Posts Tagged: "software patent"

The U.S. Supreme Court (SCOTUS) is set to hear Andy Warhol v. Lynn Goldsmith in October. It will be the latest in a series of cases the Court has taken on over the last decade-plus that promise to change U.S. innovation as we know it. The case will be heard on the heels of other controversial SCOTUS decisions that have drastically changed the legal landscape, with rulings that transfer power from the federal government to the individual states (Dobbs v. Jackson Women’s Health Organization) or that reduce federal oversight altogether (West Virginia v. EPA). It has also put limits on specific executive powers and plans to rule soon on affirmative action. Not getting as much attention, but arguably equally important, are some recent and not-so-recent decisions that have changed the landscape of the rights of authors and inventors, and the upcoming Warhol case, which may effectively remove them altogether. Unfortunately, many people, including politicians and academics, don’t understand—or refuse to recognize the importance of—intellectual property rights for the advancement of civilization.

This morning, Senator Thom Tillis (R-NC) introduced the Patent Eligibility Restoration Act of 2022, S.4734, which would amend the U.S. Patent Act to clarify the application of 35 U.S.C. Section 101 to certain technologies. While the bill was welcomed by many in the intellectual property (IP) community, since it would abrogate or weaken many of the seminal decisions that have arguably caused confusion on eligibility over the last decade-plus, some have called the bill out as being far from perfect. Questions remain with respect to the text’s language regarding the definition of “technological” and what it means for software patents, for instance, as some commenters note below.

Today’s software is built like a Lego model. Instead of a singularly developed string of code, multiple building blocks of existing code are used to create a codebase. Some of those building blocks are developed in-house by the software vendor. Others are developed by third-party commercial software providers. And a lot of them come from open-source projects. When you’re a company that puts that codebase into your final product, you must take precautions to minimize the risks that each type of code presents to you and to your customers. This is what is meant by protecting your software supply chain. It’s also how you maximize the value of the code for you and your customers. Each type of code has its own set of benefits and risks that need to be understood and managed. This article addresses just one type of those building blocks: open source software (OSS).

For every action there is an equal and opposite reaction, or so states Newton’s third law of motion. It is safe to say that Newton never met an intellectual property lawyer, and he never had to deal with the whims and fancy of an arbitrary and capricious Supreme Court. Earlier this week, the Supreme Court issued its much-anticipated decision in Google v. Oracle, in which the Court ruled that Google’s intentional copying of 11,500 lines of computer code from Oracle was a fair use despite the fact that Google made many tens of billions of dollars in the process, and despite the fact that the record showed that Google consciously chose to copy, rather than independently create, because programmers were already familiar with the 11,500 lines of code they wanted to take.

In Part I of this article, I explained that the CAFC invalidated almost every software patent on appeal for eligibility in 2020 and recapped the first 13 such cases of the year. Despite the many software eligibility cases decided last year, there is still some uncertainty about what passes muster under the Alice two-step framework. Below is a recap of the remaining 14 cases considered by the CAFC in 2020 with respect to software patent eligibility.

Last year was an active one at the United States Court of Appeals for the Federal Circuit (CAFC) for software eligibility. It also was a brutal year for patent owners, as the CAFC invalidated almost every software patent on appeal for eligibility. Despite the many cases decided last year, there is still some uncertainty about what passes muster under the Alice two-step framework promulgated by the Supreme Court in 2014. But one thing that has become increasingly clear is that the CAFC wants to see how a particular result is achieved or how a problem is solved. This desire for a “how” or rule set from the claims creates an evident tension with the traditional notion that patent claims should recite structure, not functional language. These recent CAFC cases have also made it clear that courts will look to the specification for implementation details, even if these details do not emerge in the claims. This analysis has previously been reserved for the written description requirement under Section 112 but found its way into the Alice two-step.

On March 13, American semiconductor developer Broadcom Corporation filed a lawsuit in the Central District of California  alleging claims of patent infringement against streaming media producer and provider Netflix, Inc. At a moment in history when streaming services are going to be in higher demand than ever for some time due to social distancing mandates, the complaint marks the first chapter in what could become an interesting legal battle involving dynamic networking and video encoding patent claims. If Netflix is found to infringe, the streaming video giant could ultimately be facing a large verdict. Broadcom is asserting claims from nine U.S. patents and accuses Netflix of directly infringing the patent claims through its Internet video streaming technology and indirectly infringing by inducing end users to infringe through their use of the Netflix software application

It has been one year since my software patent was invalidated in the U.S. District Court for the Southern District of New York.  Now, this intellectual property is considered worthless and my dream of paying off extensive student loans with the proceeds from patent licensing fees are in the past. The irony being that if it were not for these extensive student loans, this invention, most likely, would not have come to into being. My patent No. 6,769,915, issued in 2003, was invalidated under Section 101 and struck down on appeal. The patent covers “a user-interactive behavior modification system” that is in competition with technology pursued by the companies including Nike, FitBit, Apple, and Samsung.  The rules that existed when I applied for this software patent in 2000 no longer guarantee myself and hundreds of other independent inventors the right to collect patent licensing fees. This right was granted to all with The Patent Act of 1790. Yet, over the last 15 years, the U.S. patent laws have been changed drastically by extremely well-financed lobbyists on behalf of the U.S. Patent and Trademark Office’s (USPTO’s) largest customers— global corporations, including the Big Tech industry. This has relieved Apple, Google, Facebook, etc. from the necessity of having to pay independent inventors software licensing fees. With this shift in intellectual property laws, the once small startups of Silicon Valley have become the large monopolies they are now.

