Ethics, Week 11, Nov 17 NTP v RIM patent case (blackberry) mp3 patents and cases more examples whether software really is a special case. stakeholders patents and standard-setting DataTreasury case Stallman essay on patents (on the course page) Open Source Patent reform act (last proposed 2007; did NOT pass) KSR v Teleflex In Re Bilski - This may *really* change things! ========================================================== NTP v RIM (Research In Motion): maker of Blackberry Was this really a "business method" patent?? The software case is VERY weak. There has been some discussion in the media about how the patent covers the way forwarding is handled, and where messages are stored, but I see NO evidence of that in the actual patent application. See http://www.spectrum.ieee.org/mar06/3087 Thomas Campana filed his patents in 1991. Lawsuit was brought in 2000, after RIM (and others) wouldn't agree to a license. Campana died in October 2004. RIM settled for $612 million in Mar 2006 , after an original verdict of $33 million (part of the settlement is that there are no ongoing royalty payments, so this isn't as egregious as it might seem. Still, the settlement amount just seemed to balloon.) The patent had been challenged with the USPTO. The PTO retracted one or two of the patents in Feb 2006, but the presiding judge in the case (Judge Spencer) refused to stay the case pending further USPTO findings: Just a day after a judge in the NTP-RIM patent fight said that he would not wait for the US Patent Office to complete a review of NTP's patents, that same Patent Office announced a "non-final" ruling on one of the NTP patents, suggesting that the original patent might not be valid. -- techdirt.com NTP owned nothing but patents, but Thomas Campana -- co-founder -- did "invent" the technology. So NTP is not a classic "patent troll". The case was before Judge James Spencer of the US District Court for Eastern Virginia, known as the home of the "rocket docket": part of the court's culture was strict adherence to timetables. RIM engaged the mega-lawfirm of Jones,Day, which irritated Judge Spencer regularly (probably with delay tactics). This was a classic Bad Idea. However, it also appears that Judge Spencer had little if any awareness of the central debates regarding software and business-method patents. During the trial, RIM put on a demo of some supposedly pre-Campana text-messaging software, BUT a major part of it was post-Campana's-patent. Another bad idea. Rim failed to prove the patent invalid in court. But the burden of proof was on them. With the USPTO, the burden of proof was (is) on NTP. Original verdict: $33 million RIM could have been liable for triple damages if infringement was found to be "willful". However, Judge Spencer compromised here on 42%, raising the award to $47 million. RIM appealed Judge Spencer's decision to the appellate circuit court. ================= Core problem with NTP wireless email patent: The only new element is the use of RF links in an email network. (Store-and-forward idea is acknowledged as prior art). BUT: Prior art clearly includes both the following: 1. Use of RF for IP links 2. Email based on ANY set of IP links There is room for innovation in terms of identifying the nearest wireless hub, but that's not in the patent. Central idea of NTP patent: if a wireless unit is out of range, messages are stored at Network Operations Center (NOC). However, this idea is a fundamental part of the original SMTP rfc 821 (August 1982). Specifically, rfc 821 implicitly calls for a forwarding node to hold messages when retrying to contact the next hop, and the final server in the line holds messages indefinitely when waiting for the user to connect and download email. On the face of it, NTP's patents were for a SYSTEM, that is, for software. But there isn't any real claim there. The patent makes much more sense as a BUSINESS METHOD patent, but apparently this distinction was never clarified through the course of the trial. One problem with the claim that NTP's patents were for a business method is that such patents were not granted until a 1998 court case. NTP's patents were applied for in 1991. It seems amazing to me, but this distinction (between system and method patents) played little if any role in the trial. ==================== Nobody disputes that RIM developed their system independently. Patents for genuine hardware electronics methods are not an issue here: modulation techniques receiver--cpu interaction NTP's patents covered only the system, *not* the devices. Real issue: patent system often ignores the fundamental CS principle of *abstraction* (ie building networks with any links) (If this was a business-method patent, that might make this issue irrelevant.) ===================== Appellate court notes; ruling of Aug 2, 2005 In their appeal, RIM appears to be trying to narrow the scope of the NTP claims. Somehow the assertion that there was prior art for * RF links for IP data * email over ANY kind o flink was lost. (They may have felt that was a lost cause.) Perhaps they should have focused on the patent's own claim of prior art in trying to limit the patent claims?? The appellate court cited Tanenbaum, _Computer Networks_, a classic