New Patent Reform Bill Defines Software Patents; Targets Trolls

from the well-that's-interesting... dept

We’ve discussed the “America Invents Act,” a patent reform bill that passed last year after years of Congressional fighting. As we (and plenty of others) noted at the time, for all the hyperbole around the bill, it completely ignored nearly every problem with the patent system today, and seemed almost entirely useless. Our worry, then, was that this would kill off any appetite for Congress to take on the real problems of patents today. So it’s good to see that a new patent bill has been introduced — by Reps. Peter DeFazio and Jason Chaffetz, with a very, very minor change to patent law: it would allow those sued for hardware or software patents the ability to recover litigation costs if it’s determined that the suing patent holder “did not have a reasonable likelihood of succeeding.”

In other words, this is a bill targeted very directly at the pure trolls: the patent holders who sue companies with no real intention of taking a case to court, but rather just to get them to pay a settlement fee to avoid the (expensive) court costs in defending a patent infringement claim (which is quite frequently much more expensive than the settlement options):

Notwithstanding section 285, in an action disputing the validity or alleging the infringement of a computer hardware or software patent, upon making a determination that the party alleging the infringement of the patent did not have a reasonable likelihood of succeeding, the court may award the recovery of full costs to the prevailing party, including reasonable attorney’s fees, other than the United States.

But what’s much more interesting about this is that it seeks to carve out a specific definition for software patents. I know that in software circles there’s been plenty of talk over the years about the problems of software patents, and many don’t believe that software should be patentable at all. However, as defenders of the patent system like to point out, there’s no such “thing” as a “software patent” defined in the law, so it would be difficult to say software isn’t subject to patents. Well… this bill defines software patents:

SOFTWARE PATENT.–The term ‘software patent’ means a patent that covers–

“(A) any process that could be implemented in a computer regardless of whether a computer is specifically mentioned in the patent; or
“(B) any computer system that is programmed to perform a process described in subparagraph (A).”.

Given the massive fight in previous years over patent reform, I fully expect to see patent system supporters throw a massive hissy fit over this very, very minor change to patent law, but it’s so minor that I’m at a loss as to how they’ll have any compelling argument. The only reason I can think to be against the changes here is if you’re in the business of abusing the patent system to shake down innovators. I actually think that supporters of the patent system, such as pharma companies, should support this kind of change too. If the patent system can successfully slice off the problems associated with software patents, it means that there will be less pressure for massive patent system changes.

Of course, if you want real patent reform that takes on the larger issues that impact all sorts of areas (beyond just software), we’ve made clear our suggestions — though there doesn’t seem to be any appetite in Congress to make such major changes in the near future.

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Comments on “New Patent Reform Bill Defines Software Patents; Targets Trolls”

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TaCktiX (profile) says:

Re: "other than the United States."

It means that if the United States government is the litigant (someone educate me if it’s possible for the US to be the defendant in patent cases), that the legal costs recoupment clause is null and void. Since the United States typically only prosecutes direct violations of law, it’s just a way to keep this law from overriding already-existent law dealing with the US government’s role in legal cases.

G Thompson (profile) says:

Re: Re:

What you don’t realise is that this type of, lets call it what it really is ‘tort reform’ is what the rest of the world already does and the US really needs to come into reciprocal alignment or it will suffer even more economic problems in the strategic long term.

The US needs strong tort reform especially in regards to enacting loser pays on all civil matters (only some states have anything close).

G Thompson (profile) says:

Re: Re:

“may’ is quite equitable to be in the act, since the plaintiff might lose on technical grounds only though still has a good case that passes the reasonable test.

The ‘may’ could also allow the court to allocate percentages of fault/loss which could in some instances be very equitable to the case.

No matter what the awarding of costs (or not) must (or one would hope) be given in a written reason/opinion by the court so that an appeal where appropriate can be done.

Mike says:

Re: Re:

The point would be to give meaning to the term “software patent” in the new section 285A lest anyone raising this will simply get spun into a court-created definition of “software patent” the moment it is litigated.

Of course the fight, as defined, will simply be about whether something is a “computer system” or if it could be implemented on a computer system.

Coyne Tibbets says:

Mr. Obvious comments

Hate to be Mr Obvious here, but the argument of the opponents of this is, well, obvious:

“It will stifle innovation by making the enforcement of patents too risky for the innovator. What innovator could afford the risk and cost of innovation when they can be penalized for trying to enforce the patent on their invention? This Law will effectively destroy innovation by making it possible for anyone to steal the benefits of the innovator’s efforts.”

Anonymous Coward says:

Judgement Proof Entities

The problem is, all patent trolls are judgement proof entities. They are very deliberately set up that way, as shell companies with empty offices. They can act as a one-way channel for money to the secret owners. If anybody tries to get money out of the owners of the troll, then they are stymied by the secrecy. If any troll gets an adverse judgement, then the troll just quietly disappears or simply refuses to pay. Then the patent shows up in the hands of another troll and the legal games continue.

