Larry Page - Lenovo to acquire Motorola Mobility - A Comment

Late January 29, in Lenovo to acquire Motorola Mobility, CEO Larry Page announced that Google had just signed an agreement to sell Motorola Mobility to Lenovo for $2.91 billion.

Mr. Page explains "we acquired Motorola in 2012 to help supercharge the Android ecosystem by creating a stronger patent portfolio for Google and great smartphones for users." He claims "both the Moto G and the Moto X are doing really well, and I’m very excited about the smartphone lineup for 2014. And on the intellectual property side, Motorola’s patents have helped create a level playing field, which is good news for all Android’s users and partners." Mr. Page concludes "Google will retain the vast majority of Motorola’s patents, which we will continue to use to defend the entire Android ecosystem."

Google is smart to sell Motorola to Lenovo and keep the patents, because it may generate another strong Android handset maker, it will allow Google to focus solely on improving Android software, and it will strengthen its own patent portfolio. The Motorola patents may prove useful in the future, but Motorola Mobility has not been winning many of its patent infringement actions in recent years. Motorola's patents have not so far created a level playing field. Beside the standard problem of getting through a court with finding of patent infringement, some of the widely used Motorola patents are standard essential patents (SEPs) subject to fair reasonable and non-discriminatory terms (FRAND). Thus, winning only results in relatively modest damages.

In selling the operating business and keeping the patents, Google has become a non-practicing entity (NPE) on a huge scale. Congress has let the patent litigation abuse concerns fuel bills that may  adversely impact all NPEs. For example, see the bills including fee shifting if a patent owner loses. Hopefully, Google will help Congress to recognize this NPE distinction is not based on the law, nor actually anything and its lobbyists will focus patent reform efforts to more precisely target bad actors rather than all NPEs engaging in patent licensing and enforcement.

Copyright © 2014 Robert Moll. All rights reserved.

Joe Mullin - Court: Google Infringed Patents, Must Pay 1.36% of Adwords Revenue

Today, in Court: Google infringed patents, must pay 1.36% of AdWords revenue, Joe Mullin reports that U.S. District Court Judge Raymond Jackson awarded Vringo the royalty it sought for Google's infringement of the Lycos patents. Last week Judge Jackson ruled that Google's design around of the Adword software was not "colorably different" from the old infringing software. Google is appealing the infringement verdict and the royalty rate decision to the Federal Circuit.

See my related articles:

Vringo v. Google - Laches Dashing Expectations - From $493M to $31M?

USPTO Confirms Validity of U.S. Patent No. 6,314,420, Which Vringo Asserts Against Google.

Copyright © 2014 Robert Moll. All rights reserved.

CNET - Google, Samsung Patent Licensing Deal - A Comment

Today, in Google, Samsung Patent Licensing Deal CNET reports that Google and Samsung have agreed to a broad cross-license of their patents and their applications filed over the next 10 years. CNET notes the companies were vague about the licensing terms. We don't know if all or a subset of the patents and applications are subject to the cross-license.

The article correctly notes Apple and Samsung are unlikely to agree to a broad patent cross-license. Here's my take on that. Judge Lucy Koh's order for settlement talks in February 2014 only highlight the unwillingness to settle. The press release mentioned in the article only suggests Samsung and Google's may wish for the patent war to end. Seungho Ahn, the head of Samsung's Intellectual Property Center, says we have "more to gain from cooperating than engaging in unnecessary patent disputes," and Allen Lo, deputy general counsel for patents at Google, says "by working together on agreements like this, companies can reduce the potential for litigation and focus instead on innovation." But an agreement requires both sides to see a benefit.

The problem is the economics weigh against an Apple-Samsung settlement in the patent war. The damages are huge, e.g., $1B, and Apple's legal fees appear to be less than the probability of being awarded damages x the damages awarded. In addition, Apple's success in enforcement of its patents suggests it will continue. See FOSS patents for the details. Finally, Apple's ability to capture its innovation in non-standard essential patents, with much higher damages, make it rational to continue to sue for patent infringement.

Thus, the Google-Samsung patent cross-license is not a change of heart about the merits of the patent war, but an acknowledgment they are not winning it and don't want to make things worse by fighting each other.

Copyright © 2014 Robert Moll. All rights reserved.

USPTO - Michelle Lee - Our New Deputy Under Secretary of Commerce for Intellectual Property and Deputy Director of the USPTO

Michelle Lee, Deputy Under Secretary of Commerce for Intellectual Property and Deputy Director of the USPTO, posted an interesting article Moving Forward yesterday. What do I expect based on what I have read? Someone like David Kappos, smart, driven, and 110% committed to improve our U.S. patent system. At the same time, Ms. Lee's plan to address patent litigation abuse per the White House plan appears to expand the USPTO's mission beyond its normal bounds, i.e., unless we are talking about strengthening PTAB to help it efficiently invalidate or narrow improperly issued patents.

