by Assistant Professor Colleen Chien, Santa Clara University Law School, colleenchien@gmail.com, @colleen_chien (Download PDF of this at SSRN)
Following President’s Obama remarks and reintroduction of the SHIELD Act, today the House Judiciary Committee Subcommittee on Courts, Intellectual Property and the Internet is holding hearings on litigation abuse by patent trolls (aka patent assertion entities or PAEs). Companies J.C. Penney, SAS, Cisco, Johnson & Johnson, & Adobe, are testifying. Part of the discussion may focus on patent troll metrics, on which I have previously reported. These statistics draw heavily upon proprietary research as well as my own analyses, so, in the interest of full disclosure, below are the numbers and what I know about them. Some say that the time has come to act, not to further study the PAE phenomenon but I believe in both – that to craft interventions that are both narrowly tailored and actually will work requires a deep understanding and careful analysis.
(It bears mentioning as well that much also can be learned from related experiences — indeed, litigation abuse is nothing new and in fact the Judiciary committee that is hosting today’s hearing held a hearing on litigation abuse in non-patent contexts yesterday. In the patent troll context, many interventions, like fee-shifting, improving patent quality control, special defenses, and maintenance fee tweaking have been suggested/tried before – in the recent past (early 2000s) as well as in the late 1800s, against both farming and railroad patent trolls and related contexts. FWIW, in my paper on the topic, I discuss other fixes like court leadership, industry organizations, collective action, and bolstering protection of users based on what has worked in these settings.)
1. PAEs brought 62% of 2012 patent litigations
According to RPX Corporation PAEs initiated 62% of all patent litigation, or 2,921 of 4,701 suits in 2012. RPX is a publicly-traded company that provides solutions to troll threats for its member companies and has great data, principally maintained by Seth Besse.
PAE Suits (2005-2012)
Credit: © RPX Corporation 2013
Data checks on RPX numbers:
- Patent Freedom reports 2,923 NPE lawsuits in 2012, as compared to RPX's 2,921 PAE lawsuits, using a slightly different definition.
- I compared about 1,000 of RPX's codings with my own, and reported the result in Appendix C of this paper: "The share of disagreements between the databases was 7%, with the net number of trolls varying by 4%."
-
Robin Feldman, Sara Jeruss, and Joshua Walker found that about 40% of 2011 suits were brought by patent monetizers in their study for the GAO. See comparison at page 17.
Comparison to 2011: The share of suits brought by PAEs in 2012 grew from 2011. However, the AIA's misjonder rules, which curbed the troll tactic of naming multiple unrelated defendants in a single suit which had artificially deflated troll suit numbers, are responsible. Thus, the increase in the number of troll suits, post-AIA, is most likely an artifact of the AIA.
2. In 2012, PAEs Sued More Non-Tech Companies than Tech Companies
Though the PAE share may surprise some, patented technologies like software are the building blocks of modern commerce. "Low-tech" industries like funeral homes, advertising agencies, and retailers like JC Penny which is testifying today are all taking steps to protect themselves from troll demands. Though historically a "tech" problem, in 2012 PAEs sued more non-tech companies than tech companies, according to the analysis below by Patent Freedom, which provides market intelligence on patent trolls. Retailers are hit the hardest by non-tech PAE suits, followed by automotive like Ford, which has also testified against trolls, financial services, and consumer products. So expect a broadening of the coalition to deal with trolls especially as many in these sectors are likely being sued over their use rather than making of technology.
3. Individual Inventor v. Corporate PAE suits
Not all trolls are created alike. Individuals get injunctions, corporate trolls don't. (See my paper with Mark Lemley, at FIG 3.) The SHIELD act would force corporate losing trolls to pay, but not individuals. "Non-practicing entities" can also include universities and startups, which is why I created the term PAE to apply to businesses that assert patents as their primary business model – universities and startups don't, they are focused on commercializing or transferring technology. (As Justice Kennedy put it in his eBay concurrence, trolls are firms that "use patents not as a basis for producing and selling goods but, instead, primarily for obtaining licensing fees.")
Based on data provided by RPX, 94% of 2012 suits brought by entities that don't practice were brought by corporate PAEs. Individual inventors were another 5% and the remaining 1% universities, based on data provided by RPX. However, PWC's excellent litigation report reports much higher "individual NPE" proportion – of 51% but for the 1995-2011 period and likely using a different methodology (the PWC university share is a bit higher). Because the SHIELD act turns on the individual vs. corporate distinction, it would be good to reconcile these numbers.
The Distribution of 2012 NPE Suits by NPE Type (based on RPX data)
4. PAE defendants comprised 59% of all patent lit defendants
According to RPX Corporation, defendants to PAE suits represented 59% of 2012 patent litigation defendants, or 4,125 out of 6,934. (Patent Freedom counted 3,859 NPE defendants to RPX's 4,125).
PAE Defendants (2005-2012)
Credit: © RPX Corporation 2013
Comparison to 2011: As the graph above shows, the absolute number of defendants named in PAE suits in 2011 shrank about 25% in 2012. However, that the relative share of troll defendants only declined by 4% (from 63% to 59%), supports that this trend reflects a general decline in new patent cases brought by practicing and non-practicing entities, rather than a fundamental shift away from the courts by PAEs.
The Success of the Misjoinder Rules
While the share of PAE defendants has not gone down significantly, I do believe, based on unreported analyses that I have performed, that trolls have changed their litigation tactics in at least one respect – they are less likely, because of the misjoinder rules, to name small defendants in lawsuits where they cannot be joined with other parties. In this way, the joinder rules can be said to be having their intended impact of making life harder for trolls. The small companies that actually are sued, however, are arguably worse off because they have fewer joint defense options. And even if they are not sued, many small defendants are receiving letters (see below).
5. 55% of Unique PAE defendants makes $10M or less
Based on my analysis of RPX's database, 55% of unique PAE defendants make $10M or less in revenue, and 66% make less than $100M a year. (previously I have erroneously reported the 55% number as associated with defendants making "less than $10M", it should be "$10M or less." Apologies for the error!). While small defendants have historically received less attention as troll targets, the patent woes of podcasters and small businesses that use scanners, not to mention bakeries (I love bread) have gotten recent attention.