There must be a provision in the law to immediately invalidate any patent, which has an outstanding unpaid judgement against its owners, for as long as the judgement remains unpaid. Also, there needs to be some court-approved system for officially recording payments. The record has to get made only after the payment has actually happened.

Invalidating all patents owned by any troll, with an unpaid judgement against it, would be good too.

Lennart Regebro says:

This is an improvement...

…but it doesn’t go far enough. The patent claimant should pretty much be forced to pay the costs if the lose, always.

It’s probably argued that it makes it to risky for small companies to sue, but the fact is that small companies do not have the money to sue anyway, so it won’t make a practical difference.

Patents are protection in practice only for large companies.

Anonymous Coward says:

Good Defazio is someone who actually answers his emails. Too bad he is so ineffective and once again a politician doesn’t understand his subject. I think this bill is full of shit. Software should not be patented. It is a published work using text, thus copyrights. There is no invention involved, you are merely taking processes that already exist in a computer and making them work together. It’s called being a programmer, not an inventor. Dumb Asses leading the dumber asses. We will never invent anything unique in this country unless you work for a corporation and pay all the patents to even write a menu. Just imagine paying Apple $.30 every time your programmed web page is viewed.
FraK THEM! and Defazio too.

staff (profile) says:

more dissembling by Masnick

Masnick and his monkeys have an unreported conflict of interest-

They sell blog filler and “insights” to major corporations including MS, HP, IBM etc. who just happen to be some of the world?s most frequent patent suit defendants. Obviously, he has failed to report his conflicts as any reputable reporter would. But then Masnick and his monkeys are not reporters. They are patent system saboteurs receiving funding from huge corporate infringers. They cannot be trusted and have no credibility. All they know about patents is they don?t have any.

If you’re tired of nonsensical dissembling by invention thieves and their paid puppets (some say Masnick is one of many), you can find some levity and sanity from those who have actually invented something and have personal experience in these matters at…

Just because they call it “reform” doesn’t mean it is.

“patent reform”…America Invents Act, vers 2.0, 3.0…

?This is not a patent reform bill? Senator Maria Cantwell (D-WA) complained, despite other democrats praising the overhaul. ?This is a big corporation patent giveaway that tramples on the right of small inventors.?

Senator Cantwell is right. Just because they call it ?reform? doesn?t mean it is. The agents of banks, huge multinationals, and China are at it again trying to brain wash and bankrupt America.

They should have called these bills the America STOPS Inventing Act or ASIA, because that?s where they?re sending all our jobs.

The patent bill (vers 2, 3, etc) is nothing less than another monumental federal giveaway for banks, huge multinationals, and China and an off shoring job killing nightmare for America. Even the leading patent expert in China has stated the bill will help them steal our inventions. Congress passed it and Obama signed it. Who are they working for??

Patent reform is a fraud on America. Congress and Obama are both to blame. This bill will not do what they claim it will. What it will do is help large multinational corporations maintain their monopolies by robbing and destroying their small entity and startup competitors (so it will do exactly what the large multinationals paid for) and with them the jobs they would have created. The bill will make it harder and more expensive for small firms to get and enforce their patents. Without patents we cant get funded. In this way large firms are able to play king of the hill and keep their small competitors from reaching the top as they have. Yet small entities create the lion’s share of new jobs. According to recent studies by the Kauffman Foundation and economists at the U.S. Census Bureau, ?startups aren?t everything when it comes to job growth. They?re the only thing.? This bill is a wholesale destroyer of US jobs. Those wishing to help fight this bill should contact us as below.

Small entities and inventors have been given far too little voice on this bill when one considers that they rely far more heavily on the patent system than do large firms who can control their markets by their size alone. The smaller the firm, the more they rely on patents -especially startups and individual inventors. Congress and Obama tinkering with patent law while gagging inventors is like a surgeon operating before examining the patient.

Those wishing to help fight big business giveaways and set America on a course for sustainable prosperity, not large corporation lobbied poverty, should contact us as below and join the fight as we are building a network of inventors and other stakeholders to lobby Congress to restore property rights for all patent owners -large and small.

Please see for a different/opposing view on patent reform.

JaseP says:

Re: more dissembling by Masnick

Ridiculous …

You both refuse to acknowledge that the system is broken as well as abused. Software should never have been patentable subject matter.

Software coders are not “inventors.” They are artisans. A software coder no more invents something than a painter “invents” an image. Case law to the contrary utilizes legal fiction to support something that big business wanted. You have things totally in reverse. Big business will HATE this law.

