10.10.16
Posted in America, Patents at 7:03 am by Dr. Roy Schestowitz
Summary: The Federal Trade Commission’s report about patent assertion entities (euphemism for a particular type of patent trolls) is bad news for patent trolls and potentially the catalyst of upcoming patent reform
Having published "Towards the End of Patent Trolls-Friendly Courts in the United States" and "Towards the End of Software Patents in the United States", we finally turn our attention to the FTC’s new study, which comes at a good time because of those former two installments (about courts in Texas and software patents, not to mention Apple’s stupid software patents that it uses to demand hundreds of millions of dollars — a subject of plenty of media coverage at the end of last week).
The USPTO is partly to blame here, for reasons that the Government Accountability Office (GAO) explained a few months back. Patent trolls use software patents quite a lot; without these patents, patent trolls would almost cease to exist. We wrote about evidence of that in the distant past.
“Patent trolls use software patents quite a lot; without these patents, patent trolls would almost cease to exist.”So, what has the FTC just shown us? In the words of CCIA, which took money from Microsoft after it had gone after it: “Ed Black said trolls are exploiting #patent system for a quick buck so we appreciate the #FTC ‘s patent troll study pic.twitter.com/AKdQFRBo19″ (there’s a photo in there).
“The FTC study on PAEs is finally out. A long report with a lot of useful data. It will take a while to parse it all,” wrote Professor Risch, who at times sounded like he defended software patents (several times in the past).
“FTC patent assertion entity study recommends fixing discovery asymmetries,” wrote another person, “mandating more disclosure by PAEs; streamlining litigation…”
“Long awaited @FTC study on patent assertion calls for strong patent reform,” wrote one character upon a quick glance.
More press coverage regarding the FTC’s study (that would likely transform the whole of the US patent system through upcoming reform) was soon generated, starting with blogs like this one:
FTC Releases Big Report On Patent Trolls, Says The Patent System Needs To Change
[...]
For quite some time now the FTC has been making lots of noises about the problems of the patent system and patent trolls in particular. While the US Patent Office itself has done little to address the problem, the FTC has recognized the harm patent trolling is doing to innovation and consumers. More than five years ago, the FTC released a big report on patent trolling and the problems it causes — suggesting that the Patent Office should start getting rid of vague patents with “indefinite” claims. That has happened a little bit, but much more because of the Supreme Court forcing the issue, rather than the USPTO listening to the FTC.
However, since then, it’s appeared that the FTC has only grown more concerned. Basically every year we report that the FTC is investigating patent trolls in some form or another. In 2012 (a year after that first report), the FTC began exploring patent trolling more thoroughly. In 2013, it announced an official investigation that would make use of subpoenas to find out how patent trolls were actually operating. Later that year it was revealed that it would subpoena 25 patent trolling operations. Since then, though, it’s been mostly crickets. There was one famous troll, MPHJ, who sued the FTC in a case that was dismissed.
And now, finally, after all these years, the FTC has released its big report. It appears that 22 patent trolling operations responded to the subpoenas, though many had “affiliates and other related entities” allowing the FTC to study many more patent trolling operations overall. The study lumps patent trolls (they prefer the euphemistic “Patent Assertion Entities” or PAEs) into two categories: litigation trolls and portfolio trolls. In short, litigation trolls are the smaller guys with just a small number of patents, who would threaten and sue companies (and quickly reach settlements) over those few patents. It’s more of a “mom & pop” shakedown kind of business. Portfolio trolls are the bigger, well funded operations, that have a massive portfolio of patents and play a more comprehensive shakedown game, going to lots of big companies and basically saying “you infringe on some of our patents, so give us a bunch of money to not figure out which ones.” Think: Intellectual Ventures or Acacia.
The differences here matter, because the businesses are quite different. Lots of the actual lawsuits come from the litigation trolls as a sort of negotiation tactic. The portfolio trolls don’t actually have to go to court that often — they have “sales people” who are a bit more effective. But the amount of dead-weight loss to the economy from the portfolio trolls is much larger. When big companies agree to a portfolio troll shakedown it’s often for a tremendous amount of money. The FTC study found 80% of the revenue went to portfolios, and only 20% to litigation trolls — even though litigation trolls filed 96% of the lawsuits and 91% of the reported licenses.
One interesting — and potentially surprising — finding of the study was that the FTC did not see evidence of much pure demand letter shakedown. That is, it’s been said that many of the smaller trolls just send letters, but never expect to go to court, since many may just settle based on the demand letter. But the FTC didn’t find much evidence to support that — saying that most of the revenue for litigation trolls came from actually going to court (and then rapidly settling). In short, it appears that the leverage of a federal lawsuit (in eastern Texas, probably) is much stronger than just a threat of a lawsuit. But a key takeaway from this is that attempts to reform demand letters (which has been regularly proposed — such as requiring them to outline what the infringement is) won’t actually help much.
Almost everyone (except trolls) would agree that the patent system in the US needs fixing. See this new article (“Patent reforms must also include our trade courts”) and a National Retail Federation press release (“FTC Study Should Provide Momentum to Pass Patent Reform Legislation”), not to mention a growing bulk of media coverage, such as [1, 2, 3, 4, 5]. More media coverage of this kind will continue this week, with patent trolls getting negative publicity after people actually read those hundreds of pages and summarise what’s in them. See “Public Knowledge Applauds FTC’s Call for Strong Patent Litigation Reform” and the excellent early coverage from Jeff Roberts, who said that the “FTC has harsh words for patent trolls – what tech folks have been saying for years http://fortune.com/2016/10/06/ftc-patent-report/ …”
“IAM is nowadays doing to journalism what the US presidential candidates already do to journalism. So-called ‘news’ sites pick a side and hardly pretend to be unbiased observers.”“Both Mayer and the FTC,” I told him, “say what we’ve been saying for years, e.g. code is like prose and protected by copyright” (Roberts liked that). The patent mess in the United States is being tackled little by little; almost exactly 5 years ago Obama signed one patent reform bill and soon there will be another.
IAM’s Mr. Lloyd, quite proudly a proponent of software patents and all sorts of other nuisance, decided to go against the flow because IAM is not really a news site. The voice of the patent trolls, IAM ‘magazine’ (partly funded by trolls), attacks the FTC for saying the truth about them. It’s quite laughable that all they could say (in the headline) about the news is that it “is probably already out of date” (got to be seen to be believed).
IAM is nowadays doing to journalism what the US presidential candidates already do to journalism. So-called ‘news’ sites pick a side and hardly pretend to be unbiased observers. Here is Watchtroll; watch how his site spins the study against troll as pro-trolls — because hey! — it’s not journalism anyway, just lobbying. Talk about lying to or misleading readers.
What did MIP do? Well, it resorted to shooting the messenger or its intelligence, as usual. To quote a portion from this article:
The Federal Trade Commission’s long-awaited patent assertion entity report differentiates between portfolio PAEs and litigation PAEs. The Innovation Alliance has called it an “unscientific case study”
The Innovation Alliance is a think tank, much like the Scientific Alliance and Copyright Alliance. It calls the FTC’s study an “unscientific case study” because its paymasters are unhappy with the findings.
Here is the original page about this study:
A new Federal Trade Commission report spotlights the business practices of patent assertion entities (PAEs), firms that acquire patents from third parties and then try to make money by licensing or suing accused infringers. The report includes several recommendations for patent litigation reforms.
“This report is a big step forward in enhancing our understanding of PAEs and provides an empirical foundation for ongoing policy discussions,” said FTC Chairwoman Edith Ramirez. “The recommendations we are proposing are designed to balance the needs of patent holders with the goal of reducing nuisance litigation.”
Patently-O did a fairly decent job covering it (it’s the first such coverage we found):
The report offers important insight into PAE business models – primarily identifying two categories: Litigation PAEs and Portfolio PAEs. The FTC found that Litigation PAE licensies are “typically … less than the lower bounds of early stage litigation costs” and thus seen by the FTC as consistent with “nuisance litigation.” The report suggests a variety of litigation reforms to help alleviate potential abusive litigation tactics by patent owners.