Notes:
Because small companies are sued fewer times than large companies – e.g. Apple gets dozens of PAE demands whereas a small company may only get a handful – the number of total demands is more heavily skewed towards large companies than the unique defendant count. However, I believe 55% to be a conservative estimate because I calculated it based on actual revenue estimates in the RPX database provided by Dun & Bradstreet and commercial providers, and excluded from both the nominator and denominator companies for whom no revenue is reported. If, on the other hand, we assume that companies without coded revenue likely have limited revenue – an assumption other scholars have made– the share would grow. Longer discussion of methodological issues and approaches to filling in missing data here. Also of note, because of the success of the joinder rules in discouraging suits against individual small cos., the 55% number has likely declined in recent months.
6.At the ITC in 2012, PAE complainants brought about 35% of patent complaints and about half of patent respondents.
337 Patent Investigations & Respondents |
2011 |
2012 |
New Patent Investigations |
69 |
40 |
PAE Share |
23% |
30% |
New Patent Defendants |
226 |
184 |
PAE Share |
43% |
48% |
My research assistants worked with me to code the complainants in these cases, using data provided by the ITC. As with district court defendant counts, total ITC investigations and defendants (called "respondents") declined in 2012 from 2011, by about 40% and 20%, respectively. However, the PAE share of investigations and respondents actually increased from 2011 to 2012, from 43% to 48%.
Data checks:
- Last summer, the ITC published a report called "Facts and Trends" that tracks NPEs. It reported a combined NPE share of 19% of investigations, and 41% of defendants in 2011, versus my PAE shares of 23% and 43%, respectively (see above). The ITC report also notes that ITC numbers tend to vary greatly from year to year, given their relatively small numbers of investigations, which I tend to agree with.
- Covington & Burling's Robert Fram and Ashley Miller, in an excellent unpublished paper The Rise of Non-Practicing Entity Litigation at the ITC: The State of the Law and Litigation Strategy (Jan. 5, 2011), tracked the percentage of companies relying on their licensing activities to show a domestic industry from 13% in 2000-2006 to 35% in the first 8 months of 2010). Based on an extension of their database they shared with me, the rate in 2011 (through Oct. 1) was 41%.
Legislative reform?: Members of the ITC bar and ex-ITC officials remain deeply skeptical of the efforts to reform the ITC legislatively that tech companies are pushing for. Last summer, I argued that the ITC's decision-making was evolving, and recommended revisiting its record in six months to a year. However, the fewer cases and exclusion orders that the ALJs have issued since then have meant a slower evolution of the ITC's law, despite more attention from government agencies and others.
While we wait, I still find it puzzling that entities like Acacia, Industrial Technology Research Institute of Taiwan, Beacon Navigation GmbH of Switzerland, and Intellectual Ventures would put up the considerable funds it takes to bring an ITC case when the ITC can't award the licensing revenues they seek, but only an exclusion order. The best I can tell is that this trend reflects a deeper dissatisfaction of patentholders with the consequences of eBay, rather than a desire to stop unfair importation, particularly since PAEs name domestic defendants more often than foreign ones (see Appendix A).
7. Some High Impact PAE Patents Fit the "Buy and Sue" Pattern
SHIELD has put more emphasis on the provenance of patents, with Joff Wild at IAM estimating that SHIELD might only cover one in four NPEs based on Patent Freedom Data. I really respect Joff's blog and magazine, and recommend it to anyone who is serious about understanding the monetizer perspective (though the magazine is expensive). However, I have a different view of the numbers, that because patent impact is heavily skewed, what matters are high impact patents– that is to say, if just Lodsys and Geotag were discouraged from bringing their suits, many people would have been happy. Through our analysis of "high impact" patents I asked Patent Freedom to put together for another analysis, we found that the nine out of ten were purchased before assertion, rather than owner-asserted.
10 High-Impact PAE Patent Campaigns: 9 out of litigated patents were bought, not owner-asserted
.
Also, I understand that the Patent Freedom folks have a different view of their own data than IAM so if you are interested follow them on Twitter:@PatentFreedom.
8. PAEs are Less Successful than Practicing Entities in Litigation
PWC's excellent annual litigation report is chock full of statistics about patent litigation and in particular, with respect to NPEs, that: they look to juries more (but the differences are declining), a higher median damage award and a lower than practicing company success rate (34% practicing co v.23% NPE ) that is declining (Chart 5B).
John Allison, Mark Lemley, and Josh Walker's paper documents that the "most litigated" (8x or more) NPE patents lose more than 90% of the time in court. Data provided by RPX found that such repeat litigants dominate PAE cases – 61% of defendants named in 2011-2012 were sued by a PAE who had brought the case 8+ times (see page 33).
9. Public PAEs
My research assistant and I have been working on profiling public company PAEs – those which derive a majority or significant revenue from asserting patents. Depending on how you slice it, we have found about 16 of them (ACTG, ASUR, DEMO: OTC, NSSI, OPTI, RMBS, VHC, WIN:TO, VRNG, PANL, DSS: NYSE Amex , WDDD: OTC, BB,PCO, PRKR, UPIP); a number of the stocks are very volatile and live and die by litigation outcomes – invest with caution.
10. What We Need to Understand Better: Demands , Users, the Differential Impact of Interventions
Litigations are only a tiny part of the story. While good data on patent demand letters is lacking, here are a few data points:
- In my survey of startups, among companies that had received threats (N=79), in some cases many threats, less than a third had been sued. This survey is being redistributed to a larger and more representative sample which should yield better estimates when it is concluded.
- In its RICO complaint against Innovatio, Cisco reported that over 8,000 letters had been sent, even though there were only 26 named defendants, a ratio of 276:1.
We also need to understand how many of these suits are user based ones – in my survey (N=79), 40% of respondents said the demand was based on a technology they were using, not making. Such suits seem hard to justify as anything but nuisance-based.
Some will say that the time has come to act, not to further study the PAE phenomenon but in order to craft interventions that are both narrowly tailored and actually will work requires careful analysis and learning from the past as many interventions like fee-shifting, patent quality control, and maintenance fee tweaking have been suggested/tried before, in related and different contexts — some of them even to trolls of the late 1800s, as detailed in my paper, which also suggests: bolstering protection of and staying cases against users, industry organizations, and collective action.)
