Summary: The latest extensive evidence that software patents are a failed strategy in the US, as not only courts keep rejecting these but also PTAB and even patent examiners

WHEN 35 U.S.C. ۤ 101 reached the USPTO things did not change instantaneously. It took a while for examiners to adapt and become courageous enough to say "no" to software patents. It's increasingly being reported that software patent applications are being rejected and the number of US patents is generally expected to decrease this year. The bar is being raised; at long last.

"It's increasingly being reported that software patent applications are being rejected and the number of US patents is generally expected to decrease this year."Software patents aren't desirable. They never were. Those who advocated/demanded them were patent maximalists rather than actual coders/programmers/software developers. Not too long ago we saw Shelston IP [1, 2] pretending to speak for startups in support of software patents. It's a lie. It's gross misrepresentation. In their own words: "Shelston IP has in recent years been fairly critical of IP Australia's ever-tightening policies for examining (and rejecting) patent applications in the computer technology space. To a greater extent, our frustrations tend to arise from our work with local technology start-ups, for whom the availability of patent protection and the presence of a robust patent system are crucial for success in the market."

Nonsense. Shelston IP has long attacked restrictions on patents covering software. It did so because it had profited from startups that either wasted money on patents or needed to defend themselves from spurious patent lawsuits. Here are the concluding words: "Software patents for start-ups. They're not that scary; they offer necessary protections for founders and investors."

"Shelston IP has long attacked restrictions on patents covering software. It did so because it had profited from startups that either wasted money on patents or needed to defend themselves from spurious patent lawsuits."Complete nonsense. Over the years we wrote at least half a dozen articles about Shelston IP. In the United States and elsewhere there's this 'cabal' of such law firms that hijack the voice of developers and tell us that it's horrific to see software patents phased out. It happened in Australia and New Zealand (where Shelston IP is based) and now it's happening in the United States. Belatedly? Sure. But better late than never. Just like Shelston IP down under, there are firms in the US that profited from litigation with software patents. Sporting a picture of a snail, earlier today Samuel Hayim and Kate Gaudry wrote an anti-PTAB piece for Watchtroll. For the uninitiated, PTAB is by far the largest enforcer of ۤ 101/Alice and thus the biggest eliminator of software patents. See last Wednesday's "PTAB Affirms Examiner's 101 Rejection of" series (of new examples and a few later ۤ 101 rejections) [1, 2, 3, 4, 5, 6, 7, 8, 9, 10]. It's impressive that almost every single time an IPR is received/accepted the patent will end up invalidated or not granted.

These patents are increasingly rejected by the USPTO and not just the courts. See this new article ("Nearly All Post-Alice Eligibility Rejections are Affirmed in Whole by the PTAB") which says the same thing: [via Mr. Loney]

Frequently, the fate of a patent application lies with a single patent examiner. This power frustrates applicants when an impasse has been reached in terms of interpretation of the claims, cited art, or patent statutes. However, the applicant has the opportunity to change the decision-maker by appealing a rejection. Then, the decision-maker changes from the patent examiner to a panel of Patent Trial and Appeal Board (PTAB) administrative law judges (ALJs). This strategy may appear to be particularly advantageous when the applicant believes that allowance prospects with the examiner are slim to non-existent.

Here is a new example of €§ 101 rejection by a court: "The court granted defendant's motion for summary judgment of invalidity because the asserted claims of plaintiff’s vibration attenuating patent encompassed unpatentable subject matter and found that the claims were directed to a law of nature."

"These patents are increasingly rejected by the USPTO and not just the courts."James Korenchan did not tolerate such patents being thrown out, so he has just written about it. "District Court for the District of Delaware, claims of a vibration attenuation patent were deemed patent ineligible as being directed to laws of nature under 35 U.S.C. ۤ 101," he said.

That makes perfect sense and we covered similar examples a couple of weeks ago. There's also discussion about this notion of "law of nature" [1, 2] -- a subject we wrote about last weekend. It's like a relatively new theme.

Here is another new example: (from earlier today)

Asserted Claims of Digital Advertising Distribution Patents Invalid Under 35 U.S.C. ۤ 101

The court granted defendant's motion to dismiss because the asserted claims of plaintiff’s digital advertising distribution patents encompassed unpatentable subject matter and found that the claims were directed toward an abstract idea.