Copyright © 2014 Robert Moll. All rights reserved.

Medtronic Inc. v. Mirowski Family Ventures, LLC - A Patent Owner Must Prove Infringement in Declaratory Judgment Action

Today, in Medtronic, Inc. v. Mirowski Family Ventures, LLC, the Supreme Court held when a licensee files a declaratory judgment action that products don't infringe a licensed patent, the patent owner must prove infringement.

Justice Breyer delivered the opinion for the Court and framed the question: "A patent licensee paying royalties into an escrow account under a patent licensing agreement seeks a declaratory judgment that some of its products are not covered by or do not infringe the patent, and that it therefore does not owe royalties for those products. In that suit, who bears the burden of proof, or, to be more precise, the burden of persuasion? Must the patentee prove infringement or must the licensee prove non-infringement?

The Court asserted legal logic supports "the burden of persuasion is with the patentee, just as it would be had the patentee brought an infringement suit." He stated it is well established that the burden of proving infringement rests upon the patent owner. The Declaratory Judgment Act is only procedural while the burden of proof is a rule of substantive law.

The Court also noted shifting the burden to the licensee could create uncertainty about the scope of the patent. Suppose an alleged infringer lost the declaratory judgment action because the evidence was inconclusive on non-infringement, the alleged infringer might continue in the same conduct, forcing the patent owner to file an infringement action. If the burden shifted, the patent owner might fail to prove infringement if the evidence was inconclusive. As a result nobody would know what products infringe. Thus, the declaratory judgment suit would not provide "an immediate and definitive determination of the legal rights of the parties."

The Court stated to shift the burden would make it difficult for the licensee to understand the patent owner's infringement claim, which the patent owner would be in a better position to know, while the alleged infringer would have to argue against every infringement theory.

The Court emphasized that burden shifting to the licensee is difficult to reconcile with the purpose of the Declaratory Judgment Act to ameliorate the dilemma posed by putting one who challenges a patent's scope to the choice between abandoning his rights or risking suit.

The Court was not persuaded by contrary arguments. It noted the Federal Circuit's lacked support in Schaffer v. Weast, 546 U.S. 49 (2005), since it was not a declaratory judgment case. It said the Federal Circuit's position that the holding applied only in the limited circumstances did not change the fact those circumstances are often present. The Court noted the patent owner started the dispute in response to the concern a licensee could force a patent owner into patent litigation.

The Court concluded the public interest didn't favor imposing the burden of proving infringement upon the licensee, since the public interest has a "paramount interest in seeing that patent monopolies are kept within their legitimate scope."

Copyright © 2014 Robert Moll. All rights reserved.

USA Today - The Other Reason Google bought Nest: Patents

Today, Alistair Barr of USA Today wrote an interesting article The other reason Google bought Nest: patents. It notes bringing Tony Fadell and his group of talented x-Apple developers is not all that made Nest so valuable. I agree with Mr. Barr's article, and would add Nest's foresight to build a significant patent portfolio to protect its innovative technology is what many startups should be doing. Don't listen to anyone who tells you don't file on your inventions because you don't have money to enforce your patent rights in court. This assumes your company will not be bought by another company which does have financial resources to monetize the patents, that contingency fee representation does not exist, and/or that the patent(s) cannot be licensed and/or sold to a company able to best leverage the value in the patent.

Thanks to Alan Snyder for sending this article my way!

Copyright © 2014 Robert Moll. All rights reserved.

USPTO - EFS and Private PAIR - Updated Jan. 20, 2014

I regularly file papers with the electronic filing system (EFS) and review the status of non-published application on Private PAIR (patent application information retrieval). It is a cumbersome process but recently it got worse for some of us.

The USPTO notified some, it turns out me too, cannot authenticate themselves to the system beginning on or about January 15. If you cannot authenticate, the USPTO suggested to upgrade to Java 7 update 51. I also had to restart the computer after the update to resolve the authentication issue.

The USPO recommends if the authentication issue continues, contact the Patent Electronic Business Center from 6:00 am to 12:00 midnight (ET) Monday through Friday: 1-866-217-9197 or ebc@uspto.gov.

Now to authenticate on private PAIR or EFS you take the following steps:

1.  Click on digital certificate field or browse button, then an Entrust Publisher's dialog box appears "Do you want to run this application?" Click on the Run button and check the box you don't want to see this dialog again.

This displays the private PAIR login with the digital certificate file path and an empty password field.

2.  Check the box that "I understand that the technology in patent application may be subject to U.S. dual-use export controls (Without step 2, you may not be able to insert the digital certificate).

3.  Browse on your computer to the digital certificate and double click on it to insert the certificate into login field.

4.  Type your password.

5.  Click on the authenticate button.

Copyright © 2014 Robert Moll. All rights reserved.