11. What Really Counts
What really matters is not PAE litigation itself but the impact it has on businesses, innovation, and the economy, and in particular how these impacts are distributed and also the justice or injustice of the claims – that is why there is so much heat on the PAE issue –because people who are sued feel that had no ability to anticipate or avoid it. My research has documented the positive impacts of a liquid IP market, and that startups are selling to trolls and benefiting from that monetization. However, it also documents a significant emotional toll: people said demands have "invoked rage over the waste of time," made a target "very very angry," "ruined family friends" and caused "stress" and "ill-will generation [sic]": "it was agonizing to hand over all the money we had earned from a product we had invented and created ourselves to a firm that invents nothing and creates nothing. Our founder has since lost his house, car [sic] all his assets." As the numbers of impacted companies and industries continues to grow, don't be surprised if the ranks of those who support curbing most egregious litigation abuses – the practices of going after end-users, rather than manufacturers and extracting from small companies nuisance-based rather than value-based settlements – continues to swell as well.
= = = = =
Notes:
- With thanks to my research assistants Aashish Karkhanis, Nicole Shanahan, Teri Karobonik, John Neal, and Coryn Millslagle and to RPX Corp., Patent Freedom, Gazelle Technologies, Robert Fram and Ashley Miller.
- High impact patents discussed above include 7,222,078 (Lodsys), 7,346,472 (Bluespike), 5,937,402 (DataTern), 6,101,502 (Datatern), 5,930,474 (Geotag), 6,150,947 (Ogma), 5,223,844 (PJC Logistics), 6,185,590 (Project Paperless), 7,054,949 (Single Touch) 8,015,307 (Single Touch).
Suppose he is still out cold?
link to youtu.be
anon, I see your slight of hand. But since I now disagree with the Supreme Court that math is the common weal of all mankind, I will join your conspiracy with respect to "applied math."
101, every claim must be directed to a practical application, something that one can physically make, use or sell. You agreed with this in principle in an earlier post.
I submit that a claim that has a business utility that is not directed to a practical application, is directed to business method in the abstract. One needs at least a computer program, or a spreadsheet or something else tangible that is manipulated.
As I understand the Supreme reasoning, math by itself (basic math) IS a law of nature (not saying I agree with this reasoning). Applied math, on the other hand, evinces a purpose (the hand of man). It is for this reason that encryption is patent eligible.
101, the Supreme Court seems reluctant to define or limit Useful Arts. Until they do, is not clear that even music is unpatentable subject matter; although most of us would consider it to be not within the Useful Arts. I would also agree that things such as hope, fear, belief, the spiritual, and the like should be excluded from eligiblity as not being within the Useful Arts. Thus a claim to a method of increasing the belief in the lord should be proscribed as much as a machine adapted to do an illegal act, such as stab a person in the back.
The only recognized exceptions that I know of are
1. Laws of Nature; and
2. Natural Phenomena
I do not think a Product of Nature exception exists.
The exceptions state that these things, Laws of Nature and phenomena of nature, are exception because they are the common weal of mankind. For that reason they cannot be appropriated to only one. Thus Supreme Court will find unpatentable claims that effectively monopolize these things.
But beyond that, the laws should not exclude their eligibility. I will agree that business methods are not excluded per Bilski.
However, generally, and even in connection with Laws of Nature, patents are awarded for practical applications, applications that can be described in terms of making and using under 112, and that can be made used and sold under 271. Simply stating a principle without any practical application is not sufficient. This was the holding in Morse.
But I do not agree (now, after further consideration) that mathematics are the common weal of mankind. They are the invention of one.
However, one still has to provide a practical application, but the claims can, IMHO, be very broad because excluded subject matter is not involved.
Correction: ….are subject to the same conditions and requirements as the other sections in the statute.
Ned: “101, since I define those business methods that are ineligible to be those business methods that are abstract, surely we you would agree that such claims would be ineligible because they are abstract and not necessary because they are business methods.”
The problem I have with your statement is that it requires one to assume business methods are something different from the “‘ordinary, contemporary, common meaning,’” of method.
Remember a method (process) is statutory, and the Court has ONLY created three exceptions. Whether the invention purports to conduct business or not is not one of the exceptions and is of no relevance to statutory subject matter.
Ned: ” In truth, the question really should be whether the claims as a whole are obvious – unless, that is, the utility itself is not within the useful arts. ”
No, “obviousness” is but one of the conditions and requirements for obtaining a patent, and methods, even those deemed to be business oriented, are subject to the same conditions and requirements as the other sections in 101.
As far as “utility itself is not within the useful arts” this too is not a sound legal position for the Court to use to declare business methods an exception.
Conducting business, if that what the methods is directed to, is not taught or categorized as a liberal art but as an industrial art & science, and therefore falls under the “Useful Arts” umbrella in the Constitution.
Ned, you obviously want to lobby to restrict or eliminate certain types of inventions from the marketplace.
Perhaps it is inventions that effect or directly involve money changing hands, or software being sold and developed. The problem is the congress has not agreed with you. And the Court just does not have the legal authority to make that change in law.
“101, the integration analysis applies only when one is claiming something that may be potentially unpatentable subject matter such as laws of nature, natural phenomena, mental steps or mathematics. ”
Hello Ned:
This is not entirely accurate. Mental steps per se are not an “exception” to patent eligible subject matter. Only a process claim that was composed of all mental steps would be an exception. Those steps would be primarily as follows
1. Feeling…
2. Imagining…
3. Believing…. etc.
e.g. methods that can be performed by human thought alone, ( Cybersource). However claims composed of mental steps combined with non mental step(s) can very well be patent eligible subject matter.
Now, mathematics, which comes under the abstract idea exception only applies to math equations or algorithms and word problems that can be reduced to math equations such as the type in Bilski.
But even math equations can be statutory subject matter when combined or “integrated” with other steps in a process that is not entirely composed of mental steps.
Thus, we have Diehr as the case most on point for what is statutory subject matter.
Finally “Integration” applies to “all” claims in “all” cases. Historically patent claims have been considered “inherently” integrated by the Court. But even with “Integration” the claims are still subject to all the conditions and requirements of 35 USC, and what ever Court created judicial exceptions exist at the time.
For example, a claim of all thinking steps, of the typed presented above could be “integrated” but still fail to be new, useful, novel, non obvious and fully described ad enabled, and thus fail to be patent eligible and/or patentable subject matter. The same can be said of any math equation reduced to steps.