The 269 page report will be a catalyst for patent reform measures and thus should be considered carefully.
I have not personally read this report, but rest assured the patent microcosm and its front groups will attack both the messenger and the message by all means possible. They’ll do anything to derail patent reform that puts an end to (or significantly curbs) patent trolls. █
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Posted in America, Patents at 6:10 am by Dr. Roy Schestowitz
The patent microcosm is hopping mad and in denial over it
Summary: A closer look at the latest historic decision on software patents and other news serving to cement the end of software patents in the United States (provided the cases are appealed upwards)
THE USPTO is gradually departing from software patents, whereas the EPO goes the other way. Does that mean that elimination of software patents in the US would not be sufficient in extinguishing the scourge of software patents worldwide? Maybe. But at least progress is being made in the birthplace of software patents. Today’s article binds together many bits of coverage, focusing in particular on the Court of Appeals for the Federal Circuit (CAFC).
There are many ways by which to weaken or thwart patent litigation. One such way, as noted the other day, is blurred allegations. As Patently-O put it, “Lyda appears as a narrow decision against an individual-inventor plaintiff, the decision is important because it establishes that a patent infringement complaint must provide factual allegations at the claim-element-by-claim-element level in order to avoid a dismissal on the pleadings.”
Distracting From Haldane Robert Mayer
What is more interesting, however, is dismissal based on the two-step analysis — something which has happened a lot since Alice and we wrote about thrice since a decision was handed down by Judge Haldane Robert Mayer of CAFC. We are hardly shocked to discover the patent microcosm either refusing to write about it or simply attacking the judge, as we shall show later. Robert R. Sachs of Bilski Blog seems to be among those who simply said nothing about it. Instead, quite a while after the decision from Judge Mayer, he instead wrote about a bundle of cases in favour of software patents. To quote: “For patent prosecutors, MAZ, along with DDR, Enfish and McRo, suggests the value of discussing in the patent application specific problems in the prior art and linking aspects of the claimed invention to their solutions. The general trend over the past several years has been to say less in the background and summary of invention. That is still good advice, and these cases do not contradict that view, as the underlying patents provided very short and concise statements of the prior art problem, not lengthy expositions. Prosecutors that draft only a trivial background and little or no summary of the invention may end up removing an important basis for establishing eligibility and defeating an early dispositive motion. If the motivation for this approach is the risk that the background and summary will narrow the scope of the claims, I would say better a slightly narrowed patent than none at all.”
David Kappos Still Lobbying
What is worth noting here is that patent attorneys and lawyers are still looking for ways to work around the law and patent software in spite of the rules. Here we have some patent law firms scrambling to find tricks for patenting and asserting software patents; see “4 Tips For Overcoming ‘Abstract Idea’ Rejection” or (less relevant) “Anything You Say Can and Will be Used Against You in a Court of Law”. It’s part of a pattern. They write many articles about it and even set up events on the subject. One new event from IAM, advertised just before the weekend, targets patent maximalists and features a corrupt judge, Rader, and an official-turned-lobbyist, David Kappos. IAM ‘magazine’, one might note, evidently doesn’t keep good track of judge names; they spell a key name with a typo, “Radar”, not Rader. To quote the event’s overview: “Are patents in the United States dead? Should US companies continue to file US patents? What are the right innovation policies for the United States? What is the right thing for small companies to do in patenting their innovation? How will investors look at patenting in the future? What is happening elsewhere in the world? Come and join this critical discussion with Radar, Kappos, Schramm, Cabeca and others.”
Kappos is, in our view, the most corrupt public official in this domain, turning from a public official at the Patent Office into a corporate lobbyist for Microsoft, IBM, etc. Are they not at all regulating what people do after their service at the PTO? Is there no cool-off period? Nothing? Watch this news article entitled “Kappos: McRO is CAFC’s “most important 101 case since Alice””. To quote:
“McRO gets to the core issues and for that reason I thought it’s clearly the most important 101 case the Federal Circuit has put out since Alice” – David Kappos”I didn’t see a tremendous amount of the principle or the reasoning in those previous cases,” David Kappos, partner at Cravath Swaine & Moore
This doesn’t disclose that he’s also a lobbyist. Cravath Swaine & Moore is not his sole source of income.
CAFC said copyright should be enough for software, but this continues to be ignored by Kappos and the rest of the software patents boosters, who develop no software at all. They just lean on cases like McRO even a month later.
PTAB is Still Invalidating a Lot of Software Patents
According to this page from the USPTO and an article about it, PTAB fees might soon go up. PTAB has played an important role in improving the USPTO (well, at least quality is improving), but a rise in fees would discourage appeals; the same thing was attempted at the EPO. It has meanwhile turned out that the (in)famous appeal from Kyle Bass (the patent microcosm calls “trolls” those invaliding patents, as in this case where they used to dub the appellant “reverse troll”) was not successful. The appeal was not about software patents however.
Michael Loney of MIP shows that PTAB continues to invalidate software patents at a steady pace; there are no signs of stopping or slowing down. There are charts in the page that says:
Managing IP reveals Patent Trial and Appeal Board filing figures for September and the third quarter, as well as ranking the top petitioners and patent owners for the first nine months of 2016. More PGRs than CBMs were filed for the first time ever in September
The third quarter has ended with 454 Patent Trial and Appeal Board (PTAB) petitions filed, down only slightly on the 459 petitions filed in the second quarter.
Expect this to carry on for quite some time because SCOTUS certainly isn’t overturning Mayo and Alice. As one article put it the other day (in the headline), “The Supreme Court Refuses To Consider Patents Invalidated Under The Mayo/Alice Framework”. It’s just done with that and given how long it has been since the Bilski case, it might take another half a decade before anything can really change (or reconsidered).
Copyrights — Not Patents — for Software
The main theme in this past week’s news about patent was something along the lines of Haldane Robert Mayer’s ruling, which we covered here several times before. He asserted that copyrights should be sufficient in the domain of software and a new article entitled “Copyright Tools for Protecting Software” got published. SCOTUS “limited the field of software patentability,” it says, hence software developers should focus on copyright, not patents. To quote from the article:
For businesses that run on software, protecting intellectual property is even more important than locking the office door at night. IP protection in the United States comes in many forms, including patents, copyrights, and trade secret laws. Patents have long been considered the gold standard in intellectual property, in large part because they protect inventive concepts and are not limited to specific expressions. However, software companies should think beyond patents in protecting their IP, especially since the Supreme Court in 2014′s Alice Corp. v. CLS Bank International, 134 S. Ct. 2347, limited the field of software patentability, and the Post Grant Review system installed by the America Invents Act (Pub. L. 112-29) invalidates more software patents by the day.
Regarding the ruling from Haldane Robert Mayer, it was everywhere in the news and people also brought that up in our IRC channels. Consider articles such as “A judge wants to make patent trolling a first amendment issue” (The Verge) and “WHAT DO SOFTWARE PATENTS AND ‘CHINATOWN DANCE ROCK’ HAVE IN COMMON? FREE SPEECH” (Bloomberg). Also see Mike Masnick’s take on it over at TechDirt. It’s titled “Prominent Pro-Patent Judge Issues Opinion Declaring All Software Patents Bad”. It actually upset Bastian Best, a patent attorney from Germany. “Most people declaring “all <insert subject> are bad” should not be taken too seriously,” he wrote about this article and I told him that it sounded like had made a joke, along the lines of a famous saying from Alexandre Dumas: “All generalizations are dangerous, even this one.” (there are variants of this quote from other people)
In relation to another one of Best’s tweets, Benjamin Henrion wrote, “we believe you. Patent law is a religion…”
Anyway, here is what TechDirt actually said in its article, having followed this subject very closely for many years:
Well here’s an unexpected surprise. A lawsuit brought by the world’s largest patent troll, Intellectual Ventures, and handled on appeal (as are all patent cases), by the notoriously awful Court of Appeals for the Federal Circuit (CAFC) may have actually killed off software patents. Really. Notably, the Supreme Court deserves a big assist here, for a series of rulings on patent-eligible subject matter, culminating in the Alice ruling. At the time, we noted that you could read the ruling to kill off software patents, even as the Supreme Court insisted that it did not. In short, the Supreme Court said that any patent that “does no more than require a generic computer to perform generic computer functions” is not patent eligible. But then it insisted that there was plenty of software that this wouldn’t apply to. But it’s actually pretty difficult to think of any examples — which is why we were pretty sure at the time that Alice should represent the end for software patents, but bemoaned the Supreme Court not directly saying so, noting it would lead to lots of litigation. Still, the impact has been pretty widespread, with the Alice ruling being used both by the courts and the US Patent Office to reject lots and lots of software and business method patent claims.