text. The court also wrote: The message is next sorted by the recipient’s ISP mail server into the recipient’s particular “mailbox,” where it is stored until the recipient initiates a connection with the server and downloads the message off the server onto his or her personal machine. This configuration is commonly referred to as a “pull” system because emails cannot be distributed to the user’s machine without a connection being initiated by the user to “pull” the messages from the mail server. Pull system??? This is marketing terminology. Campana’s particular innovation was to integrate existing electronic mail systems with RF wireless communications networks. A message originating in an electronic mail system may be transmitted not only by wireline but also via RF, in which case it is received by the user and stored on his or her mobile RF receiver. Is the court suggesting that this is a "push" system? Yes, in fact. But this was a major misunderstanding of prior art. How is a blackberry different from a laptop with persistent Internet connectivity, limited to port 25 (email)? An important issue for the court was that blackberries were NOT seen as email endpoints. Rather, they were seen as portable intermediate nodes: they would receive email, they could display the email, but the email's ultimate destination was the user's laptop (via some cable). ====================================================================== uspto.gov -> patents -> patft (uspto.gov/patft) Search by patent number: http://patft.uspto.gov/netahtml/PTO/srchnum.htm Look at patents: =============== 6317592 Electronic mail system with RF communications to mobile processors This is the "newest" patent. Claim 150 (really paragraph 150) was singled out as having been infringed. (It is reproduced below.) 6198783 System for wireless serial transmission of encoded information Modulation techniques 6067451 Electronic mail system with RF communications to mobile processors 6272190 System for wireless transmission and receiving of information and method of operation thereof uspto.gov -> patents -> patft (uspto.gov/patft) Search by patent number: http://patft.uspto.gov/netahtml/PTO/srchnum.htm ====================================================================== Here are two primary claims. The "patentese" is unfortunate and confusing, but the core claim in both cases is using RF links to transmit email. claim 248 of patent 6067451 =========================== 246. In a system comprising a communication system which transmits electronic mail containing information, with the electronic mail being inputted to the communication system from a plurality of processors, a RF system and an interface connecting the communication system to the RF system with the information contained in the electronic mail and an identification of a RF device in the RF system being transmitted from the interface to the RF system and broadcast by the RF system to an identified RF device, the identified RF device comprising: a RF receiver, which receives the information when the identification of the device is detected in a broadcast by the RF system to the RF receiver; and a memory, coupled to the RF receiver, which stores the information received by the RF receiver contained in the electronic mail inputted to the communication system. 247. The RF device in accordance with claim 246 further comprising: a processor, coupled to the memory, which after the information has been outputted from the memory, processes the information. 248. The RF device in accordance with claim 247 further comprising: at least one application program, executed by the processor, which processes the information. claim 150 of patent 6317592 =========================== 150. In a communication system comprising a wireless system which communication system transmits electronic mail inputted to the communication system from an originating device which executes electronic mail programming to originate the electronic mail, mobile processors which execute electronic mail programming to function as a destination of electronic mail, and a destination processor to which the electronic mail is transmitted from the originating device and after reception of the electronic mail by the destination processor, information contained in the electronic mail and an identification of a wireless device in the wireless system are transmitted by the wireless system to the wireless device and from the wireless device to one of the mobile processors, the wireless device and one mobile processor comprising: a wireless receiver connected to the one mobile processor with the one mobile processor receiving the information contained in the electronic mail after the identification of the wireless device is detected by the wireless receiver in a broadcast by the wireless system. ============================== RIM argued before the appellate court that the district court erred in construing the claim terms: (a) “electronic mail system” (appearing in the ’960, ’670, and ’172 patents); (b) “gateway switch” (appearing in the ’960 patent); and (c) “originating processor” and “originated information” (appearing in the ’960, ’670, and ’592 patents). It seems clear that the district court did NOT