Intellectual Ventures Big Case Shut Down By Judge Over Completely Bogus Patents

from the but-of-course dept

Late last fall, we highlighted some very questionable practices by Intellectual Ventures in suing a bunch of big banks for patent infringement. Our focus was on a particular patent, 6,182,894, which was initially assigned to American Express, and which claimed to cover the concept of CID or CVV codes (those little extra three numbers on the back of your credit card you're supposed to type in as an added security measure). American Express, perhaps realizing how ridiculous it would be to sue over such a patent "donated" it to a non-profit, the Consumer and Merchant Awareness Foundation ("CMAF"), who explicitly promised that it would only be used to encourage better credit card security, and that it would never use the patent "against issuers, acquirers, merchants or consumers related to activity in the retail financial services and payment areas." Of course, it took all of about two years before CMAF effectively sold the patent to Intellectual Ventures, and then disappeared as an entity. IV, apparently, felt that it was not bound by the original promises, and started suing basically everyone. Soon after our story appeared exposing this questionable activity, Intellectual Ventures suddenly decided to drop that particular patent from its lawsuit. Shocking.

However, it continued with a few other patents... but that all ended last week when a judge rejected the remaining patents as completely bogus:
... the Court concludes as a matter of law, based on a clear and convincing evidence, that neither the '137 nor the '382 patent contains patentable subject matter under Section 101.... Nothing in the Court's Claim Construction establishes patentability, since however the claim terms may be construed each patent consists of nothing more [than] the entry of data into a computer database, the breakdown and organization of that entered data according to some criteria, disclosed in the '137 patent, but not the '382 patent, and the transmission of information derived from that entered data to a computer user, all through the use of conventional computer components, such as a database and processors, operating in a conventional manner. There is no inventive technology or other inventive concept that authorizes the protections of a patent, such as an improvement in the workings of the computer or the transmissibility of data or some other transformation of data into something qualitatively beyond the informational content of the data entered, even though the data might be organized and manipulated to disclose useful correlations. Rather, these patents are "drawn to a mental process -- i.e., an abstract idea."...
The two patents in question, 8,083,137 and 7,603,382, describe some rather basic and obvious ideas that a couple of patent lawyers twisted around to make it appear like they were patentable. The '382 patent claims to patent offering up a custom webpage to a user based on their personal preferences. The '137 patent is about "administering financial accounts." In both cases, Joe Mullin in the link above notes that they appear to have really originated with patent lawyers. The '137 patent did come from an engineer, but it wasn't because of anything she invented. She was doing some retirement planning, and her patent lawyer husband thought that her ideas for tracking budgets could be patented. The '382 patent just came straight from a patent lawyer.

And, of course, what the judge was noting above, is that neither should have been granted as patents in the first place, because both just involved basic data processing that any software could do. Neither did anything even remotely inventive. And, of course, the fact that both originated with patent lawyers highlights just how bogus IV's constant refrain is about how it's protecting individual inventors. It's never been about individual inventors at all.

It's been about the lawsuits and the money.

Which is why it should be no surprise to read about IV's response to this complete loss:
[Our] patent portfolio is deep and we have another action pending against Capital One in Maryland. We remain committed to defending our intellectual property rights, as well as those of our customers and investors.
In other words, okay, if we didn't get you with the first batch of bogus patents, we have tens of thousands of other bogus patents, and sooner or later, some judge will either let us win, or these banks will fork over lots of cash to make us go away.
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Filed Under: patent lawyers, patents
Companies: capitol one, intellectual ventures


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  • icon
    rw (profile), 22 Apr 2014 @ 3:35pm

    Personally, I think all existing patents should be invalidated, then any that the "inventor" thinks should be valid could be resubmitted but require in-depth review before being re-issued.

    link to this | view in chronology ]

    • icon
      Mark1 (profile), 22 Apr 2014 @ 6:11pm

      Re: invaliatin patents

      The USPTO goes through an extensive research process. They try to deny patents because it gives the patent holder the right to disallow anyone from using the patented material. This is the government giving the inventor a monopoly on the patented material. Getting a patent isn't easy.

      link to this | view in chronology ]

      • identicon
        Anonymous Coward, 22 Apr 2014 @ 6:19pm

        Re: Re: invaliatin patents

        It isn't nearly difficult enough, since many patents I've read are either obvious to one like me, an ordinary practitioner in the art, or are useless to one like me, because they merely describe the idea covered by the patent but lack enough detail to actually produce the invention.