For the purposes of this thread the take away is that there is no exception under current law to business methods, ( as the Supreme Court has defined that term) nor any legal foundation in current Court opinion for business methods to be made an exception to patent eligible subject matter.
But, anon, something is abstract only when it is not applied to an useful end.
There is a fundamental flaw in Bilski. It is this:
Business utility is not proscribed from patenting as is, for example, a law of nature. A business method, if not excluded because it is not within the Useful Arts, is potentially patentable subject matter. Whether a claim wholly prempts a business method is legally irrelevant if business methods are not excluded from eligibilty.
Anon,
Will you agree with me that newly discovered math is not like a law of nature, freely available to all mankind? If so, the legal basis for Benson's broad statement and ultimate conclusion is suspect.
Thus a claim that includes math and a computer to carry out the math presumably, without more, passes 101 because math is not an exception, and a computer is statutory subject matter all by itself. The question then becomes one of obviousness under 103.
If Benson made a mistake, it was in equating math to laws of nature, subject matter that cannot be patented, directly or indirectly.
“but that does not mean all mathematics must be excluded from being patented.”
Glory be.
Think Applied Math.
Think encryption.
Think.
“since I define those business methods that are ineligible to be those business methods that are abstract”
So…
We have moved the goal posts to “those” business methods that are circularly defined as abstract in your IMHO-Law other-worldly discussion, have we?
Ned, please come back to planet Earth and talk US patent law.
Thanks.
101, the integration analysis applies only when one is claiming something that may be potentially unpatentable subject matter such as laws of nature, natural phenomena, mental steps or mathematics. When one is claiming potentially excluded subject matter, the only thing the Supreme Court really is concerned about is whether enough has been added to the claim such that the claim itself is not claiming the law of nature, etc., in the abstract, but rather whether it is claiming a practical application. Integration here is the key.
101, with respect the law of nature, I think the Supreme Court might be right in that laws of nature are forbidden subject matter and the real question is whether one is attempting the claim the law of nature itself by adding in conventional steps that don't change the nature of the claim.
However when one is dealing with business methods, they are not forbidden subject matter in the same way as claims to law of nature. Thus the analysis is not whether one is attempting to claim forbidden subject matter, but whether the claim is obvious.
I am now tend to agree with you 101 that declaring mathematics to be among the excluded classes does not make sense. Laws of nature can be expressed mathematically, but that does not mean all mathematics must be excluded from being patented. Still, one must claim a practical physical application in order to obtain a patent, but mathematics per se are not laws of nature.
And yet, the Supreme Court has said that mathematics are forbidden subject matter. Thus when a claim masquerading as a business method really is a claim to new mathematics applied in a business context, the Supreme Court might be justified in adopting the "Prometheus" analysis to exclude claims to mathematics by determining whether enough has been added. But to apply the Prometheus analysis without first determining whether something forbidden is potentially being claimed makes the assumption, which may be unwarranted, that the principle potentially being claimed, a business method, is unpatentable subject matter and that something else besides the business method must be added.
101, since I define those business methods that are ineligible to be those business methods that are abstract, surely we you would agree that such claims would be ineligible because they are abstract and not necessary because they are business methods.
However when the claims manipulate tangibles, they are not wholly abstract are they? In truth, the question really should be whether the claims as a whole are obvious – unless, that is, the utility itself is not within the useful arts.
I can see the approach taken by the Supreme Court in Prometheus as being the logical approach when the claims are directed to a forbidden subject matter, such as "law of nature." But to apply the same approach to business methods makes the unstated assumption that "business methods" are forbidden subject matter in the same way as natural phenomena and laws of nature, which the Supreme Court in Bilski said they are not. Therefore it would seem contrary to Bilski to analyze business method claims in the same way as law of nature claims.
So in the end, I think the Supreme Court needs to rethink its analysis of business method claims.
Still can’t hear you Leopold…
(where did he run off too?)
spin…
spin…
spin…
“That depends on what the definition of “is” is…”
Ned said : “Compare State Street Bank on “invention” with the theory of the government that the issue with Prometheus was one of 102/103. That is the comparison I make. You say you agree with Rich on this. If so, you then agree with the government position in Prometheus.”
Here is what the Government actually stated as their position in Prometheus:
“.. the claims should ultimately be found invalid because, as construed by the district court, they “merely … appen[d] a purely mental step or inference to a process that is otherwise known in (or obvious in light of) the prior art.” But the Supreme Court should affirm the Federal Circuit’s holding on subject matter eligibility.” [AMICUS BRIEF SUPPORTING NEITHER PARTY
UNITED STATES (Solicitor General Donald Verrilli, Jr.) ]
That was actually somewhat close to MM’s whacky mental steps test. You called him brilliant and helped him celebrate what you both thought was a 9-0 victory. But in reality the Court said:
“The Government, however, suggests in effect that the novelty of a component law of nature may be disregarded when evaluating the novelty of the whole. See Brief for United States as Amicus Curiae 27. But §§102 and 103 say nothing about treating laws of nature as if they were part of the prior art when applying those sections. Cf. Diehr, 450 U. S., at 188 (patent claims “must be considered as a whole”). And studiously ignoring all laws of nature when evaluating a patent application under §§102 and 103 would “make all inventions unpatentable because all inventions can be reduced to underlying principles of nature which, once known, make their implementation obvious. These considerations lead us to decline the Government’s invitation to substitute §§102, 103, and 112 inquiries for the better established inquiry under §101. [MAYO COLLABORATIVE SERVICES v. PROMETHEUS LABORATORIES, INC.]”
As for as comparing SS to the Governments rejected brief. I see no comparison. In fact I see the Prometheus Court’s insistence that 101 be used for subject matter eligibility, and 102, 103 and 112 be used for patentability to be quite consistent with Rich view of the statute.
In effect the Government wanted to conflate and mix up the sections like you and MM have pined for all these years. But the Supreme Court in Prometheus said, no thank you. They pretty much kept everything Rich stood for, claims as a whole, integration, processes as an independent section, and no business method exception.
“One is not start with whether the claim is nominally directed to patent eligible subject matter, such as a player piano, a computer, or a process for drawing blood and conducting a blood test that involves a transformation. Rather one starts with the unpatentable subject matter in asks the question whether enough has been added, and this they say is a section 101 test.”