US Supreme Court Certiorari - SAP America v. Versata Software - Software Patent Infringement, Expert Testimony, and Denial of Stay of Litigation Based on PTAB Invalidity Decision

Today, Mary Pat Dwyer of the SCOTUS Blog stated the petition of the day relates to the Federal Circuit's decision in SAP America, Inc. v. Versata Software, Inc.

SAP, the petitioner and defendant below, frame the issue as follows: (1) Whether a computer software manufacturer may be liable for direct infringement of a patent drawn to computer instructions where the software, as shipped, does not contain sufficient instructions to perform the claimed operations; (2) whether flaws in an expert’s methodology may be raised as part of a challenge to the sufficiency of the evidence or only to the testimony’s admissibility; and (3) whether a patent infringement action should be stayed where the Patent Trial and Appeal Board (PTAB) has declared invalid all patent claims at issue in the infringement action and the defendant, which sought such review at the first opportunity, might otherwise be compelled to pay an enormous damages judgment and be subjected to a permanent injunction on the basis of the invalid claims.

Versata Software, the respondent and patent owner, frame the issue as follows: (1) Whether both courts below erred in ruling that the trial record supported the jury’s factual determination that SAP’s software and source code, as shipped, met every limitation of the asserted patent claims without modification by the customer; (2) whether the Federal Circuit properly declined to address challenges to the expert’s methodology insofar as they were framed as challenges to admissibility where SAP conceded it was not challenging the testimony’s admissibility on methodological grounds and had waived any such challenge below; and (3) whether the Federal Circuit was required to stay this patent infringement action under the Leahy-Smith America Invents Act where SAP did not seek a stay until after the Federal Circuit had issued its opinion on the merits, and the four statutory factors each weigh against the requested stay.

Whether or not the Supreme Court hears this case, the message I am hearing is delay in requesting a stay may negate a major benefit (e.g., erasing $330M in damages) of a PTAB decision holding the patent invalid. 

See the papers, orders, and proceedings at SCOTUS blog page.

Copyright © 2014 Robert Moll. All rights reserved.

New York AG Investigation Results in Settlement with MPHJ Technology Investments

Professor Robin Feldman said I might find this interesting: A.G. Schneiderman Announces Groundbreaking Settlement with Abusive "Patent Troll." She is right, and thus it's my late night post.

I suggest reading the attorney general's press release, but the following passage describes the deceptive conduct that led to the attorney general's investigation:

"Certain patent trolls, such as MPHJ, have adopted a strategy of targeting small and medium sized businesses. These companies acquire patents of dubious validity, then send deceptive and abusive letters to a large number of small businesses in an effort to extract small, often nuisance-value license payments from them. This strategy can be successful, and the collective value of these smaller payments can be quite high, because smaller businesses often do not have the experience or resources needed to fully evaluate the patents. In MPHJ’s case, it told hundreds of New York businesses that they "likely" infringed its scanner-related patents, creating the impression that MPHJ had conducted a meaningful, individualized analysis of the targeted company’s business. In fact, MPHJ merely sent form letters to companies of a certain size and industry classification. In addition, MPHJ falsely told businesses that most other businesses it had previously contacted had acquired licenses when in fact only a handful of businesses had done so. MPHJ also provided misleading information about the fees that the (few) prior licensees had paid. And MPHJ falsely threatened to sue hundreds of businesses if they did not respond to its letters within two weeks; in fact, it has never filed a patent lawsuit against a New York business.

The AG also listed its guidelines to stop the most abusive tactics used by patent trolls:

"Diligence and Good Faith When Contacting Potential Infringers. The guidelines require a patent holder to make a serious, good-faith effort to determine whether a targeted business actually engages in infringement before making an accusation. This prohibits the mass mailing of accusations of infringement to hundreds of businesses with little regard to the actual likelihood that the businesses infringed. The guidelines also forbid using a lawyer as a threatening mouthpiece for baseless allegations. If a patent troll communicates through an attorney, the attorney sending such letters must also make diligent efforts to ensure that there is a good-faith basis for believing that the targeted business infringed the patents.

Providing Material Information So an Accused Infringer Can Evaluate the Claim. When a patent holder accuses a business of infringing its patent, the guidelines require it to explain the basis for the claim in reasonable detail. This information will allow the recipient to assess whether the accusation has any foundation in light of the actual activities of the recipient’s business. The guidelines also prohibit a patent holder from trying to collect revenue for a patent that has been held invalid, and from failing to disclose material information that reveals the patent’s likely invalidity.

No Misleading Statements about a License Fee. If a patent holder seeks to justify a specific licensing fee, it must clearly explain the factual basis for its proposed fee. This requirement prevents a patent troll from taking advantage of informational asymmetry to deceive businesses into paying more than a fair price for a license.