grasp the generality of any of these three terms, but the appeals court did NOT overrule. Instead they found ... the court looks to those sources available to the public that show what a person of ordinary skill in the art would have understood disputed claim language to mean RIM argues there are two ordinary meanings of “electronic mail system”: a broad definition that encompasses “communicating word processors, PCs, telex, facsimile, videotex, voicemail and radio paging systems (beepers)” and a narrow definition that defines the term in the context of “pull” technology In other words, RIM argues that NTP's use of "electronic mail system" when discussing prior art meant "pull-based email system" ====================================================================== ====================================================================== Alcatel-Lucent v Microsoft: Alcatel-Lucent won $1,500 million in infringement suit about mp3 decoders Feb 22, 2007 MS countersued for other patents The judge eventually set aside the damages, and the appellate court agreed. ================= Who holds the MP3 patents? * Fraunhofer Society and Fraunhofer IIS * Thompson Consumer Electronics * Alcatel-Lucent * Texas MP3 Technologies * Sisvel Aug 6, 2007: MS won new trial MS is now suing A-L for other patents. check out mp3licensing.com (Thompson) Royalty Rates: basic mp3 decoder: $0.75/unit mp3 was published in 1991. Will all US mp3 patents expire in 2011? Original holder: Thompson Consumer Electronics & Fraunhofer Institute These still hold the "core" mp3 patents. Patent claimants: Thompson Fraunhofer Sisvel / Audio MPEG Texas MP3 Technologies Alcatel-Lucent To date, (some) patent holders have announced that no action will be taken against open-source decoders. The mp3 compression algorithm *is* admittedly a deep idea. ========================================================== Patent reform: PTO trying to learn more prior art Watchdog groups doing same Trivial prior art is harder and harder to patent, simply due to the passage of time and better documentation of trivial techniques Still problems with patented protocols (and business methods) Someone tried patenting a storyline a few years ago. This patent WAS rejected. ========================================================= ============================== Note that patents are for the use of an idea in a specific context: * prime factorization FOR THE PURPOSE OF ENCRYPTION * xor FOR THE PURPOSE OF ERASING AND REDRAWING THE MOUSE * digital scanning for the purpose of storing bank records (see below) * RF links for the purpose of email [?] Patent problems: submarine patents: you don't hear about them until too late! prior art: hard to find, hard to document, trivial ideas were never written down! This will go away. non-obviousness: difficult to contest many ideas go into one program! Technology evolves extremely rapidly Violates settled expectations (important part of law!) What's patented seems to be more a matter of chance than anything else. ignorance is no defense: "submarine" patents entire process is secret: you can be making good-faith effort to be noninfringing and get hit with a huge verdict. wilful: you had advance notice of infringing. Your belief that the patent was invalid may NOT be a defense, although it has been accepted as a defense in some cases. Damages automatically triple. ====================== Is software legitimately a special case? Or is it just that there are lots of small-time whiners in software who want to profit from the work of others without paying? * # of innovations used * problem with prior art * mathematical nature * prior art and non-obviousness * pace of computing inventiveness * rate of radical v incremental change * open source <===*************************** * patented standards * software patents have had the effect of postponing adoption until patent expires (cf James Gosling's first language) * 20 years is much too long EU Parliament recently voted 648-14 AGAINST the EPO (European Patent Office) directive. software issues: * software has way too many features, compared to ordinary inventions. Licensing 1000 features at 1%-of-revenue each is just not going to work. * prior art is very hard to find, as many patented ideas were not written down BECAUSE THEY WERE OBVIOUS. ================= Who are the stakeholders in software patents? Compare pharmaceuticals http://www.pbs.org/cringely/pulpit/2005/pulpit_20050818_000863.html "Do you feel helped by patent reform?" Three groups: * small inventors * large corporations * patent-holding companies (eg trolls) how large corporations manage: patent banks legal departments cross-licensing small inventors: market your invention yourself?? sell to a holding company These are tricky places. They produce nothing, they interfere with progress, but they *do* produce a market for new patents. Open source voip mp3 to date, *some* patent holders have announced that no action will be taken against open-source *de*coders. =============================== Role of "patent trolls", or patent licensing firms ("troll" as in "the troll under the bridge, demanding tolls", not "trolling" as in fishing for "flames") Note that the established-company-versus-established-company