Source: https://patentplanetblog.blogspot.com/2014/01/
Timestamp: 2019-04-25 08:47:20+00:00

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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.
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.
USPTO Confirms Validity of U.S. Patent No. 6,314,420, Which Vringo Asserts Against Google.
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.
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.
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."
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!
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.
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.
5. Click on the authenticate button.
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.
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.
"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.
"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.
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.
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.
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.
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.
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).
This case will impact the value of US patents relating to distributed computing (e.g., cloud computing).
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.
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.
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.
"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.
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.
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.

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