Source: https://patentplanetblog.blogspot.com/2016/05/
Timestamp: 2019-04-25 08:41:07+00:00

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If you are skeptical of articles applying the label "patent troll" to yet another patent owner, you may not be crazy. See Edward Lee, Patent Trolls: Moral Panics, Motions in Limine, and Patent Reform in the Stanford Technology Law Review.
From the abstract: "This Article provides the first empirical study of the use of the term "patent troll" by U.S. media-specifically, examining leading newspapers and online publications. The study offers several key findings: (1) First, starting in 2006, the U.S. media surveyed used "patent troll" far more than any other term, despite the efforts of scholars to devise alternative, more neutral-sounding terms. The tipping point was the combination of the controversial Blackberry and eBay patent cases in 2006—prior to that time, "patent holding company" was the most popular term. (2) Second, the media more often portrayed such patent entities in a one-sided, negative light with very little analysis or empirical support. For example, few works provided statistics or discussion of any studies to support their negative portrayal. Practically no articles mentioned the lack of a working requirement in U.S. patent law, which permits all patentees not to practice their inventions. These findings provide support for the recent judicial decisions that have barred, at trial, the use of the term "patent troll" as unfairly prejudicial."
In Enfish, LLC v. Microsoft Corp., (2016) the Federal Circuit recently held that a claim directed to database software was patent eligible under 35 U.S.C. §101, because it was not directed to an abstract idea. This decision is worth discussing because Enfish clarifies whether a claim is an abstract idea.
In Alice Corp. v. CLS Bank Int’l (2014), the Supreme Court set forth a two-part test under 35 U.S.C. §101 to determine if a claim to a software-related invention is patent eligible. The test asks: (1) is the claim directed to an abstract idea; and (2) if so, does the claim recite "significantly more" (an "inventive concept") than the abstract idea?
The Supreme Court did not establish a definitive rule to determine what constitutes an "abstract idea." Instead, the Supreme Court found it sufficient to compare a claim to claims found to be directed to an abstract idea in previous cases. For example, fundamental economic and conventional business practices are often held to be an abstract idea, but comparing a claim to a claim directed to a process for curing rubber or hedging a risk only takes one so far.
Thus, it's understandable why many have found it tricky to decide what constitutes an abstract idea. Some say the abstract ideas is the preamble while others say it's some or all of the body of the claim. Some even assert the abstract idea is the entire body of the claim except the "processor" and "memory." Who knows? This shifting definition of the abstract idea defeats all inventions from being patented. Yet Alice itself noted we should tread carefully in construing this exclusionary principle of abstract ideas lest it swallow all of patent law. See Alice, 134 S. Ct. at 2354. Compare to Diamond v. Diehr, 450 U.S. 175, at 189 (1981) (cautioning that overgeneralizing claims, "if carried to its extreme, make[s] all inventions unpatentable because all inventions can be reduced to underlying principles of nature which, once known, make their implementation obvious").
Given these kind of difficulties, the Federal Circuit in Enfish cautions it is not enough to ask whether a claim involves a patent-ineligible concept. For all inventions at some level embody, use, reflect, rest upon, or apply ... abstract ideas. Rather, the directed to inquiry applies a stage-one filter to claims, considered in light of the specification, based on whether 'their character as a whole is directed to excluded subject matter.
The Supreme Court stated claims that improve the functioning of the computer itself or improve an existing technological process might not succumb to the abstract idea exception. See Alice, 134 S. Ct. at 2358-2359. The Supreme Court in Bilski noted improvement not defined by reference to "physical" components do not doom the claims and to hold otherwise risks resurrecting a bright-line machine-or-transformation test or a categorical ban on software patent Bilski v. Kappos, 561 U.S. 593, at 603-604 (2010).
It is one thing to say you have added "a processor" and "a memory" to a fundamental economic practice such as Bilski or Alice or mathematical equation. It is quite another to say the claim is patent ineligible when it is directed to a specific implementation that improves the functioning of the computer itself or improves an existing technological process.
The Federal Circuit gets this in Enfish and says the claims were not directed to an abstract idea under step one of the Alice analysis, thus didn't need to proceed to step two. Even if we proceed to step two, the Supreme Court has stated whether the additional elements recite "significantly more" than an abstract idea is a search for an "inventive concept." Thus, if the claim is not disclosed, suggested, or made obvious by the prior art, it should be understood the claim recites "significantly more" or "an inventive concept." Otherwise, we maintain an illogical position that claim is novel (35 U.S.C. §102) and non-obvious (35 U.S.C. §103) yet somehow doesn't recite an inventive concept. Surely, the meeting all of the requirements of 35 U.S.C. § 102 and §103 indicates that the claims encompass an inventive concept. The Supreme Court has imported the novelty requirement of 35 USC 102 into 35 USC 101, and hopefully won't take a further step "off the cliff" by judicially constructing an inventive concept hurdle that exceeds the novelty requirements of 35 USC 102 and obviousness requirement of 35 USC 103.
See the recent USPTO Memo Recent Subject Matter Eligibility Decisions (Enfish, LLC v. Microsoft Corp. and TLI Communications LLC v. A.V. Automotive, LLC).
Today, Washington Post reports Google Beats Oracle on Copyright, Defeating $9 Billion Claim based on a jury verdict that Google made only fair use of Oracle's APIs in the Android operating system.
Congress states four factors determine if the fair use defense exists. The jury must consider: (1) the purpose and character of the accused use; (2) the nature of the copyrighted work; (3) the amount or substantiality of the part used in relation to the copyright work as a whole; and (4) the effect of the accused use on the potential market or value of the copyrighted work.
The Supreme Court has stated elsewhere that factor (4) is "undoubtedly the single most important element of fair use." Thus, a jury verdict for fair use which appears to impact the potential market for Java in mobile devices is a bit surprising. Perhaps the $9B damages Oracle sought worked against the jury's sensibilities.
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.

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