Ned, the Court did not say this is a section 101 test.
In fact the Court in Prometheus did not state any bright line test whatsoever for patent eligibility.
Instead the Court referred to “integration” for identifying claims that “are” eligible subject matter.
Niether did the Court in Prometheus say, “start” with the unpatentable subject matter and ask the question whether enough has been added.
The mistake you are making is failing to recognize that
1. Prometheus applied extra solution activity analysis to the claims.
2. Extra solution activity analysis is only applied when a claim begins with a “bare” Court created judicial exception.
(BTW, Raders use of “manifestly evident” in Research Corp, as well as Linn’s use in Alice, stands for essentially the same principle as “bare” in Prometheus.)
Of course, in Prometheus’ case the “bare”, or “manifestly evident” exception was a Law of Nature. In the case of such an exception the Court looks at the claims as a whole to determine if the added steps are a sufficient limitation so that the exception is not pre-empted and the claim is not a monopoly on the judicial exception itself.
But I repeat the Court has NEVER used, or said use extra solution activity analysis as a test for all process claims, or as a beginning analysis for all process claims.
To apply such an analysis for all process claims at 101 would be a gross legal error.
If in doubt about when to use “extra solution” activity just remember this handy mnemonic device.
“If it’s not bare, don’t go there!”
Hello Ned:
101 Integration Expert: Thank you for the response. I do not see how any of it provides any legal support for your opinion that business methods should be non statutory subject matter. Nor have you presented anything that is contradictory to the Courts apparent definition for business methods which is :“[a]n orderly procedure or process … regular way or manner of doing anything; hence, a set form of procedure adopted in investigation or instruction”).
Of course if you wish to elaborate further to show how what you stated above shows “legal support” for your opinion, I am willing to listen.
I’m not even sure they rinsed them first.
I am in the same situation everything stolen and nothing in the right name except theis guy would have had to steal from me theoretically because I invented everything significant
Ya patents are of plenty of use they allow you to sell the patent outright or recieve royalties or have an exclusive market (Use) to produce the product without competition for a limited time 20 Years in exchange for improving human lifestyle and advancing human intrests
“does make you a l-ar, though”
LOL – the single most undeserving person in the blogosphere to utter that phrase.
From you: another absolute meaningless post.
Show me the lie, Malcolm – as I have asked you (without answer) so many times previously.
And tell me, does your email system have a spam filter?
“at a joke I made here (at your expense – so sorry).”
Malcolm, that’s quite ridiculous, as I already posted in reply to your political views (think: all politicans are… politicans – I care for none of them).
So yes, another vacuous post from you.
Way to go Malcolm.
anon, why are you being difficult here? Rich's position in State Street IS your position. He clearly indicates that machines, processes, etc., must still face 102/103/112. He just denies that patentable subject matter has anything to do with the term "invention" in 101 that was the basis, prior to '52 for the courts to impose both a degree of separation from the prior art that was beyond trivial (not the work of one of ordinary skill) or to say principles in the abstract and laws of nature were not "inventions" even though they might be discovered.
Your posturing here is making much to do about nothing, I think.
If I still misunderstand your position, why don't you simply state your position on "invention" in 101?
Ya that example is quite unfair but the term troll or indegent inventor paralegal represtntative patroller doesent apply because the enforcement is against customers or end users by the patentee and not against a large profit producing company hording all their should be business partners profit portion. Also it should be realized that the original conciever was me so the wrong entity is attempting enforcement although it might be tough to prove this one it was me with an employee and It was likley espionaged. If its any comfort Ide only charge about 9.95 for lifetime use.
my posts are not “insane rantings”
Have you figured out which law firm uses staff to screen registered letters to attorneys and throws the letters out without letting the attorneys see them if the staff person decides that the letters contain information about prior art relative to a client of the attorney?
Originally you indicated that you knew of such a firm. If so, you are the only one on this planet with such knowledge. Of course, everyone here knows that you just made that baloney scheme up out of thin air. That doesn’t make you “insane” … necessarily. It does make you a l-ar, though, and a rather distasteful one.
western civilization
Oh, look, the kids are playing on grandpa’s lawn again. Watch out!
this is an argument not about how the patent system should look, but whether we should have it at all.
Oh, I thought we were talking about patent trolls and the various ways of curtailing their greedy, resource-wasting behavior.
Personally, I think we should have a patent system that encourages and supports innovators who create things rather than one which encourages the usual grifters, skimmers and leeches to gamble at the Great Patent Casino.
“Patent trolls don’t care if their patents are invalid. I mean, if they are determined to be valid in litigation, that’s a bonus for them. But other than that, they don’t care.”
To whatever extent that statement is true, it applies equally to non-trolls.
Absolute bullshirt.
By the way, have you seen him lately?
Yes, he laughed at a joke I made here (at your expense – so sorry).
Another vacuous post.
Not at all, after you recognize that most patent t–b-ggers are old white Republicans. You know: Fox News demographics. So keep digging your heels in and never, ever stop fluffing j–k patents and the trolls who rely on them. It’s what works for you, man.
“This is you position as well.”
Ned, this is a blatant lie.
I have been more than clear that there is no free pass for ANYTHING past 101.
Review the careful distinctions that I have POUNDED into you regarding the difference between “categorically” (which you are implicitly slipping back into) and “as a category.”
Yet another well traveled merry-go-round for you Ned.
Please stop the nonsense already.
Patent eligible versus patentable.
Ned – we’ve been there, done that.
“Anon, regardless of authority,”
No, Ned, NOT regardless of authority.
Pay attention and stop your nonsense.
Understand the difference between patent eligibility and patentability.
We’ve been on this merry-go-round many many many times now.
Another vacuous post.
Way to go Malcolm.
But attaching the post to me is oh so Leopold of you. By the way, have you seen him lately?
The beleaguered Republican Party put into writing today what its leaders have been saying since last year’s election: The GOP is too old, too white and too insular.
Take note, patent t–baggers.
The, anon, tell us what you position is on "invention." Is this a 101 issue or a 103 issue?
And if both, what are the differences?
Anon, regardless of authority, you have argued that "invention" is no longer a 101 issue. That you have repeatedly argued. I agreed on the basis of 282.