Transparency of the True Identity of the Patent Holder. The guidelines prohibit a patent troll from hiding its identity from its targets. This allows businesses that have been targeted by patent troll campaigns to find information about the patent troll. Ensuring transparency has a number of positive effects, including allowing targeted businesses to find and communicate with one another."

The attorney general says "the guidelines in this settlement are minimum standards- they are not a safe harbor."

"As redress, the settlement requires MPHJ to allow any licensees that received deceptive letters to void their license with it and receive a full refund, and it prohibits MPHJ from further contacting certain small businesses it previously targeted. The settlement also imposes a variety of obligations on MPHJ that should serve as guidelines for all patent trolls engaged in similar patent assertion behavior."

This is an interesting development in patent law and it makes some sense for states to police deceptive practice. At the same time, why aren't manufacturers defending and indemnifying these small businesses? It should be universal practice and widely publicized. Most small businesses cannot conduct a patent investigation even if all the guidelines are followed nor can they afford defending themselves in a patent suit. Further, the manufacturers might add a web page up for purchasers to upload or email any patent dispute letter and a standard reply to the patent owner saying I bought my gear from company X which has requested all correspondence go directly to it, because it is handling this dispute. Finally, I have mixed feelings about state efforts. US patent law is federal law and most times best handled by Congress to avoid the risk of balkanizing US patent law state by state.

Copyright © 2014 Robert Moll. All rights reserved.

Supreme Court Grants Review of Definiteness Requirement of 35 USC 112 in Nautilus v. Biosig Instruments

On January 10, 2014, the U.S. Supreme Court granted a petition for certiorari to review the judgment of the Federal Circuit regarding the definiteness requirement of 35 USC 112(b) in Nautilus, Inc. v. Biosig Instruments, Inc. 

As background this case involves U.S. Patent No. 5,337,753 (the '753 patent), which relates to a heart rate monitor circuit design. The district court held claim 1 invalid for indefiniteness, and the Federal Circuit reversed. 

Claim 1 of the '753 patent recites a heart rate monitor for use by a user in association with exercise apparatus and/or exercise procedures, comprising: 

• an elongate member;
• electronic circuitry including a difference amplifier having a first input terminal of a first polarity and a second input terminal of a second polarity opposite to said first polarity; said elongate member comprising a first half and a second half;
• a first live electrode and a first common electrode mounted on said first half in spaced relationship with each other;
• a second live electrode and a second common electrode mounted on said second half in spaced relationship with each other;
• said first and second common electrodes being connected to each other and to a point of common potential;
• said first live electrode being connected to said first terminal of said difference amplifier and said second live electrode being connected to said second terminal of said difference amplifier;
• a display device disposed on said elongate member;
• wherein, said elongate member is held by said user with one hand of the user on said first half contacting said first live electrode and said first common electrode, and with the other hand of the user on said second half contacting said second live electrode and said second common electrode;
• whereby, a first electromyogram signal will be detected between said first live electrode and said first common electrode, and a second electromyogram signal, of substantially equal magnitude and phase to said first electromyogram signal will be detected between said second live electrode and said second common electrode;
• so that, when said first electromyogram signal is applied to said first terminal and said second electromyogram signal is applied to said second terminal, the first and second electromyogram signals will be subtracted from each other to produce a substantially zero electromyogram signal at the output of said difference amplifier;
• and whereby a first electrocardiograph signal will be detected between said first live electrode and said first common electrode and a second electrocardiograph signal, of substantially equal magnitude but of opposite phase to said first electrocardiograph signal will be detected between said second live electrode and said second common electrode;
• so that, when said first electrocardiograph signal is applied to said first terminal and said second electrocardiograph signal is applied to said second terminal, the first and second electrocardiograph signals will be added to each other to produce a non-zero electrocardiograph signal at the output of said difference amplifier;
• means for measuring time intervals between heart pulses on detected electrocardiograph signal;
• means for calculating the heart rate of said user using said measure time intervals;
• said means for calculating being connected to said display device;
• whereby, the heart rate of said user is displayed on said display device (emphasis added).

35 U.S.C. § 112(b) requires a patent claim "particularly point out and distinctly claim the invention" so the public is given notice of the scope of the claim, that is, what can't be done without patent license. The Federal Circuit has stated a claim is definite and valid if it "reasonably apprises one of ordinary skill in the art of the scope of the invention. The Federal Circuit has stated a claim is not indefinite, because it contains words of degree such as "substantially", the parties disagree on claim interpretation, the claim is difficult to interpret, or an error in the claim is correctable in multiple ways. The Federal Circuit has even stated a claim is only indefinite if it is "insolubly ambiguous."

The briefs are lengthy, but in a nutshell Nautilus argued that "spaced relationship" recited in "a first live electrode and a first common electrode mounted on said first half in spaced relationship with each other" and "a second live electrode and a second common electrode mounted on said second half in spaced relationship with each other" made claim 1 indefinite. It also argued that Biosig kept changing the meaning of "spaced relationship" to obtain allowance, avoid invalidity challenges, and prove infringement. Biosig argued that (1) Nautilus misrepresented the prosecution history, (2) one of ordinary skill would be able to measure whether the electrodes were in such a spaced relationship that would substantially eliminated EMG signals when the device was used, and (3) the claim had not undergone multiple metamorphoses.

