In TC Heartland v. Kraft Foods, the court restricted the ability of patent holders to sue for infringement in plaintiff-friendly courts. Instead, the court held, patent cases could only be filed where a defendant is incorporated or has a regular place of business.
That common-sense test has greatly curtailed the popularity of the notoriously patent-friendly Eastern District of Texas, where patent holders win nearly 80 percent of the time. With the Supreme Court’s decision in the TC Heartland case, filings in the Eastern District have shrunk from 40 percent of all patent infringement cases to 10 percent.
Although Apple can still be sued in Eastern District, thanks to a retail store that happens to be located on the wrong side of the street in the city of Plano, the real victims of the Texas court have long been smaller companies and start-ups, who have little choice but to settle with patent trolls even over obviously bad patents to avoid expensive, drawn-out litigation.
Just last month, the Supreme Court heard arguments in another important case, which challenged the legality of a streamlined Patent Office review process that has likewise reduced abusive litigation. A decision is expected sometime next year.
Still, there were plenty of eye-rolling moments in the world of patents this year. That’s according to Daniel Nazer, who holds the Mark Cuban Chair to Eliminate Stupid Patents at the Electronic Frontier Foundation in San Francisco, a position endowed by the well-known tech investor.
As his title suggests, Nazer’s work is focused on exposing and defusing patents that shouldn’t have been granted in the first place. To that end, EFF publishes a monthly column highlighting the excesses of a patent system that EFF sees as in desperate need of reform, including those they crown with the dubious honor of “Stupid Patent of the Month.”
That may sound like a joke, but bad patents are serious business. According to the Consumer Technology Association, patent trolling drains $1.5 billion from the U.S. economy every week.
This year’s stupidest patents include several glaringly obvious and unoriginal ideas, including the “invention” of automated out-of-office emails, a way to organize files on a computer, software that helps users count calories, and a disturbing trend of patents being granted on the use of routine and well-known artificial intelligence techniques.
Yet the U.S. Patent Office gave each of these protection that now lasts 20 years. Some of the patents were approved this year; in other cases, 2017 marked the first time a troll tried to enforce them, often against a wide range of users and third-party developers who were almost certainly unaware of the existence of the claimed inventions.
Nazer believes none of these patents should have been granted in the first place, having failed to overcome the basic legal requirements of being both original and non-obvious. A big part of the problem, he says, has to do with how the patent office works. “Patent examiners spend an average of only 18 hours reviewing each application,” he told me, “which is grossly inadequate.”
Worse, in reviewing applications for software patents, examiners only compare other software patents. They rarely if ever have the time to look at actual software already in the market, leaving it to the expensive litigation process to sort the genuine innovations from the frauds.
Software patents, recognized as a valid category only in the last 20 years, are the fastest-growing category of applications and, unsurprisingly, have outsized representation in EFF’s horror stories. That’s despite the fact that in 2014, the Supreme Court took important steps to slow the expansion of this dubious category. In Alice Corp. v. CLS Bank, the justices held that simply doing a manual process on a general-purpose computer is insufficiently novel to qualify for patent protection.
But many of this year’s worst patents did just that, Nazer says.
That’s the case with EFF’s January winner, a patent granted to CBS Interactive for software that allows users to “interact” with song lyrics by reviewing and entering annotations. Ditto for a patent, recently asserted against Uber and Lyft, that purports to cover all software that “determines if a taxi is free,” and, if so “sends the current location of the taxi to the taxi dispatch server.” And then there’s a patent granted to HP for software that sends calendar reminder messages, which the patent office reviewed for years “without ever considering any real-world products” that already existed.
The Alice case, Nazer says, needs to be more aggressively applied by the courts and the Patent Office. And the Supreme Court could go further, ruling that Congress never intended for software to be patentable in the first place. Software, after all, is already protected under both copyright and, in many cases, trade secret law, providing plenty of incentives for developers to keep writing code.
At the time Alice was decided, Nazer notes, advocates proclaimed the end of the software industry. Yet spending on research and development remains at record-high levels, and software continues, in the words of Internet entrepreneur Marc Andreessen, “to eat the world.”
“If that’s what happens when you weaken patents,” Nazer says, “let’s weaken them some more.”
With that attitude, it’s little surprise that EFF’s project has often drawn ire from pro-patent groups. The “Stupid Patent of the Month,” in fact, was itself the subject of litigation. Last year, EFF named a patent for a “virtual cabinet” to graphically represent data stored on a computer as its stupid patent for June. After suing “just about anyone who runs a website,” GEMSA, the company who holds the patent, sued Nazer and EFF for defamation in an Australian court, where free speech protections are considerably weaker.
But late last month, a federal court in California sided with EFF, holding that Australian law could not be squared with the First Amendment. Citing an American law that protects U.S. defendants from “libel tourism,” the court concluded easily that none of GEMSA’s claims “could give rise to defamation under U.S. and California law.”
Nazer hopes the court’s strongly worded opinion will deter future efforts to mute his project, which still has a long way to go. Congress, after all, has done little in the last several years to rebalance patent law in favor of true innovators. And while the federal courts have been doing some of their job for them, it’s not enough.
So, expect a full slate of stupid patents to be exposed next year.
Correction: An earlier version of this post incorrectly referred to CLS Bank as CTS Bank.