But this latest ruling, from the very court that upended things nearly two decades ago in declaring software much more broadly patentable than anyone believed, may now be the nail in the coffin on software patents in the US. The headline, of course, is that the patents that Intellectual Ventures used against anti-virus firms Symantec and Trend Micro, were bunk, because they did not cover patent eligible subject matter. But the part that has everyone chattering is the concurring opinion by Judge Haldane Mayer, that says it’s time to face facts: Alice killed software patents. And Mayer is not some newcomer. He’s been at the Federal Circuit since the 1980s and was actually the chief judge in the late 90s/early 2000s when CAFC was at its worst in terms of expanding patent law. And it appears he’s been born again into the anti-software patent world. It’s… quite a conversion.
Yes, exactly, and this reversal is noteworthy, as we said here many times before. “The greatest expansion in what software is patentable,” the above continues, “occurred when Judge Mayer was chief judge of the USCAFC. Judge Mayer oversaw the creation of software patents. Now Judge Mayer has written an opinion which fully agrees with the points made by any of the anti-software patent people, including me.”
Hence the great significance of it. Not only is the pro-software patents court making a 180-degrees turn; it’s even that particular judge.
A short post by Thom Holwerda was succinctly (but right to the point) titled “US judge: end software patents, copyright is sufficient” and bloggers like Pogson cited the above, stating: “Over on Tech Dirt, there’s TFA about a ruling of a court that could pound in the last nail of the coffin of “software patents”, you know, patents on stuff that’s not patentable because it looks new and shiny just because it’s coded into a computer…”
Readers have told us that even Danish media covered it (we imagine a lot more all around the world); the translation of the headline is roughly “Have software patents died?”
Combining the FTC study (to be covered later and separately) with the CAFC ruling that names software patents as well as patent trolls (the plaintiff was the world’s biggest patent troll, Intellectual Ventures), we can imagine that there were many depressed patent lawyers this past weekend. Here is another news headline: “Circuit Court Judge Has Finally Had It With Software Patents” (from Mother Jones). To quote Kevin Drum:
The interesting thing here is that this was written by a longtime judge for the Federal Circuit Court: Haldane Mayer, a Reagan appointee who is now on senior status. Apparently, Mayer has had enough. In a recent case involving a patent troll, he didn’t feel like fiddling around on the edges of the Alice test handed down recently by the Supreme Court. He believes that Alice effectively does away with software patents entirely. Instead, software should be governed by copyright, as it was for decades before a series of vague rulings and the establishment of a new court accidentally created them in the 70s and 80s.
Mayer’s analysis is just a concurring opinion and has no legal force. Still, it’s encouraging that an experienced judge is saying stuff like this out loud. Maybe a few other will now follow suit. And maybe the Supreme Court will eventually agree. Maybe.
Getting Nasty and Attacking the Judge
The judge above is now being attacked pretty viciously by Watchtroll. We expected this. Joff Wild, the editor in chief of IAM ‘magazine’, made it very clear to me that he’s an adamant supporter of software patents and he had no coverage of this key case until about a week later. These guys were looking for spin, we presume… but they were not alone. The patent microcosm, by attacking a judge who has demolished some software patents, is basically defending a very nasty patent troll here. Is that a clever thing to do?
“Just When You Thought the Federal Circuit Was Softening Restrictions on Software Patents, the Tide Turns Again,” wrote another outspoken patent maximalism site (which habitually mocks judges). To quote:
Intellectual Ventures I LLC (“IV”) sued Symantec Corp. and Trend Micro (defendants) for infringement of various claims of three U.S. Patents (Nos. 6,460,050; 6,073,142; and 5,987,610). The District Court held the asserted claims of the ’050 patent and the ’142 patent to be ineligible under § 101, and the asserted claim of the ’610 patent to be eligible. The Federal Circuit affirmed as to the ineligibility of the asserted claims of the ’050 patent and ’142 patent, but reversed as to the asserted claim of the ’610 patent, resulting in finding all asserted claims ineligible under § 101.
Some reasoning applied during the two-step analysis, and in particular when finding that the patents are “directed to abstract ideas,” is not clearly provided by the Federal Circuit. The analysis for each of the three patents is summarized below. This decision just muddies the waters following other recent patent-owner friendly decisions in which the Federal Circuit seemed to be creating more ways for software patents to survive.
The decision further includes quite an interesting concurrence in which First Amendment rights were discussed as being implicated with Software patents?? Further comments will be provided on the concurrence alone.
This article was relatively polite (for this site), but as expected, Watchtroll went truly nasty. “It did not took [sic] long for the software patent boosters to react to Free Speech clash,” Henrion noted (also see “it did not took long to react to the free speech clash.”) and this nasty piece was the accompanying link. Watchtroll has even exceeded our own expectations and he was propped up by Patently-O and by IAM ‘magazine’ (though we assume linking is not the same as endorsing). IAM said: “No holding back here from Gene (or the many other commenters) on the subject of Judge Mayer, Alice & software patents!” (linking to this tweet)
“Well done,” I told the patent microcosm, “for making yourselves look like an enemy of society and also the court system…”
Henrion added that it happens “when someone is making your job irrelevant.”
“So whether computer programmers think software should be patented is completely irrelevant,” he remarked. Watchtroll (Gene Quinn) does not even know how computer programs work. I debated him over it in hundreds of tweets before he just ran away and blocked me (not that I said anything rude). “Let’s continue the swpat discussion here,” Henrion wrote, “it is fun to rehash the arguments with the other side” (even if it feeds the trolls, like Watchtroll).
If Watchtroll represents “the other side”, then Mayer et al would use Alice even more frequently and crush software patents for spite. Misleading headlines from the likes of Gene Quinn show us that the patent microcosm and software patents proponents aren’t just liars but also morally corrupt. The patent microcosm and those boosters not only attack the Supreme Court (Justices) but also lie about and smear judges. So who’s the rude side? By failing to distance itself from Gene Quinn and habitually contributing to Watchtroll’s site, the patent microcosm associates itself with nasty behaviour. The patent microcosm has gotten so bad and rude — because software patents are a dying breed — that they falsely make mental claims on judges (claiming them to be mentally deranged or ill), even impotence. Mocking sexual health (by connotation at least) of judges is about as low as one can stoop. The patent microcosm and these software patents boosters do themselves a huge disservice here. See our recent article "With Patent Law Firms Like These, No Wonder There's Distrust and Animosity".
Andre Rebentisch (FFII) wrote: “Apparently judge-bashing is considered appropriate in the US as @ipwatchdog shows. Just gets awkward when they target European ones.”
For those who are curious to know what Watchtroll wrote, here are some portions of it, calling for the judge to resign:
It has been obvious for some time now to any objective observer, but recent events make it such that it is time for someone to say it openly. Judge Haldane Robert Mayer, former Chief Judge of the United States Court of Appeals for the Federal Circuit, should step down and move quietly into retirement.