Biosig states the question presented to the Supreme Court is as follows: whether Petitioner has shown that the Federal Circuit's test for patent indefiniteness under 35 U.S.C. § 112, para. 2, conflicts with this Court's precedent in light of the U.S. Patent and Trademark Office recently informing this Court that there was no conflict, and whether the Federal Circuit erred in giving respect to the presumption of validity specified by Congress in 35 U.S.C. § 282 in considering the invalidity defense of indefiniteness under 35 U.S.C. §112, para. 2.

Nautilus states the question presented to the Supreme Court is as follows: does the Federal Circuit’s acceptance of ambiguous patent claims with multiple reasonable interpretations— so long as the ambiguity is not "insoluble" by a court—defeat the statutory requirement of particular and distinct patent claiming? Does the presumption of validity dilute the requirement of particular and distinct patent claiming?

The SCOTUS blog has the legal briefs and more details at Nautilus, Inc. v. Biosig Instruments, Inc.

I expect the Supreme Court to reformulate a definiteness requirement that is functionally like the standard for resolving ambiguity in contracts, that is, whatever ambiguity exists in the contract will be construed against the drafter. This will reemphasize U.S. patent law should be analyzed consistent with analogous areas of law and the Supreme Court's willingness to limit the Federal Circuit special rules. Whatever happens, I think this case has the potential to impact the value of many U.S. patents.  

Copyright © 2014 Robert Moll. All rights reserved.

Supreme Court Grants Review of Joint Infringement in Limelight Networks v. Akamai Technologies

On January 10, 2014, the U.S. Supreme Court granted a petition for certiorari to review the judgment of the Federal Circuit regarding the issue of joint infringement in Limelight Networks, Inc. v. Akamai Technologies, Inc.

As background this case involves U.S. Patent No. 6,108,703 (the '703 patent), which relates to storing web pages at the content provider (web site) and storing their embedded objects at another domain closer to the client. This is one of inventor Daniel Lewins' contributions to the Web: store popular web pages at the web site so hits can be tracked, but store their embedded objects at domains closer to the browsers to reduce page latency.

Claim 19 of the '703 patent recites a content delivery service, comprising:

• replicating a set of page objects across a wide area network of content servers managed by a domain other than a content provider domain;
• for a given page normally served from the content provider domain, tagging the embedded objects of the page so that requests for the page objects resolve to the domain instead of the content provider domain;
• responsive to a request for the given page received at the content provider domain, serving the given page from the content provider domain; and
• serving at least one embedded object of the given page from a given content server in the domain instead of from the content provider domain.

Joint infringement arose in this case because direct infringement under 35 U.S.C. § 271(a) requires a single entity perform all of steps of the process claim. Limelight performed all the steps of claim 19 except for the step of "tagging the embedded objects of the page so that requests for the page objects resolve to the domain instead of the content provider domain," which it encouraged customers perform.

Perhaps Limelight thought given the law that it might escape infringement, because no single entity performed all of the steps as required for direct infringement under 35 U.S.C. § 271(a). In the past, liability for inducement of infringement 35 U.S.C. § 271(b) required a direct infringer. Nonetheless, Akamai successfully argued before the Federal Circuit that inducement did not require a direct infringer as long as a single entity induces the infringement such that all of the steps are performed by multiple entities.

So now the parties frame the issues this way: patent owners Akamai and MIT state the issue is whether a party may be liable for patent infringement under 35 U.S.C. § 271(a) or § 271(b) when two or more entities perform all of the steps of a process claim. Accused infringer Limelight Networks states the issue is whether the Federal Circuit erred in holding that a defendant may be held liable for inducing patent infringement under 35 U.S.C. § 271(b) even though no one has committed direct infringement under § 271(a).

The SCOTUS blog has more information at Limelight Networks, Inc. Akamai Technologies, Inc. and Akamai Technologies, Inc. v. Limelight Networks, Inc. regarding the proceedings, orders, and parties briefs. Also see Lisa McElroy of the SCOTUS blog for details on what a CVSG means in a non-US government case: "CVSG" in plain English

This case will impact the value of US patents relating to distributed computing (e.g., cloud computing).

Copyright © 2014 Robert Moll. All rights reserved.

Ashby Jones of WSJ - Law 2014: Patents Likely to Keep Top Billing in the News

Mr. Ashby Jones predicts what patent issues (e.g., US patent reform legislation, the Supreme Court case on software patent eligibility, Alice v. CLS Bank, and rise of the Patent Trial and Appeal Board) are likely in 2014 in the WSJ article Law 2014: Patents Likely to Keep Top Billing in the News.