Last week we wrote about a similar patent at the EPO. Patents on delivery of ads aren't just lacking in terms of novelty; it's all trivial, never mind extensive prior art. Why are they being granted anyway?

"Patents on delivery of ads aren't just lacking in terms of novelty; it's all trivial, never mind extensive prior art."Software patents are dead in the water in the US, more so than in Europe. These patents perish again and again, this time in Quantum Stream Inc. v Charter Communications, Inc. et al (covered here before).

There's also this latest "Stupid Patent of the Month" from the EFF, this time covered by Joe Mullin [1, 2], whom they recently hired.

To quote Mullin:

This month’s Stupid Patent shows what happens when the patent system strays outside its proper boundaries. US Patent No. 8,706,513 describes a “fungible basket of investment grade gems” for use in “financial instruments.” In other words, it’s a rating and trading system that attempts to turn diamonds into a tradeable commodity like oil, gold, or corn.

Of course, creating new types of investment vehicles isn’t really an invention. And patents on newfangled financial techniques like this were generally barred following Bilski v. Kappos, a 2008 Supreme Court case that prevents the patenting of purely financial instruments. Since then, the law has become even less favorable to abstract business method patents like this one. In our view, the ’513 patent would not survive a challenge under Bilski or the Supreme Court’s 2014 decision in Alice v. CLS Bank.

Despite its clear problems, the ’513 patent is being asserted in court—and one of the people best placed to testify against the patent may not be allowed to.

The public’s right to challenge a patent in court is a critical part of the US patent system, that has always balanced the exclusive power of a patent. It’s especially important since patents are often granted by overworked examiners who get an average of 18 hours to review applications.

But there are two types of persons that, increasingly, aren't allowed to challenge problematic patents: inventors of patents, and even partial owners of patents. Under a doctrine known as “assignor estoppel,” the Federal Circuit has barred inventors from challenging patents that they acquired for a former employer. Assignor estoppel was originally meant to cover a narrow set of circumstances—inventors who engaged in fraud or bad dealing, for instance—but the nation’s top patent court now routinely applies it to prevent inventors from challenging patents.

This is just a 'classic' abstract patent, as per Bilski, not just Alice. If reassessed, it would almost certainly be invalidated.

"Software patents are dead in the water in the US, more so than in Europe."It's still possible to pursue software patents in the US; it's easier when buzzwords are used to hide how abstract things really are. IBM, for example, would do anything to patent software and it lobbies the most for software patents (even more so than Microsoft). See this article from 4 days ago; software patents aren't reputable, so IBM might as well just call these patents "Cloud AI" (two buzzwords in a row, conjoined) or something like that. The language of the article is quite revealing:

IBM's Big Bet On Cloud AI Will Pay Of

[...]

In 2017, over 1,900 of these were cloud patents. IBM did not share the number of AI related patents it was granted, but a large part of AI progress today is being made in software and algorithms, which are harder to patent.

We wrote about this before. IBM is just playing games with semantics.

It might be OK with examiners, but what would PTAB and courts say? PTAB thwarts a lot of IBM patents these days.

"PTAB thwarts a lot of IBM patents these days."Just because IBM uses terms like "AI-related" doesn't mean it's not simply software patents (permitted in China but barely accepted in the US anymore). See last week's article titled "China has shot far ahead of the US on deep-learning patents".

Well, that's China and SIPO. They gave up on quality control.

Charles Bieneman very recently noted the following Alice rejection:

Claims directed to “providing an internet third party data channel” were held invalid at the pleadings stage under 35 U.S.C. €§ 101 and the two-part Alice patent-eligibility test because the claims attempt “to monopolize the abstract idea of monitoring a preexisting data stream between a server and a client for a specific condition and modifying that stream when that condition is present.”

Bieneman's article is titled "How Easy Can Patent-Eligibility Analysis Be?" and compare that to "How Difficult is it to Judge Patentable Subject Matter?"

