05.27.17

The United States Has Already Tackled Both Software Patents and Patent Trolls

Posted in America, Courtroom, Patents at 4:54 am by Dr. Roy Schestowitz

There is also a correlation between those two

Summary: An outline of some notable responses to TC Heartland and where we go from here

INCREASINGLY, in the past few years, the US improved a lot of things in its patent system, first with AIA (which soon thereafter brought PTAB), then Alice (which further empowered PTAB against software patents), and now TC Heartland, which is going to force many patent trolls out of software patents-friendly courts.

Having written on the subject since my early twenties, I am personally gratified to see what happened in the US over the past half a decade, especially the past 3 years (since Alice). Maybe the same will happen in Europe. One can hope…

The patent microcosm is in a state of despair and disrepair. It clings onto rare exceptions in a desperate effort to entice clients. Here is one of them, who typically moans about PTAB, writing: “Encouraging some PTAB panels find eligibility under 101: https://e-foia.uspto.gov/Foia/RetrievePdf?system=BPAI&flNm=fd2017002637-05-15-2017-1 … “we do not agree ..claim directed to abstract idea”” (Section 101).

But how often does that happen? Rarely. TC Heartland aside, or even Alice aside, courts are going to get tougher on patents. There will likely be even a lower incentive to sue. As for PTAB, the smaller the number of lawsuits, the lower the incentive to petition it (IPRs).

What does the future hold? Probably a lot less lawsuits, especially software patent lawsuits. As for patent trolls, some of them might as well disband now. Gone are the golden days of Texas…

Even Andy Updegrove, who rarely writes blog posts these days, covered this case/outcome (TC Heartland). James Bessen, who published many academic papers about patent trolls, linked to this new press report which says:

Patent trolls can’t go judge shopping anymore.

The tech world is delighted.

On Monday, The U.S. Supreme Court on Monday put strict limits on where patent infringement lawsuits can be filed.

“Patent trolls take it on the chin,” read a headline at TechCrunch. “Supreme Court Messes With Texas ‘Patent Troll’ Hotbed in Win for Tech Industry,” wrote Fortune. “Life much harder for patent trolls,” concluded The Verge.

Patent trolls are shell companies that buy up patents and force businesses to pay license fees or face expensive litigation even if the outfits filing the suits make no useful product of their own. Those are called non-practicing entities by the courts, patent trolls by critics.

“Red Hat hails defeat of ‘patent trolls’ at Supreme Court,” says another new headline about the biggest GNU/Linux company. To quote: “The Supreme Court is making it easier for companies to defend themselves against patent infringement lawsuits in a case hailed by North Carolina’s attorney general. Red Hat and SAS are among firms that have waged a long legal battle against so-called “patent trolls.”

“Red Hat, which had filed a brief in the case, welcomed the decision.”

The mainstream media did not neglect to cover this, more or less properly (we have not yet seen what patent maximalists are saying).

“Costs of defending patent litigation will be reduced,” the New York Times wrote, “and the costs of patent trolling activity will be increased…”

A wish come true? Certainly for the trolls guru Joe Mullin, who used to run a blog dedicated to this topic and now writes about it for Ars Technica. “Supreme Court makes it much harder for patent trolls to sue in East Texas,” said his headline. A reader sent us the following excerpt from his article:

In a unanimous decision, the justices held that the US Court of Appeals for the Federal Circuit, which handles all patent appeals, has been using the wrong standard to decide where a patent lawsuit can be brought. Today’s Supreme Court ruling in TC Heartland v. Kraft Foods enforces a more strict standard for where cases can be filed. It overturns a looser rule that the Federal Circuit has used since 1990.

Here is the original: Supreme Court of the United States: TC Heartland LLC v . Kraft Foods Group Brands LLC [warning for PDF]

We wrote about the decision just hours after it came out (we had been looking forward to it for many months, correctly predicting this outcome).

Here is what the EFF wrote: “Today the Supreme Court issued a decision that will have a massive impact on patent troll litigation. In TC Heartland v. Kraft Foods, the court ruled that patent owners can sue corporate defendants only in districts where the defendant is incorporated or has committed acts of infringement and has a regular and established place of business. This means that patent trolls can no longer drag companies to distant and inconvenient forums that favor patent owners but have little connection to the dispute. Most significantly, it will be much harder for trolls to sue in the Eastern District of Texas.”

Watch this response to the EFF that says: “They’re called “patent owners.” If they can’t sue in Texas, they’ll just sue somewhere else, no?”

Well, the villainous Bristows (UPC propagandists) wrote about this. Their employee who ‘took over’ IP Kat — the one who is habitually celebrating patent trolls in Europe (like that infamous troll case in London earlier this spring) — went with the title “US Supreme Court ruling has potential to attract patent litigation to Europe”. There is a real danger is that if UPC ever happens, that will make Europe the ‘new Texas’, or the new Western hub for patent trolls. We cannot let this happen and therefore our focus on Europe will persist if not intensify.

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