IP Watchdog - As Congress Contemplates Curbing Alice, More Than 60% of Issued U.S. Patents are Software Related - Brief Comment

Congress needs to pass predictable patent eligibility law for software related inventions, but not at all sure this will happen in 2019.

Patent eligibility is too unpredictable since the U.S. Supreme Court's Alice decision. Sure, some software inventions don't deserve a U.S. patent as the claims lack novelty or would have been obvious, but once we step away from a prior art analysis under 35 U.S.C. 102/103 and clarity, enablement and written description requirements of 35 U.S.C. 112, decision-makers (i.e., judges and examiners) have opportunity to abstract (generalize) a patent claim based on subjective opinion then assert without evidence the rest the claim language isn't significantly more.

We also need clarity on patent eligibility for the sake of industries that are not part of the traditional software industry. For example, Raymond Millien's As Congress Contemplates Curbing Alice, More Than 60% of Issued U.S. Patents are Software Related and McKinsey's Ondrej Burkacky's Rethinking car software and electronics note the growing importance of software in the car industry. Could it be true that a car contains 150 million lines of code?

Should the United States let more than half the U.S. patent filings which related to software languish under the unpredictable patent eligibility Alice test? Arguing Alice is not all that bad and consistent with centuries of court precedent or that we now have a Chinese foreign patent troll problem are the latest shaky excuses. See e.g., career patent litigator John Vandenberg's hearing testimony.

Congress has not acted on this issue for five years since the Alice decision. As Justin Bieber might say: "What up Congress?" Unfortunately, the 35 U.S.C. 101 reform bill is tied to a proposal to modify 35 U.S.C. 112(f) that is likely to increase means-plus-function treatment of functional elements in claims.

Copyright © 2019 Robert Moll. All rights reserved.

USPTO - Examining Computer-Implemented Functional Claim Limitations for Compliance with 35 U.S.C. § 112

The USPTO has a free webinar 12-1 PM ET, Tuesday, June 11: Examining Computer-Implemented Functional Claim Limitations for Compliance with 35 U.S.C. § 112.

The USPTO will discuss examination of computer-implemented functional claim limitations under 35 U.S.C. § 112(f) (the step or means plus function clause) and 35 U.S.C. § 112(a) (the enablement and written description clause).

The USPTO requests questions be sent to patentquality@uspto.gov.

Registration is not necessary to attend. More information is available on the USPTO's event page.

Interesting in view of Congress' proposal to revise 35 U.S.C. § 112.

Copyright © 2019 Robert Moll. All rights reserved.

Congress - Draft Bill for Revising 35 U.S.C. § 101, Patent Eligibility and 35 U.S.C. § 112(f)

The Congressional Senate and House Intellectual Property Subcommittees released a draft bill for revisions to 35 U.S.C. § 101 and 35 U.S.C. § 112(f) "to solicit feedback" and discuss in hearings.

The draft bill for revised 35 U.S.C. § 101:

(a) Whoever invents or discovers any useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.

(b) Eligibility under this section shall be determined only while considering the claimed invention as a whole, without discounting or disregarding any claim limitation.

Section 100 (Definitions):

(k) The term “useful” means any invention or discovery that provides specific and practical utility in any field of technology through human intervention.

The draft bill for revised 35 U.S.C. § 112(f):

(f) Functional Claim Elements Element in Claim for a Combination— An element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure, material, or acts in support thereof shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.

The proposal also suggests further language be added to construe the statute “in favor of eligibility” and to expressly eliminate the non-statutory exceptions to eligibility.

For details - Senator Tillis et al. Press Release.

If Congress passes this proposed revision to 35 U.S.C. § 101, it may prove favorable to the current problem of novelty issues being analyzed without reference to specific prior art in determining patent eligibility, while the proposed revision to 35 U.S.C. § 112 may prove favorable to defendants seeking to significantly narrow claims by invoking Section 112 treatment whenever the claim recites a function without reference to structure.

Copyright © 2019 Robert Moll. All rights reserved.

Congress - Defend Trade Secrets Act of 2016 (DTSA)

Trade secret is now governed by Federal law rather than state law. This is a major shift in trade secret law. Further, compared to changes we have seen in U.S. patent law, the Defend Trade Secrets Act of 2016 (DTSA), signed by President Obama on May 12, 2016, passed with little controversy.

See Professor Dennis Crouch's [Updated] Defend Trade Secrets Act of 2016: Markup and Commentary for a marked up version and series of articles on DTSA.

Copyright © 2016 Robert Moll. All rights reserved.

