Friday, December 30, 2016

IP Watchdog - The Four Consequential Patent Trends of 2016 - Brief Comment

In the IP Watchdog article, The Four Consequential Patent Trends of 2016, Steve Brachmann highlights some key trends in the US patent system today.

The article notes that the FTC Report - Patent Assertion Entity and the decline in patent litigation in 2016 discredit the patent troll narrative, but the media is still lagging on the truth. It notes China and the US have patent systems moving in opposite directions given China's decision to open the door to software and business method patenting, and the Federal Circuit has frustrated patent owners on issues arising from the PTAB trials.

My brief comment is Congress might considering addressing these trends in 2017:

Congress may or may not need more patent reform, but it shouldn't amend any patent law based on the false patent troll narrative. For example, Congress should read the FTC report which among other things, debunks the "patent troll" label as prejudicial. Journalists often have tight deadlines that run counter to rigorous fact investigation. The lobbyists and other hired guns help special interests rather than illuminate journalists. We need laws that strengthen the US economy not certain big tech companies.

Instead of being surprised how China is moving forward with software and business method patenting, Congress should amend the language of 35 USC 101 to clarify the patent-eligible standard for software inventions. Allowance of US software applications should not rest on a patent eligibility test that arguably nobody fully understands. Patentability of software related inventions should return to primarily an examination of prior art.

Practitioners can invalidate patents in the USPTO at lower cost than in court, but the Patent Trial and Appeal Board (PTAB) rules currently tilt the procedure in favor of patent challengers. This is a large topic, but one example is PTAB accords claims the broadest reasonable interpretation, a standard premised on an ability to amend claims, but implements rules that make it nearly impossible to amend claims. Congress should level the playing field of the PTAB trials.

Large entities have successful pushed for a weaker US patent system that permits efficient infringement. Thus, a small entity cannot reliably stop misappropriation of its inventions. But a weaker patent system does not discriminate. Large entities that worked so hard to weaken patents are now more vulnerable to free riders who have no real reason to stop infringing.

Copyright © 2016 Robert Moll. All rights reserved.

Tuesday, December 27, 2016

Joe Mullin - These three 2016 cases gave new life to software patents

In the recent article, These three 2016 cases gave new life to software patents, Joe Mullin observes the Federal Circuit has issued a set of favorable decisions upholding software patents in 2016.

It's nice to hear a "true believer" in the patent troll narrative and the idea software patents harm the economy acknowledge this trend. Even though the article notes the favorable decision, it attempts to spin the yarn that Blue Planet was software patents "last hope." I disagree, and expect more favorable decisions in 2017. Such decisions should not be surprising either, however, as the Federal Circuit is merely doing its job to define the "abstract idea" exception that the US Supreme Court declined to fully define in Alice v. CLS Bank. Like many recent decisions the Supreme Court narrowly decides the case at hand and leave the Federal Circuit latitude to tailor that basic test to the facts at hand. Unfortunately, some articles seem to not recognize a court decides a case with specific facts, and Congress passes laws.

The Alice decision has rendered non-inventive abstract ideas performed on a general purpose computer patent ineligible. I have no problem with this "major blow to software patents." My problem is the Alice decision subjects stakeholders to a decision-maker's personal opinion on (1) what claim limitations constitute the abstract idea; and (2) whether the claim recites "an inventive concept" without the safeguard of comparing the entire claim to the prior art.

Copyright © 2016Robert Moll. All rights reserved.

Thursday, December 22, 2016

Reuters - Nokia sues Apple for infringing patents, industry back on war footing

Reuters reports "Nokia Corp (NOKIA.HE) said on Wednesday it had filed a number of lawsuits against Apple Inc. (AAPL.O) for violating 32 technology patents, striking back at the iPhone maker's legal action targeting the one-time cellphone industry leader a day earlier.

Nokia's lawsuits, filed in courts in Dusseldorf, Mannheim and Munich, Germany, and the U.S. District Court for the Eastern District of Texas, cover patents for displays, user interfaces, software, antennas, chipsets and video coding."

For more details: Nokia sues Apple for infringing patents, industry back on war footing.

Copyright © 2016 Robert Moll. All rights reserved.

Monday, December 19, 2016

Federal Circuit - Unwired Planet v. Google - PTAB's Definition of Covered Business Method Is Too Broad

In Unwired Planet v. Google, the Federal Circuit vacated and remanded the Patent Trial and Appeal Board's ("PTAB") decision to invalidate US Patent No. 7,203,752 under covered business method ("CBM") review, because PTAB relied on a single statement in the legislative history rather than the statutory definition of a covered business method.

Section 18 of the America Invents Act states CBM review is only available for a "covered business method patent," which the AIA defines as "a patent that claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except that the term does not include patents for technological inventions."