It's a reminder that Michael Risch is not against software patents; Groklaw tolerated his views anyway (he's not all bad). "In other words, as more than nothing is patentable, it becomes harder to sort," he wrote last week. "Indeed, this study starts with cases after the Federal Circuit's ruling in McRo affirming validity. Had I taken it before McRo, I could have gotten it 100% correct - just say it's invalid. That's actually an overstatement. According to Bilskiblog, just before McRo, 66% of claims were found invalid. Between that time and April 2017 (when this study cuts off), 50% of claims were found invalid. As more were valid, picking the valid ones gets harder. While the draft discusses some of these nuances, a slightly more robust discussion of statistical issues might be useful."

"The patent microcosm is losing hope."These people aren't happy to see the erosion of software patents. One court decision on top of another, more so after Alice (SCOTUS), software patents are ebbing away. They's a dying breed. They're already dead in many ways (in US courts). Nobody would really claim otherwise in 2017. CAFC just finished/completed the job. The patent microcosm is losing hope. But it's not giving up just yet.

We are attempting to understand the tactics which the patent microcosm will use from now on. They bash PTAB, they deny reality (spreading fake news about software patents still being worthwhile), and they lobby politicians. But nothing of this kind has worked so far. Watchtroll is so dishonest that it now intentionally conflates computers (hardware) with code (abstract). Watchtroll is where facts come to rot and die. From this article that's a week old:

Computers, processors, memories and transmission equipment are devices or machines. All these machines, as configured systems, have a documented history of addressing concrete technical problems that were difficult to overcome. Ultimately, computing machines are characterized by what they do, or by their architecture. This article illustrates some of the historical issues in developing programmed and programmable machines.

We got some comments about this article (in Diaspora*) and they too ridicule this article.

"McDermott Will & Emery's Amol Parikh still perpetuates a lie about GUIs being algorithms (they're not)."Well, the hardware -- not the programs themselves -- could be patented. Things have changed and the scale/accessibility of coding is no longer the same as it used to be. Physical machines are not algorithms.

McDermott Will & Emery's Amol Parikh still perpetuates a lie about GUIs being algorithms (they're not). He posted this in several domains last week [1, 2]. To quote:

Affirming a series of district court rulings, the US Court of Appeals for the Federal Circuit found claims directed to software menus that display a limited subset of commonly used functions—useful in conserving space on small screens—to be patent eligible. Core Wireless Licensing v. LG Electronics, Inc., Case No. 16-2684 (Fed. Cir., Jan. 25, 2018) (Moore, J). The Court also affirmed the district court’s denial of the defendant’s motion for judgment as a matter of law (JMOL) on anticipation, despite the fact that the plaintiff put forward no rebuttal witness on validity.

[...]

The Federal Circuit affirmed. Addressing the ۤ 101 issue, the Court found that rather than merely reciting indices, the patents claimed a concrete solution to a problem specific to computers, which was lack of screen size and resulting navigational difficulties. The Court analogized these patents to others that offered seemingly abstract solutions to novel issues created by computers that the Court had previously held to be patent eligible.

The case was about user interfaces, not algorithms. But as usual, there are those looking to gain by distortion/misinterpreting the outcome.

Examiners are receiving some new instructions and there are those who hope that things can be swayed by the revised MPEP. Christopher Francis wrote about it some days ago and so did others, albeit more briefly. On the written description requirement of 35 U.S.C. ۤ 112(a):

The memorandum concludes by providing the examining corps with a list of currently available guidance on the examination of claims for compliance with the written description requirement. According to the memorandum, "USPTO personnel should continue to follow the guidance in the MPEP regarding written description (see, e.g., MPEP 2161.01 and 2163), except insofar as MPEP 2163 indicates that disclosure of a fully characterized antigen may provide written descriptive support of an antibody to that antigen."

None of this seems to affect ۤ 101 in any way whatsoever. ۤ 101 remains in tact (as is).

"Examiners are receiving some new instructions and there are those who hope that things can be swayed by the revised MPEP."The CCIA has meanwhile responded to a common lie about ۤ 101 -- a lie/line promoted by lobbyists like David Kappos. "Is ۤ 101 Impossible To Understand?"

No.

CCIA explains:

Critics of the Alice/Mayo framework for €§ 101 patentable subject matter tend to claim that it’s impossible to understand or apply. Thanks to an enterprising 3L at Stanford, we now have survey evidence that the critics (and Judge Michel) are wrong.

[...]

