08.19.16

Patents Roundup: Trolls Dominate Litigation, PTAB Crushes Patents, Patent Box Regime Persists, and OIN Explains Itself

Posted in America, Microsoft, OIN, Patents at 11:46 pm by Dr. Roy Schestowitz

Summary: Another roundup of patent news from around the Web with special focus on software patenting

THE USPTO is problematic for quite a few reasons, chiefly or primarily the low patent quality (especially in recent years). When there’s no quality control, as was increasingly the case under Kappos, patents cease to be respected and people resort to filing lawsuits and fighting in courts, which is an expensive process (small companies would just settle out of court, even if they know they can win the case).

“As Suntory and Asahi settle their patent dispute over non-alcoholic beer,” wrote MIP the other say, “John A Tessensohn surveys the state of litigation in Japan, and compares it with the United States” (where litigation is extremely high in frequency).

It is worth taking stock of who’s suing with patents in the US. “Of the 19 patent lawsuits filed today,” United for Patent Reform wrote some days ago, “16 were filed by patent trolls — 84%. It’s time for Congress to take action to #fixpatents!”

It has been estimated recently that nearly 90% of all technology patent lawsuits are now filed by patent trolls. Most of them use software patents. In other words, in the absence of software patents, there would be far fewer trolls and lawsuits.

Speaking of trolls, the EFF’s Elliot Harmon tackles an old problem which is universities selling their patents by the tons/bucketloads to patent trolls (Microsoft’s patent troll Intellectual Ventures, quite notably compared to other entities, buys them and then shakes companies down with these patents, which were originally earned thanks to taxpayers’ money/investment). Here is what Harmon wrote:

When universities invent, those inventions should benefit everyone. Unfortunately, they sometimes end up in the hands of patent trolls—companies that serve no purpose but to amass patents and demand money from others. When a university sells patents to trolls, it undermines the university’s purpose as a driver of innovation. Those patents become landmines that make innovation more difficult.

A few weeks ago, we wrote about the problem of universities selling or licensing patents to trolls. We said that the only way that universities will change their patenting and technology transfer policies is if students, professors, and other members of the university community start demanding it.

It’s time to start making those demands.

Well, many demands should be made, even here in Europe. The system is unregulated, so it has been evolving along the lines large corporations and their patent lawyers demand, not the public good. Watch this new article about the “Patent Box Regime”, which is a tax evasion scam/scheme (Microsoft does a lot of that), using patents as loophole. “It relates to income that arises from patents, copyrighted software, and, in the case of smaller companies, other intellectual property that is similar to an invention that could be patented,” according to this article from Tax News.

“The system is unregulated, so it has been evolving along the lines large corporations and their patent lawyers demand, not the public good.”That’s probably too much for small companies to apply for, as is often the case when it comes to Ireland as a notorious tax haven. To quote: “The regime is only available to the companies that carried out the research and development, within the meaning of section 766 of the Taxes Consolidation Act 1997. The guidance provides definitions of a qualifying company, a qualifying asset, and profits arising from exploiting the qualifying asset. It also explains the extensive documentation requirements that must be complied with to claim relief under the KDB.”

We wrote about this subject many times before. There’s no indication that European authorities are doing anything at all to stop this abuse.

Speaking of Microsoft, a Microsoft promotion site says that PTAB, abolisher of many software patents, has just come to Microsoft’s rescue. “Personalized Home Page patent troll threatening Microsoft, Google and others squashed by appeal court,” says the headline. To quote:

Bloomberg Legal reports that the Patent Trial and Appeal Board has invalidated a patent held by B.E. Technology LLC for a Personalized Internet User Interface or home page which dates back to 1998 and which the company was using against Google, Microsoft and 6 other companies.

B.E. Technology filed 11 lawsuits accused smartphones and tablets of infringing their patent, but also included a wide variety of other devices, including Microsoft Xbox 360 consoles.

Google , Microsoft, Samsung and Sony all challenged the patent, submitting 5 petitions with the Patent Trial and Appeal Board, and was eventually able to show that a 1996 patent covered all of B.E. Technology’s claims, rendering it invalid.

