Distortion has become an art form

Summary: The Court of Appeals for the Federal Circuit (CAFC), which deals with appeals from PTAB, has been issuing many decisions in favour of § 101, but those aren't being talked about or emphasised by the patent 'industry'

THE last post from yesterday, which was about the Patent Trial and Appeal Board (PTAB), showed an increase in activity and likely growing pressure for USPTO examiners to reject software patents (PTAB watches what they do). Clearly, based on recent studies, not enough software patents are being rejected (not yet anyway) as many are pure rubbish and it's still profitable to the Office (the financial incentive perturbs the process).

According to these two examples from yesterday [1, 2], not only PTAB rejects software patents; examiners do too ("PTAB Affirmed Examiner's [Section] 101 Rejection of Software Claims in a patent application" and "PTAB Affirmed Examiner's 101 Rejection of Philips Patent Application Claims for Shape Sensing with optical fiber"). This is generally very encouraging. It's just a shame that examiners do let software patents slip in sometimes. Eventually, however, it's the courts (not PTAB or examiners) that get to decide on things unless there's an out-of-court settlement. Affirmations of PTAB decisions by CAFC are as recent as days ago, citing Alice/Section 101. This has become the new normal. There are other grounds for dismissal, but this scenario is most common. At lower courts the situation is a tad different, for instance:

The court denied defendant's motion to dismiss on the ground that plaintiff’s synthetic gem investment product patent encompassed unpatentable subject matter because there were genuine disputes of fact whether an individual defendant was estopped from challenging the patent's validity.

Putting aside the legalese, what we see here is a case going forward, but it's not CAFC. CAFC typically (about 80% of the time) accepts PTAB's veto of a patent (or patents) and closes the case. Sites of patent lawyers still obsess over the exceptions, i.e. the situations in which CAFC expresses a disagreement. For example:

In practice however, it is a rare reference that includes a technical explanation that is so strongly worded to satisfy the teaching away standard. Yet, as the Federal Circuit made clear this week, less pronounced evidence of divergent technical teachings cannot be disregarded by the Patent Trial & Appeal Board (PTAB).

Like we said yesterday, patent maximalists now piggyback a decision or two to 'scandalise' PTAB. We saw new examples of that less than 24 hours ago. Yesterday afternoon IAM's Richard Lloyd spread the Berkheimer falsehoods [1, 2, 3, 4] again. He did this in order to promote software patents, calling it "blockbuster" even though it's not (Managing IP had labeled it the same thing). Here is what he wrote with the words "big boost" in the headline. What a liar. "Blockbuster" is a word that was also repeated by others, along with "boost". What a pathetic echo chamber. They're now trying to influence the USPTO’s subject matter eligibility guidance, citing Berkheimer. To quote:

If you want to submit comments on how you think the subject matter eligibility guidance should be revised — particularly in response to the recent Berkheimer v. HP precedential opinion — you can still do so.

But it had no substantial impact and wasn't really about Section 101 (§ 101), just as Aatrix Software, Inc. v Green Shades wasn't. We wrote about that too. So did Michael Borella, who said: "Aatrix brought an infringement action against Green Shades in the Middle District of Florida, alleging infringement of U.S. Patent Nos. 7,171,615 and 8,984,393. Green Shades filed a 12(b)(6) motion to dismiss on the grounds that all asserted claims were not eligible for patent under 35 U.S.C. § 101."

As expected, § 101 does not always work. It's not applicable to everything. But Aatrix (the above case) isn't quite what the patent 'industry' tries to make of it. They're just desperate for 'ammo'.

There has long been an attempt to create a rift between CAFC and PTAB, but it never quite worked. Sites like Watchtroll and Patently-O has been attempting that for years. Here's Watchtroll writing about a decision that we wrote about last weekend. The patent maximalists attempted to frame it as US government hypocrisy -- an allegation we debunked last week.

Here's Watchtroll's post about Nordt's CAFC case and almost pure spam/ad about another CAFC case (it's all just marketing, but in the form of 'articles').

Dennis Crouch wrote about this case as well as another (Xitronix Corp. v KLA-Tencor Corp) -- a case which was mentioned a lot only because the decision is precedential [1, 2]. Other CAFC cases that got covered [1, 2] as recently as yesterday [1, 2] were mostly disregarded. They ignore cases or rulings unless they deal with § 101. It's really the bottom of the barrel. This particular one showed the patent microcosm moaning about the "two-part test from Alice Corp. v. CLS Bank [...] albeit in a nonprecedential case." To quote the relevant part:

One of the more frustrating aspects of the current judicial patent eligibility framework is the propensity for courts, even the Federal Circuit, to carry out the two-part test from Alice Corp. v. CLS Bank Int'l in a conclusory fashion. When this occurs, the claims under review are most likely going to be found non-statutory and invalid under 35 U.S.C. § 101. In this case, the Federal Circuit actually provides ample reasoning for finding that claims fail the test, albeit in a nonprecedential case.

Watchtroll did the cherry-picking of CAFC cases yesterday, finding -- at best -- one single case resulting not in overturning of a PTAB decision (it vacated). To recapitulate some old statistics:

• Only about 2% of patents (granted by examiners) are independently examined
• CAFC agrees with PTAB about 80% of the time
• The vast majority of the industry is supportive of PTAB

Don't let lobbying sites such as IAM change perception. They cannot change the underlying facts, so they are attempting to change politicians' understanding of the patent system. ⬆