I think, implicitly, that Rich may have agreed that conditions of patentability meant 102/103/112, as the statute says, and not 101. If the subject matter is nominally directed to a statutory class, move on to 102/103/112.
If this is not your position, please explain what your position is in more detail.
In the first place you should not have been ordered to turn over all your companies profits unless the infringement was wilful and blatant.The business partner of the and contingent prosee legal representative of the patentee produced something of great value that being the invention without which the business segment of the economy would not exist and they did the patent preparation and enforcement legal work. You mention that legislations favor one type of litigant over another and they do the thieves are brought to justice by the victums and infringers are thieves.
I hear Oboma complainting about the need for the shield act to prevent entraprenurs from having there profits hijacked like there is no method of fairly negotiating with the patent concievers reguarding lisencing or % of profits after all expences like my company does.These companies want all the profits no matter how profitable the product is there bandits and should be denied business lisences. At my company you can special order conception of new products with no money due till my invention produces it for you in sufficient quantities no reason for the shield act to destroy the incentive to create and hault human advancement
They should require in the shield act that the inventor serve registered mail on the infringers to give notice of potential troll action if their not sucessful at negotiations with the infringers to bring them to justice before the lucrative money from their usage of the stolen patent is prosecuted
I wonder if Leopold will ever show up and actually talk about the points under discussion?
I missed no point Ned.
You are attempting to conflate and kick up dust.
I do not touch State Street and decline your invitation to jump into the briar patch. I do not need State Street to understand what the law actually is now. today. in this universe.
Please stop your nonsense and join me on planet Earth.
“But, anon, you have repeated said this.”
No Ned, I have never argued from State Street.
You may be confused with my position, but my position is grounded on other than State Street.
My position is grounded in what Frederico and the Supreme Court itself have said.
We’ve been on this merry-go-round before Ned – you flat out agreed with me.
Stop your nonsense.
Please.
101–
Thanks for this, I will read through it.
anon, review State Street Bank, at 1375. Rich said BMs should be analyzed under 103. This is you position as well.
But, anon, you have repeated said this. You say, "Invention" has been removed from consideration under 101 and condified in 103. That is exactly what Rich said in State Street Bank:
"As an alternative ground for invalidating the '056 patent under § 101, the court relied on the judicially-created, so-called "business method" exception to statutory subject matter. We take this opportunity to lay this ill-conceived exception to rest. Since its inception, the "business method" exception has merely represented the application of some general, but no longer applicable legal principle, perhaps arising out of the "requirement for invention" — which was eliminated by § 103. Since the 1952 Patent Act, business methods have been, and should have been, subject to the same legal requirements for patentability as applied to any other process or method." SSB at 1375
Anon, I think you missed my point. Compare State Street Bank on "invention" with the theory of the government that the issue with Prometheus was one of 102/103. That is the comparison I make.
You say you agree with Rich on this. If so, you then agree with the government position in Prometheus.
WRONG Ned – the reason was that Congress recognized business method patents when it passed Seciotn 271 (you know, the section that Stevens would have written out of the law).
We’ve been on this meery-go-round before Ned.
Stop the nonsense.
Ned,
STOP THE NONSENSE.
Nowehere have I ever said anything that would give you reason to state:
“I would agree with you that judge rich may have had it right when he argued in State Street Bank that when considering a machine (or other clearly eligible subject matter) set forth as part of a claim, the claim had to be analyzed under section 103 and not section 101.”
STOP.
NO NED – what fell in Prometheus was your beloved MoT (which was found to have been met. There you go again conflating things and kicking up all kinds of dust.
Bilski: MoT not required
Prometheus: MoT not sufficient
swallow
Anon, I must've missed that updated case. Can you tell me what it is one more time?
I would agree with you that judge rich may have had it right when he argued in State Street Bank that when considering a machine (or other clearly eligible subject matter) set forth as part of a claim, the claim had to be analyzed under section 103 and not section 101. That was my position also prior to the opinion issued by the Supreme Court in Prometheus. There is also the position of the government advanced to the Supreme Court in Prometheus (if the old elements past section 101, then the issue was novelty and obviousness they argued).
But as you remind me often, the Supreme Court declared that approach incorrect. One is not start with whether the claim is nominally directed to patent eligible subject matter, such as a player piano, a computer, or a process for drawing blood and conducting a blood test that involves a transformation. Rather one starts with the unpatentable subject matter in asks the question whether enough has been added, and this they say is a section 101 test.
Frankly, having considered both views, I think Judge Rich's approach might be the better approach, but it is not accepted by the Supreme Court and is Gone with the Wind.
“as about manipulation of things like a player piano”
ARRGGHHH
! Canard Alert !
The (attempted) introduction into the discussion of items clearly not within the useful arts.
Ned – stop the nonsense.
Please.
ps – I have already given you an updated case on the “use of machine” doctrine c_rrp that you are implying.
pp – Your tortured attempt to impugn on a 101/103 matter falls flat.
101, since you now seem to agree that all business methods must manipulate something physical in order to be practicable, then I would tend to agree that Judge Rich's view, expressed in State Street Bank, that the issue with respect to business methods is not section 101, but section 103, should be the correct view. But, I hope you recognize that this very argument was advanced by the government in the Prometheus case (the old elements were otherwise statutory, meaning the issue really was one of obviousness), and was soundly rejected.
101, the point about manipulation of "old physical items" is to say point as about manipulation of things like a player piano. Does the new music somehow create a new player piano. Does the new business use somehow create a new ledger sheet?
This question was somewhat addressed eons ago by the Supreme Court when it declared that the new use of an old machine cannot be patented as a new machine, but could be patented perhaps as a process. I think Judge Rich correctly observed in State Street Bank that this kind of statement was related to the degree of separation from the prior art necessary to make an "invention," which now have been codified in section 103.
Therefore I think Judge Rich would say that when claiming a machine where the departure from the prior art was in the nature of a new use of the old machine, the issue was not section 101, but section 103.
I can see a lot of merit in Judge Rich's approach here, and it was the suggestion to Supreme Court by the government in Mayo, that the issue was not section 101 in the case where the claim's old elements otherwise passed 101, but a question of novelty and obviousness. But of course, as we saw the Supreme Court soundly rejected this notion, and implicitly Judge Rich's remarks in State Street Bank.