Speaking of PTAB, Michael Loney wrote a couple of articles (from New York) about the latest figures. He is presenting some graph about big growth in post-grant reviews in 2016, but also demonstrates a decline in the first half of year for filings. The “Patent Trial and Appeal Board filing so far this year is down on 2015,” he notes (as he did before). However, another graph is presented in this article. It says that “Post-grant review petition filing this year is already higher than the whole of 2015, with biopharma companies leading the way.” The part about the decline says this: “The 826 petitions filed in the first six months of the year was the lowest half-year figure since the 730 filed in the first half of 2014 while the PTAB’s appeal was taking hold.”

It’s not entirely clear (yet) if PTAB will grow fast enough to ever overwhelm all software patents, or most patents which Alice effectively invalidates. The patent microcosm just keeps attacking PTAB’s legitimacy, with shameless smears too.

A theme we found in the news today [1-3] was patents of pharmaceutical giants (often referred to, collectively, as Big Pharma). It is common knowledge that Big Pharma are to a large degree subsidised by the US government (i.e. taxpayers), consistently to the tune of tens of billions of dollars per year (this number too is common knowledge), yet all money and patents go to private hands. Talk about injustice! Here is a new comment regarding one of these new articles:

It seems the new patentability landscape post-Alice, Myriad and Mayo is taking shape
- Alice really meant that computer implemented inventions were only patentable in as far as they related to the working of a computer somehow, and so business methods and mental acts are unpatentable inventions
- Myriad and Mayo could could not have meant all inventions relating to natural products and laws were not patentable, and products in particular which are different from nature and have practical uses remain patentable
- Mayo remains a bit of mystery until the Federal Circuit approves an invention based on a natural correlation. Sequenom shows it is difficult to get broad claims where any sort of natural correlation is involved and so diagnostic inventions remain in limbo.

In an age when patents are foolishly treated like money [4] and the patent microcosm spreads tired old myths about patents (marketing) [5] it’s only to be expected that reduction in patents would be portrayed as a loss to “innovation” or something along those lines. Shelston IP, the self-serving propagandists (for their own pocket) who lobby for software patents down under [1, 2] can again be found in the media [6]. They still try to change New Zealand’s patent law so as to allow software patenting. They don’t care about programmers, they just want to tax programmers.

In the US, software patents are somewhat of a passing fad. It doesn’t mean that nobody applies for them and even gets granted some. According to this new article about an acquisition, “Denning noted that AppFirst also has a number of patents around the architecture of its agents.” Additionally, this other new article says that “several patents related to the technology behind their picking system.”

This sounds like software patents, but software patents are rather useless when it comes to litigation as courts typically reject those nowadays. This new article states about CAFC (where software patents very rarely survive scrutiny) that “[i]t is also a reminder that, for the Federal Circuit, the underlying patent and prior art documents represent the most important evidence available in a patent validity dispute.” Well, that’s just common sense and any courts ought to consider that aside from Alice (in the circumstances of allegedly abstract patents).

Another new article says that “Bose holds several patents on this technology…Bose also improved the sound silencing software.” Regarding BlackBerry, which is becoming somewhat of a patent troll nowadays, this article says that “Blackberry [is] slowly fading into obscurity when it comes to the handset market, it makes sense the company would turn to its software, patents, and enterprise expertise as a way to keep the company afloat.”

Nowadays, as we correctly predicted, BlackBerry is a troll (PAE). It is even filing lawsuits down in Texas, as we noted earlier this month. Some of these patents are on software, some on hardware, and some on networking. And speaking of which, there is this new article (behind paywall) about Internet Protocol (IP) patents. The summary says: “Fluent in both types of IP: Scott Bradner has been an architect of intellectual property (IP) policy for internet protocol (IP) standards. He played a core role in the development of internet protocol, leading to the very digital revolution we know today, as well as the next generation IPv6, all the while designing intellectual property policy to go along with it. Here is an interview with Bradner.”