This bill will never pass. Lobbyists will prevent that. That the subject has come up means that the issue has caught the attention of Congress, and means that they they are taking flack about the issue from constituents. Innovation is being stiffled under the current system. The “little guy” can’t break into the market, but for to be sued for moving data within a database, or displaying a progress bar on a screen, or doing something that had been done for decades, just not on a “mobile internet device.”

Maybe this bill will send a message for big corporate interests to “cool it” a little… Probably not… But at least it’s on the table now.

And, by the way,… you need a web designer. That website stinks.

Jose_X (profile) says:

Re: Re: more dissembling by Masnick

Process patents will hopefully one day be clearly made unconstitutional (abstract) when there is no manufacture of any physical substance (ignoring the triviality that all energy has a mass equivalent). The SCOTUS might be on way to ruling that way eventually. They have soundly rejected software, pure algorithm, and business method patents and accepted the Diehr case because rubber was being created. The screens on people’s gadgets are no place to grant a monopoly on a broad idea that is merely “non-obvious” to a person having “ordinary” skill in the art. There are hundreds to thousands of very bright folks who find any given patent to be obvious and all of these are handcuffed if we allow the sw patents. swpat are a huge cost to society and to freedom of many individuals (it’s not a high cost manufacturing issue, for which patents were intended). As evidence of how low the inventiveness bar is, note how most trolls have written patent claims but have not been able to write a decent program to leverage that patent. The claims are merely “non-obvious to a person having ordinary skill in the art”.

This bill is a good first step (assuming the SCOTUS doesn’t take it to mean that swpats on items an ordinary citizen can create should even exist) since it will stop bogus lawsuits by well-funded groups to stomp out competition or pressure agreements that otherwise never would have been agreed.

I recently read here that the creator of minecraft will fight a patent attack. Hope something like this bill passes and helps there. If trolls knew that they had to have a good case, there would be a lot fewer lawsuits and many more interesting products being created and faster.

Jose_X (profile) says:

Re: more dissembling by Masnick

I challenge you to find 2 people, neither of which is a lawyer, a “patent troll”, or the mother of one or more of these, who believes that a the government should give a patent holder ownership rights over what someone else creates **independently**. If science worked that way, we would have been in deep trouble.

DannyB (profile) says:

This bill is bad policy

First, it’s bad ecologically.

Consider the ecological waste of otherwise perfectly good furniture that will be destroyed.

Second, it’s bad economically.

This bill artificially distort the distribution of wealth by transferring more wealth to furniture manufacturers, and secondarily causing an increase in the price of operating systems and office software.

And finally, I appeal to you with . . .

Think of the chairs!

How can Microsoft hinder Android and Linux with patents that are not good enough to litigate over, let alone even disclose what the actual patents are?

hegemon13 says:

Still ripe for abuse

I am concerned about the phrasing of “did not have a reasonable likelihood of succeeding.” I understand the intention behind it, and I support that intention. However, I can see this phrase being twisted to allow large corporations to retaliate against small-business or startup plaintiffs who have a legitimate case.

Patrick (user link) says:

A compelling argument?

“I fully expect to see patent system supporters throw a massive hissy fit over this very, very minor change to patent law, but it’s so minor that I’m at a loss as to how they’ll have any compelling argument.”

Actually there are several. From my post:

Second, the bill is entirely one-sided in multiple ways. For one thing, accused infringers can easily raise frivolous defenses to run up litigation cost for indigent patent owners, yet the bill provides no mechanism to deal with these types of issues. In addition, the bill applies to lawsuits ?disputing the validity? of a patent. Thus, if a patent owner attempts to initiate licensing discussions with a company outside of litigation, the company would be able to file a declaratory judgment action, casting the patent owner into unwanted litigation, while arguing for the patent owner to pay the company?s high-priced attorneys to boot. This, combined with the final point, threatens to chill even good faith assertion of patent claims out of fear that a court would misunderstand what it means to have a ?reasonable likelihood of success.?

Ultimately, the SHIELD act is too blunt an instrument, and only addresses one side of litigation abuses. If debate on the bill is to go further, serious changes are warranted.

Richard (profile) says:

The problem I see is that this might only protect large companies, which I’ll admit are the most common targets for patent trolls. Small companies, like start ups, who might not even have their own patents, will still be facing lawsuits that would be crippling to the business to defend. It won’t really matter if you get paid back your lawyers fees for defending if your business is bankrupted before then.

Jose_X (profile) says:

This reminds me of when SCOTUS (for Bilski?) interpreted in a minority opinion that Congress’ backdooring of business method patents around 1999(8?7?) via an indirect definition meant business methods generally were always intended to exist as patentable. It now appears as if a full software solution can be patented, even when the SCOTUS has indicated it might not be, because Congress recognized them officially.

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