The European Patent Office (EPO) recently published its Guidelines for Examination 2019, which came into force on November 1. Compared to previous years, the volume of changes is much smaller, and this witnesses the effort by the EPO in past years to arrive at a more stable text of the Guidelines, particularly concerning the software patentability sections. Yet some changes have been made to software patentability guidelines as well as to other important sections, such as the numerical ranges and clarity matters. Continuing the trend of past years, the Guidelines continue to be enriched with helpful examples.

Trading Technologies International, Inc. (TT) has filed a second petition with the U.S. Supreme Court asking it to review a Federal Circuit holding that computer-implemented inventions that do not improve the basic functions of the computer itself are directed to abstract ideas and therefore patent ineligible. The present petition relates to U.S. Patent Nos. 7,685,055 (the “’055 patent”); 7,693,768 (the “’768 patent”); and 7,725,382 (the “’382 patent”). The petition TT filed in September relates to Patent Nos. 7,533,056, 7,212,999, and 7,904,374. The patents are all from the same family as three other patents found patent eligible by the CAFC in 2017. The latest petition argues that the Federal Circuit “simply declined to address conflicting Federal Circuit authority involving the same patent family or the line of other Federal Circuit decisions adopting and applying that authority’s reasoning,” and, therefore, clarification is needed from the High Court. The company’s argument may also get a boost from another petition filed recently appealing the controversial decision in ChargePoint v. Semaconnect, in which the Federal Circuit held that a vehicle charging station was not patent eligible.

The Senate Judiciary Committee’s Subcommittee on Intellectual Property is holding a hearing on October 30 to discuss the quality of patents issued by the USPTO. This hearing should be a great opportunity to discuss the current and future challenges facing the USPTO, including modernizing the software tools used by examiners. Unfortunately, the hearing title (“Promoting the Useful Arts: How can Congress prevent the issuance of poor quality patents?”) begins with the premise that there are poor quality patents and perpetuates the unsubstantiated position that past litigation abuse was due to patent quality. Perhaps a better start would have been to call the hearing “Promoting the Useful Arts: How can Congress help the USPTO improve patent examination?”

Yesterday, we published a response from Daniel Takash, the Regulatory Policy Fellow at the Niskanen Center’s Captured Economy Project, asking for a more civil IP debate. The response was itself responding to Lydia Malone’s critical view of the R Street panel on Capitol Hill that she attended, and which she felt took the position that patents are too strong. I, too, wrote an article in advance of the R Street presentation where I was highly critical of the motivations of R Street. Mr. Takash suggests “[w]e should all do our best to live by Antonin Scalia’s maxim to ‘attack arguments, not people.’” That is perfectly reasonable. It is, however, also perfectly reasonable to question the motivations of those who are making claims that are unquestionably false. To be quite direct about it, the R Street supposition that patents are too strong is pure fantasy of the first order. Anyone with even fleeting familiarity with the subject matter who has at all been paying attention to the demise of the U.S. patent system over the last 12+ years knows that U.S. patents are not too strong. U.S. patents are too weak. So weak that for the first time in a decade the number of U.S. patent applications has decreased while patent applications worldwide surged forward by more than 5% during 2018. Moreover, U.S. applicants are not foregoing patent protection, they just aren’t filing as much in the United States. Indeed, U.S. applicants continue to be the hungriest for patents worldwide.

Insurance is a highly regulated field. New approaches to innovation are sorely needed. The need for innovation itself is undeniable as the tech world runs head long into the world of insurance. For example, the regulation of insurance is hundreds of years in the making and steeped in arcane regulation. However, the patent system—ostensibly an engine of innovation—has been notably hostile to insurance innovations, especially since the Supreme Court’s 2014 decision in Alice Corp. Pty Ltd. v. CLS Bank Intern. Indeed, the USPTO’s latest guidance on applying Alice specifically lists insurance as a type of fundamental economic practice that should be treated as unpatentable. While the federal patent system may be restricting the protection available for insurance innovations, there are other ways of supporting innovation, and Kentucky is leading the way with its recently passed regulatory sandbox for insurance innovation.

Trading Technologies International, Inc. (TT) has filed a petition for certiorari with the U.S. Supreme Court asking it to clarify U.S. patent eligibility law, including whether the Court should overrule its “abstract idea” precedents. The petition relates to the Federal Circuit’s April 2019 decision siding with the Patent Trial and Appeal Board (PTAB) that certain claims of TT’s patents for graphical user interfaces (GUI) for electronic trading were eligible for covered business method (CBM) review and also patent ineligible. IPWatchdog has written much about this and related Trading Technologies cases. Though earlier Federal Circuit panels had found other TT patents not eligible for CBM, as the court found they were directed to technological inventions, Judge Moore said in her April opinion that the patents at issue here—numbers 7,533,056, 7,212,999, and 7,904,374—”relate to the practice of a financial product, not a technological invention,” and that “the specification makes clear that the invention simply displays information that allows a trader to process information more quickly.”