        The patent office does not have enough ordinary practitioners of the various arts, or they would detect patents which don't actually teach the invention.

        link to this | view in chronology ]

        • identicon
          PRMan, 23 Apr 2014 @ 6:42am

          Re: Re: Re: invaliatin patents

          Why in the world would a software developer want to work at the patent office? Especially when 99% of us don't even think that software patents should be a thing.

          link to this | view in chronology ]

      • identicon
        Anonymous Coward, 22 Apr 2014 @ 6:20pm

        Re: Re: invaliatin patents

        You mean like the patenton swinging sideways

        link to this | view in chronology ]

      • icon
        That Anonymous Coward (profile), 23 Apr 2014 @ 12:41am

        Re: Re: invaliatin patents

        "The USPTO goes through an extensive research process"
        [citation needed]

        What they claim and the fact there is a patent on a PB&J Sandwich (IIRC) sorta undermine this statement.

        link to this | view in chronology ]

      • icon
        John Fenderson (profile), 23 Apr 2014 @ 6:50am

        Re: Re: invaliatin patents

        "The USPTO goes through an extensive research process."

        It used to, maybe, but not really anymore since the patent office has been directed to speed up the patent approval process and lean toward approving patents. Especially if you use fat track: http://www.uspto.gov/patents/init_events/Track_One.jsp

        link to this | view in chronology ]

        • identicon
          Anonymous Coward, 23 Apr 2014 @ 10:04am

          Re: Re: Re: invaliatin patents

          I wish someone would tell that to the examiners I get. I just got an office action that cites eight different references.

          link to this | view in chronology ]

          • icon
            John Fenderson (profile), 23 Apr 2014 @ 10:19am

            Re: Re: Re: Re: invaliatin patents

            You just need to pay extra for the fast track.

            link to this | view in chronology ]

          • identicon
            Anonymous Coward, 23 Apr 2014 @ 10:39am

            Re: Re: Re: Re: invaliatin patents

            If they are possible prior art, that is the examiner doing their job. You do not get a patent just for inventing something, but only if the invention is a genuine new idea. If someone else got there first that is hard luck.

            link to this | view in chronology ]

  • icon
    That One Guy (profile), 22 Apr 2014 @ 3:36pm

    Ah legalized extortion and those that practice it(with the help of the courts and legal system).

    Truly, the patent laws of today drive innovation and invention forward at such staggering rates, why, it almost looks like it's going backwards at times...

    link to this | view in chronology ]

  • identicon
    Anonymous Coward, 22 Apr 2014 @ 5:31pm

    and why is it that we always criticize the patent holder for suing for bogus patents but we continue to completely ignore that it was the patent office that granted these dumb patents.

    link to this | view in chronology ]

    • identicon
      Anonymous Coward, 23 Apr 2014 @ 2:17am

      Re:

      Indeed. The correct response to this is to invalidate all current patents by putting them in the public domain. Then, you give the USPTO more funding so that engineers in each field are working there as reviewers, to check for obviousness. Then you pay people to be researchers of prior art.

      But that won't happen, as some of the largest tech companies will veto it with their dollars.

      link to this | view in chronology ]

      • identicon
        Anonymous Coward, 23 Apr 2014 @ 2:38am

        Re: Re:

        Hence directing the time of qualified engineers away from engineering, developing, inventing, and innovating and toward patent reviewing.

        link to this | view in chronology ]

        • icon
          nasch (profile), 23 Apr 2014 @ 11:11am

          Re: Re: Re:

          Hence directing the time of qualified engineers away from engineering, developing, inventing, and innovating and toward patent reviewing.

