Patent Loving Court Strikes Again: CAFC Orders USPTO To Reconsider NTP Patents It Had Rejected

from the amazing dept

Thu, Aug 4th 2011 10:09pm — Mike Masnick

We have discussed at great lengths the problems of the US setting up a specialized appeals court that handles patent cases, known as CAFC or the court of appeals for the federal circuit. That court has tended to lean increasingly "pro-patent" over the years, presiding over the greatest judicial-driven expansion of the patent system and what it covers. For a few years, the Supreme Court had started smacking down the massive overreach of CAFC, but in the past two years, it's started to back down and let CAFC do its thing again.

If there was a "poster child" for the ridiculous excesses of the patent system, it was NTP, the results of a company that completely flopped in the marketplace (because it couldn't execute) that then successfully used the patent system to pressure RIM -- a company who successfully executed where NTP failed -- to hand over an astounding $612.5 million, even as the USPTO had made it clear that it found NTP's patents unlikely to be valid.

Despite NTP and its small group of investors making out like bandits on the RIM case, they continued to sue a lot more companies. Unlike in the RIM case, where the judge put tremendous pressure on RIM to settle, even as the USPTO had made it clear that it was likely to reject NTP's patents, in these other cases, the judges wisely decided to wait for the USPTO, who did, in fact, invalidate many NTP patent claims.

And, of course, NTP appealed the USPTO's reasoning... and along comes CAFC to say that the USPTO got it wrong, and it needs to reconsider its invalidation of claims in seven of NTP's patents, meaning that NTP has, yet again, been given new life. And, of course, thanks to the somewhat idiotic and dangerous "presumption of validity," this means that the courts need to treat those patents as valid while the USPTO reviews them yet again.

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Filed Under: cafc, patents, reexam
Companies: ntp, rim

25 Comments

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Anonymous Coward, 4 Aug 2011 @ 11:34pm

Patent Loving Court
Well of course they're patent loving. If it weren't for patents they wouldn't exist. And the larger the patent system grows, the more important they become. I don't expect to see them acting against themselves anytime soon.
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Manabi (profile), 5 Aug 2011 @ 1:33am

Re: Patent Loving Court
Not to mention they apparently didn't learn anything from the supreme court slapping them down there for a few years. They don't seem interested in learning.
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Andrew D. Todd, 5 Aug 2011 @ 1:39am

OSI Model As Obviousness.
The grounds for appeal to the Supreme Court would involve the OSI Network Stack/Layer model. The model was in use long before the patent horizon, and was well publicized, taught in classes, etc. The model sets up the notion of interchangeable components which perform specified functions, conform to standardized interfaces, and are transparent to components at other levels. A "person of ordinary inventiveness," as defined in KSR v. Teleflex, would solve a communications problem as he had been trained to do, by figuring out which of the seven layers the problem resided in, and building a component to solve the problem in that layer. Is your problem a transport layer problem (Level 4, eg. TCP), or a global routing problem (Level 3, eg. IP), or a local network/datalink problem (Level 2+, eg. Ethernet), or what? Having built your component, and designed it to match the existing interlayer interfaces, everything in the higher layers works automatically, and the various possible combinations are obvious.

The same principle of course applies to other systems. For example, in mass storage, there is the long established stack of Database/ Unix-Style_Mount-Un-Mount_System/ File_System/ Block_Device. This would affect the validity of certain patents covering particular uses of Flash-storage devices, for example.

From my personal library, I can produce any number of old copies of Byte, Dr. Dobbs' Journal, etc., in which various and sundry computer systems are presented in terms of illustrated layer/stack diagrams. One can debate about the level of inventiveness involved in establishing a layer/stack system, ab initio, for a particular class of computer systems, but there was surely no striking originality in using one which had already been popularized.

What we want the Supreme Court to hold is that the widespread publication of a "general partitioning model" creates a framework of obviousness, in which it is obvious to see if a known component can be plugged into one of the compartments, and used with whatever is already plugged into the framework.
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Anonymous Coward, 5 Aug 2011 @ 4:43am

omgwtfaataawwmetd
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Cowardly Anon, 5 Aug 2011 @ 5:38am

Oh, ok...you're right...maybe I did miss something. Let me take a look.