Copyright © 2014 Robert Moll. All rights reserved.

USPTO Issues Record Number of Patents in 2013 - See Professor Crouch Patently-O Article

Professor Crouch's article Utility Patents Granted in 2013: A New Record (For the Fourth Consecutive Year) states the USPTO issued 277,861 utility patents in 2013. The graph accompanying the article indicates this quadrupled what I saw as a patent attorney admitted in 1989.

Copyright © 2014 Robert Moll. All rights reserved.

Paul Graham - Are Software Patents Evil?

In the article Are Software Patents Evil, Paul Graham does a nice job explaining the role of patents in startups. It is based on his presentation to Google in 2006, which may be long ago, but I think describes patents better than many things I have read in recent years. It also has weight because Mr. Graham is not a lawyer, but a software programmer, a writer, an artist, and a startup advisor. See details in Paul Graham wiki. He is not trying to make us like patents so we will file more, he is trying to grapple with a difficult problem software companies face today.

I suggest reading the article, but for now here's a passage you don't hear often from the software community:

"Patents are a hard problem. I've had to advise most of the startups we've funded about them, and despite years of experience I'm still not always sure I'm giving the right advice.

One thing I do feel pretty certain of is that if you're against software patents, you're against patents in general. Gradually our machines consist more and more of software. Things that used to be done with levers and cams and gears are now done with loops and trees and closures. There's nothing special about physical embodiments of control systems that should make them patentable, and the software equivalent not.

Unfortunately, patent law is inconsistent on this point. Patent law in most countries says that algorithms aren't patentable. This rule is left over from a time when "algorithm" meant something like the Sieve of Eratosthenes. In 1800, people could not see as readily as we can that a great many patents on mechanical objects were really patents on the algorithms they embodied.

Patent lawyers still have to pretend that's what they're doing when they patent algorithms. You must not use the word "algorithm" in the title of a patent application, just as you must not use the word "essays" in the title of a book. If you want to patent an algorithm, you have to frame it as a computer system executing that algorithm. Then it's mechanical; phew. The default euphemism for algorithm is "system and method." Try a patent search for that phrase and see how many results you get.

Since software patents are no different from hardware patents, people who say "software patents are evil" are saying simply "patents are evil." So why do so many people complain about software patents specifically?

I think the problem is more with the patent office than the concept of software patents. Whenever software meets government, bad things happen, because software changes fast and government changes slow. The patent office has been overwhelmed by both the volume and the novelty of applications for software patents, and as a result they've made a lot of mistakes."

Few can describe how patents relate to startups. It takes time to master a domain, but also I think people don't have access to enough experiences. Perhaps his role at the YCombinator investment firm interfacing with literally thousands of software companies generates the data to get it right. See Randall Stross' The Launch Pad Inside YCombinator for details. That's why recent criticisms of his comments about lack of woman in computer science is off-base. He is not discriminating against women, but giving his candid impression based on data on a problem many would like fixed.

Copyright © 2014 Robert Moll. All rights reserved.

USPTO Software Partnership - Berkeley, CA - October 17, 2013 - More Details

If you are seeking to see where the USPTO is heading on software related inventions, you may want to go back to October 17, 2013 when the USPTO hosted its Software Partnership meeting at the U.C. Berkeley School of Law in Berkeley, California.

When it was first announced, the USPTO didn't give much detail, but presented the meeting as an opportunity for stakeholders to discuss how to enhance the quality of software related patents.

The USPTO now has a lot more detail, including over 3.5 hours videos of the meetings (Part 1:  Software Partnership Meeting 17 October 2013 (length 1:28:31), Part 2:  Software Partnership Meeting 17 October 2013 (length 2:16:07)), a topic list, the White House Action plan, and many comments from the public. See the USPTO videos, topics, and public comments (HERE).

Ms. Michele Lee emphasized many of these topics during her presentation at the Advanced Patent Law Institute in December 2013. If Ms. Lee is appointed the USPTO Director, these topics (e.g., functional claiming, required glossaries, etc.) may be part of what one will need to understand in pursuing U.S. patents on software related inventions.

Copyright © 2014 Robert Moll. All rights reserved.

Paul Michel - Recollections of Judge Giles S. Rich

Not all readers are familiar with the legacy of Judge Giles S. Rich. If this is the case, you should consider reading Recollections of Judge Giles S. Rich where former Federal Circuit chief judge Paul Michel writes an eloquent tribute to this great man, the oldest full-time appellant judge (95 years old) in American history, and the primary architect of modern U.S. patent law.

Copyright © 2013 Robert Moll. All rights reserved.

USPTO Updated ADS Form and Forms to Revive a Lapsed Patent or an Abandoned Application Under Patent Law Treaty

The Patent Law Treaty (PLT) entered into force in the United States on December 18, 2013. The PLT is a multilateral treaty to harmonize patent procedures, the form and content of patent applications, and legal representation. My first impression is that it generally helps applicants when they make mistakes.

