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Alice Case Beats Microsoft Patent Troll, USPTO Director Michelle Lee Wants Reform

USPTO panel



Summary: Latest developments surrounding software patents and patent trolls in the United States

For somewhat of a change, today we have some good news. Amid complaints about the patent system (see for example "Patent abuse hurts in Lansing, nation") the USPTO's Michelle Lee, whom we wrote about before [1, 2, 3, 4, 5], remarks on patent reform at The Center for Strategic and International Studies (CSIS) Patent Reform Forum. She said that "there are certain changes that only Congress can make via legislation. Which is why I’m pleased that patent litigation reform legislation is currently moving forward."

"Legacy of software patents may be short-lived if this carries on."But with or without a reform (Congress involvement), there are changes that are made at the courts. According to patent lawyers and the pro-patents circles (even lawyers' sites), "the Federal Circuit has affirmed that Intellectual Ventures’ asserted patent claims are invalid for lacking eligible subject matter. Intellectual Ventures v. Capital One (Fed. Cir. 2015) (Patent Nos. 8,083,137, 7,603,382, and 7,260,587)."

This is Microsoft's patent troll, which also attacks Android/Linux these days. "The Federal Circuit on Monday rejected patent licensing giant Intellectual Ventures Management LLC's bid to overturn the invalidation of several online banking patents it asserted against Capital One Financial Corp., saying they cover abstract ideas under the standard set by the U.S. Supreme Court's landmark Alice ruling."

What we have here is Alice vs. Microsoft's main troll and the ruler, surprisingly enough, is the court most friendly towards software patents (and their originator). This is pretty big news. Those who celebrate it are on a roll. "Matthew Moore argued three Federal Circuit appeals in a single week in May," says The Recorder. "He won all three cases." See page two of the original decision [PDF] to see Moore's involvement in this case. These people now know how to kill software patents even in the most hostile environment (CAFC). Legacy of software patents may be short-lived if this carries on.

On the other hand, Newegg, which was hit with millions in 'damages' due to software patents, finds out that it is unable to appeal. As a trolls expert put it: "Online retailer Newegg has developed a reputation for taking on so-called "patent trolls," even when that means going through lengthy litigation and unpredictable jury trials.

"The company's last patent trial concluded in November 2013, when Newegg faced off against a patent troll called TQP Development. TQP used US Patent No. 5,412,730 to make a vast claim to basic Internet encryption technologies, saying that anyone using the common combination of SSL and the RC5 encryption algorithm was infringing. By the time of the trial with Newegg, TQP had sued more than 120 companies and earned $45 million in settlement payments."

This comes after a 20-month delay, so it basically predates the SCOTUS ruling regarding Alice -- a ruling that would have possibly helped Newegg win this case.

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