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Software Patents Are Dying in the US, But Patent Lawyers Refuse to Admit It

"It is difficult to get a man to understand something when his salary depends upon his not understanding it." ~Upton Sinclair

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Summary: Patent lawyers continue to distort the reality of software patents' demise in the United States

The CAFC introduced software patents in the US, but a lot has changed since SCOTUS (the Supreme Court), which is above CAFC, ruled against a software patent and extrapolated from that to potentially invalidate a huge number of software patents. Patent lawyers are furious that even some portion of their business, software patents, is going down in flames and we have already shown them trying to deny it, curse, distort, or resort to blame shifting. Truth be damned! This post presents some more recent responses from them. These saturated the press because opposition to software patents has been inactive as of late.



"Patent lawyers are furious that even some portion of their business, software patents, is going down in flames and we have already shown them trying to deny it, curse, distort, or resort to blame shifting."A new article titled "Federal Circuit Puts Added Squeeze on Software Patents" shows the far-reaching impact of recent developments as "The courts set a new record for rejecting software patents in 2014", according to one opponent of software patents. It is not just about SCOTUS anymore because various lower courts, including CAFC, follow the same footsteps of the highest court. They have no choice is they want to obey the law, otherwise appeals will follow suit and be accepted on caselaw grounds.

Over at Managing Intellectual Property, a pro-patents site, is is claimed that "Business method patent issuance has plummeted since Alice". Another new article from patents-centric media provides a summary of post-Alice rulings on patentability of software. Rosenbaum IP, a law firm, wrote on December 2nd that "drafting narrow claims to ensure software is patent-eligible presents a challenge for patent practitioners. Patent practitioners are trained to draft claims with the broadest possible scope in order to ensnare as many infringers as possible."

To them, the problem is not software patents but those who are rejecting them. Here is another news article about the post-Alice world, noting: "The U.S. Supreme Court's recent decision announcing the framework for determining patent-eligible subject matter under 35 U.S.C. Section 101 has created a rabbit hole that will require a rethinking of intellectual-property protection strategies."

No, not really. Developers already have copyrights and that is more and enough (sometimes too much, e.g. copyrights on APIs in the US, which CAFC accepts, the EU rejects, and SCOTUS will hopefully bury soon). Here is a report about a recent case which shows that not all software patents are categorically dead, at least not yet. To quote the report: "For those following the law of patent eligibility in the United States, a December 5, 2014 precedential decision by the Court of Appeals for the Federal Circuit held that a patent on webpage-display technology is patent eligible under 35 U.S.C. ۤ 101. A slew of recent court decisions have gone the other way, leaving arguably similar patents invalid."

Over at patent lawyers' sites, especially in blogs that do not pretend to be journalism, a different picture is presented to readers. Within the echo chamber of patent lawyers truth is warped. Here is WatchTroll, whom we criticised before for extreme bias, glorifying software patents and those acquiring them with help from patent lawyers. He also calls patent trolling "Patent Monetization" and does some revisionism under the banner of "The History of Software Patents in the United States”. He mocks opposition to software patents and says: "The first software patent was granted by the United States Patent and Trademark Office (USPTO) on April 23, 1968 on an application filed on April 9, 1965, Martin A. Goetz, a pioneer in the development of the commercial software industry, was the inventor of the first software patent ever granted, U.S. Patent No. 3,380,029. Several years ago PBS Digital Studios profiled Goetz and his pursuit of the first software patent."

Martin Goetz is extremely biased in favour of software patents, so he is convenient for what is basically a defence of such patents. It is agenda disguised as 'history' (not just 'news') and it clearly became a series whose claims we reject. It's a selective account of history.

There are other pro-software patents 'news' sites and there is utterly, overly selective coverage there (any losses for software patents are ignored). We reviewed dozens of these over the past fortnight and it's very easy to spot to one who knows the facts and keeps abreast of many cases. WatchTroll's site acknowledges that the "Federal Circuit Finds Software Patent Claim Patent Eligible", but most of the time he just tries to paint everyone as a supporter of software patents (the opposite is true), thereby trying to pressure judges and mislead colleagues. Totally irresponsible!

In other lawyers' Web sites there is another type of bias that looks more professional. An article by Adam M. Breier from Finnegan, Henderson, Farabow, Garrett & Dunner, LLP shows us one a such example where patent lawyers are trying hard to promote software patents, sometimes by only covering what suits their agenda. They usually ignore the bad news (to them) and mislead readers by providing only coverage one half of the half-filled glass. At National Law Review there is an article titled "Section 101 and Software Patents: Abstract or Not?" (published here as well). Therein, an overview is presented by a biased author.