This is even reflected in the data. Attorneys were significantly more likely to be wrong by guessing ineligible on an eligible claim than vice versa. This suggests that attorneys are pessimistically biased to think that eligible patents are ineligible.

That might just help explain why some critics think Alice is a bigger problem than it actually is.

"There is much speculation about whether it is still possible to patent software," Daniel Rudoy (Wolf, Greenfield & Sacks, P.C.) wrote some days ago. One can still patent, but not enforce. Not successfully anyway. Barely.

"ۤ 101 remains in tact (as is)."Just when we thought the Berkheimer hype [1, 2] was over it was brought up again by the ALL CAPS anti-PTAB accounts and again by legal firms that are clinging onto minor cases like Berkheimer and Aatrix to pretend software patents are worth pursuing. Here's this new example:

The Federal Circuit recently issued a trio of decisions relating to early motions seeking dismissal under 35 U.S.C. €§ 101 based on subject matter eligibility under the Supreme Court’s Alice decision. These cases provide insight on patent drafting strategies to avoid subject matter eligibility issues, as well as potential pitfalls to avoid during the patent drafting process. These cases also demonstrate that properly drafted software and business method patents are likely to avoid early dismissal in litigation based on subject matter eligibility issues, which strengthens these types of patents.

[...]

These recent decisions provide greater clarity on the type of information needed in a patent application specification to avoid summary dismissal under section 101 and to strengthen any resulting patents. In particular, in both Berkheimer and Aatrix, the Federal Circuit relied on statements in the patents identifying specific problems in the art and how the claimed technology disclosed an inventive solution that was not routine, conventional, or well-understood, and finding that material issues of fact existed under the Alice analysis. In contrast, Automated Tracking Solutions illustrates the pitfall of stating in a patent that portions of the technology are conventional. LeClairRyan's patent attorneys will continue to monitor the developing precedent in this area and will advise you about any further developments.

As usual, one common method for patenting software is to assert that it is strictly combined with hardware. Watch last week's press release which claims the "patented hardware and software systems are used to advertise all types of products and services within the retail environment..." (is the hardware really part of the invention?)

"As usual, one common method for patenting software is to assert that it is strictly combined with hardware."There are a few more new articles, which we add into the mix only in hindsight.

"The protector of innovation" from Missouri S&T News and Research is such a laughable article and it's no surprise that this puff with is from/about a "senior patent counsel" (who makes a living from patenting and litigation) to promote software patents. What utter nonsense this article is. They are glorifying patents on very trivial ideas and basically build up a sort of 'bio' for a lawyer rather than focus on the issues at hand. To quote:

The next time you get on eBay to sell a pair of sneakers and marvel at how seamless the sales process is or buy something that’s either hard to find or a great deal, make sure to thank an S&T grad.

As senior patent counsel at the multinational e-commerce corporation, Jeff Leng, Bus’06, CSci’06, helps protect the company’s intellectual property through obtaining patents on new technology and software that makes the shopping and selling experience more enjoyable for millions of eBay users.

Those sales have absolutely nothing to do with patents. Publications like to promote the illusion that patents rather than code are the cornerstones of such platforms.

"We are already a step closer to a world without software patents (the one major setback is China); but that does not mean that incredible efforts won't be dedicated to reversal/turning of this tide."Earlier today one author went even further than us and spoke about "The problem with patents in tech," basically insinuating that the problem isn't just software patents but patents on high-tech in general. To quote:

Patents are everywhere, and of course not just in the US, but there are particular industries where they show up more often than not. In our not so small corner of the world, we see dozens of patents on interesting technologies and potential products. Emphasis on “potential” because most of the time, they never come to be. Sometimes not from the party that filed the patent. More often than not, patents only surface when media get whiff of them or when used in a lawsuit. Because while patents were initially conceived to foster innovation, they run the risk of suffocating that very same thing instead.

In some domains, the public interest is harmed rather than served by patents. Moreover, the interest of practitioners (like programmers) can be harmed. So it's important, especially when policy is being shaped, to listen to the real industry, not the patent 'industry' (people like the aforementioned "senior patent counsel", Shelston IP, Watchtroll and so on). We are already a step closer to a world without software patents (the one major setback is China); but that does not mean that incredible efforts won't be dedicated to reversal/turning of this tide. ⬆