Mr. 101, with all due respect, a cited reason for the Bilski majority not to exclude so-called business methods from patent eligibility was that there was no good definition of "business method patent."
“Uh, how about running patent search and submitting a patent paplication on those products you believe you have invented? Kinda like the inventors who obtained the patents being asserted against you did.”
Why should they share?
“What really matters is not PAE litigation itself but the impact it has on businesses, innovation, and the economy, and in particular how these impacts are distributed and also the justice or injustice of the claims – that is why there is so much heat on the PAE issue –because people who are sued feel that had no ability to anticipate or avoid it.”
Uh, how about running patent search and submitting a patent paplication on those products you believe you have invented? Kinda like the inventors who obtained the patents being asserted against you did.
What would the impact upon innovation be if inventors could not monetize their patents or could only do so at reduced amounts because the purchasing “troll” devalued the patent due to the adverse impacts of laws like SHIELD?
Laws, courts and process are all about determining the equities involved in any suit. Legislation designed to favor one type of litgant over the other is all about closing the courthouse doors to protect the activities of the potential litigant who supports the legislation.
“it was agonizing to hand over all the money we had earned from a product we had invented and created ourselves to a firm that invents nothing and creates nothing.” Seriously? I would think if one had invented the product at issue the money would not be handed over. Perhaps you might want to secure your own patent for your invention.
Hello Leo:
Both patents have business utility ( in addition to commercial application ) because in order to use the patented processes you need to pay the owners of the patent a license fee and/or royalty.
This is why ALL patents have business utility. And it is why Ned’s statement:
” I think a business utility is hardly within the useful arts”
is factually and logically in correct.
For example:
If ALL patents have business utility as proved and demonstrated above, and business utility is not within the useful arts as Ned claims, then ALL patents would be invalid for not being within the useful arts.
But since both you and Ned both failed to prove your premise, and it has in fact been disproved, you are both factually and logically incorrect.
Please let me know if you have any further questions.
I am here to help.
IBP: “‘m still willing to listen to an explanation”
Since you now claim to be “willing to listen to an explanation”. I will elaborate.
Using the Courts line of 101 cases as the lens thru which to determine when claims are “integrated” it is apparent that a new and useful process claim in general has a clear presumption of “Integration” and the presumption remains valid, and requires no further analysis under 101 unless the claims as a whole recite; A bare Court created judicial exception, (derived implicitly from the Congressional Statute of 101). Since we know software per se is not one of the Court created judicial exceptions that takes us right to determining if software indeed meets the definition of “Integrated”.
“([u]nless otherwise defined, ‘words will be interpreted as taking their ordinary, contemporary, common meaning.”) [Diehr, supra, at 182.]
When one checks the dictionary definition for the ordinary, contemporary, common meaning of “integrated” it says:
“in·te·grat·ed [in-ti-grey-tid] Show IPA adjective:
1.combining or coordinating separate elements so as to provide a harmonious, interrelated whole:
2.organized or structured so that constituent units function cooperatively”
Hence we know:
That which is “integrated” is a process
That which is “integrated” is structured.
I do not believe there can be any debate that software meets the above definition of “integrated” and thus software is not barred at least at the threshold of 101.
And to extrapolate to the subject at hand , software and computers as “integrated circuits” is defined in the same dictionary as:
“integrated circuit noun Electronics.
a circuit of transistors, resistors, and capacitors constructed on a single semiconductor wafer or chip, in which the components are interconnected to perform a given function. Abbreviation: IC”
Therefore when the additional question is asked, (is software integrated with a computer statutory subject matter?) , there can be only one answer.
And that answer is an unequivocal, yes!
Any further questions?
IBP:”I already asked you in a gentlemanly fashion to explain what you meant by that term, and you insulted me by posting, IIRC, tautological rubbish.”
101 Integration Expert: You do not recall correctly at all. You NEVER asked me in ANY fashion to elaborate on what an “Integrated” technological process is. With the keyword here being “integrated”. You simply called my definition rubbish. And now you have doubled down on your insults by calling my definition “tautological rubbish.” Such is not the work of a gentlemen, and certainly no scholar. Beside I believe a tautology means stating the same thing twice. And there is nothing repetitious or logically unchallengeable in my definition of software as an “Integrated” technological process. Indeed I have been very open to anyone performing “integration analysis” or in fact invalidating it using the law. A challenge ALL the Anti’s have ducked and run away from including, and up to this point, yourself.
“Read about it, think some more, and you will get it.”
No, IBP, he will not. Your rationality will fail with Malcolm. Guaranteed. He has already indicated that he cannot see the absurdity.
MM: “the “patent trolls” and their supporters are, by and large, the same people who have neither (sic) seen a patent that they didn’t love”
Come on, man, where has your mind gone? Just the same as any “non-patent-troll”, they can’t stand any patent that is used against them in some way.
“Patent trolls don’t care if their patents are invalid. I mean, if they are determined to be valid in litigation, that’s a bonus for them. But other than that, they don’t care.”
To whatever extent that statement is true, it applies equally to non-trolls.
As to the rest, what I’m saying is that the very existence of a patent system reflects what is a foundational principle in the formation of not only this country, but of advanced western society–and the type of erosion of that system that is proposed here is grounded in principles that are not equally foundational.
Failure to post a required bond would effectively result in the forced transfer of private property from one private entity to another, without compensation. That is classic re-distribution, and is diametrically opposed to the principle of dominion, or the private control of the disposition of property. It is more than just a limit on the use of property, it is a divestiture, a diminution in dominion.
Why is that important? Because the value in property rises in proportion to the degree of dominion over it by a private owner–that was a foundational concept behind private private, rather than shared, property ownership. By compelling what is effectively an uncompensated transfer of a portion of the right of dominion (control over the disposition and use), there is a good argument to be made that the total value of the property in question is decreased. Read about it, think some more, and you will get it.
Why is that total value important? Because overall, it furthers autonomy, individuality, and self-determination, which are concepts that have proven their worth to our society and western civilization in general. One can argue about inequalities and disparities in the distribution of those qualities, but in a general or aggregate sense, I have never seen their worth meaningfully questioned.
Don’t misinterpret what I’m saying. Think about it this way: why isn’t the outcome, instead of being an uncompensated tranfer, a compensated transfer or compulsory license for a market royalty rate? That would be bad enough for other reasons, but it would not diminish property value nearly as much as this proposal would do.
