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Microsoft and Its Patent Trolls Face an Uphill Battle in a Patent System Which is Increasingly Hostile Towards Software Patents

An unusual dumper



Summary: The huge number of shells (trolls) that are connected directly and indirectly to Microsoft are struggling in the age of PTAB and 35 U.S.C. ۤ 101; but that does not mean that we should take our eyes off them (and their proponents)

Microsoft, the company which "loves Linux" so much that it sees the need to create cheesy memes about it and then paste them like a million times all around the World Wide Web, relies on patents granted by the USPTO to sue companies which distribute GNU/Linux. Apple does the same thing. Microsoft typically does this through patent trolls, some of which are based in the Eastern District of Texas, the capital of patent trolls. Some are based elsewhere, e.g. Acacia, and they have a cluster of shell entities (making it incredibly hard to keep track of, just as they intended).



Having spent about a dozen years researching these trolls and their connections, we're a little harder (than most) to fool. 5 days ago Unified Patents wrote about its petition against Acacia, a Microsoft-connected patent troll (which attacks GNU/Linux vendors). Remember that Acacia had hired for its management from Microsoft just before it sued companies like Red Hat and Novell. Here is what Unified Patents wrote:

On May 23, 2018, the Patent Trial and Appeal Board (PTAB) instituted trial on all challenged claims in an IPR filed by Unified against U.S. Patent 8,902,770 owned and asserted by Cellular Communications Equipment, an Acacia subsidiary and well-known NPE. The '770 patent, directed to a method for “explicit signaling between a network and the user equipment,” has been asserted in district litigation against such companies as Apple, ZTE, AT&T, Verizon, Sprint, Boost Mobile, and T-Mobile.


Acacia is still around unfortunately; it's also active. The above names one of its many shells, "Cellular Communications Equipment" (it would be hard to know this connection without some research). Watch out for another shell called "PanOptis" because "Sony transfers over 100 US patents to NPE PanOptis," IAM notes, linking to its article which in turn links PanOptis to other trolls, such as Avanci (mentioned here more recently again). To quote: "Recent USPTO records show that Sony has transferred a portfolio of over one hundred US patents to an affiliate of NPE PanOptis, a part of the Marconi Group. The Japanese company already participates in the Avanci and Velos patent pools, and its link-up with PanOptis underlines Marconi’s diverse offering. Sony assigned 135 US patent rights to Plano-based Wi-Fi One LLC on 26th January, but the transaction was not recorded until last month. Wi-Fi One is just one of the vehicles controlled by PanOptis, the NPE founded by Leslie Ware which became part of the Marconi Group in February 2017."

Wi-Fi One is another patent troll which we wrote many articles about (in recent months). Notice the trend; large companies like Sony, which shares investments with Microsoft in several patent cartels (e.g. Rockstar Consortium and Intellectual Ventures), spread patents to trolls. As for Avanci (Ericsson-connected, also part of Rockstar Consortium, along with Apple and BlackBerry), IAM says that its "auto royalty fee [on many Linux-powered systems] will be $3 to $15 per vehicle no matter how many patent owners sign up to our auto platform, the firm confirms to IAM."

The underlying article (not behind paywall for a change) says more:

There will be no changes to the $3 to $15 per car royalty fees licensees are asked to pay to access the patents that form the Avanci auto patent platform, the firm has told IAM. “As we add new patent owners to the Avanci platform, the price the licensees pay for a licence will not increase,” Luke McLeroy, vice president of business development, said. “In fact, after publishing our rates in December of 2017, Avanci added four patent owners to the platform and the price didn’t increase. This is the case even if all standard essential patent owners join the platform.”

[...]

Each of the manufacturers that Avanci is talking to, said McLeroy, “is on its own journey in determining how wireless can be implemented within their respective products”. He continued: “Within this journey, there are different stages of understanding on how the licensing process works in the telecommunications space vs the automotive industry and it takes time to find that common ground where a licence can be taken.”


These patents are all rather dodgy, but put together in a pool (like that of MPEG-LA) it's far too expensive to challenge them all. A combination of many dubious patents in large numbers (quantity) is how Microsoft typically blackmails Android and GNU/Linux/ChromeOS OEMs. Sometimes it's not even Microsoft doing the blackmail (not directly anyway). Microsoft can always rely on its special patent troll, Intellectual Ventures, to do the lawsuit or pass patents to one of its thousands of shells to do that. It's one heck of a racket!

Mr. Gross has this new update about the Patent Trial and Appeal Board's (PTAB) ruling on litigation 'ventures' of Intellectual Ventures: "have no idea what IV patent attys were thinking appealing this patent case to PTAB; subject matter ("selling insurance policies,""funding at least one of purchase...""inducing water temperature changes") just invites a beating with 101 stick over head: https://e-foia.uspto.gov/Foia/RetrievePdf?system=BPAI&flNm=fd2016005828-05-07-2018-1 …"

He's referring to Section 101 (Alice). It always gets them. Here's one of Microsoft's: "MSFT wins rare [Section] 101 case at PTAB for utterance clustering based on Mcro: "process performed by human animators is not the same as that as the rules-based process recited in the claimed automation, as the human process is driven by subjective determinations" https://e-foia.uspto.gov/Foia/RetrievePdf?system=BPAI&flNm=fd2017010766-05-08-2018-1 …"

Another PTAB case, Hakkani-Tur, speaks of "rejection of all twenty pending claims in U.S. Application No. 14/846,486, for which the real party in interest is Microsoft. [...] The claims had been rejected under 35 U.S.C. ۤ 101..."