For years Judge Mayer has had his own – shall we say “unique” – view of patent law. He has made a habit out of writing his own rather eccentric anti-patent views into dissents and concurring opinions and then later citing to himself in those dissents and concurring opinions as if they were somehow authoritative. If an attorney were to do something like that they would wind up being sanctioned, as ultimately happened when the Federal Circuit rebuked attorney James Hicks for mischaracterizing prior holdings and rulings in a brief submitted to the Court. But when a Federal Circuit Judge does such things we all just shake our head and sigh.
[...]
Simply stated, the industry and the public deserve better than Judge Mayer. His anti-patent views seem to have matured into an irrational hatred that so cloud his judgment that he twists, exaggerates and misrepresents in order to attempt to impose his radical views into the law. There is no place for a judge like that. It is time for him to leave the Court. If he chooses not to step down it would seem appropriate for the Court to do what they would with an attorney who grossly exaggerates and mischaracterizes cases and rulings to the point of misrepresentation.
IAM, by the way, was hardly much better. It is in denial of course, and with a biased, belated headline too (almost a week late): “No – the CAFC’s Justice Mayer has not just brought an end to software patents or anything close” (yes, the headline starts with the word “No”, just to remind us it’s not really a news site). To quote: “Software patents are not about to be suddenly ripped up thanks to Mayer’s comments – if it wanted to, the Supreme Court could easily have done that by now. What is more plausible is that in writing his concurrence, Mayer is really speaking to an audience of his fellow judges and, perhaps alarmed by recent decisions like McRO, he’s attempting to place a brake on the string of recent pro-software patent decisions.”
They are quoting Manny Schecter, chief software patents propagandist at IBM, as saying: “It is hard to understand why Judge Mayer would push the Federal Circuit “to acknowledge that Alice sounded the death knell for software patents” given that the Supreme Court in Alice did not refer specifically to software, appeared to be warding off this type of sweeping conclusion when it indicated that we must “tread carefully in construing this exclusionary principle lest it swallow all of patent law”, and (contrary to Judge Mayer) stated: “There is no dispute that a computer is a tangible system (in §101 terms, a “machine”), or that many computer-implemented claims are formally addressed to patent-eligible subject matter.” Furthermore, let’s not lose perspective. Judge Mayer is a single judge on the Federal Circuit, which we know to be deeply divided on this subject – recall the inability of the Federal Circuit to reach consensus in Alice when it reviewed the case en banc. My problem with Alice is not that it banned software patents (because it did not), but that its failure to provide clear guidance has resulted in a torrent of uncertainty.”
Law Firms Said Nothing or Resorted to Misdirection
Well, finally, almost a week and a half later, one law firm covered the case, under the headline “Judge Mayer Finds that Section 101 Bars Patents on Software”. To quote:
In Intellectual Ventures v. Symantec, [2015-1769, 2015-1770, 2015-1771] (September 30, 2016), the Federal Circuit affirmed summary judgment that the asserted claims of the ‘050 and ‘142 patents were directed to ineligible subject matter and reversed the finding that the asserted claim of the ‘610 patent covered eligible subject matter.
At Step I of the Mayo/Alice Test for the ‘050, the Federal Circuit agreed that the ‘050 patent was directed to the abstract idea of filtering emails, noting that it it was long-prevalent practice for people receiving paper mail to look at an envelope and discard certain letters, without opening them, from sources from which they did not wish to receive mail based on characteristics of the mail. At Step II of the Mayo/Alice Test, the Federal Circuit rejected the argument that because the jury determined that the prior art did not anticipate or make obvious the claimed invention, the claims necessarily met Step II, noting the fact that the claims may not have been anticipated or obvious does not suggest that the idea of “determining” and “outputting” is not abstract, much less that its implementation is not routine and conventional.
All other law firms seem to be looking at other cases, as if the above never happened or isn’t worth covering. This serves to confirm what we have been saying about cherry-picking. The following article by Matthew A. Ambros of Foley & Lardner [1, 2] is an example of misdirection and here is another example of it. From Joseph Robinson and Robert Schaffer came another distracting piece, leaving in tact only the aforementioned attack on the judge (courtesy of Watchtroll himself).
Another utterly misleading bunch of articles whose authors live 3-4 weeks in the past (McRO) and ignore the latest case can be found in [1, 2] or the repeatedly bumped-up (in the news) “Federal Circuit Strengthens Software, Business Method Patents” (behind paywall). One might get the impression from these that software patents are doing great, enjoying a resurgence, etc.
It is absolutely amazing that no legal firm that profits from patents (except from the one example above) speaks about the latest major case at CAFC. They talk about all sort of other things that serve to distract their clients. Covering another case (old case, new article), this one speaks about program running on a general-purpose mobile phone not being patentable. Like that wasn’t already obvious…
Sob Stories
Last week the Wall Street-centric media posted a pro-patents sob story/puff piece. “Patents for diagnostic methods and natural products have become difficult to obtain of late, although the U.S. law in this area is still evolving,” the author stated.
They are speaking for monopolies, not for ordinary businesses. So did Mark Summerfield, who quit his job last month and openly asked Watchtroll for some kind of attack piece on the judge. To quote: “Looking forward to your excoriation of Mayer’s appalling concurring opinion in IV v Symantec. I assume it’s on the way?”
Well, personal attacks are Watchtroll's expertise. We wrote about this a couple of times on Tuesday, expecting some ad hominem attacks from the ‘usual suspects’ and we were right. Henrion said, “if the watchdog would be serious about expropriation, the article would not be about defending patents hein…”
“I can’t speak for Gene, but I care more about my clients than money,” Summerfield wrote, “which is why I just quit my job” (citing his blog post about it).
Speaking to others (Crouch in this case), Henrion said about SCOTUS refusing to revisit software patentability that it’s “another way to say to the patent community if they got the message in the first place?”
Mikko Hypponen, writing about the latest ruling, said: “I can’t wait for software patents to die. And I hold several software patents myself.”
“Writing software is hard,” Daniel Nazer (EFF) wrote. “Having a vague idea about software is easy. Software patents reward the latter and punish the former. End them.”
“If copyrights were adequate,” Henrion said, “why does Red hat so closely associated [sic] with OSS have so many hundreds of patents?”
We actually wrote about this several times in the past.
Linking to this item, one patent attorney wrote that “Uber Has a Big Alice Problem,” as if anyone out there should care about an evil company like Uber and sob for it.
We expect many pieces in the corporate media in the coming weeks, explaining why the CAFC’s ruling has dealt a blow to “innovation” or some other myths. We can envision that such pieces would be composed by large corporations, their patent lawyers, or journalists who sparingly quote those two groups. █
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10.09.16
Posted in America, Patents at 6:12 pm by Dr. Roy Schestowitz
Summary: Texas and its epidemic of patent trolls (owing to trolls-friendly courts) may be enjoying its last months of exploitation and the patent law firms that are based there might soon need to relocate
THE USPTO is moving in the opposite direction of the EPO (which pursues the UPC). Tomorrow we’ll publish a lengthy and detailed post about the FTC study, but today — in preparation for that — we shall remark on another aspect.
A recent article by Annalee Newitz spoke about Lee Cheng, who made a name for himself by fighting patent trolls to death and even compelling them to pay Newegg’s legal fees after the trolls had lost (a lengthy and expensive process). Newegg was praised here in the past for this (one example among half a dozen from last year) and ““Patents are bullshit,” says Newegg legal chief” is the headline of this new article. To quote from it:
Lee Cheng is one of the few attorneys to fight back against patent trolls and prevail. And at the latest Ars Live event, we talked to him about his most famous case, how people can fight patent trolls today, and what the future of patent abuse will look like in coming decades. His answers, as expected, were incredibly candid and hilarious.
In 2007, a patent troll known as Soverain had already gotten millions of dollars out of The Gap and Amazon for their online shopping cart patent when they hit Newegg with a suit. Cheng’s colleagues in the legal community said you’d better just pay up—this patent is legit. Cheng didn’t see it that way. Newegg had just reached a billion in sales, and he thought this piece of litigation would be the first of many lawsuits brought by companies that wanted a piece of Newegg’s success. And sure enough, soon after the shopping cart claim, Newegg was hit with patent claims on several aspects of online search. Cheng decided he wasn’t going to lie down and take it. He thought he could win on appeal if he could just make it through the courts in the Eastern District of Texas, where 40 percent of patent infringement claims are brought.
