Summary: A ۤ 101 change which effectively strikes out software patents (if not at the patent office, then in appeal boards and courts) continues to alter the litigation landscape much to the chagrin/regret of various circles

THE USPTO is our main subject of coverage today. It's improving, albeit slowly if not gradually, owing to the Supreme Court (where changes are major and rapid, with the PTO slow to begrudgingly adopt these).

Not everyone is happy about the changes. Patent law firms, for example, are in somewhat of a panic over it. The Inventors [sic] Digest's Editor-in-Chief also wants us to think that improvements in patent quality is a "Bad Thing", citing the U.S. Chamber of Commerce (CoC). To quote: ""The damage done by recent court rulings, legislation and government agencies is subjective. But America’s plummeting ranking in patent system strength is a point of fact: The 2017 U.S. Chamber of Commerce Global IP Index marked the first time America has not ranked first in patent system strength. It is now ranked 10th."

By "patent system strength" they don't mean patent strength but something else. Americans should know that the latter is what counts. Litigation is in the interest of the litigation 'industry', not a producing industry.

"Should Abstract Ideas Be Unpatentable?"

That was the question asked in this headline from a month ago at Patent Progress (CCIA). It's about Alice:

The pattern of the dots (just like the pattern of lines in a barcode, or the pattern of squares in a QR code) encodes information—in this case, the URL for Patent Progress.

That’s it. That’s what Kaldren claims to own. Encoding information into a set of dots, reading that information, and using it in communications and messaging.

[...]

Patent Progress has written about how businesses use Alice and €§ 101 to stop patent trolls. And we’ve talked about the inter partes review process and how that can be used as well.

The Kaldren v. Snap case has all the hallmarks of a case that shows why both €§ 101 and IPRs are good for the patent system. Without €§ 101 or IPRs, they’d face a long and expensive lawsuit in order to have an opportunity to convince a jury that the Kaldren patents are about old technology and should never have issued. With €§ 101 and IPRs, they at least have an opportunity to show the court early on that the patents are about abstract ideas, and an opportunity to go to the Patent Office and ask that they take a second, more detailed look at whether these patents should have issued in the first place.

The matter of fact is, a lot of technology companies are very happy about Alice. It is them -- not a bunch of law firms -- that should help determine policy on patents in their own domain. Sadly, the media (in this area/topic) is dominated by law firms. They keep interjecting themselves into articles if not writing those articles themselves. Consider a sort of propaganda piece in the local press here (Manchester). Susan Hall, a Partner at Clarke Willmott, basically does her firm's 'marketing' in the guise of an 'article', with statements like: “The only way to obtain a patent for software inventions is to show that they produce a 'technical effect'..."

Actually, software patents are not allowed here. The term "technical effect" typically comes from the patent microcosm when it tries to mislead EPO examiners into granting software patents.

A few days ago, on Thursday, we learned of yet another Alice victory as the "asserted claims of the Patents-In-Suit were found invalid under 35 U.S.C. ۤ 101," according to Patent Docs. Here is more information:

Accordingly, the District Court found that the asserted claims fail to disclose any inventive concept which would transform the claims' abstract idea into a patent-eligible subject matter. As such, the asserted claims of the Patents-In-Suit were found invalid under 35 U.S.C. ۤ 101.

Clearly, in today's reality for software patents, the claims in these patents are too broad. Many of the patents have priority dates going back to 1998 and issue dates over 10 years ago. But, claims of this scope and lack of detail would not make it through the Patent Office using today's examination standards.

This case is yet another example, however, where the language of the claims should satisfy section 101 and be considered patentable subject matter, and then, the invalidity challenge should arise under section 102/103 to show that nothing new and unobvious is claimed by virtue of such broad claims.

Yesterday we gave many more examples of ۤ 101 invalidations (spanning May to July) and then revealed who was lobbying against that.

Two days earlier (than the above from CCIA) the media in Texas published an article titled "Software patents are bad for startups, need to go" -- something which one doesn't exactly expect from Texas. This was said in relation or in light of patent trolling and here are some passages:

Last week, the founders of Pied Piper from the acclaimed HBO comedy “Silicon Valley,” crossed paths with “patent troll.” Trolls buy rights to an overly broad patent for pennies, then make a living by suing start-ups and settling for thousands of dollars. These lawsuits have become a depraved legacy of the Lone Star state, 40 percent of patent lawsuits in the last decade have been filed in the Eastern District of Texas. The premise that allows these trolls to exist, patents for software, are unnecessary for successful technology companies and detract from the incentive to innovate. It is necessary to abolish software patents to create a better technology industry.

Patents are a cornerstone of tech behemoths. The ongoing Smartphone Patent Wars between Apple, Google, Microsoft, and Samsung has incurred over $20 billion worth of litigation. Yet even though the industry places a premium on intellectual property (IP), the fundamental nature of the United States patent system is unfit to handle software patents.

Patents have historically been granted to protect “things,” like the drugs developed by pharmaceutical companies, the words written by an author, or the mechanism used to lock a door. These physical patents are explicitly constructed because they describe exact mechanical functions, like a special hinge that keeps a door propped open.

[...]

The abundance of software patents have trickled into daily life – the desktop computer involves 592,345 patents. The result is “patent thickets,” a veritable forest of patents that startups developing must navigate lest they get sued by Apple. The vagueness of software patents have allowed companies to sue individuals for trivialities like using a copier and has cost defendants over $83 billion per year. Software patents have already put startups in India in a tight spot, and a failure to reduce software patents poses to put the US in the same situation

Regarding Texas, Patently-O had this coverage about the Texas Supreme Court. It's a case which deals not with patent venue/scope but with agent privileges:

Enter Texas, where one of its court of appeals held that, because the claim in that case was not patent infringement, but a state law claim, Texas law applied, and under it, there was no patent agent privilege. My earlier post about it is here. That post also links to the amicus brief I filed, arguing a point not raised by the parties: that under Texas choice of law principles, Federal Circuit law applied and there was good reason to defer to its approach.

The same site wrote about Millennium Pharma v Sandoz. "On appeal," Patently-O wrote, "the Federal Circuit has reversed."

In its decision, the district court recognized that the resulting compound was likely unexpected, but focused on the process of getting to that result – holding that the claimed compound was simply the “natural result” inherent to the lyophilized process and that it would have been obvious to try the process on boronate + mannitol. On appeal, the Federal Circuit has reversed.

This one isn't about software, so CAFC siding with the claimant does not impact ۤ 101 in any way.

Patently-O, one month earlier, wrote about the aspect of secret software patents -- something which clearly would not be an issue if software patents were more officially dropped, removing a tax on developers. To quote:

In each of these release scenarios, the technology remains locked in unused or inaccessible software code prior to an official release. Helsinn makes it clear that hiding away patentable features will not prevent the on-sale bar from being triggered in these situations. Avoiding the on-sale bar may require that programmers be aware of these issues and take special care to remove test features from the release version of the software.

Although the situations described above specifically relate to software development, there are myriad examples from other industries in which an invention is sold without disclosing implementation details. Thus, although Helsinn does not tell us whether purely secret sales will be patent invalidating, the case may ultimately have a greater impact than whichever dispute ultimately decides the private sales issue.

All in all, the above cases serve to show obvious change along the lines of software patents, resistance to that change from particular circles, support for that change, and yet more cases that demonstrate perpetuation of the change. As we said yesterday, "Alice/U.S.C. €§ 101 is a Done Deal, Meaning Software Patents Are Effectively Dead in the US" (maybe officially too, one day)... ⬆