alice v. cls bank – Techdirt (original) (raw)

Congress Poised To Bring Back Unfettered Patent Trolling

from the all-trolling-all-the-time-act dept

Have you been missing patent trolls destroying innovation and making products you like more expensive? Have you felt that, maybe, some lawyers who did nothing but send extortionate shakedown letters weren’t getting rich enough? Well then, good news for you, Congress is looking to bring all that back!

In the early years of Techdirt, we spent a lot of time talking about patent trolling, and how terrible, ridiculous patents that never should have been granted were being used as a shakedown mechanism against actual innovators. Greedy, shameless lawyers would get or buy extremely broad and vague patents, where there was no intention to actually bring a product to market, and then they’d threaten, extort, or otherwise shakedown, companies who actually built successful products, often totally unrelated to the patents in question.

Thankfully, a decade or so ago, the worst aspects of patent trolling were limited (though certainly not eliminated). Changes to the law made it easier to challenge bad patents, and the Supreme Court ran through a series of cases that made it clear that terrible concepts like business models and pure software were not patent-eligible subject matter. Both have been hugely important.

And the Senate is looking to roll back both of them.

In 2012, the America Invents Act had some issues, but among its good ideas was the Patent Trial and Appeals Board (PTAB), which enabled “Inter Partes Review” (IPR) of patents. This allowed anyone to challenge the validity of a patent by showing prior art to the PTAB, allowing the PTAB to say that the original patent examiner made a mistake and shouldn’t have granted a patent.

This process has been hugely important in stopping dangerous and bad patents. In the early 2000s, scholars detailed part of the reason the patent system was so broken was the lack of an antagonistic process in the granting of patents. You have the party applying for the patent, and then you have the examiner. The examiner may challenge the applicant on certain points, but there is no such thing as a “final” no (even if there is something called a final rejection), such that the applicant can keep trying. And there’s no one pushing back on the other side and pointing out why something doesn’t deserve a 20-year monopoly.

That resulted in plenty of patents that shouldn’t have been granted becoming weapons of mass litigation. The IPR process allowed people to challenge these patents, to show that the sole patent examiner who handled the case got it wrong, and to get rid of the dangerous and unnecessary monopoly.

Patent trolls have long hated the IPR system. They’ve challenged it multiple times, but so far, the concept has held up in court, including the Supreme Court.

The other major change that helped stop terrible patents was the Supreme Court repeatedly taking cases about people patenting things that should never have been patentable, and calling out the patent office and the lower courts for allowing this nonsense. One of these cases, Alice v. CLS Bank, from a decade ago, effectively said that software and business models weren’t patentable (though not as clearly as it should have). This followed on similar rulings saying that medical diagnostics and genes shouldn’t be patentable either.

But, of course, some people in Congress love patents and patent trolling. Senators Chris Coons (who, for years, worked for W.L. Gore, a company known for its patent enforcement, though which was also on the receiving end of many patent lawsuits) and Thom Tillis have long been supporters of ever more troll-friendly IP laws.

They have two bills that may get voted on today that seek to wipe out all of the good things discussed above. EFF has a summary of each:

The Patent Eligibility Restoration Act (PERA, S. 2140) would overturn Alice, enabling patent trolls to extort small business owners and even hobbyists, just for using common software systems to express themselves or run their businesses. PERA would also overturn another 2013 Supreme Court case that prevents most kinds of patenting of human genes.

Meanwhile, the PREVAIL Act (S. 2220) seeks to severely limit how the public can challenge bad patents at the patent office. Challenges like these are one of the most effective ways to throw out patents that never should have been granted in the first place.

Both of these would be horrific for the future of innovation and would bring back into the foreground more patent trolling shakedowns over completely bogus patents that never should have been granted. It would literally set innovation back a decade. And for what? To help a few lawyers shakedown more innovators? Who wants that other than the patent trolls?

Over the last decade, patent trolling hasn’t gone completely away, but it has become less of an existential threat for innovators than it was for the first ten to fifteen years of the 2000s. These two bills would destroy that and bring us back to an era of less innovation and more shakedowns.

The EFF link has ways to contact your senators to vote against these bills, and I hope that many of you will do so.

Filed Under: alice v. cls bank, business model patents, chris coons, gene patents, ipr, patent trolls, patentable subject matter, patents, ptab, software patents, thom tillis

Cloudflare Gets An Easy, Quick And Complete Win Over Patent Troll

from the good-news dept

Last year, we wrote about how a relatively new patent trolling operation had pretty clearly picked the wrong target in suing internet infrastructure provider Cloudflare with a sketchy patent (US Patent 6,453,335 on “providing an internet third party data channel.”) Cloudflare decided not only to fight the case, but to fight all of Blackbird’s patents, crowdsourcing and funding searches into prior art on any patent held by Blackbird Technologies, and arguing that the company was engaging in questionable legal practices — acting both as a patent holding company and a law firm, while sometimes pretending not to be a law firm (despite employing mostly lawyers) to avoid some serious ethics questions.

On Monday, Cloudflare received a fairly complete victory, with the judge easily dismissing the case and pointing out that the ‘335 patent was clearly invalid:

Abstract ideas are not patentable. The ‘335 patent is directed to the abstract idea of monitoring a data stream and modifying that data when a specific condition is identified…. The limitations in representative claims 1 and 18 “recite generic computer, network and Internet components, none of which is inventive by itself.” … Both claims describe a “processing device” that monitors a preexisting data stream between a server and a client for a specific condition and modifies that stream when that condition is present. But the patent makes clear the processing device can be generic hardware, such as a filter, router, or proxy, or generic software.

Dependent claims 8 and 24 identify a specific condition for the processing device to monitor: a data transmission rate below a set threshold. Identifying a specific condition narrows the scope of these claims. But this additional limitation is not inventive; it is simply a conventional application of the broader idea…. A patent that uses generic components can contain an inventive concept if those generic pieces are arranged in a “non-conventional and non-generic” way…. But the ‘335 patent does not attempt to patent a discrete and non-conventional means of monitoring and modifying a data stream. In fact, the claims make clear the processing device used to monitor and modify data can be nearly anything and can be placed nearly anywhere, so long as the processing device is not the server that originates the data stream. In other words, the patent attempts to monopolize the abstract idea of monitoring a preexisting data stream between a server and a client for a specific condition and modifying that stream when that condition is present.

Patent cases — even ones that should be easy — are pretty famous for forcing the defendant to go through a long and expensive process to conclude. Normally there are extensive back and forth and filings and hearings between the parties as the court determines just what the patents cover and what the defendants are alleged to have done. Here, however, Cloudflare made an early motion to dismiss based on the claim that the patent itself is clearly invalid under the Supreme Court’s Alice ruling that abstract ideas are not patentable. The court found this so persuasive that it tossed the case and the patent at this early stage (and did so in just two quick pages).

Blackbird may appeal, but it’s difficult to see any appeal getting very far either. And, given how Cloudflare is still asking for prior art on all of Blackbird’s other patents, the company may be interested in getting as far away as possible from Cloudflare as quickly as possible. But, then again, no one said that the people who run patent trolling operations are very smart.

Either way, kudos to Cloudflare for hitting back hard and getting an early victory against patent troll Blackbird.

Filed Under: alice v. cls bank, patent troll, patents
Companies: blackbird technologies, cloudflare