Google's lawyers argued (1) a CBM patent claims activities that are financial in nature, incidental to a financial activity, or complementary to a financial activity, (2) the patent describes systems and methods that allow users of wireless devices (e.g., cell phones) to set privacy preferences that determine whether a client application is allowed to access device location, and (3) the specification describes a service or good provider that would want to know a wireless device is in its area so relevant ads can be transmitted to the device.

Thus, Google's arguments were not based on Section 18, but a statement in the legislative history and the fact that the specification discusses advertising which relates to "financial activity." The Federal Circuit was not persuaded noting that a method being "incidental" or "complementary" to financial activity opens up the CBM review to many types of patents and PTAB erred in applying a standard not adopted by the USPTO and broader than the AIA contemplates to determine whether the '752 patent is a CBM patent.

If a company has been sued or accused of infringement of a CBM patent, it might consider CBM review because unlike inter partes review it can challenge a CBM patent under 35 USC 101, which is currently a potent defense in certain cases. However, the general language of Section 18 seems likely to invite arguments as to what is a financial product or service and/or a technological invention in the future.

Copyright © 2016 Robert Moll. All rights reserved.

Monday, December 12, 2016

US Supreme Court - Apple v. Samsung - Reverses Apple's Award of $399M for Infringement of Apple's Design Patents

In Samsung Electronics Co. Ltd. v. Apple Inc., the US Supreme Court reversed the Federal Circuit's $399 million award to Apple for Samsung's infringement of Apple's design patents.

As background a design patent is limited to "any new, original and ornamental design for an article of manufacture." 35 USC 171. A design patent seeks to protect appearance. When infringement occurs a design patent holder may elect infringer's profits as a remedy. This is sought when profits exceed a reasonable royalty. US patent law states one who "applies the patented design ... to any article of manufacture ... shall be liable to the owner to the extent of his total profit ... but the owner shall not twice recover the profit made from the infringement." 35 USC 289.

Before the Federal Circuit Samsung had argued Apple's design patent applied to the case, while Apple argued it applied to the entire phone. The Federal Circuit agreed the "article of manufacture” was the entire phone, which, of course, includes hardware and software having considerable value.

Based on Samsung's petition for certiorari the Supreme Court agreed to consider the question: Where a design patent is applied to only a component of a product, should an award of infringer's profits be limited to those profits attributable to the component?

Before the Supreme Court Samsung argued the Federal Circuit held a district court need not exclude unprotected functional features from a design patent's protected ornamental scope and a design-patent holder is entitled to an infringer's entire profits from sales of any product found to contain a patented design without regard to the design's contribution to that product's value or sales, resulting in an award in profits far beyond the value of any inventive contribution.

The Supreme Court was persuaded and held Apple’s patented design applied to the case rather than the entire phone and more broadly stated the "article of manufacturer" may mean not the end product (i.e., phone) sold to consumers but a component of the end product.

The Supreme Court's decision to reverse an award based on Samsung's profit on its entire phone makes sense because to hold otherwise ignores the value of the hardware/software. What's missing in this decision, however, is guidance on how to determine the value of the case. I think the court should determine that value in light of the fact people give importance to how a smartphone looks, which of course is why more than Apple chose to go with the patented design.

Also see my related post: Supreme Court - Apple v. Samsung - SCOTUS Blog - Justices cautious about resolving Samsung-Apple dispute over design of cell phones.

Copyright © 2016 Robert Moll. All rights reserved.

Friday, December 2, 2016

Bloomberg BNA - China Looks to Boost Protection for Software Patents

Bloomberg BNA published an article China Looks to Boost Protection for Software Patents that is worth reading. Here's Bloomberg BNA:

"A draft revision to China’s patent examination guidelines released late last month will likely make it easier to get software and business method patents.

Other proposed changes to ease the standard for amending granted patent claims should also help patent holders and, especially, patent assertion entities, practitioners say.

The draft guidelines follow developments that some have interpreted as evidence of China’s maturing and improving environment for IP owners. The guidelines are not law but rules for instructing examiners at China’s State Intellectual Property Office (SIPO) on how to properly examine patent applications.

There is no official timeline for when to expect finalized guidelines, though some expect they could come as early as next year."

As stated in the article, "One of the biggest changes in the guidelines confirms that software and business methods are patentable. They seek to address concerns that some examiners have been too cautious in treating all references to business models or computers as red flags that signal unpatentability. A sentence in the draft explains that claims relating to a business method are not excluded from patentability if they contain sufficient technical features.

Meanwhile, another change clarifies that apparatus claims relating to software can contain both hardware and 'program' components. And the draft changed language that some examiners have interpreted as barring nearly all computer program references. The guidelines clarify that inventions relating to 'computer programs per se' are not patentable because those are rules and methods for mental activities."

Copyright © 2016 Robert Moll. All rights reserved.