Patents in a Post-Alice World

Thoughts on Reports from IPBC Global in San Francisco

Intellectual Asset Management is today reporting on its blog on subjects near and dear to all of us: IP value, software patents in our “tricky” new era, legislation that could affect litigation, the environment post-Alice, and more.

Most interesting to me were the reports from Joff Wild, including on what Rockstar Consortium’s John Veschi said about software patents at SCOTUS:

Even in the post-Alice world software can be interesting, said Veschi, especially as at some stage it is almost certain the pendulum will swing back, especially if the Supreme Court ever gets round to taking a case in which it sets out what kinds of patents it does think are OK, rather than ones that it does not like. 

Rockstar and Veschi’s perspective is important. Deep down inside, we all know the pendulum will swing back at some point, and it’s reassuring to hear someone talking about it in the industry. Rockstar just happens to be one of the largest and most aggressive patent assertion entities in the world. And it’s no troll, by common definition: consortium members include Apple, Ericsson, Microsoft and Sony. Since it was formed precisely with the intent to acquire the patents of Nortel as the latter company failed, it’s no surprise Rockstar is keeping a close eye on the prospects for asserting software (and hardware) patents.

I disagree with him on one point, however. I do not believe SCOTUS will tell us what kinds of patents it believes are OK. That, I feel confident SCOTUS is leaving to the Federal Circuit. Stay tuned.

Wold also remarks on what he calls the “big shift” in the market from a focus on infringement to one on validity:

This blog and others have written about the shift in the market that has led the prevailing question in many patent lawsuits to be whether the patent is valid, rather than whether it has been infringed. That shift was encapsulated in one of the final sessions of the day entitled ‘Validity is king.’ Part of the reason behind the change has been the rise of IPR proceedings, which give defendants in a suit the opportunity to challenge the claims in a patent and potentially scupper the plaintiff’s case.

The question I’m reminded of is this: Will IPR proceedings continue to have such a profound effect on patents and district court litigations? Or, using the pendulum analogy, will the patents at issue eventually become more difficult to strike down using IPR, taking us back to a place more familiar to most litigators? I will address the IPR trend in future posts.

We also learn this, regarding prospects for patent reform (which I don’t think we need):

US patent reform keeps on cropping up … . [T]he general consensus seems to be that something will be agreed—probably based around the Senate’s PATENT Act … with many more compromises relating to IPRs, joinder and end-user rules. But not everybody thinks so.

One senior player in the tech space who supports reform told me that he believes there is a danger that the closer things get to 2016 and election year, the less chance there will be that anything will be done; legislators, he said, will have too many other things on their minds. By contrast an old European hand was pretty sure there would be change. He figured that as most US patent grants are now made in favour of non-American owners, the US has far less incentive to offer strong patent protection; economically, weaker patents may suit the country’s perceived short term interests better. There could be something in that.

This may be one of the few times I would welcome politics taking a front seat to the law-making function of Congress.

It may be worth further considering the US’s lack of incentive to uphold strong patent protection, at least in the short term. We shall see.



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