          Good point. We should just abolish patents entirely. And before someone mentions that then we wouldn't have all these patents that disclose how to do these wonderful things, they don't do that anyway. They're designed to be not helpful to anyone else.

          link to this | view in chronology ]

          • icon
            John Fenderson (profile), 23 Apr 2014 @ 11:33am

            Re: Re: Re: Re:

            "they don't do that anyway"

            This is true. However, I would argue that the concept of patents as a way to get inventors to disclose useful inventions is a sound one. The problem is that our patent system is broken.

            So I don't advocate getting rid of patents entirely, but instead fixing the patent system we have, or replacing it, so we have one that functions correctly.

            link to this | view in chronology ]

  • icon
    Mark1 (profile), 22 Apr 2014 @ 6:18pm

    Patents cost money

    I find it hard to believe they (American Express) would go through the process of getting a patent and pay the fees unless American Express thought it had some value. I assume this is a process patent. The process is checking the code on the back with purpose of increasing security.
    There are nearly endless reasons to deny a patent. So why did the USPTO grant the patent in the first place. I don't get it but I do have faith that the judge knew and did the right thing.

    link to this | view in chronology ]

    • icon
      lucidrenegade (profile), 22 Apr 2014 @ 6:22pm

      Re: Patents cost money

      Because the patent office is staffed by a bunch of morons who let just about anything through?

      link to this | view in chronology ]

    • identicon
      Anonymous Coward, 23 Apr 2014 @ 12:31am

      Re: Patents cost money

      I find it hard to believe they (American Express) would go through the process of getting a patent and pay the fees unless American Express thought it had some value.

      To senior MBA types, the number of patents held shows just how innovative the company is. The value of a patent to these types is that they can count them, and produce numbers that so long as they are increasing makes them look good.

      link to this | view in chronology ]

      • identicon
        Anonymous Coward, 23 Apr 2014 @ 10:43am

        Re: Re: Patents cost money

        They also allow a company to fight back with their own portfolio of patents. If someone is attacking you with bogus patents, then hit them back with your own bogus patents.

        link to this | view in chronology ]

  • identicon
    Anonymous Anonymous Coward, 22 Apr 2014 @ 6:54pm

    A Challenge

    I double down, triple whammy, dare Congress to kill IP, except for very limited Trademark.

    There, that'll fix it.

    link to this | view in chronology ]

  • icon
    Paraquat (profile), 22 Apr 2014 @ 7:01pm

    IV is financed by Microsoft

    Keep in mind that Intellectual Ventures is basically Microsoft. They finance this patent troll as a means of keeping their competitors legally hampered. IV never sues Microsoft, their bread & butter.

    Fraud and racketeering used to be illegal in America, but now it's the new normal.

    Just keep this in mind next time you are considering buying anything sold by Microsoft, or its subsidiaries (ie Nokia).

    link to this | view in chronology ]

  • identicon
    Anonymous Coward, 22 Apr 2014 @ 8:12pm

    Quote re: '137

    Up until the time when she invented this[...] You get a bill at the end of the month and you know that you spent X dollars, but you don't know in what categories. If you want to do a budget for travel, food, and whatnot�you don't get that. You might get it at the end of a year, but you don't get it at the time of sale, and you don't get it by the month. That was the essence of her invention.

    That quote is amazing. The patent lawyer is saying that '137 is little more than "do the same stuff you were probably already doing, but monthly". Were they this frank before they lost? Did they list the stuff people "might get [...] at the end of a year" as prior art, and would there be any penalty if it can be shown they knew but didn't list it?

    link to this | view in chronology ]

  • identicon
    Anonymous Coward, 23 Apr 2014 @ 2:03am

    Just like how IBM behaved

    Quote: [Our] patent portfolio is deep and we have another action pending against Capital One in Maryland.

    http://www.fosspatents.com/2010/04/when-it-comes-to-patents-ibm-stands-for.html

    http://www.forbes.com /asap/2002/0624/044.html

    link to this | view in chronology ]

  • identicon
    Anonymous Coward, 23 Apr 2014 @ 2:45am

    [Our] patent portfolio is deep and we have another action pending against Capital One in Maryland.