defense of a "patent bank" is useless here. =============================== Patents and standards-setting Company A participates in creation of a standard; they suggest solution S for a particular issue. After the standard is widely adopted, company A announces that they have patented S, and that they will license it for a significant fee. N-data patent on ethernet speed autonegotiation: http://arstechnica.com/news.ars/post/20080123-ftc-defends-ethernet-forces-patent-troll-back-under-bridge.html =============================== ======= DataTreasury (datatreasury.com) They have developed technology for storage of digital images of bank checks. From their website: The Corporation was founded in 1998 and was granted its first two Network architectural patents (5,910,988 and 6,032,137) in 1999 and 2000, respectively. The patents detail the important and revolutionary aspects of DataTreasury's systems for remote image capture, document imaging, centralized processing and electronic storage. Our innovations were particularly noted for enhanced security, fault tolerance and high reliability. These key elements form the underpinnings of DataTreasury's technology. From politico.com/news/stories/0308/9202.html The company had benefited from a controversial 1998 court ruling that broadened the definition of a patent to include business processes. Patent reform act singles out this patent for congressional revocation It appears that DataTreasury is claiming a business-method patent on the use of electronic image scanning for check processing. They are looking for very significant licensing fees. Again, EVERY piece of the technology has been around from well before the patent (scanning, secure storage, ???) The DataTreasury patent has been singled out by Congress for action, but it is not clear what will happen. ========================================================== =========================== Stallman issues * impossible to search patent database * license costs fail to take # of innovations into account * deep problems with prior art: often too trivial Others: * huge social costs to uphold weak patents Barriers to entry Patent Trolls: companies that have no assets but patent claims, and don't attempt to produce anything but simply collect. Is this bad? Or are such companies just creating a market for small inventors to sell their inventions? ========================================================== Patent reform: PTO trying to learn more prior art Watchdog groups doing same Trivial prior art is harder and harder to patent Still problems with patented protocols Patented storylines [!] ========================================================= =========================== Patent and open source The open-source community is a STRONG proponent of eliminating software patents. Is the open-source community entitled to: * an applet-aware browser? * an mp3 player? * a gif viewer? * other ideas that are patented? Does MS intend to destroy or hobble or marginalize linux through patents? It is very well documented that the patent process has a very NEGATIVE impact on open-source development, and on generally accepted software adoption. So if the purpose of software patents is to aid technological process, and it doesn't do that, are software patents a good idea? ========================================================= Patent Reform Act of 2007: H.R. 1908 and S. 1145 Those marked with ---> are the most significant. did not pass (yet) * Changes in U.S. patent law o 1.1 Switch from first to invent to first to file o 1.2 Expand prior user rights, to compensate o 1.3 Publish patent applications o 1.3.5 Allow corporate filers (ie inventor's employer) ---> o 1.4 Allow pre-issuance protests by third parties o 1.5 Expand use of post-issuance reexamination and opposition proceedings o 1.6 Eliminate the "best mode" requirement (obscure) ---> o 1.7 Modify the patent law doctrine of willful infringement "willful" is a serious problem, because it vastly increases the damages and is applied rather inconsistently. ---> o 1.8 Modify the patent law doctrine of inequitable conduct o 1.9 Allow patent applications to be submitted by an assignee ---> o 1.10 Limit access to injunctions o Damages: must proportion to incremental improvement over prior art o Bars "tax planning" patents [!] o Bars DataTreasury from bank extortion Discuss: first-to-file: who benefits? how are small inventors affected? How are prior-art rules affected? publish applications. ======================================================================== KSR v Teleflex, April 30, 2007 Some good patent news This Supreme Court case altered the legal standard for disproving "non-obviousness" in favor of defendants. It is now rather easier to challenge patents on this basis. Teleflex had a patent on a pedal coupled to an electronic throttle control (basically cruise control). The question was whether that was "obvious" The proper question to have asked was whether a pedal designer of ordinary skill, facing the wide range of needs created by developments in the field of endeavor, would have seen a benefit to upgrading [a prior art patent] with a sensor *not* thought of it by themselves, and *not* motivated to implement the change, but simply