*shuffles some papers*

Nope, didn't miss a damn thing. These patents are still made of shit and the person who granted them should be fired.

That is all.
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Josef Anvil (profile), 5 Aug 2011 @ 5:41am

EPIC WTF?
CAFC "decides" that USPTO needs to review these patents again for validity????

Perhaps the court doesn't understand what the "P" in USPTO stands for? I am now wondering how the courts would react if patent examiners began doubting judges' interpretation of the law and having cases retried that have already been determined.

Seriously, how much of that RIM settlement has gone into the pocket of that judge?
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Anonymous Coward, 5 Aug 2011 @ 6:16am

Re: EPIC WTF?
Seriously, how much of that RIM settlement has gone into the pocket of that judge?

A taxpayer-funded message from the Judicial Council, on the US Courts government website, �Federal Judicial Pay Increase Fact Sheet�:

Low federal judicial salaries threaten the independence of the Third Branch.

Chief Justice Roberts has stated that:

� "Inadequate compensation directly threatens the viability of life tenure, and if tenure in office is made uncertain, the strength and independence judges need to uphold the rule of law-even when it is unpopular to do so-will be seriously eroded."

Federal judges say: "I CAN HAS MOAR MONEY?�
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abc gum, 5 Aug 2011 @ 6:20am

Is there a double jeopardy clause in patent law?
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Anonymous Coward, 5 Aug 2011 @ 6:37am

Re: Re: Patent Loving Court
They got $612.5 million for contributing absolutely nothing, it seems like they've learned their lesson all right ...
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Anonymous Coward, 5 Aug 2011 @ 6:44am

Re: Re: Re: Patent Loving Court
Forget the lottery, parasitic patent litigation is where the money is.
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Gordon (profile), 5 Aug 2011 @ 7:08am

But what about......
Just suppose someone has to pay these asshats a whole shit-ton of cash for a patent that has this "presumption of validity". Then come to find out that the patent in question is still declared shit by PTO, does NTP then have to give the money back? What about any other damages (court fees and lawyer fees and whatnot?) Most likely no right?
So they win....later comes out they're full of shit (so technically they lose), but they still come out ahead?

That works.

/s
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Anonymous Coward, 5 Aug 2011 @ 7:13am

"presumption of validity" is just innocent until proven guilty at work. It's amazing you can come out against it, I guess you don't like it when the system protects a patent holder, even if you think their stuff is invalid.

If their material is invalid, someone will prove it in a court of law. You cannot assume that every patent is bad and requires the patent holder to prove it, because they have already proven it enough to get the patent. Once achieved, they reach the "innocent until proven guilty", aka "presumption of validity".

Mike, you really make me shake my head this week, you seem to be going all over your own stands just to try to call patent owners out, and to try to cut down their rights. Why?
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Thomas (profile), 5 Aug 2011 @ 7:18am

So how much..
money do the courts collect when they return a judgement favorable to the patent holders Is it a flat fee? Or a percentage of what the patent holder finally gets from the people they sue??

Judges are just as likely to be corrupt as the politicians these days. Even SCOTUS has some rulings that make one wonder if they are biased.
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abc gum, 5 Aug 2011 @ 7:48am

Re:
It is similar to bad parenting ...

Can I have a cookie?
No
Can I have a cookie?
No
Can I have a cookie?
No
Can I have a cookie?
No
Can I have a cookie?
Alllllright - here you go, now leave me alone!

Seems there ought to be a limit, possibly a requirement to appeal to a higher court or STFU.

Also it would make sense that if one wins a suit which alleged infringement of a patent they can no longer be sued relative to that particular accusation.

I suppose this asking too much.