    In other words, if you do not accede to our demands, we will cost you much more in court fees and executive time defending yourselves than our very reasonable demands for protection money.

    link to this | view in chronology ]

  • identicon
    Anonymous Coward, 23 Apr 2014 @ 2:53am

    And so Ronald J. Riley's hero takes a boot to the head. Delicious are his tears and soothing are the sounds of his stamping feet.

    link to this | view in chronology ]

  • icon
    DannyB (profile), 23 Apr 2014 @ 6:34am

    The incentives need to be changed

    When a patent application is granted, it should cost a modest amount. This protects real inventors -- especially the little guy.

    When a patent application is rejected, it should cost a great deal. This protects everyone from despicable trolls that are leeches upon society -- such as Intellectual Vultures.

    The cost of rejected patent applications can pay for the research necessary to grant patents that are genuine inventions and qualify for a patent in every way.

    How about a "three strikes" like system (or pick a number) that disallows additional patent applications after some threshold number of rejected patent applications? Vexatious Patent Trolls are required to get permission from some quick preliminary review process (and pay handsomely for it) before being allowed to file an application.

    If a granted patent is later found to be invalid, there should be some kind of disincentive for that. Maybe for both the 'inventor' and the patent examiner.

    The public should be invited to produce evidence to invalidate patent applications before they are ever granted. Maybe there should be bounties for this? (Paid by the applicant?)

    Courts should presume that patents are invalid if the patent is challenged. Patent licensing costs should be required to be reasonable. Antitrust considerations should be analyzed when patents are used to stop competitors who may not even infringe upon a patent being used to try to stop competition.

    Patent lifetimes need to be dramatically shortened.

    Patent litigation or royalty collection should not be allowed except by a bona fide business that genuinely practices the patent and in the field of business they are in. Defendants can challenge whether plaintiffs are actually in business, in that business, or whether they even practice the patent themselves. After all, if patents are to grant you exclusive rights to use the patent, then you should be using it. Otherwise, everyone else should get to use it. If you're not going to benefit the public and promote the useful arts and science, then someone else should be able to. No more Microsoft owned Intellectual Vultures, or Apple owned Rockstar patent trolls.

    link to this | view in chronology ]

    • identicon
      Anonymous Coward, 23 Apr 2014 @ 10:09am

      Re: The incentives need to be changed

      Patents give the owner the exclusive right to make, USE, SELL, or OFFER TO SELL the patented invention.

      Under your proposal, independent inventors who only invent should quit.

      link to this | view in chronology ]

    • icon
      That One Guy (profile), 23 Apr 2014 @ 10:48am

      Re: The incentives need to be changed

      Minor suggested change:

      Leave the initial patent application fee(if there is any) in place. Should the patent be rejected, and not be resubmitted, then nothing further results.

      However, should they resubmit the same, or a similar patent, make a slight change:

      Give them two, and only two chances to 'fix any issues'.

      If they submit it the second time, charge a modest fee, to help defray the costs of going over the patent a second time.

      Should they submit it a third time though, after having it rejected twice, charge a hefty fee, something like 5x-10x the cost of the second submission cost.

      Should it be rejected three times, then that's it, the patent idea is found to be invalid, and they are prohibited from submitted it again, ever.

      Should they try and get crafty, and change the wording and submit it again anyway, they would not only receive a very large fine(something like 50x the cost of the second fee), they are also banned from submitting any patent applications for a period of at least one year, with the ban only being lifted when the time limit has passed, and they have paid the penalty fine.

      This would help pay for any costs of going over the same material multiple times, and also punish those who attempt to just wear down the patent office by resubmitting the same patent multiple times until it's accepted, by given them ample reason not to just keep throwing it at them until it makes it through.

      link to this | view in chronology ]


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