Patent Troll #3: Podcasting invented in 2009?

Adam Carolla is a comedian TV personality and was dragged into a software war. He was sued by Personal Audio over infringing a patent the company was granted on March 2009. The patent in question is called a “system for disseminating media content representing episodes in a serialized sequence.” When Personal Audio sued Carolla, it focused on claim 31 of the patent: apparatus for disseminating a series of episodes represented by media files via the Internet as said episodes become available. In other words, Personal Audio is claiming the ownership of the podcast industry, because what claimed in patent can essentially be seen as the definition for “podcast.” Interestingly, Carolla started podcasting in February 23^rd 2009, before the patent was actually issued.  The case was eventually settled between two parties and the settlement is confidential. It is likely that Carolla paid nothing to the Personal Audio. However, we do know that Carolla spent about $675,000 defending the case.

Carolla’s settlement demonstrates the ugliness of the U.S. patent legal system. The motivation of the patent system is to encourage innovation by rewarding innovators a monopoly power for a period of time since inventing is costly and risky. After all, if a medical company’s years of research and investments into developing a new drug that cures cancer can be instantly copied by another medical company once the product succeeds, the first medical company wouldn’t have engaged in the development at all.  However, when a patent is granted over broad and abstract ideas such as the idea of “podcast,” they do more harm than good. This case demonstrates that the problem of “Patent trolls” is serious.  Personal Audio and other patent trolls have a simple business model: collect broad patents that appear to cover some part of an industry, and then they sue everyone, hoping that most companies will choose to pay a settlement over the hassle and cost of lawsuits. 

All in all, we should have legal systems to protect inventors who have put in the hard work to bring to market products that do matter and do better people’s lives. However, in light of patent troll problems, I think other criterions such whether the patent owner is using the patent or/and if the “infringer” is using the patent in a way that threatens the patent owner’s business interest should be considered in verdict decision of whether the infringement has occurred and damage calculation.  

Patent Troll #2: Software Patenting

On June 19, 2014, the Supreme Court ruled on Alice Corporation Pty. Ltd. V.CLS Bank International case that Alice Corp’s patent fails to transform abstract idea into a patent-eligible invention under section 101 of Patent Act and is therefore invalid. This case is important because it sends out a clear message that using a computer to implement an abstract idea does not make that invention eligible for a patent.

Alice Corp. owns patent on a process of verifying payments on a computer.  The company claims it has a patent on using a computer to confirm a financial transaction and says anyone using a computer process to do this should pay the company a fee. CLS Bank, which settles foreign exchange transactions challenged this patent. The U.S Supreme court unanimously sided with CLS. This ruling invalidated a significant number of patents, generally called “software patents”, that are misapplied in the first place.

To understand why this ruling is significant to reduce the impact of patent trolls requires understanding why many software patents are in fact trivial. Software patents differ from other patents in that many software inventions are merely translating practical everyday functions into the computer programs. Some of these practical everyday functions include budget planning or putting items on shopping cart. If the inventors were allowed to claim credit for these overly broad or/and abstract ideas, platform entrepreneurs who enter the game later will have hefty fees to pay. The court's decision effectively prevent the patent system to over-reward easy ideas and generate needless costs on people who do the real work of transforming practical everyday functions into viable platform economy.

Patent Troll #1 Startup Fightback

In this blog, I study patent litigation between Life360 and Advanced Ground Information System (AGIS). Life360 is a Startup company aimed at helping family members to stay connected to each other. It is a mobile-based social network that heavily uses location-sharing applications. AGIS is a military contractor, software developer, and technology company. AGIS has a system called LifeRing, which uses GPS-based location technology and existing cellular communication networks to enable its users to exchange location, heading, speeding and other information with other members of their group, and see each other’s locations superimposed onto onscreen maps and satellite images.

AGIS filed a lawsuit against Life360 in the Southern District of Florida. The patent in question is U.S. patent 7031728, which was filed in 2004. It covers “a cellular PDA communication system for allowing a plurality of cellular phone users to monitor each other’s location and status, to initiate cellular phone calls by touching a symbol on the display.” Both Life360 and AGIS depend on location-based reporting and communication technology, and the question is whether they merely have similar functions or in fact have similar functions based on the same technology developed by AGIS. The Jury sided with Life360 after Life360 spent over $100,000 in assembling all of the prior art to demonstrate that they did not use anything in the disputed patent. 

This case received a lot of attention in the tech community because of Life360’s CEO, Chris Hull’s unswerving attitude in refusing to settle with what he sees as “patent troll.” He claimed that AGIS had no employees on LinkedIn, and a waterfront mansion in Florida as the corporate headquarters. Additionally he advocated start-ups to fight back against patent troll by sharing resources with other victims. He also offered free legal help for other victims sued by patent troll. This case is important because Chris Hull has shown an example of how a start-up can fight against patent trolls.

Obviousness by Robert Green Sterne

The following is a link to the video by Robert Green Sterne
https://youtu.be/k4PbnA99ev4

Robert Greene Sterne, editor-in-chief of Patent Office Litigation and founding director at intellectual property law firm Sterne, Kessler, Goldstein& Fox PLLC talks about the importance of obviousness within patent laws and in the context of newly formed (2012) patent trial and appeal board. In the video, he explains the definition of obviousness in the legal terms and the role that obviousness plays. He predicts that the issue of obviousness will be a central theme in the new contestant proceedings. In other words, the proceedings will second-guess the invention on whether there is enough innovation. He recognizes obviousness is a tricky issue and educates the viewers on procedures by which the inventor should take to make sure his inventions meets “non-obviousness” requirement as best it could. 

Understanding Obviousness: Different Test Standards

For an invention to be patentable, it must meet the requirement of “non-obviousness.” In the general term, an invention is not obvious if the invention is not obvious to a “person having ordinary skill in art.” But is there a systematic way in which we can check the obviousness of the patents? Luckily, there are two tests that are generally used in the United States to check the obviousness of an invention and I will briefly introduce these two tests to bring into perspective what are the general expectations for meeting the “non-obviousness” requirement and how the court makes its decision when disputes occur.

The first test is Teaching-suggestion-motivation test. This requires that there be a suggestion or teaching in the prior art to combine elements shown in the prior art in order to find a patent obvious. To illustrate how this works, I will use the arm-chair example we discussed in class. If there is a prior patent on the arm table and as well as on the chair, the invention of arm-chair will not be considered obvious unless there is a suggestion from prior publications that the arm-table and arm-chair could be combined.  This sets a very high hurdle for obviousness determination because it cannot be possible for prior inventors to list all possible combinations of their inventions. To take this example to extreme, if Alice has invented a wooden pencil, Angela else has invented the red color paint, and there is no prior suggestion that these two inventions can be combined, Bob’s invention of red pencil (painting the wooden pencil with red paint) would in fact pass the “non-obviousness” test.

Another test commonly used is Graham factors. According to the Wikipedia, Graham factors held that obviousness should be determined by looking at: 1. the scope and content of the prior art;2. the level of ordinary skill in the art; 3. the differences between the claimed invention and the prior art; and 4. objective evidence of nonobviousness.  In addition, the court outlined examples of factors that show “objective evidence of nonobviousness.” They are: 1. commercial success; 2. long-felt but unsolved needs; and 3. failure of others. The Graham factors are more flexible than the Teaching suggesting-motivation test, but unfortunately they are also much more arbitrary. In fact, I think “Obviousness” is inherently an arbitrary concept just as the idea of patent itself. Thomas Jefferson promoted patent laws on utilitarian economic concern of promoting technological innovation. Ultimately, it all comes to the judge’s decision on whether an invention deserves to be recognized.