For example, the USPTO recently notified me that they had new USPTO forms to implement PLT procedures to revive a lapsed patent or an abandoned application:

• Application Data Sheet (PTO/AIA/14)
• Petition for Revival of an Application for Patent Abandoned Unintentionally under 37 CFR 1.137(a) (PTO/SB/64)
• Petition for Revival of an Application for Patent Abandoned for Failure to Notify the Office of a Foreign or International Filing (37 CFR 1.137(f))(PTO/SB/64a)
• Petition to Accept Unintentionally Delayed Payment of Maintenance Fee in an Expired Patent (37 CFR 1.378(b)) (both PTO/SB/66 and SB/66-EFS-Web)

The USPTO says for help in submitting forms using the electronic filing system (EFS) call the patent electronic business center (EBC) from 6:00 am to 12:00 midnight (ET) Monday - Friday at 1-866-217-9197 or send an email to ebc@uspto.gov. For information on the forms, email patentpractice@uspto.gov.

Copyright © 2013 Robert Moll. All rights reserved.

Google DJ Action of Noninfringement of Rockstar Patents

Alan Cooper and Suzie Lipton sent email that I should consider giving some coverage to what is going on with Google's counter-suit against the Rockstar consortium patents this week.

As most know, Rockstar consortium is a patent holding company that includes as shareholders Apple, Microsoft, and RIM that outbid Google to purchase patents from the bankrupt telecom company Nortel for $4.5 billion. Media suspects Apple and Microsoft are using the Rockstar patents as a proxy to attack the Android ecosystem. Also rumored is the patents are not worth what many bidders thought and some are even up for sale.

There are many articles on this topic, and rumors make it  difficult to know what is true. Part of the problem is the reporting from even stellar journalists mixes up even the basic terminology.

For example, in Google files counter-suit against Rockstar, seeking to avoid East Texas we were told "Rockstar Consortium, a patent-holding company formed from the bankrupt Canadian telecom company Nortel, sued Google and manufacturers of Android phones over patents almost two months ago" and "this week Google filed its counter-attack seeking to invalidate Rockstar's patents" (emphasis added).

I enjoy Mr. Mullin's contributions so I read the article, but found Google's complaint mentioned in the article was not seeking to invalidate Rockstar's patents. Instead, Google filed a Complaint for Declaratory Judgment of Non-Infringement for each of seven patents. It's not that the patent claims shouldn't have issued for invalidity; it's the patent claims don't describe Google's products or processes.

When much happens behind the scenes and one of my favorite journalists doesn't get the facts straight, you need to delve into the original sources of authority and/or wonder if it is not smarter to await further developments.

Copyright © 2013 Robert Moll. All rights reserved.

Electronically Submitting Assignments - No Recording Fee Effective January 1, 2014

Today, I submitted an assignment for recordation in the USPTO. I used the electronic patent assignment system (EPAS) and waited until this week because the USPTO appeared to state it would no longer charge the $40 recording fee for assignments submitted electronically on or after December 18, 2013. However, at the end of the process the USPTO said a $40 recording fee was due. Because I had to meet the three-month deadline, I submitted a $40 payment. Later I re-read the USPTO fee schedule and noted what was trumpeted as a fee revision only pertained to fee codes not the amounts. I note this in case you also found the USPTO fee schedule less than clear.

Copyright © 2013 Robert Moll. All rights reserved.

Motorola Rushes to the USPTO With Sketchy Drawings - New Matter under 35 USC 132?

In Motorola Rushes Patent Filing for Ugliest Smartwatch, Patently Apple explains "Motorola under Google has to ensure they'll stay on top of new trends this time around" and so rushed a smartwatch application to the USPTO. Patently Apple says we will take the patent filing seriously if it was conceived by their on-site kindergarten class. After I chuckled a bit, I realized there is point to to make about this all too common practice of filing US patent applications with informal drawings.

Many patent attorneys file drawings just like those shown in the Motorola patent application and justify it by saying we wanted to lock in the earliest possible filing date and can always file formal drawings when the USPTO objects to the drawings. However, this approach ignores that if a court holds the amendment to the drawings introduced new matter, any patent claim depending on that drawing is open to a new matter challenge. Will the patent claim be invalidated? It will depend on the scope and nature of the amendments, but in amending the drawings, an applicant cannot introduce subject matter beyond that disclosed in the original application. Further, whatever you save by filing the application with informal drawings will be lost when formal drawings are required. More important, the formal drawing that looks great compared to the informal drawing may have set up an invalidity defense to any patent claim requiring the drawing for support.

Copyright © 2013 Robert Moll. All rights reserved.

USPTO Fees Effective on January 1, 2014

The USPTO changed certain patent fees on December 18, 2013, which will be effective on January 1, 2014.

