision represents a significant setback for Sungkyunkwan’s maiden assertion campaign – one of two launched in the US by Korean universities in recent months.

Sungkyunkwan University, Research & Business Foundation filed suits against Canadian 3D imaging product developer LMI Technologies and German optics company Carl Zeiss in early December last year, alleging infringement of its US patent 7,957,639 (‘Method and system for determining optimal exposure of structured light based 3D camera’). It followed up with further lawsuits using the same patent later in the month, targeting US-based Hexagon Metrology, Quebec City-based Creaform 3D, Luxembourg’s Artec Group, and China’s Hangzhou Shining 3D and its distributor MakerTree 3D.

However, the assertions appear to have been dealt what may well be a mortal blow, just months since Sungkyunkwan set off on its groundbreaking campaign. According to court documents viewed by IAM using Lex Machina, in late March counsel for LMI filed for a motion to dismiss the university’s case on the basis that the first claim of the patent-in-suit – the only claim being asserted – “fails to recite eligible subject matter” and therefore should be considered invalid.

So they put a lot of their eggs in the software patents basket and gambled their future on a pile of rubbish. It happens...

Here is another new 'gem' from IAM, regarding patent hoarders which produce nothing but lawsuits:

The recent announcement of a massive new IP investment fund launched by the IP Office of Singapore confirms that there is still significant interest in the business model, and ID Ventures can claim to be one of the first to implement it in this region. With ID’s core patent business sailing into potentially controversial waters, it is a nice auxiliary to have.

Maybe they should focus on creating things, not just writing patents.

The other day we saw this new request for participation in a survey about patents on business methods, almost siblings of sofwtare patents. Asking the patent microcosm (the site's audience), however, will give them highly warped results. To quote: "The Covered Business Method Review program is a transitional program that sunsets in 2020. These AIA trails have been extremely effective at knocking-out patents that qualify for review. The question of the day is whether Congress should extend and possibly expand the program beyond the 2020 deadline and beyond the non-technological financial services limitations."

Whatever comes out of this survey will be somewhat of a joke because almost every person who takes part in the survey is a dyed-in-the-wool patent maximalist. What is the purpose of this survey? The usual lobbying? Disguised as an 'academic' 'study' from Professor Crouch and his ilk?

Either way, the good news is that no matter the spin, the numbers (from the USPTO and the courts) tend to speak for themselves. Lex Machina, which is run by pro-reform academics, keeps track of such numbers. These numbers show that the patent maximalists are losing their grip on the system. As MIP put it the other day, "ANDA patent litigation fell 32.5% in 2016". To quote what's not behind a paywall:

A report from Lex Machina reveals Hatch-Waxman/ANDA case filing dropped last year. It also revealed the busiest pharmaceutical companies and law firms for ANDA litigation

No joke would be complete, however, without something from IAM, a site where up is down, down is up, extortion is "agreement", and Alice is a "blow" (see above). Watch how IAM, the think tank of patent trolls, tries to spin the above decline (in lawsuits collateral) as an increase. This is the hilarious part:

Damages in patent infringement lawsuits fell in 2016 compared with the year before according to the 2017 edition of PwC's annual Patent Litigation Study. This may indicate that if conditions are improving for patent owners in the US, court awards are yet to reflect this.

But they are demonstrably not improving. Why is IAM in such deep denial about this? Someone, please, call the nut house warden... ⬆