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What the New US Government May Mean to Patents and the Latest Death of Software Patents in the US

Posted in America, Patents at 4:49 pm by Dr. Roy Schestowitz

Politics being put aside for a moment, except patent aspects alone

Donald and Melania Trump
Photo credit: Marc Nozell from Merrimack, New Hampshire, USA

Summary: Patent news from the United States, as discussed in several prominent patent blogs over the past week (when news was dominated by Donald Trump‘s election win)

Trump and Patents

THE US political system is in somewhat of a divisive turmoil right now and even today people wonder what this will mean for patents (“The Next Unknown in Intellectual Property“). Based on the appointments made by Trump (so far), it’s going to be more of the same as corporations and lobbyists will steer policy; there is no sign of revolution there.

Here is what Patently-O had to say on the subject: “The question on everyone’s mind is how the patent office and patent system will be restructured once Donald Trump becomes president. Trump has substantial personal experience protecting and enforcing his own trademarks, including attempts to protect more controversial marks such as ‘you’re fired.’ However his businesses have few if any patent rights and have relied on the perception of luxury rather than innovation for their successes.”

Here is what IAM, apologist of patent trolling, said about the subject:

Well, hands up if you saw that coming! For those of us who lived through the Brexit referendum, the idea that polls and betting markets are accurate forecasting tools was shown to be nonsensical months ago; but, even so, Donald Trump’s victory over Hillary Clinton in the US presidential election has come as a surprise to many – we really should have known better.

President-elect Trump will be inaugurated on 20th January, so he has just over two months to get his policy priorities sorted out and his top team in place. Given that he has so much to do, it is unlikely that IP will be at the forefront of his thinking; however, there will be a lot of members of the US IP community wondering what the future will bring for patent, trademark and copyright owners.

Agenda of patent maximalists too continues unabated. Frommer Lawrence & Haug LLP, a law firm, is trying to figure out how to work around the law and get software patents in the US (article by Joseph Saphia and Bonnie L. Gaudette) and Professor Dennis Crouch speaks of the Chevron deference (background here), saying that “[t]his change would breathe new life into Challenges of the AIA Trial system, USITC decisions, as well as a large host of USPTO procedural examination rules and fees.”

In another new article, this one about software patents in Amdocs v Openet, Crouch says:

In the end, I don’t know how important Amdocs will be, but it offers an interesting split decision on the eligibility of software patent claims. Senior Judge Plager and Judge Newman were in the majority — finding the claims eligible — with Judge Reyna in dissent. One takeaway is that the Federal Circuit continues to be divided on the issues. By luck-of-the-panel in this case, the minority on the court as a whole were the majority on the panel (pushing against Alice & Mayo). Going forward, the split can be reconciled by another Supreme Court opinion, a forceful Federal Circuit en banc decision, or perhaps by future judicial appointments by President Trump. I expect 2-3 vacancies on the court during Trump’s first term.

This is where things get potentially troublesome. Over the years we wrote about Scalia’s stance on software patents and now that he is dead no doubt some other Conservative Justice will be installed. People like Joseph Saphia, Bonnie Gaudette, Dennis Crouch and so on certainly hope for a resurgence of software patents. This is bad news for opponents of software patents, notably people who actually develop software. In the imminent future, however, there is nothing that can bring back software patents, based on today’s cumulative outline of SCOTUS cases from Professor Crouch. “Software is a field of technology that is closely akin to mechanical engineering,” said Cohausz & Florack, another law firm without a clue about software and how it works (it is extremely different from mechanical engineering). It’s yet another new rant about the scarcity of software patents or their lost legitimacy in the US.

FRAND

Software patents in the area of telecom continue to be a barrier to startups that use Free/Open Source software to get off the ground, so we must get patents out of industry standards. According to this new article from MIP, however, the plague of FRAND (similar or related to SEPs) is still there. To quote: “What level of royalty fee can be considered genuinely FRAND? There is disappointingly little case law on this question, says David Sant, but a pending case in the UK may provide guidance…”

If these patents are on software, then in lieu with the law the royalty should be zero (with “Z” before RAND/FRAND). Otherwise, bad things would happen not only in the UK but in the whole of Europe.

Speaking of telecom patents, “France Brevets Licenses NFC Patents to HTC,” says a new announcement and China is not tolerating Qualcomm with its SEPs and therefore China benefits. Here is the part about Microsoft's patent blackmail of Xiaomi over its Linux products: “The privately-held company has reportedly run margins as slim as 1.8%, perhaps explaining why its biggest third-party acquisition has been a hybrid licensing deal with Microsoft, potentially allowing it to gain 1,500 patents without a big upfront cash payment.”

That’s nonsense. As we wrote at the time, Microsoft used patents to compel Xiaomi to preload Microsoft malware on millions of products, reaffirming that Microsoft still hates Linux and attempts to destroy it from the inside using patents.

Netflix v Rovi

Back in 2015 there was press coverage about Netflix v Rovi and there is some good news from the US right now. As a credible and good reporter put it (not some patent lawyers), “TiVo’s “TV Guide” patents are DOA at appeals court”. To quote his article:

A five-year-old patent brawl between Netflix and Rovi (now TiVo) has reached a turning point, with the US Court of Appeals for the Federal Circuit upholding a major lower-court victory by Netflix.

The litigation between the two companies began in 2011, when Netflix sued to invalidate a batch of patents on Rovi’s digital entertainment guides, for which Rovi had demanded Netflix pay licensing fees.

The patents described ways of navigating TV and other video content online. Even after Netflix lawyers bested Rovi at the International Trade Commission and then pounded all five patents out of existence at district court last year, Rovi said it would push forward with an appeal.

Now it’s clear that Rovi’s strategy to patent digital TV guides has hit a wall. Just a few days after Rovi’s lawyers made their oral argument, a panel of judges at the Federal Circuit upheld (PDF) the lower court’s decision in its entirety without comment.

As a reminder, Rovi is now connected to the world's largest patent troll, Intellectual Ventures, which is in turn strongly connected to Microsoft and Bill Gates.

Patent Quality

Courts quite certainly are growing tired of software patents and fewer software patents are even brought before the court (probably the more potent among them). The USPTO hosts a “patent quality conference” these days, perhaps realising that quality is a problem after the US Government Accountability Office (GAO) explicitly said so. To quote Patently-O: “The following is reprinted from USPTO Director Michelle K. Lee’s “Director’s Blog.” On December 13, 2016, the USPTO is hosting its next patent quality conference.”

Just hosting a conference about it does not, in its own right, improve quality. One can hope though. As for Trump’s policy on it, this may remain somewhat of an enigma but with more Conservatives at SCOTUS things don’t look particularly promising.

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