The Internet is supposed to be open to all. Just like the World Wide Web, it should be free from patents (less true today than it was at its genesis, for reasons we covered in past years), so the notion of so-called ‘IP’ on IP (Internet Protocol) is troubling. So is the notion of a ‘FOSS’ group which is open to software patents. OIN, for instance, was created by companies that are not against software patents but wish to minimise risk of being sued. Deb Nicholson, who moved to OIN from the Free Software Foundation, defends OIN as follows. From an interview published earlier today:

The Open Invention Network — OIN, as its friends call it — “is a defensive patent pool and community of patent non-aggression which enables freedom of action in Linux.” That’s what it says (among other things) on the front page of the organization’s website. Basically, if you join OIN (which costs $0) you agree not to sue other members over Linux and Android-related patents, and in return they promise not to sue you. Google, IBM, and NEC are the top three members shown on OIN’s “community” page, which lists over 2,000 members/licensees ranging from Ford to one-person Android app developers.

Today’s interviewee, Deb Nicholson, is the group’s community outreach director. One description of her says she “blurs the line between professional and punk rock,” which is a very cool line to blur. She travels a lot and speaks at a lot of conferences.

She used to work for the Free Software Foundation. You may have heard of them. It is less likely, however, that you know about OIN. But you should, because it does hugely valuable work in keeping the slimy jaws of patent trolls away from innocent FOSS developers and users. If you’re an OIN member and a nasty software patent beast comes after you, they risk the wrath of… well, not “The Wrath of Khan,” but of running afoul of one of the many thousands, possibly hundreds of thousands, of patents held by OIN’s many members.

That’s hardly the solution at all. Just hoarding software patents and putting them in a very large pool — no matter how large — does not rid us from the actual menace. It’s like stockpiling weapons to make one secure from other groups with a large arsenal. Mutual disarmament of all groups, or invalidation of software patents, is the solution. Nicholson’s previous employer, the Free Software Foundation, ‘gets’ that. █

Related/contextual items from the news:

1. Bad and Good News for Bio-Pharmaceutical Patenting in the United States

   Two recent developments in U.S. patent law mean mixed news for the bio-pharmaceutical industry. First, the bad news — the U.S. Supreme Court declined to accept for review the closely-watched Ariosa Diagnostics v. Sequenom case concerning the patentability of a diagnostic method. Second, the good news — a panel of the U.S. Court of Appeals for the Federal Circuit issued the Rapid Litigation Management v. Cellz Direct decision further clarifying application of the two-step Alice/Mayo test (1. claim directed to a patent ineligible category and 2. lack of inventive concept) concerning laws of nature.

2. The ‘Cancer Moonshot’ May Succeed — If We Don’t Weaken Patent Protections [Opinion]

   Earlier this summer, the Patent and Trademark Office created an expedited review process for certain patent applications covering “immunotherapies” — new cancer treatments that re-engineer the body’s immune system to attack tumors. Within days, the National Institutes of Health rejected a petition that urged the agency to use “march-in” rights to effectively take back the patent on a prostate cancer drug: It would’ve had a chilling effect on the development of new drugs if such blatant government overreach was implemented.

3. The Downfall Of Invention: A Broken Patent System

   It’s time to restore the U.S. patent system to its original purpose – to protect and incentivize invention, not innovation. There’s a difference. Innovation is the investment in the commercialization of inventions. Just because a company invests money to commercialize a drug does not mean it has invented a new drug. This is where today’s patent system is broken. If we continue to muddle innovation with the patent system’s original purpose of invention, we will continue to hand out 20 years or more of monopoly power to companies for the same science over and over again and keep paying higher drug prices. Instead of incentivizing a race to the top, we are pursuing a policy of a race to the bottom. Only with genuine inventions can true medical innovations flourish and support both society’s health and a strong drug development pipeline.

4. Thailand Enforces Law To Promote IP As Loan Collateral, Amends Trademark Law To Raise Penalty For Deception

   Thailand has enforced a new law to promote using intellectual property as loan collateral, an effort likely to make intellectual property a more valuable asset for its holders. But experts caution that the country still lacks the infrastructure of a viable IP market.

5. Your Ultimate Guide to Applying for a Patent

6. The Patents Act 2013 creates legislative space (as distinct from impetus) for a New Zealand innovation patent

   A New Zealand “innovation patent”? Unlikely, but watch this space nonetheless. The popularity of Australia’s innovation patents regime has been well documented. Although it is not without its faults, has been prone to certain unintended outcomes and has recently gained some high-profile critics, the Australian innovation patents regime has arguably been relatively successful in stimulating R&D activity (innovation) amongst Australian small-to-medium enterprises (SMEs).

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