Congress - Copyright Review Listening Tour - Santa Clara University Law School - November 9, 2015

On Monday November 9, Santa Clara Law will host the House Judiciary Committee's Copyright Review Listening Tour about the future of U.S. copyright law.

As Chairman Goodlatte and Ranking Member Conyers stated: "Two years ago, the House Judiciary Committee launched a comprehensive review of our nation’s copyright laws, which have not been updated since 1976. As technology continues to rapidly advance, we have a responsibility to ensure that our laws are keeping pace with these developments. The Committee is traveling to locations across America to hear directly from creators and innovators about the challenges they face in their creative fields and what changes are needed to ensure U.S. copyright law reflects the digital age in which we live. We look forward to continuing the productive dialog that we had in Nashville, the first stop of the Committee’s listening tour."

The following members of Congress, academics, and other stakeholders will speak at this event:

Laura Covington, Vice President of Intellectual Property Policy, Yahoo

Clint Cox, VP of Technical Operations, Ultimate Fighting Championship

Tony Falzone, Deputy General Counsel, Pinterest

Alex Feerst, Attorney, Legal Team, Medium

Brewster Kahle, Founder and Digital Librarian, Internet Archive

Zoe Keating, Cellist, Composer and Technologist

Michael Keller, University Librarian, Stanford University

Lisamaria Martinez, Director of Community Services, Lighthouse for the Blind of San Francisco

Tyler Ochoa, Professor of Law, Santa Clara University School of Law

Matthew M. Sarboraria, Vice President of Intellectual Property, Oracle

Brianna Schofield, Teaching Fellow, Berkeley Center for Law & Technology

Ellen Seidler, independent filmmaker

Ted Ullyot, Partner, Andreesen Horowitz

Ruth Vitale, Chief Executive Officer, Creative Future

Timothy Vollmer, Manager of Public Policy, Creative Commons

Kit Walsh, Staff Attorney, Electronic Frontier Foundation

Kyle Wiens, Founder and CEO, iFixit

Matt Zinn, General Counsel, TiVO

This event is free and open to the public.

Register here

Copyright © 2015 Robert Moll. All rights reserved.

Supreme Court - Amended Federal Rules of Civil Procedure - Effective December 1, 2015

The amendments to the Federal Rules of Civil Procedure (FRCP) become effective on December 1. The amendments will impact non-practicing patent owners who are used to filing form patent infringement complaints with little pre-filing research and leveraging the fact they have little to produce in discovery compared to the defendants. 

The amendments eliminate the patent infringement form, and require patent owners state additional facts in support of infringement, and in some cases file claim charts.

The amendments will also reduce the scope of discovery to "any non-privileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit."

Copyright © 2015 Robert Moll. All rights reserved.

Supreme Court - Amendments to the Federal Rules of Civil Procedure - Reducing Litigation Costs

Chief Justice Roberts of the United States Supreme Court submitted amendments to the Federal Rules of Civil Procedure to Congress on April 29. The amendments most likely to impact US patent litigation are as follows:

1. Rule 26 is amended so that it no longer permits discovery of any information that may reasonably lead to the discovery of admissible evidence. Further, discovery must be proportional to the needs of the case. This sounds like a helpful change, but it's hard to predict if this will reduce the discovery costs in patent litigation.

2. Rule 84 is deleted, including Form 18, the standard patent infringement complaint form. This may promote greater specificity in the patent infringement complaint, which is helpful.

Unless Congress objects the amendments become effective on December 1, 2015. I expect lobbyist to face an uphill battle if they challenge these two amendments given they are intended to make litigation less costly.

Copyright © 2015 Robert Moll. All rights reserved.

WSJ - Senate Tees Up Bipartisan Bill Aimed at Patent Litigation

Today, I suggest reading the WSJ article Senate Tees Up Bipartisan Bill Aimed at Patent Litigation:

"Last year, the House of Representative cast a vote in support of patent reform, specifically for measures intended to clamp down on a flood of patent lawsuits. Corporate defendants, academics and others thought plaintiffs were abusing the court system, filing 'nuisance' lawsuits that were likely to trigger quick settlements. But the Senate's effort to play ball with the House died amid a flurry of finger-pointing. Earlier this year, the House reintroduced its bill — the Innovation Act — and Wednesday afternoon, the Senate offered up a companion to the House bill that seems to have bipartisan support among some influential senators. The bill was introduced by Sens. Charles Schumer (D., N.Y.); John Cornyn (R., Texas);Senate Judiciary Chairman Charles Grassley (R., Iowa) and that committee’s ranking Democrat, Patrick Leahy (D., Vt).