Remember that Newegg got dragged down to Texas, and notably the Eastern District of Texas, which is probably the world's most notorious (globally). It actually advertises its bias that favours litigants with abstract patents. That’s why many companies and trolls file their patent cases in there. On the fifth of October we saw United for Patent Reform stating that “85% of the 33 patent lawsuits filed today were filed by patent trolls. It’s time for Congress to take action to #fixpatents!”
How many of these were filed in Texas?
Patent Progress wrote that “The Eastern District of Texas Is Still Home for Patent Trolls” (also under the #fixpatents hashtag) and pointed to this new article from Mr. Levy (cross-posted at the Huffington Post). To quote some bits:
The year is mostly over, so I thought I would take a look and see what’s going on in the Eastern District of Texas. The Eastern District of Texas still has more patent cases filed there than any other district at 1,224. Some 794 (that’s about 8% of all patent cases) of those cases were assigned to Judge Rodney Gilstrap, in the Marshall Division — almost 10 times more than any judge outside the Eastern District. That’s more than twice as many as the entire District of Delaware (311 cases), even though most big companies are incorporated in Delaware.
In fact, Judge Gilstrap, a judge in a small town in Texas, is handling about as many patent cases as Delaware, California, Illinois, and New Jersey combined.
Marshall, Texas has a population of about 25,000 people. It has no major research facilities, no major industries, and has not produced any major innovations that I can identify. And yet it hosts more patent litigation than any other place in the country, by an order of magnitude.
I’m sure Marshall is a charming town with nice people, but there’s simply no reason for so much patent litigation to go through there. We might as well have patent litigation go through Bangor, Maine, where I went to high school. The town is about the same size, but it has better food and it’s near the coast. Bangor also has a modern airport and a life-size statue of Paul Bunyan.
Seriously, it’s obvious that something is wrong here, even if you don’t know the details. Patent trolls wouldn’t be flocking to a small town with no airport unless they had good reason.
And they do have good reason.
Levy is right to single out or point out Mr. Gilstrap for reasons that we covered here before. In another new article, this one from Patently-O, they alluded to the VENUE Act [1, 2] by suggesting change to patent venue and naming the VENUE Act explicitly:
Earlier this year, we presented some initial results of our study of what might happen if patent venue reform took place. Since then, Senator Flake (R-Az) introduced the VENUE Act of 2016, and last month, petitioners, led by a group including James Dabney and John Duffy, filed a petition for writ of certiori in the TC Heartland case in the Supreme Court. Amicus briefs are due October 17, 2016 and Kraft’s brief is due on November 16, 2016.
To support these deliberations, we examined the history of the patent venue law and presented some statistics about plaintiff venue preferences for the Eastern District (for even more statistics on this point see the new paper by Brian Love and James Yoon). Additionally, we empirically modeled both reforms by randomly selecting 939 cases from 2015, and making our best guess as to where cases would have been filed under the proposed rules, assuming they would have been filed at all. Since 2015, the overall number of patent cases has declined, about 20% YTD based on data from Lex Machina (4,216 cases by this time last year vs. 3,369 today). The Eastern District of Texas has made a number of changes and its share is also down from 44% in 2015, to 35% 2016 YTD (30% in 1Q, 36% in 2Q, and 38% in 3Q); the next closest district (Delaware) has seen about 9% of filings, based on data from Lex Machina.
After the FTC study that we shall mention separately it seems more likely that the VENUE Act will become a reality, or folded into an existing/prospective patent reform bill.
Speaking of patent trolls, even universities are feeding them now. Here is MIP sort of supporting the practice, as if weaponising universities that are funded by the public and turn into trolls that tax the same public is a good thing. No wonder MIP did this, with firms like McKool Smith as ‘company’; To quote: “The increase in university patent lawsuits in recent years and strategies for winning cases were among the issues discussed by presenters in the webcast “University Patent Licensing and Enforcement”, hosted by Managing IP in association with McKool Smith on September 26.”
These are euphemisms for what often boils down to trolling, if not direct then indirect, e.g. by passing patents to trolls like Intellectual Ventures — now at the epicentre of the collapse of software patents in the United States (more on that in an imminent long post as well).
If the VENUE Act passes, or even gets incorporated into a future patent reform bill, then Texas can say goodbye to a lot of its parasitic business. █
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10.03.16
Posted in America, Patents at 4:44 pm by Dr. Roy Schestowitz
Screenshots taken by Jan Wildeboer (Red Hat)
Summary: Further reinforcing the current trend, software patents’ demise in the United States has just been ascertained again, even if legal firms and patent maximalists prefer not to comment on it (as it would give this latest decision more visibility)
THE latest decision (see portions above) from the Court of Appeals for the Federal Circuit (CAFC) is eye-catching, but either it hasn’t caught the eye of legal firms or they’re just trying to ignore it, so we’ll be covering it more than we usually cover such decisions. We have made a local copy [PDF] (original here) of the full decision. We also mentioned it earlier today and yesterday, reaffirming that several software patents are dead, potentially implicating many more (by precedence/extrapolation).
Jan Wildeboer wrote to us (and few others) [1, 2]: “Wow! Software patents can violate #1stamendment according to #CAFC judge! [...] Can’t get enough. Judge defines patent trolls. #CAFC level. Huge. Page 36…”
Some people are also writing to us about it in our IRC channels today. They want this subject covered.
Where is the news coverage about it? It has been several days since this decision and patent law firms are still a month behind the times (McRO again), obsessing over very old news. Consider as a new example Sterne Kessler Goldstein & Fox’s “Patent Rights in the U.S.: Is the Pendulum Finally Swinging Back to Center?” (earlier today)
They speak about McRO while ignoring everything that has happened since. Shame on them. It seems as though bad legal advice from patent law firms is becoming the norm. They mislead scientists for cash (litigation, patent applications etc.), attempting to convince them that patents on algorithms are still a ‘thing’ after Alice. One does not even need to sue a company with software patents in order to lose these patents, owing to inter partes reviews (IPRs). The above lawyers reveal their biases with their obligatory rants about PTAB, stating that “PTAB [is] causing uncertainty over validity and enforcement of patents.”
We are still waiting to see patent law firms which offer their bogus ‘analyses’ (if any) of this latest CAFC ruling on software patents; they hope we don’t see it, judging by the fact that only Patently-O wrote about it (we covered it this morning). The ruling is very important because it serves to demonstrate a loss for patent trolls and for software patents (or patent trolls that use software patents, which is typical). The decision criticises patent trolling as well.
Judging by this new press release (from Trend Micro, which is itself a patent aggressor, not the patent microcosm), some other companies breathe in relief.
So far, based on our research, only one press article has been published about this decision. It’s titled “Here’s Why Software Patents Are in Peril After the Intellectual Ventures Ruling” and it says:
The end may be in sight for software patents—which have long been highly controversial in the tech industry—in the wake of a remarkable appeals court ruling that described such patents as a “deadweight loss on the nation’s economy” and a threat to the First Amendment’s free speech protections.
The ruling, issued on Friday by the U.S. Court of Appeals for the Federal Circuit, found that three patents asserted against anti-virus companies Symantec symc and Trend Micro were invalid because they did not describe a patentable invention. The patents were owned by Intellectual Ventures, which has a notorious reputation in the tech world as a so-called “patent troll,” a phrase that describes firms that buy up old patents and wage lawsuits in order to demand payments from productive companies.
[...]
Software Patents as a Threat to Free Speech
Friday’s ruling is also significant because Judge Mayer eschews the insider baseball language that typically dominates patent law, and addresses patents in the broader context of technology and government monopolies.