See the updated USPTO fee schedule here.

For details call the USPTO Contact Center at 800-786-9199 or 571-272-1000.

Copyright © 2013 Robert Moll. All rights reserved.

US Senate Hearing - Protecting Small Businesses and Promoting Innovation by Limiting Patent Troll Abuse

Today, the Senate Judiciary Committee conducted a hearing Protecting Small Businesses and Promoting Innovation by Limiting Patent Troll Abuse.

I am still wading through the witness testimony but it appears worth reading if you are interested about the Senate's patent reform effort. Here is the witness testimony:

John Dwyer, CEO New England Federal Credit Union

Dana Rao, Adobe System's VP and Associate General Counsel of IP and Litigation

Philip Johnson, Johnson & Johnson's Chief IP Counsel

Steve Bossone, PhD, Biotech scientist

Harry Wolin, AMD's Senior VP, GC, and Secretary

Todd Dickinson, AIPLA's Executive Director and former Director USPTO, etc.

Copyright © 2013 Robert Moll. All rights reserved.

Professor David Hricik's Legal Ethics and Non-Practicing Entities Article

Much of the press talks about the lack of ethics of patent trolls, but like many things there is more to the story.

For example, Santa Clara University Law School invited Professor Hricik to speak on legal ethics that face a "patent troll" or non-practicing entity's (NPE) counsel. It sounds like the assumption was to focus on this side, because NPE's have much less discovery than defendants which can be leverage to extract a nuisance settlement.

In preparing for the talk, Professor Hricik realized, and called it counter-intuitive, that the legal ethics issues extend to defendant's counsel in a big way, because they have significant control over how discovery is scheduled, but are typically paid by the hour. For example, they could bifurcate discovery and schedule determinative issues like infringement at the front end of discovery to save money. Yet the NPE's desire the suit not be quickly adjudicated aligns with defendant counsel's desire to "earn" fees during discovery. So if the NPE counsel makes comprehensive discovery, the defendant's counsel may act in a cost ineffective way.

Professor Hricik notes Rule 11 and 35 USC 285 require counsel act ethically. My observation is courts rarely use Rule 11 and Section 285 to police how parties manage discovery. And without court limits, discovery in patent litigation is too often a law firm money maker.

Anyway, I agree with Professor Hricik about ethics obligations running to all parties in NPE litigation, and recommend reading: Legal Ethics and Non-Practicing Entities: Being on the Receiving End Matters too.

Copyright © 2013 Robert Moll. All rights reserved.

Nest Faces Incumbent Dirty Tricks, Patent Lawsuits & More

In Nest Labs CEO advice: Startup? More like lawyer up, Tony Fadell says startups challenging the incumbents need to prepare not just for competition but dirty tricks:

"They will throw everything under the sun at you, and a lot of it is not cool. In addition to patent lawsuits, they'll trash your products on review sites. Nest Labs has been able to track some one-star reviews back to the facilities of its competitors, and he values having a lawyer who can fight the patent suits."

Yes, but what's an even dirtier trick? Maybe the Goodlatte Innovation Act (HR 3309) that purports to stop patent trolls, but will no doubt intimidate some small companies into not enforcing legitimate patent rights to avoid the risk of paying incumbent's legal bills. Nothing like the threat of shifting your legal bill to send a startup on its way!

How will Goodlatte shift incumbent legal fees to small companies? It proposes mandatory attorney fee shifting in every single case when a court concludes the loser's conduct or claim was not reasonably justified. Each time a defendant wins, the patent owner will face a motion for attorney fees. This is a huge change from 35 USC 285 that requires each party bear its expenses, including attorney fees except in exceptional cases.

Congress appears to be rushing the Goodlatte's bill to passage before smaller entities can oppose it and/or before the Supreme Court can decide two cases on the award of attorney fees in patent cases: Highmark Inc. v. Allcare Management Systems, Inc. and Octane Fitness v. Icon Health and Fitness. It might be smart to hear how the Supreme Court would guide this topic instead of rushing forward to change 35 USC 285.

Copyright © 2013 Robert Moll. All rights reserved.

Europe's Top Regulator Warns Nokia - Patent Licensing Will Trigger Antitrust Action

On December 9, Europe's top regulator warned although he approved the $7.2 billion sale of Nokia's business to Microsoft, he was concerned Nokia would attempt to "extract higher returns" from its patents. He said this seeking higher returns (e.g., a higher royalty rate in patent licensing) was behaving "like a patent troll, or "a patent assertion entity" and  he would not tolerate Nokia taking "illegal advantage" of its patents but instead sue it for the antitrust violation. So what can you Nokia do with its patents in Europe? Put them on a bookshelf-- and promise never to assert them.

See Associated Press article EU Warns Nokia Not to Become 'Patent Troll'

Copyright © 2013 Robert Moll. All rights reserved.