This bipartisan bill shifts the legal burden back onto those who would abuse the patent system in order to make a quick buck at the expense of businesses that are playing by the rules," said Sen. Schumer, in a statement. 'I'm hopeful we can move quickly and in a bipartisan way to get this bill passed in committee and on the Senate floor this summer.'"

The article gives a summary of the Innovation Act that loses me on several points. The article never talks the dramatic decrease in patent infringement lawsuits last year. Is this carelessness or related to the sources of the article? It fails to talk about the defendants overwhelming success in the America Invents Act (AIA) trials. Defendants have had a long losing streak there, and the Innovation Act seeks to remove the estoppel provisions. Why isn't this discussed? The article exaggerates support for patent reform in 2014. It didn't die because of "finger pointing" in Congress. It died because it changed decades of how we conduct patent litigation. Congress hit a snag because it tried to pass laws that would weaken patent owner rights. Each party pays its own attorney fees unless it's an exceptional case in the USA to encourages patent owners to come to court if they cannot settle a patent infringement case. However, the Bill proposes mandatory attorney fee shifting for losers in patent litigation. Mandatory fee shifting would reduce patent troll lawsuits, but would also discourage patent owners with legitimate claims. It proposes to tilt the playing field further in favor of big companies who can shift all their legal fees on small companies who make the mistake of suing for patent infringement and losing the case.

I don't know if patent reform will pass this year. What seems more certain to me is tech lobbyists will push for patent reform (even reviving what failed) and present it as in the public interest and protecting us from those patent trolls. It's getting impossible to not conclude it's really about lowering costs of doing business (e.g., paying patent licenses) of big tech in the USA.

Copyright © 2015 Robert Moll. All rights reserved.

WSJ - Patent Reform Bill Arises Again in Congress

Tonight, I suggest reading the Wall Street Journal article Patent Reform Bill Arises Again in Congress, discussing Congress' latest effort to change US patent law to address patent litigation abuse.

If you want details, here's Innovation Act 2015, which I will refer to as the Bill. If you want a brief account of Congress' latest patent reform, here's the key changes with brief comments:

1. Attorney Fee Awards - Current law permits the recovery of attorney fees to the prevailing party in an exceptional case, while the new law would require an award attorney fees to the prevailing party unless a judge finds that (1) the legal position and litigation conduct of the non-prevailing party was reasonably justified in law and fact; or (2) special circumstances (e.g., severe hardship to inventor) make attorney fee awards unjust. If the patent owner cannot pay the attorney fees, the court can make "the interested parties" (e.g., investors) pay the attorney fees.

My comment - This is a major change from the American rule where each party pays its own attorney fees. It will reduce patent litigation by smaller companies as they will now have to bear the risk of paying all of the attorneys if they lose and a court decides the legal position was unjustified and cannot establish special circumstances. No doubt many defendants may want this, but the Supreme Court's Highmark and Octane decisions adequately protect the "poor defendants" who hope to reduce patent litigation to just a "sport of kings."

2. Complaints Need Claim Charts - When a patent owners sues for patent infringement, the complaint will need to include a claim chart showing how the claim(s) read on the accused product or process except if it cannot be reasonably known before filing the complaint. Form 18 governing the content of complaints is eliminated, but not if you are pharmaceutical company.

My comment - this higher pleading standard will eliminate some patent infringement suits, because preparing a claim chart makes one stare at the infringement case. If you can't do a claim chart, maybe the case should not be filed. Placing the initial cost of a claim chart on the patent owner is better than asking a court to take on a poorly researched case that wastes court resources and defendant's money. Not sure eliminating Form 18 is useful. The Judicial Conference already says it plans to eliminate Form 18 in 2015 and why give pharmaceuticals "a free pass" on Form 18?

3. PTAB Claim Construction - The Bill proposes to replace the Patent Trial and Appeal Board (PTAB)'s broadest reasonable interpretation (BRI) for claims in inter partes review, post-grant review, and covered business methods with the court's narrower interpretation of claims.

My comment - This will help patents survive invalidity challenges in the USPTO, and better corresponds to the reality that patent owners rarely succeed on motions to amend claims.

4. Limit Discovery - This has a couple of parts: (1) claim construction must happen before much discovery occurs; and (2) only large companies or posting a bond will get discovery of non-core documents.

My comment - Claim construction before significant discovery sounds right, but saying a large company gets discovery without posting a bond only increases their advantages over a smaller company, and may raise disputes on whether certain requested discovery is "core" or "non-core."