Pointing out that intellectual property monopolies can limit free speech, Mayer notes that copyright law has built-in First Amendment protections such as “fair use” and that patent law must include similar safeguards. He suggests that the safeguard comes in the form of a part of the Patent Act, known as “Section 101,” which says some things—including abstract ideas—simply can’t be patented in the first place.
IAM ‘magazine’ has not said anything about this decision. So much for ‘news’; it was so quick to crow about McRO (beating everybody to it), but not a word about Intellectual Ventures? They have just released a new issue of the magazine and this time the Intellectual Ventures troll is not on their main feature/cover page (puff pieces galore); not this time around…
Over at Twitter IAM wrote: “Trolls don’t fight it out in the courtroom. They seek to leverage low quality patents to secure quick licensing wins” (does not mention Intellectual Ventures)
Funny that IAM mentions the VirnetX case but not Intellectual Ventures, which speaks directly to IAM. This case was actually mentioned here twice in the past few days alone and it was challenged in court. David Kravets wrote about it, publishing this article that clarifies Texan courts (i.e. notorious bias) ruled on it, not CAFC:
An East Texas jury concluded late Friday that Apple must pay a patent troll $302.4 million in damages for infringing two patents connected to Apple’s FaceTime communication application.
The verdict is the third in the long-running case in which two earlier verdicts were overturned—one on appeal and the other by the Tyler, Texas federal judge presiding over the 6-year-long litigation.
The latest outcome is certain to renew the same legal arguments that were made in the earlier cases: Apple, for one, has maintained all along that the evidence doesn’t support infringement. VirnetX, as it did in the past and is now doing, is seeking more damages for what it says is “willful” infringement on Apple’s part. What’s more, in the previous litigation, the Nevada patent-holding company had asked the judge to shutter the Apple service at issue. Apple has maintained that such a demand was made “So that it can be used to extract a massive licensing fee.”
The case began with four of VirnetX’s patents (1, 2, 3, 4), which had originated at a company called Science Applications International Corporation, or SAIC. VirnetX has been saying for years that it plans to market various products, but its income comes from licensing patents.
If Apple can escalate this upwards, then a court like CAFC would quite likely invalidate the patents, as usual. The higher one goes (in the courts/legal system), the less room for mischief and leeway for software patents. It’s a shame that courts lower down don’t obey rulings that are handed from above, especially courts that are based in Texas. █
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Posted in America, Australia, Patents at 4:12 am by Dr. Roy Schestowitz
The demise of software patents everywhere, in slow motion…
Summary: The industry formed around the patenting of algorithms is suffering a rapid decline, as people everywhere realise that software patents in the US are worthless, even if they are somehow granted in the first place
THE TRANSITION into a software patents-free US is costing a lot of money to patent law firms all the around the world. They have become accustomed to telling clients to pursue US patents on software, but this doesn’t work anymore. These clients know a little better, in spite of misleading and selective ‘analyses’ from patent law firms.
Following the lines of pro-software patents blogs like “Bilski Blog”, the “Section 101 Blog” attempts to perpetuate the illusion of software patents potency in the US, soon to be cited by Bastian Best, who promotes software patents in Europe. Almost 3 weeks later these people are still obsessing about McRO — or about one single patent — obviously while ignoring the latest CAFC decisions because these weaken their case. We wrote about it yesterday (almost nobody else wrote about, much as we predicted because of cherry-picking, or lies by omission). Professor Dennis Crouch wrote about it yesterday as well. To quote:
The big news from Intellectual Ventures v. Symantec (Fed. Cir. 2016) is not that the court found IV’s content identification system patents invalid as claiming ineligible subject matter. (Although that did happen). Rather, the big event is Judge Mayer’s concurring opinion that makes “make two points: (1) patents constricting the essential channels of online communication run afoul of the First Amendment; and (2) claims directed to software implemented on a generic computer are categorically not eligible for patent.”
[...]
Declaring that software implemented on a generic computer falls outside of section 101 would provide much-needed clarity and consistency in our approach to patent eligibility.
This decision cites even Microsoft. It’s one of the large majority of decisions which show that CAFC is still very hostile towards software patents (more so than district courts), thanks to SCOTUS (notably the Alice decision).
Alice is causing layoffs and shutdowns of patent law firms that depend on software patents or the perception that they’re worth something, as covered here a month ago (high profile examples). Here we have a new example of this (often a blog that promotes software patents). One attorney moves from software patents to actual development of software and Benjamin Henrion told him last night “welcome back to software development.”
The explanation for this move is as follows:
The US Supreme Court issued a decision, in Alice, that has (perhaps unintentionally) granted US patent examiners and the lower courts effective carte blanche to reject claims to any computer-implemented invention they do not like the look or smell of. In around 2010, IP Australia decided that it was time to crack down on claims directed to certain computer-implemented business methods, and created a monster that ultimately resulted in the decision of a Full Bench of the Federal Court of Australia in the RPL Central case and similarly rendered a broader range of subject matter effectively unpatentable. More recently, the Australian Government’s Productivity Commission published a draft report in its enquiry into Intellectual Property Arrangements which contained a recommendation ‘to explicitly exclude business methods and software from being patentable subject matter’ in Australia.
Do I think that all computer-implemented innovations should be patentable? No. Are there still many software-based inventions that remain patentable despite the recent developments? Yes, of course there are. Do I think that the pendulum has swung too far against patent-eligibility in the US and Australia? Well, yes, I do. But what I think about all this is not really the issue right now.
The fact is that, rightly or wrongly, the law has shifted, and as a result the nature and value of advice that I provide to clients in the software space has changed as a result. I simply cannot add value to businesses in this area that I could when the boundaries of patent-eligibility were clearer and more stable. Whether I think it should be this way or not, the end result is still that my skills, knowledge and experience are now under-utilised as a patent attorney. Aside from anything else, this is highly demotivating, and I have come to believe that my talents might be put to better use elsewhere.
Or, to put it more bluntly, what is the point of me if the things I do best are of limited value to clients?
“Based on EPO insiders, they now allow patenting of software as long as it’s combined with something (like a car in this case).”Well, maybe they just realise that they lie to the public and to clients, and they have a guilty conscience over it. That’s what we have been saying for years. The world needs more software development, not more software patents. It needs more development and innovation, not more protectionism and lawsuits.
The above alludes to the situation in Australia, where patents are not worth that much because of the small population size and hence US patents are often pursued. This morning in the Indian press we have some articles [1, 2] that speaks of a company called Rivigo, which is pursing software patents in the US. To quote: “Rivigo has developed algorithms that deal with managing fuel efficiency and pilferage, availability of drivers in the relay system, and loading plans to help reduce damages to products carried by its trucks.”
“It often feels like the only way to get something out of software patents is to go to Texas — something which even BlackBerry (Canadian) has begun doing.”Well, the company went to the US to patent software because these patents are not permitted in India, but such patent would be invalided by courts or boards in the US as well, especially because of Alice. Just because the USPTO (or Battistelli’s EPO for that matter) accept some application doesn’t mean the claimed invention is novel and innovative. Based on EPO insiders, they now allow patenting of software as long as it's combined with something (like a car in this case). The courts wouldn’t quite fall for it and therefore it seems safe to say that software patents everywhere are just a slowly-imploding bubble.
Also mentioned yesterday was this case against Apple down in Texas (we last wrote about the corrupt Texas courts yesterday). It often feels like the only way to get something out of software patents is to go to Texas — something which even BlackBerry (Canadian) has begun doing. █
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10.02.16
Posted in America, Patents at 10:37 am by Dr. Roy Schestowitz
US patent law matters everywhere as even Brits can be dragged into the rocket docket of patent trolls
Summary: Some news from the abusive courts of the Eastern District of Texas, where patent justice is mostly an illusion because of the likes of Rodney Gilstrap (above)
Metaswitch Networks, a British company sued by patent thugs in Texas, has just won a case initiated in a Texan court, which is rare/hard. Metaswitch Networks now says that CAFC has just denied a patent injunction against it. Background was provided in our previous articles about this case.