Here's the relevant bunch of passages:

In a decision issued earlier this month, the U.S. Patent and Trademark Office Patent Trial and Appeal Board reversed the final rejection of all twenty pending claims in U.S. Application No. 14/846,486, for which the real party in interest is Microsoft. The claims at issue are directed to a system that trains a spoken language understanding (SLU) classifier based on user intent gleaned from user utterances (i.e., spoken natural language sentences and phrases, such as "send Mom an email"). In particular, the claimed invention involves collecting a variety of user utterances and semantically parsing the utterances (i.e., mapping the utterances into machine-understandable representations of their respective meanings) to generate a single graph that represents all the utterances in the form of nodes. The claimed invention then involves clustering (i.e., grouping) the utterances by similar user intent, and using the resulting groups to train the SLU classifier.

[...]

But the Board disagreed with the Examiner on all three points. The Board was quick to note that, although the portions of App. No. 14/846,486 cited by the Examiner might describe mathematical calculations, they do not discuss an SLU classifier, but rather discuss a method of developing the graph used to train the SLU classifier. In addition, the Board stated that the last two steps of claim 1 are more than just field of use limitations.


Does this mean that PTAB can impact Microsoft's (patent) war on GNU/Linux?

Mr. Gross goes on and on with Section 101. He wrote: "PTAB says Bilski ONLY applies to process claims: MOT test "applies to claimed processes-a category of subject matter under €§ 101 that is distinct from the dynamic messaging system recited in claim 1 that falls within the apparatus category in that statute" https://e-foia.uspto.gov/Foia/RetrievePdf?system=BPAI&flNm=fd2017002826-05-07-2018-1 …" and then this:

PTAB invents new standard for €§101 implying that "something more than the abstract idea" Alice part 2 test cat be met UNLESS there is an improvement to "the technical field of computers, communications, networking, or otherwise." https://e-foia.uspto.gov/Foia/RetrievePdf?system=BPAI&flNm=fd2017002116-05-14-2018-1 … NO SUCH PRECEDENT EXISTS!


Mr. Gross has long attacked PTAB and wrote for Web sites of patent trolls. An online buddy of his said: "The PTAB Reversed the Examiner's 101/Mayo and 103 Rejections of Claims in a Medtronic Patent Application Directed to Improving Bladder Function: https://anticipat.com/pdf/2018-05-01_13764911_178530.pdf …"

This is very rare a thing. This is why it's being pointed out. It's like all those times the patent maximalists name-drop Berkheimer as if it's the only court decision that matters. Berkheimer was overhyped nonsense from the patent microcosm, which merely hoped that by 'pulling a Berkheimer' 24/7 there would be renewed interest in software patents. Here goes Mr. Gross again: "PTAB already skirting most of CAFC Berkheimer ruling: "Appellants' Specification teaches ...that the processes, and steps of the invention, may be realized" using hardware that "may include a general purpose computer and/or dedicated computing device" https://e-foia.uspto.gov/Foia/RetrievePdf?system=BPAI&flNm=fd2016004156-05-01-2018-1 …"

They're leaving Berkheimer behind, unlike Mr. Iancu.

Lawrence Ashery of Caesar, Rivise, Bernstein, Cohen & Pokotilow has meanwhile published this long piece in support of software patents, relying solely on Berkheimer and a muchly-mesmerised (by it) Iancu. Media of law firms basically pretends that the goal should be to allow software patenting and it also overplays Berkheimer, as expected (marketing, lobbying, not advice). To quote some bits:

Then, an interesting court opinion was published in February (Berkheimer v. HP, 17-1437 (Fed. Cir. 2018)). Steven Berkheimer had sued Hewlett-Packard (HP) for infringing his patent for digitally processing and archiving files. The district court ruled that Berkheimer’s patent was invalid, because it was directed to patent-ineligible subject matter. Specifically, the court stated that Berkheimer’s inventive concept failed the second step of the Alice test because his invention related to “steps that employ only well understood, routine, and conventional computer functions.” On appeal, Berkheimer argued that whether an invention is “well understood, routine and conventional is an underlying fact question for which HP offered no evidence.” The U.S. Court of Appeals for the Federal Circuit agreed with Berkheimer, and remanded the case to the district court so that the necessary factual determination could be made.



Berkheimer v HP was also brought up by the PTAB-hostile Anticipat 5 days ago. "Expect the Berkheimer-driven patent-eligibility pendulum to swing at the PTAB," said the headline, but no, not really. Months down the line nothing has really changed. Here is what Anticipat wrote:

The past few months have seen huge developments in patent-eligibility at the USPTO. In three and a half years after Alice, the most effective way to argue against patent-eligibility for software applications was to focus on Step 1–that the claims are not directed to an abstract idea. But based on these recent developments, Step 2–that additional elements of the claims transform the judicial exception into something more–looks to be the more powerful way. The only problem is that the PTAB has not yet caught on. It will.

These huge developments have taken place in the form of Federal Circuit decisions deciding patent-eligibility favorably to the patentee, especially Berkheimer v. HP Inc., 881 F.3d 1360, 1369 (Fed. Cir. 2018). Such a clear articulation of the need for factual findings for Step 2 should usher in big change in how the Alice/Mayo framework is applied.


Anticipat uses the phrase "huge developments" twice, but Berkheimer was hardly that. Oil States was. Then again, what can be expected from a firm whose sole goal and business model is PTAB-bashing?

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