Ambushed by Antitrust

The infamous patent ambush from Rambus [1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14] is leading the way to some new developments. First of all, the recent ruling is being appealed.

Rambus appealed the FTC's ruling and the US Court of Appeals for the District of Columbia Circuit ruled against the FTC in April.

Further to that, there is a referral of the antitrust case to the Supreme Court, whose word on this would set solid precedence.

The U.S. Federal Trade Commission has asked the U.S. Supreme Court to intervene in a case in which the agency accused memory-maker Rambus of anticompetitive behavior in deceiving a standards-setting body.

The U.S. Court of Appeals for the District of Columbia Circuit in April threw out the FTC's case against Rambus, in which the agency accused the company of convincing industry groups to declare a standard for the memory used in PCs, servers, printers and cameras without admitting that it owned the patents to those technologies. The FTC Monday asked the Supreme Court to overturn that appellate decision.

Reform in Progress

Also related to the FTC is the following report about an upcoming hearing which may change the way patents get treated.

The US Federal Trade Commission has announced the first of a possible series of public hearings to explore the evolving market for intellectual property (IP). The hearings will be held beginning on December 5, 2008, in Washington, DC. "The patent system has experienced significant change since the FTC released its first IP Report in October 2003, and more changes are under consideration. The courts and patentees are exploring the full implications of Supreme Court and Federal Circuit decisions on injunctive relief, patentability, and licensing issues. Congress has considered sweeping legislative patent reform, and new debates on the appropriate methods for calculating infringement damages have engaged the patent community. New business models for buying, selling and licensing patents have emerged and evolved since 2003. In addition, there is new learning regarding the operation of the patent system and its contribution to innovation and competition."

The Bilski case, which was escalated up to the top where Bilski's patenting got defeated, continues to wreak havoc even where software is involved, and that's a good thing. Here is the latest example.

Halligan's patent application claims a "programmed computer method" that operates to identify trade secret information. (Claim 119). In essence, the computer program has the common law rules of trade secrets hardcoded, and those rules are applied to determine whether particular information is a "trade secret." Applying the machine-or-transformation test of Bilski, the Board of Patent Appeals and Interferences (BPAI) rejected Halligan's claims as lacking patentable subject matter under 35 USC ۤ 101.

Under Bilski, "[a] claimed process is surely patent-eligible under ۤ 101 if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing." To avoid preemption the Federal Circuit emphasized that "the use of a specific machine or transformation of an article must impose meaningful limits on the claim's scope to impart patent-eligibility;" that "the involvement of the machine or transformation in the claimed process must not merely be insignificant extra-solution activity;" and that the transformation "must be central to the purpose of the claimed process."

Here is another new review of the book "Intellectual Property and Open Source," which probably requires radical revision after re Bilski.

Intellectual property is an increasingly important part of our economy, and computer code in particular is presenting IP laws a serious challenge. Is code functional or expressive? Should it be covered by a patent or a copyright? What rights do we consumers have when we purchase a piece of computer software? Intellectual Property and Open Source: A Practical Guide to Protecting Code answers these questions, at least as well as any questions can be answered in this notoriously wishy-washy field of law.

Hardware Miscellany

Like many large companies, Nintendo got sued recently and the following new video tells one side of the story.

Direct link

Hardware patents remain an area that we do not cover in this Web site, but here is another report about this sector from the news.

Although there are few official press releases available, it seems that numerous well-known chip manufacturers are arguing about patents apparently involving tungsten metallisation processes.

When it comes to hardware, it's easier to impose extreme measures like an embargo [1, 2]. It's actually physical products that are taken to task, not mere knowledge that can be passed around over the wire, even across continents.

Patent Trolls

Amid tremendous pressures in an already-volatile and embattled industry, the patent trolls assault undeterred. Groklaw reckons they want a piece of the bailout money, i.e. taxpayers' expenses.

In the suit, LML alleges that the defendants infringe U.S. Patent No. RE40220. LML is seeking damages, injunctive and other relief for the alleged infringement of these patents.

RPX, which we mentioned earlier today, continues to receive coverage. The Wall Street Journal beat everyone to it (marginally), including Larry from ZDNet. It's being described as "defense" against patent trolls although it operates in similar ways to patent trolls.

Thus far, RPX has acquired more than $40 million in patent rights and will hit $100 million in its first year. The company, founded in March, counts John Amster, a former Intellectual Venures and Ocean Tomo executive, and Geoffrey Barker, founder of Cobalt, as co-CEOs.

They arrive from a patent troll [1, 2] and probably create yet another.

The biggest troll buster, Rick Frenkel, is still under attack by the very same vindictive trolls whom he was fighting.

Before departing, I took some time to study up on some of my most-followed cases there. As regular readers know, former Patent Troll Tracker blogger Rick Frenkel was sued by two East Texas patent lawyers after his identity was revealed.

Not much has changed in these lawsuits. The parties in Ward v. Cisco are still fighting over venue, and in Albritton v. Cisco they're fighting discovery battles, but since I checked up on them anyhow I'll take a minute to update both cases.

For background, see our notes about the most vicious troll, Ray Niro [1, 2, 3, 4, 5, 6, 7, 8, 9, 10]. He attacked his legitimate critic [1, 2, 3], whom we recently mentioned in [1, 2, 3, 4]. What an ugly and brutal corner of the industry this must be. it used to be about development, not racketeering and gavels. ⬆

“Software patents are a huge potential threat to the ability of people to work together on open source. Making it easier for companies and communities that have patents to make those patents available in a common pool for people to use is one way to try to help developers deal with the threat.”

--Linus Torvalds