“Federal District Court Denies Injunction Request in Genband US LLC vs Metaswitch Networks Ltd. Patent Litigation,” says the headline of the press release, issued in London 3 days ago. The press/media (local or US) didn’t seem to cover it, but someone sent us the press release that reads: “Cloud-native communications software leader Metaswitch today announced that the United States District Court for the Eastern District of Texas has denied Genband US LLC’s motion for a permanent injunction against Metaswitch stemming from patent litigation between the two companies [Case No. 2:14-cv-33-JRG]. Genband US LLC filed the motion in February 2016. “We are pleased with the court’s ruling,” said Martin Lund, Metaswitch CEO, “and look forward to continuing our successful partnerships and customer engagements utilizing our broad technology portfolio and long history of technical innovation.””
Do patent courts in Texas have ethics? Remember it’s them who enabled this expensive and cumbersome process for a British company (almost half a world away). These courts actively advertise themselves as being plaintiffs/trolls-friendly and this new article from Patently-O speaks of ethics opinions from Texas. To quote the key part: “The Texas ethical rules have some bearing on federal court litigation in the Fifth Circuit, although they do not control. See In re American Airlines, Inc., 972 F.2d 605 (5th Cir. 1992). Nonetheless, the Eastern District will consider the Texas rules as part of determining “national standards” of ethics in federal court. (I practiced in Texas for a long time, and am still licensed there and advise lawyers there, and this “national standards” of ethics thing can be a real trap for unwary lawyers who think they can rely on the Texas rules, alone.)”
“BlackBerry is Canadian, not Texan, so why pursue litigation down in Texas? It’s very obvious why and it’s a ruinous thing that makes Texas stand out as a major culprit.”What we have here helps demonstrate that the VENUE Act [1, 2] is necessary and Texan courts are a big part of the problem. Right now BlackBerry says it will stop producing phones and the company has already begun suing companies using patents, choosing to file the lawsuits in Texas. BlackBerry is Canadian, not Texan, so why pursue litigation down in Texas? It’s very obvious why and it’s a ruinous thing that makes Texas stand out as a major culprit. This actually damages the public image of the entire state.
Remember where Newegg ended up fighting back against patents trolls? Yes, that too was Texas and it involved software patents in general. Texas does not seem to care if one is a troll, if Alice forbids abstract software patents and so on. The courts there are mostly rigged, as we demonstrated before.
Newegg’s Lee Cheng recently spoke to Unpatent, an initiative we last mentioned 2 weeks ago. Here is a summary/overview of their talk:
Today we talk to Lee Cheng, the most prolific patent troll killer. He runs corporate development at Newegg where he also serves as Chief Legal Officer. We are extremely lucky of having him onboard as an Advisor to Unpatent, his experience and insights are truly invaluable.
We have a couple stories on the pipeline, but these stories are hard to find because companies are usually scared of making this public. As Lee explains, the moment you settle for the first time, you become an easy target. If you know any stories, please reach us at sadness@unpatent.co
Without further ado, you can enjoy the interview below. We also made a transcript of it in case you’d rather read it.
Rather than attempt to tackle one patent at a time, which is what Unpatent is hoping to accomplish, one should advocate for PTAB and oppose software patents. The EFF is currently trying to also limit the damage caused by courts in Texas — the kind of nuisance which now facilitates patent bullies from Canada and impacts even companies as far away as Britain. █
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Posted in America, Patents at 9:57 am by Dr. Roy Schestowitz
Among other patents on software, which the Court of Appeals for the Federal Circuit (CAFC) has just practically trashed
The art of cherry-picking, courtesy of the patent microcosm, is nothing new or unpredictable
Summary: A roundup of recent news about software patents, patent trolls, the growing realisation that they are both a problem (connected to one another), and the deafening silence from the patent microcosm, which still obsesses over a case from last month (McRO) while ignoring recent cases that are not so ‘convenient’ to the microcosm’s agenda
“The Industry Patent Purchase Program (IP3),” according to IAM, “has bought 78 US patent applications and grants according to data from the USPTO’s assignment database.” Well, USPTO patents are not worth much, let alone mere applications, especially if these pertain to software. Amid tightening of patent scope in the US we see a departure (especially in the courts) from patents on abstract, immaterial things. That’s just the reality these days, but the patent microcosm refuses to accept it and in the month of September it just couldn’t (still can’t) stop with the McRO case nonsense. What we mentioned in the previous post about PTAB is that the patent microcosm also attempts to undermine quality control.
The above finding from IAM may be connected to this news about “[a]ssignment documents now publicly available through USPTO website”. To quote: “The US Patent and Trademark Office now makes copies of patent assignments available for immediate download. Although a seemingly small gesture, the new service is valuable to patent practitioners and IP professionals who often need expedited access to assignment records for diligence purposes or otherwise to diagnose inventorship or ownership issues.”
“They’re looking for new loopholes in the wake of McRO, but it’ll go down the ashtray of history like Enfish did, changing nothing substantial unless or until the Supreme Court tackles the subject again.”Adorning an IAM endorsement (as if that’s much of an endorsement at all), Steve Lundberg, the longtime software patents propagandist, milks the McRO nonsense over at his blog. It’s more of the same at Watchtroll (heckling courts that stand in the way of software patents) and Sheppard Mullin Richter & Hampton, which is also milking McRO [1, 2] for self promotion. They’re looking for new loopholes in the wake of McRO, but it’ll go down the ashtray of history like Enfish did, changing nothing substantial unless or until the Supreme Court tackles the subject again.
Here come Knobbe Martens Olson & Bear LLP, highlighting another one of those loopholes for software patents. To quote the gist: “Can boilerplate language describing possible variations to an invention ever impact validity of a patent? Many software patents include standard “boilerplate” text describing many ways to implement an invention, such as by discussing execution of the software on a smart phone, laptop, mainframe, PDA, audio player, or even a refrigerator! Often, such boilerplate language is added to patent applications with consideration of broadening the potential scope of the recited terms or providing additional support for recited claim terms.”
This is just an attempt to ascribe physical attributes to immaterial things. The same trick has been attempted in many other places around the world and here we have Korean lawyers reposted, wherein they try to argue for software patenting because Korea’s KIPO rejects such patents, still (at least in theory/principle, unless one exploits the loopholes).
“This system seems to favour large corporations and patent trolls, not sole/lone inventors. That’s just how it was designed and optimised for (after much lobbying).”What kind of a company celebrates software patents after Alice? They’re worthless, no matter what the USPTO (rubberstamp-happy) says, but some still advertise those in press releases. According to this latest overview from Patently-O, SCOTUS won’t be contradicting or revisiting Alice any time soon, so software patents are pretty much useless in the US (for the foreseeable future). There is a growing concern at SCOTUS about massive damages (article behind paywall) as it’s easy to see that the system is favouring large corporations when one can make billions from a single low-quality patent. There have been dozens of articles in English over the weekend about a case which we covered before. Among many reports about it we now have “Apple loses FaceTime patent retrial, ordered to pay $302.4 million” and “Apple Ordered to Pay $302 Million in Damages to VirnetX in Patent Retrial”.
Francis Jeffrey, who has patents in the US, told me: “So far I got nothin’ from mine…”
This system seems to favour large corporations and patent trolls, not sole/lone inventors. That’s just how it was designed and optimised for (after much lobbying).
Consider this news about Intellectual Ventures, or more specifically an offspring of the world’s biggest patent troll, bankrolled by Microsoft and Bill Gates. There appears to be somewhat of a rebrand/offshoot:
The Invention Development Fund (IDF), formerly one of the three main fund groups under Intellectual Ventures’ (IV) management, relaunches under a new brand today as it marks the final step in its spin-out from the patent aggregation firm.
The fund – the divestiture of which was revealed by its executive vice president Paul Levins at IPBC Global in Barcelona back in June – will henceforth be known as Xinova. This moniker incorporates Chinese and Latin terms for ‘new’, reflecting the fund’s long-held objective of bridging the gap between East and West when it comes to high-tech investment and IP commercialisation.