saw the *benefit*. The old "nonobviousness" standard often in effect required proving that a patent was "prior art". This test was known as the "teaching-suggestion-motivation" test. All three pieces had to be there. Teaching-suggestion-motivation test: too narrow ======================================================================== Bilski case: (decision released October 30, 2008) This is a HUGE case, decided by an _en banc_ sitting of the Federal Circuit. Some think the Supreme Court will overrule it, but it may be more likely that SCOTUS will adjust relatively narrowly. Bilski patent: Claimed method of managing the risk of bad weather in commodities trading. He submitted a patent application seeking exclusive rights to a method of using hedge contracts to reduce the risk that a commodity's wholesale price might change. Again, the technique fails under both prior-art and obviousness standards. But those don't apply in the same way to business-method patents. Patent was rejected by the Patent Board of Appeals. The Board, in rejecting the claim, asked the fedearl circuit court for assistance in determining patentability of non-technological method claims. The federal circuit court did the following: The court by its own action grants a hearing en banc. The parties are requested to file supplemental briefs that should address the following questions: (1) Whether claim 1 of the 08/833,892 patent application claims patent-eligible subject matter under 35 U.S.C. § 101? (the patent-eligibility rules) (2) What standard should govern in determining whether a process is patent-eligible subject matter under section 101? (3) Whether the claimed subject matter is not patent-eligible because it constitutes an abstract idea or mental process; when does a claim that contains both mental and physical steps create patent-eligible subject matter? (4) Whether a method or process must result in a physical transformation of an article or be tied to a machine to be patent-eligible subject matter under section 101? (5) Whether it is appropriate to reconsider State Street Bank & Trust Co. v. Signature Financial Group, Inc., 149 F.3d 1368 (Fed. Cir. 1998), and AT&T Corp. v. Excel Communications, Inc., 172 F.3d 1352 (Fed. Cir. 1999), in this case and, if so, whether those cases should be overruled in any respect? The court *did* affirm the need for a physical transformation. Business patents, and perhaps software patents, are in TROUBLE. Note that their reasoning was taken straight from the few SCOTUS cases on record. The question: is a patent "tailored narrowly enough to encompass only a particular application of a fundamental principle rather than to pre-empt the principle itself"? Benson: NO Diehr: YES (one of the prior SCOTUS cases) Bilski: NO Part of the Benson ruling: Transformation and reduction of an article 'to a different state or thing' is THE clue to the patentability of a process claim that does not include particular machines. The Diehr patent was for making rubber, using a computer to control the process. It wins the "different state or thing" standard hands down. They also DISMISS the "useful, concrete, or tangible result" test: that is NOT enough to establish patentability. THey also reject the "technological arts" test (see above) that was once-upon-a-time part of the method-patent rules. They agree that it is too hard to tell whether something involves the technological arts; however, unlike the USPTO, they end up ruling the OTHER WAY; that is, to reject MORE broadly than the TA test. machine-or-transformation test: emphasize the OR. We will, however, consider some of our past cases to gain insight into the transformation part of the test. A claimed process is patent-eligible if it transforms an article into a different state or thing. This transformation must be central to the purpose of the claimed process. But the main aspect of the transformation test that requires clarification here is what sorts of things constitute "articles" such that their transformation is sufficient to impart patent-eligibility under §101. Tanning leather curing rubber (Diehr case) The raw materials of many information-age processes, however, are electronic signals and electronically-manipulated data. And some so-called business methods, such as that claimed in the present case, involve the manipulation of even more abstract constructs such as legal obligations, organizational relationships, and business risks. Which, if any, of these processes qualify as a transformation or reduction of an article into a different state or thing constituting patent-eligible subject matter? Applying Bilski to famous cases: RSA? material transformation in "real" terms The transformation is to a file. While it is electronic, it is decidedly material. MP3? material transformation in "real" terms? An mp3 file isn't a physical thing, but it does have a certain "thingness". People think of them as things, and buy them as things. An mp3 file is material. NTP? maybe no? The argument can be made that there is no "material thing" on the table here. Email messages are NOT it; the patent only addresses the delivery of email. DataTreasury? It seems unlikely that DataTreasury's patents would stand up to this new test.