5. Willful Infringement  - The Bill would require demand letters identify the patent, the patent owner, accused product, and importantly how the product infringes at least one claim of the patent.

My comment - This imposes another claim chart into the process of patent enforcement, which of course helps defendants avoid treble damages by merely showing a claim chart did not accompany the demand letter.

6. Transparency of Ownership - This penalizes a patent owner who fails to update the USPTO within 90 days on changes of ownership with no enhanced damages, or attorney fees and an award of attorney fees to the defendant who spent money researching the ownership information.

My comment - Patent ownership should be transparent during enforcement, but the consequences of missing the 90 day window sounds draconian. Paying the attorney fees to find out the actual ownership should suffice.

7. Stay of Customer Suits - Courts may stay (suspend) a patent infringement suit of a customer lawsuits when the manufacturer of the product challenges the patent.

 My comment - Why would anyone sue a customer?

Copyright © 2015 Robert Moll. All rights reserved.

IP Watchdog - Secret Examination Procedures at the USPTO: My Experience with SAWS

If you are interested in the USPTO's Sensitive Application Warning System (SAWS), I recommend reading entrepreneur Devon Rolf's guest post on IP Watchdog: Secret Examination Procedures at the USPTO: My Experience with SAWS.

Does SAWS have a basis in statutory law and/or regulatory rules? The article makes it sounds like SAWS is, among other things, designed to disallow US patent applications that could generate "undue publicity" or "embarrassment." I am not sure how much latitude Congress is granting the USPTO, but perhaps the USPTO can help applicants understand how this all works.

Copyright © 2014 Robert Moll. All rights reserved.

Joe Mullin - How the Patent Trolls Won in Congress - A Brief Comment

In How the patent trolls won in Congress, Joe Mullin reports that "trial lawyers and pharma companies teamed up to stop change to patent laws." This account of what stopped patent reform strains credibility.

The article revolves around anti-patent people who felt surprised and frustrated that patent reform did not pass this year. It stops short of exploring why people opposed the reform due to obstacles it raised for small businesses enforcing their patent rights. Instead it focuses on frustrated lobbyists who recount bitter disappointment on a done deal thwarted and multiple unnamed sources who blame Senator Reid as caving to special interests.

What's the evidence for this amazing claim that trial lawyers influenced Senator Reid? The article notes securities litigators met to raise funds for Senator Reid's campaign in 2010. How does this relate to patent reform in 2014? We are supposed to see Senator Reid as beholden to trial lawyers of all types now and forever. Why big pharma is to blame is not articulated.

I guess when you fail as a lobbyist, you go into damage control, casting blame on somebody (make that anybody) to avoid the perception that you failed. After all you don't want to "lose your reputation" as being effective at tailoring the law to meet your client's objectives since it could eliminate your next lucrative lobbying job.

Copyright © 2014 Robert Moll. All rights reserved.

Congress' Patent Reform Stalls for Lack of Consensus

Congressional patent reform has stalled for lack of consensus. More specifically, on May 21, 2014, Senator Patrick Leahy (D-Vt.), Chairman, Senate Judiciary Committee, stated the following:

"We have been working for almost a year with countless stakeholders on legislation to address the problem of patent trolls who are misusing the patent system. This is a real problem facing businesses in Vermont and across the country.

Unfortunately, there has been no agreement on how to combat the scourge of patent trolls on our economy without burdening the companies and universities who rely on the patent system every day to protect their inventions.  We have heard repeated concerns that the House-passed bill went beyond the scope of addressing patent trolls, and would have severe unintended consequences on legitimate patent holders who employ thousands of Americans.

I have said all along that we needed broad bipartisan support to get a bill through the Senate. Regrettably, competing companies on both sides of this issue refused to come to agreement on how to achieve that goal.

Because there is not sufficient support behind any comprehensive deal, I am taking the patent bill off the Senate Judiciary Committee agenda.  If the stakeholders are able to reach a more targeted agreement that focuses on the problem of patent trolls, there will be a path for passage this year and I will bring it immediately to the Committee.

We can all agree that patent trolls abuse the current patent system.  I hope we are able to return to this issue this year."

In my opinion, the proposed patent reform raised real obstacles (e.g., attorney fee shifting) for legitimate licensing and enforcement of patents. The goal of the legislation was purportedly to deal with patent trolls, but it would have impacted the patent rights of small businesses and startups. Hopefully, Congress will spend the time to study a tricky problem leading to laws that precisely target patent trolls rather than harm the sector of the American economy that creates jobs.

Copyright © 2014 Robert Moll. All rights reserved.