The Alice case is still in the headlines of legal sites (a month later) and words cannot express how disgusting the so-called "legal" press is. Patent lawyers are very much desperate to discredit court decisions which are hostile towards software patents these days. Articles continues to come which paint a deceiving picture, seeking to make it a self-fulfilling prophecy. Such sites are trying to shoot down the messenger and ignore the facts. Such is the case with coverage in patent lawyers' sites of Ultramercial, LLC v. Hulu, LLC (software patents lost). Here is Lowell D. Yoder from McDermott Will & Emery saying that Post-Alice Federal Circuit Finds Internet Advertising Method Not Patent Eligible" (true, but see the self-serving analysis) and others say in patent lawyers' sites that "Patent Eligibility [is] Becoming Threshold Question for Litigation". Not litigation is at stake, but the actual eligibility (including during assessment by patent examiners after issuance of new guidelines). A widely published article phrased is as a question, "Another software patent is ruled patent-ineligible - are business method and software patents at risk?" (also published here and here).

This is a rhetorical question. It hardly needs to be asked at all, except perhaps in patent lawyers' media. Also see "California district court helps clarify when software claims are patent eligible under Alice Corp. v. CLS Bank" and "Claims that CAFC's Ultramercial decision could prove a catastrophe for companies that license software patents" (or patent extortion like Microsoft's). Notice how it's framed. They make it sound like horrible news despite the fact that the vast majority of software professionals loathes software patents.

IAM, a crude patent propaganda site, is once again relaying Microsoft's talking points, which promote software patents (see "Software patent owners have nothing to fear from the CAFC's Ultramercial decision, says Microsoft's former chief patent counsel").

Also see the article "Protecting Intellectual Property Rights In Software After Alice Corp. v. CLS Bank" from the lawyers' press. It is not unusual for a legal firm to characterise monopoly on algorithm as "protecting". It is just the lingo of patent lawyers with euphemisms and double standards. Above is a loaded headline whose purpose it to appeal to emotion and make rulings against software patents seem like “catastrophe”.

The Ultramercial case shows that beyond copyrights there is no reason to have a government-sanctioned monopoly. That is not so hard to understand, is it?

The proponents of software patents and spinners against Ultramercial of course include WatchTroll, who wrote: "Ultramercial’s Federal Circuit luck has now run out. Gone from the original panel was Chief Judge Rader who retired and was replaced by Judge Mayer, which does not bode well for any patent owner."

This is the corrupt software patents extremist, Mr. Rader, whom we wrote about in [1, 2, 3]. How convenient a source to lean on!

Legal-centric sites go further by also promoting software patents in Australia (see the article "Australian full court sets new test for software patents - it's all about the substance") and in India, which still fights lobbyists who try to legalise software patents in this software giant nation (see "Disclosure Requirements For Software Patents").

Dr. Glyn Moody has an interesting new article about FRAND (usually about software patents, albeit not always) in hardware superpower China, citing a dispute with ZTE. To quote Moody:

How Should Standard-Essential Patents Be Licensed?



Patents are intellectual monopolies, designed to give the patent-holder control over an invention by excluding others from using it without permission. That's a problem when standards include patented elements. Anyone who wants to implement that standard must use the invention, which gives the patent-holder the ability, in theory, to demand and obtain any licensing deal it might propose. To limit that power, holders of these standard-essential patents are often required to agree to offer licensing terms on fair, reasonable and non-discriminatory (FRAND) terms.

[...]

However, when another Chinese company, ZTE, sought a license from Huawei, they were unable to agree on the terms, so Huawei brought an action for infringement against ZTE. According to ZTE, Huawei's attempt to obtain an injunction against it constituted an abuse of its dominant position, since ZTE was willing to negotiate a license. Here's the key part of the Advocate General's opinion.


Incidentally, there is a new report showing just illegitimate the USPTO is becoming. Now it treats patents, which are supposed to be all about publication, as secrets. To quote TechDirt: "The USPTO drops the dreaded b(5) exemption all over its internal emails, withholding stuff seemingly just to be withholding stuff, which is what the b(5) exemption does best. Supposedly this exemption is limited to memos or letters that would not be available to anyone but a "party in litigation with the [responding] agency," but in this case, seems to cover information otherwise in the public domain.

"Here's another redacted set of search results, covering variations like MARKY or MARKEY appearing on clothing. Hopefully, the two pages of black ink are covering up images rather than words. Otherwise, it would appear that the MARKY/MARKEY market is incredibly overcrowded."

How ridiculous is that? The US patent system sure seems like it's facing a crisis (of patent quality or scope) and it is going to have to cut down on software patents, business method patents, etc. in order to save its credibility. Without credibility it will cease to attract clients, some of whom sooner or later realise that acquiring a patent is not enough to successfully sue a rival in court.

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