It has become hard to keep track of these trolls and satellites. Intellectual Ventures reportedly has several thousands of them and the above might also be targeting China, where there is growing patent activity (see recent reports from IAM and from MIP).
“Suffice to say, patent law firms hardly say a word about it.”Japan, by contract, studies the issue of patent trolls, according to this IAM report that says: “This week Japan’s Yomiuri Shimbun reported that the country’s Ministry of Economy, Trade and Industry (METI) would be undertaking a study of NPE [troll] activity, with a view to making policy recommendations for the sector’s regulation. A panel including lawyers and academics could begin looking into the matter as early as October, according to the report, which suggested that part of the impetus for the study was the observation that NPEs [trolls] are expanding their activities beyond the United States.”
They really need to stop it and fast, as Japan and other nations in east Asia are beginning to have a trolls epidemic [1, 2]. This expanded to nations further south (Singapore for example) and even Australia, where the subject of software patents is increasingly coming up these days. “Australia’s patent opposition system is well established, says Wayne Condon, but it’s important to note the differences between standard patents and innovation patents,” according to this new article from MIP. There are already some famous patent trolls in Australia, such as Uniloc.
Going back to Intellectual Ventures, the world’s biggest troll, CAFC has just reportedly “Killed 3 Anti-Malware IV Patents under 101/Alice today: http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/15-1769.Opinion.9-28-2016.1.PDF …” (i.e. the usual).
“Why are law firms ignoring the latest rulings AGAINST software patents at CAFC?”Suffice to say, patent law firms hardly say a word about it. The patent microcosm is instead cherry-picking for person gain, again (new examples in [1, 2, 3, 4]), bothering to mention only Federal Circuit decisions that bolster their narrative of software patents rebound. Section 101 continues to invalidate a lot of software patents almost every week, but patent law firms intentionally don’t write about those cases. One of them wrote that “Dyk wanted 2 prove he could out “abstract” Judge Stark who now will pretty much use 101 for every #patent case Im sure” (as if that’s a bad thing).
Why are law firms ignoring the latest rulings AGAINST software patents at CAFC? Are there any valid excuses for it? This has already become a rhetorical question. Patent lawyers would rather we obsess over McRO almost a month later (latest examples in [1, 2, 3]) and not (or hardly) mention cases like Cox Communications, Inc. v Sprint Communication [1, 2]. 5 days ago an article by Alex Okuliar and James J. Tierney from Orrick went with the headline “Are Patent Rights Poised For A Resurgence?”
“It seems as though software patents are losing again (in the US and beyond), so patent lawyers try to keep quiet about it, hoping nobody will notice as that may jeopardise their bogus narrative and depress demand for ‘services’.”Well, not when it comes to software patents (anywhere). This is all wishful thinking, trying to hypnotise readers into a parallel reality wherein software patents are recovering. Orrick has also just published “Orrick Partners Examine How Antitrust Law Has Shaped Modern Patent Rights” (patents are not a right, they conflate this with the misleading term IPR, where the R stands for “rights” and alludes to copyright, trademarks, and trade secrets).
It seems as though software patents are losing again (in the US and beyond), so patent lawyers try to keep quiet about it, hoping nobody will notice as that may jeopardise their bogus narrative and depress demand for ‘services’.
The latest from the courts in a nutshell: more software patents die, patent lawyers try to distract from the news, and the nature of patent trolling is a growing concern, even in Asia. █
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Posted in America, Patents at 8:54 am by Dr. Roy Schestowitz
But the Court of Appeals for the Federal Circuit (CAFC) is not standing in the way
Summary: The bureaucratic layers/levels added for dealing with the loosening of patent quality are still subjected to endless scrutiny from those who profit from more and more patents (including frivolous litigation which they bring about)
The patent microcosm, as usual, is trying to undermine Alice, Section 101, PTAB and AIA. “Thus far,” Patently-O just wrote, “the Federal Circuit has successfully ducked any direct holding on whether eligibility under 35 U.S.C. 101 is a “condition of patentability” or a proper invalidity defenes. [...] Versata decision which held that the PTAB has authority to decide Section 101 challenges in a CBM review.” Another new post from Patently-O says that “Ethicon has filed its expected petition for writ of certiorari challenging the USPTO’s delegation of IPR Institution Decisions to the Patent Trial and Appeal Board.”
“Why does this matter? Because there’s a coordinated effort to make PTAB less effective, less efficient, and less accessible so as to slow down its invalidation of bad patents.”They are doing anything they can to stop what they call “death squad” because this board puts an end to a lot of software patents (bad for patent lawsuits, but good for everybody else). “The Federal Circuit has outlined a two-part framework for deciding whether it can review an institution decision, in its in Husky Injection Molding Sys v Athena Automation decision,” MIP wrote.
Why does this matter? Because there’s a coordinated effort to make PTAB less effective, less efficient, and less accessible so as to slow down its invalidation of bad patents. IAM ‘magazine’ wrote two days ago [1, 2] that “PTAB [is] already too expensive for SMEs. @uspto now proposes increasing fees! Will just entrench IPRs as a BigCo tool. http://www.uspto.gov/about-us/news-updates/uspto-seeking-comments-proposed-patent-fee-adjustments [...] To be fair, also unspecified proposals to broaden scope of fees cap for micro and small entities. But this has been ineffective up to now.”
“PTAB should follow the polluter payer principle,” Benjamin Henrion replied, suggesting a proportional fee, e.g. to size of appellant, holder etc.
“AIA gave us PTAB, which now kills software patents in very large numbers, but not everyone is happy.”The “Court of Appeals for the Federal Circuit upheld the Patent Trial and Appeal Board’s (PTAB’s or Board’s) decision,” the National Law Review wrote a few days ago. To quote in full: “In an opinion addressing the standard for claim construction of a patent that expires during reexamination, the US Court of Appeals for the Federal Circuit upheld the Patent Trial and Appeal Board’s (PTAB’s or Board’s) decision finding all challenged claims invalid, but found that the PTAB had used the incorrect standard for its claim construction. In re: CSB-System Int’l, Inc., Case No. 15-1832 (Fed. Cir., Aug. 9, 2016) (Stoll, J).”
AIA gave us PTAB, which now kills software patents in very large numbers, but not everyone is happy. Here is another one those rants from patent maximalists, serving to prove that PTAB did the right thing by limiting patent scope:
The AIA ushered in significant changes in the patent system. At the time, there was much consternation about the change to a first-inventor-to-file system. The prospect of enhanced post-grant challenges was an afterthought, dismissed as a variation in inter partes reexamination. Inter partes reexamination filings even spiked in 2012, as practitioners were reluctant to let go of the familiar process in favor of the new post-grant trial system.
Five years on, the emphasis has flipped; first inventor to file is accepted as not much different than the patent systems in the rest of the world. Post-grant trials now get much more attention. Some see them as the only way to save American business; others call the system disastrous for innovation. However you classify the impact, AIA trials have been significant.
Only for clerical reasons — not technical — can the Patent Trial and Appeal Board (PTAB) let bogus patents be, based on new stories/cases such as this:
In a recent decision, the Patent Trial and Appeal Board (PTAB) denied the institution of a covered business method (CBM) patent review on an Internet Portal System patent because the claims lacked any recitation of a financial product or financial activity. The decision serves well to inform petitioners that the focus for CBM decisions is becoming more on the claim language itself, in contrast to some earlier decisions by the Board where a liberal reading and interpretation of the patent in general was allowed to institute a CBM trial.
[...]
Thus, the PTAB was clear that because the challenged claims of the ’077 patent are of general utility with no explicit or inherent finance-related terminology or limitations, this patent was not considered a CBM patent eligible for review. The CBM review was thus not instituted.
We maintain our position that PTAB is a very important tool if tightening patent scope and improving patent quality is the goal. It is clear that all the above sites (patent maximalists) don’t share the view that patent quality ought to be a priority and they do whatever they can to weaken (if not put an end to) Alice, Section 101, PTAB and AIA. █
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