But this is the modus operandi of the re-distributionists: start out with an absurd position, then negotiate from there to your desired position. Regardless of how one feels about the substantive merits of any such position, the fact that a position taken for bargaining purposes is absurd should be recognized, and any such position should be dispensed with efficiently.
This proposal is such a position. I like my high art, and I like my intellectual western interpretations of former art and current “primitive” art. I enjoy the fact that there is somewhere to live other than Mogadishu, or Detroit. I enjoy the leisure time that affords me the opportunity to reflect on both my own ideas and on the ideas of others. I enjoy the democracy of communication means, and the preservation of written history.
In short, I like who I am, and to that for that in part I have western civilization and therefore the principle of private property ownership–and therefore a patent system that is one of the most fundamental ways that we have chosen to give effect to that principle.
There is room for us all. Don’t mess with my patent system in a way that erodes its very meaning. We can argue about ignorant judges or lazy public-sector bureaucrats, but this is different–this is an argument not about how the patent system should look, but whether we should have it at all.
And I think we should.
When you say there is nothing abstract about conducting a business, I assume you have something in mind that extends to the physical.
I think it is ridicules to even bring up this point. Have you ever heard of a business method that could be performed solely with the mind? I mean seriously Ned. If nothing else this thread has clearly shown your opinion against the patentability of business methods has no legal, logical, or social policy basis whatsoever.
Therefore I hope you will give up this crusade against business methods and while you are at it, software patents too.
101–
I already asked you in a gentlemanly fashion to explain what you meant by that term, and you insulted me by posting, IIRC, tautological rubbish.
I’m still willing to listen to an explanation.
“However, any such logical indication is completely missing from any of your posts today.
Pick up your arrows (you don’t have to reach far), and try again.”
Leopold – this comment also applies to your posts today – just in case you were unaware of it.
“One of us is rambling, that’s for sure.”
LOL – yup, one of us has made a point, and the other continues to evade that point.
Not hard to figure out who is who here.
“pick up another hobby”
Why? you yourself note that I seem to be having fun. Of course, it is at your expense. You are confused as to who needs a new hobby. Unless of course, you like playing the f001 (I’m OK with that – quite in fact, I have fun with that).
Are you even aware now of what the conversation is about?
No, I’m not. But you seem to be having fun.
Or are you simply rambling on because you see the red cape of “anon said”?
One of us is rambling, that’s for sure.
What’s that? Speak up Leopold, I can’t hear you.
Is everything OK, anon? A little lonely today? Maybe you should pick up another hobby.
And please, Leopold, remain blithely unaware of the actual points made in my post of 9:59 am in response to your post 9:27 am.
What’s that? Speak up Leopold, I can’t hear you.
Your awareness level is (as typical) remarkably low.
That’s what happens when you post for soapbox reasons instead of for reasons of having a discussion. Yes, I know, having a discussion is more difficult as it means actually paying attention to what the other person is saying and trying to understand when valid points are raised.
“about anything at all”
So what was your point of introducing a different patent to the thread at 12 pm on the 14th, to which bja replied and to which I also replied?
Are you even aware now of what the conversation is about? Or are you simply rambling on because you see the red cape of “anon said”?
Kind of silly?
Yes, your post was kind of silly. You never did address the point raised, though.
And no, it was not the exchange with Les, but rather, it was your exchange with bad joke ahead on the 14th at 12:07 pm.
Oh wait, you are not really arguing about the patents themselves (with validity presumed), are you? You are actually arguing about that presumption, right? Or perhaps about enforcement, right?
I wasn’t aware that I was arguing about anything at all, anon. But thanks for clearing that up.
Are you talking about the series of posts where Les and I discussed the likelihood of infringement? It would be kind of silly to talk about infringement if you weren’t presuming validity, wouldn’t it?
If you’d like to address the validity of those patent claims, then please, go ahead. I haven’t done enough research to have a firm opinion one way or the other.
arstechnica.
RMJ
consider the sources and safely ignore.
Patent trolls are demanding that small businesses pay license fees for sending images generated by scanners via email:
link to arstechnica.com
$900 per employee will bankrupt most small businesses. It is simply shocking that anyone would even think such a patent is valid, but the idiots that run the patent office and the courts seem to think so.
Both the cat exercise patent and the swinging on a swing patent can be shown to have business utility.
The ability to exercise unrestrained cats has huge potential: if you can exercise the unrestrained cat, then you can herd the cat. Anyone who has had any management experience will see the value of being able to herd cats.
The makers of swings have huge business utility in the advance of additional ways of swinging on a swing. Their products can now reach additional markets, or can be sold at a higher price with the new process feature boldly marketed.
Oh wait, you are not really arguing about the patents themselves (with validity presumed), are you? You are actually arguing about that presumption, right? Or perhaps about enforcement, right?
So the post above that made you go silent would be on point again, right (on the 14th at 6:52 pm)?
Speak up Leopold, I can’t hear you.
Right but I am the actual inventor who got cheated so those suits are paying the wrong person and we need to sue again to get triple damages from the infringers to keep the incentive to create jobs revenues and exports.Is there an attorney in the house.I think I figured out why the duty of candor was eliminated in the aia, its to allow the attorneys to put patents in the wrong name even though they know there cheating the true conciever through allowing espionaging and intimidations my plan was integrity with 15 new methods of correctly determining inventorship
Welcome back Leopold, we missed you.
Will you be addressing the points raised in your posting of patents and the presumption of validity?
Name me one patent that does not have a business utility?
How about these?
link to google.com
link to google.com
Yes I invented cheetos and the pink panther in 1966-8 and yes I was cheated of those and doritos and fritos all in my 6th and 8th grade school. is there an attorney in the house. I diud the conception of the convenience store to 7-11 with the kid on my school bus
“at the expense of everyone else’s rights”
Infringers have rights too.
See The Infringers’ Handbook, Chapter One, page one.
“bothered by the increasing disparity in wealth in our country”
Property is so evil if there is disparity as to amounts that individuals have. So of course, the ends justify the means…
Hmmm. Reminds me of Jane Fonda: “I would think that if you understood what communism was, you would hope, you would pray on your knees that someday we would someday become communists.” – Jane Fonda, 1970, Address to Michigan State University.