Oh yeah ... "presumption of validity" is not "innocent until proven guilty". Why would you make such a ridiculous statement?
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The Groove Tiger (profile), 5 Aug 2011 @ 7:54am

Re:
You are hereby accused of murder. Of course "presumption of validity" is just innocent until proven guilty, so my accusation should be assumed to be innocent (saying that it isn't valid would means you're declaring me guilty of lying!). Therefore you must be assumed a murderer until my accusation of murder is proven guilty (or invalid).
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dwg, 5 Aug 2011 @ 10:09am

Re:
You're right, you're right. Much better to have a panel of non-patent-examiner judges decide on the validity of a patent than a bunch of know-nothing engineers and scientists trained to examine patents. And, hell--give the judges the right to look at the patents de novo, too. That should do it.
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Anonymous Coward, 5 Aug 2011 @ 10:19am

Presumption of validity
What's so wrong with that? If a patent is on file, SOMEONE has already examined it and granted it. If you want to challenge it, fine. But the burden is now on you to show that the patent is not valid.

It would be silly to presume that a patent is INvalid. Imagine this being used with other government documents. "Yes, you have a driver's license there, but we're going to presume that it's invalid. You need to prove that the license is valid." Huh?
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Mike Masnick (profile), 5 Aug 2011 @ 10:47am

Re:
"presumption of validity" is just innocent until proven guilty at work. It's amazing you can come out against it, I guess you don't like it when the system protects a patent holder, even if you think their stuff is invalid.

No, it's the opposite. It's guilty until proven innocent when you presume the patent is legit. Just as with copyright cases, where the burden is on the person filing for infringement to prove that the copyright is valid, it seems reasonable for the patent holder to do the same.
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Gene Cavanaugh (profile), 5 Aug 2011 @ 11:11am

CAFC
Excellent article until I got to the somewhat idiotic statement "somewhat idiotic and dangerous "presumption of validity," - what would you suggest? Perhaps we shouldn't have a USPTO - I am open to that - but to suggest we have a USPTO, but anything they do is suspect, is to say you shouldn't have it at all.
Or haven't you heard how idiotic it is to tell someone to do something, then assume they did it wrong? Not just demoralizing, IDIOTIC!
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Anonymous Coward, 5 Aug 2011 @ 12:03pm

Re: Re:
they have already proven it enough to get the patent.

Hey, lets apply that reasoning to criminal cases too: "They have already been proven guilty enough to get charged." Then make them prove their innocence! Great idea, huh? That's the way it is in some countries. I bet you admire those countries.
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Anonymous Coward, 5 Aug 2011 @ 12:05pm

Re: Re: Re:
"You" being the previous AC, not The Groove Tiger.
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Derek Kerton (profile), 5 Aug 2011 @ 2:13pm

Re:
- "presumption of validity" is just innocent
until proven guilty at work"

Um...no. The one we should presume to be innocent, in this case, is RIM.

NTP is the accuser, RIM the defendant. Presumption of Validity, therefore, is equivalent to assumption of guilt.
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Jamie (profile), 5 Aug 2011 @ 3:24pm

Re: Presumption of validity
Once upon a time, the USPTO had enough competent staff that it was safe to assume all issued patents are valid. However, with the number of patentable areas growing (e.g. software, business models) and the number of applications increasing like crazy, more and more questionable (or downright invalid) patents are being issued.

Just look at the study that found 30% of patents covered by other older patents. That 30% are clearly invalid (in whole, our at least in part), yet they were still issued by the supposedly infallible USPTO.

I don't mind the presumption of validity, as long as that presumption is grounded in reality. That's clearly no longer the case.
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staff, 6 Aug 2011 @ 4:59pm

propaganda
There must be someone who pays you to write this propaganda for the banks and large infringers. If so, they are not getting there money's worth as it's so obvious.
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Justin Olbrantz (Quantam), 7 Aug 2011 @ 9:11pm

Re:
...I'm not sure you quite know what "presumption of innocence" means.

It means placing the burden of proof on the prosecuting party rather than the party that would be punished, so as to minimize the probability of erroneous punishment. Presumption of validity shifts the burden of proof to the party that would be punished, so as to maximize the probability of erroneous punishment.

Presumption of validity is the presumption that the district attorney is right, and the accused is guilty - the polar opposite of presumption of innocence.
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