I’ve got a new article up at The American about the Teleflex case:
It’s a familiar story: productive companies are forced to spend millions of dollars in court to defend themselves against trumped up claims. Most of these frivolous lawsuits fail, but the successful ones net eye-popping payoffs, attracting more ambitious lawyers in pursuit of ever-larger jackpots.
Of course, that describes the campaigns in recent years against the manufacturers of vaccines and breast implants. But it also describes the more recent flood of frivolous patent lawsuits that have plagued the technology industry. Last month, the Supreme Court heard oral arguments in the case of KSR v. Teleflex. The case presents the court with an opportunity to put a damper on abuse of the patent system, reducing a serious drag on one of our nation’s most productive industries.
One of the parallels between the tort reform and patent reform issues that I didn’t have space to discuss is the role of forum shopping. Just as certain southern states are known for administering “jackpot justice,” East Texas has become infamous as the go-to location for patent trolls.
Every week, I look at a software patent that’s been in the news. You can see previous installments in the series here. This week I look at a dispute between IBM and a company called PSI, which sells software to emulate the functionality of IBM’s mainframe computers. IBM filed a complaint requesting a declaratory judgment that, among other things, PSI’s software infringes several of IBM’s patents.
Here is the oldest of the bunch, “Program controlled rounding modes.” I’ll just quote from the patent itself:
In past architectures, rounding was provided either by means of a mode which controlled the rounding on all instructions, or by means of special rounding instructions. Each of these schemes has advantages and disadvantages. The mode has an advantage when a particular rounding mode is desired for an extended period of time. The special instructions have an advantage when a specific rounding is required for a single operation.
It would be advantageous, however, to have a machine which incorporates both a rounding mode and a rounding instruction.
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I’m reading through the transcript of the Teleflex case, and I think the level of hostility shown by the justices toward Mr Goldstein (arguing for the status quo) is remarkable:
MR. GOLDSTEIN: No matter what one thinks about the differential between Federal Circuit law today and Federal Circuit law a year ago or two years ago, there is a quite considerable cost by articulating a desire to head off in a new direction, because there will be dramatic instability in the patent system, the incalculable investments that underlie current patents. There is nothing fundamentally not functional about how the Federal Circuit is approaching this question. It has had decades to look at this to try and elaborate a standard. This court in cases like Sakraida and –
JUSTICE BREYER: And it so quickly modified itself.
JUSTICE SCALIA: And in the last year or so, after we granted cert in this case after these decades of thinking about it, it suddenly decides to polish it up.
MR. GOLDSTEIN: Justice Scalia, if you actually believe that, then you just don’t believe the judges in the Federal Circuit because in each of these opinions they say quite explicitly we are not changing it.
JUSTICE ALITO: Would you dispute that in some of the earlier cases, like Dembiczak with the garbage bag that looks like a pumpkin, that this TSM test was applied in a way that seemed to ask for something quite explicit in the prior art?
Between this and the exchange I quoted last week, you’ve got three of the four reliably conservative justices beating up on the federal circuit. And the fourth justice–Justice Thomas–almost never asks questions during oral argument. It seems like the right-hand side of the court is unhappy with the way the federal circuit’s been doing things. And judging from Justice Breyer’s comments, I’m guessing the left-hand side is too.
Regular readers might recall my software patent of the week for September 2, which covers the concept of controlling music playback on a computer screen. Now, via TechDirt, comes news that the lawyers responsible for that shakedown has put out a press release bragging about his accomplishment. And it really illustrates what’s wrong with our patent system:
Starkweather wrote the patent in 1996 for David Contois of Contois Music Technology. The concept consisted of a desktop computer holding multiple songs with an interface allowing a user to select three songs and play them on an electric grand piano. Starkweather saw the broader value and broke the patent into three elements: remote music storage, selection of music to download, and playing music on a music device.
Starkweather realised that downloading movies was an obvious variation to downloading music. It was data manipulated in the same way. “Sometimes it’s easy to break an invention down to its key components,” Starkweather says. “That’s why patent writing is an art, not a science, and requires creativity.”
There are a couple of interesting lessons from this. First, it’s obvious that this patent did nothing to advance the progress of science and the useful arts. The inventor had already created his invention when Starkweather came along, and had no expectation of getting a patent for it.
Second, this should make it clear that patents do create incentives for creativity. It’s just not the kind of creativity that the patent system is supposed to encourage. The real innovator here was Starkweather, who managed to get a patent that’s much broader than was merited by the actual invention, not Contois. Economists call this kind of creativity “rent seeking”–gaming the political system to extract wealth from others. Starkweather is in the same category as lobbyists and ambulence-chasing trial lawyers.
Every week, I look at a software patent that’s been in the news. You can see previous installments in the series here. This week, I consider Patent #6,988,138, “Internet-based education support system and methods,” issued in January to Blackboard Inc. According to CNet, the Software Freedom Law Center is challenging the patent’s validity. And it’s a good thing somebody is. Here’s what the patent purports to cover:
A course-based system for providing to an educational community of users access to a plurality of online courses, comprising: a) a plurality of user computers, with each user computer being associated with a user of the system and with each user being capable of having predefined characteristics indicative of multiple predetermined roles in the system, each role providing a level of access to a plurality of data files associated with a particular course and a level of control over the data files associated with the course with the multiple predetermined user roles comprising at least two user’s predetermined roles selected from the group consisting of a student role in one or more course associated with a student user, an instructor role in one or more courses associated with an instructor user and an administrator role associated with an administrator user…
And it goes on in that vein. In a nutshell, they’re trying to patent the concept of distributing course information (assignments, announcements, class discussions, grades, etc) via the web with different access permissions for different users.
With most of the patents I’ve analyzed in this series, I’ve had to make my best guess about whether someone of ordinary programming skill could have developed the type of software described in the patent. But I don’t have to make any guesses in this case, because I’ve personally worked on software that does most of the things this patent describes.
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A transcript of the KSR v. Teleflex oral argument is available here. It sure sounds like the justices are not happy with the status quo:
MR. GOLDSTEIN: Justice Scalia, I this it would be surprising for this experienced Court and all of the patent bar–remember, every single major patent bar association in the country has filed on our side –
CHIEF JUSTICE ROBERTS: Well, which way does that cut? That just indicates that this is profitable for the patent bar.
(Laughter.)
MR. GOLDSTEIN: Mr. Chief Justice, it turns out that actually is not accurate.
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Doug Lay points out this summary of today’s oral arguments in the KSR v. Teleflex case. ZDNet’s Anne Broache has another good summary. It sounds like the argument went well for the forces of sanity:
During hour-long oral arguments in a case that’s closely watched by the business community, Chief Justice John Roberts suggested that an existing federal court test for determining patent obviousness relied too little on common sense. Justice Antonin Scalia went so far as to call the test “gobbledygook” and “meaningless.”
“It’s worse than meaningless because it complicates the question rather than focusing on the statute,” Roberts went on to say of the test, which requires evidence of a past “teaching, suggestion or motivation” that would lead to a particular invention in order for it to be declared “obvious.”
My co-blogger Solveig Singleton (along with Jim Delong) filed an excellent amicus brief in the case for PFF.
Techdirt notes that the Supreme Court has turned down Microsoft’s appeal of their loss to Guatemalan inventor Carlos Armando Amado. And they were kind enough to link to my write-up of the Amado patent. As I said back in June:
So it seems that Mr. Amado’s “invention” consisted in taking a bunch of features from several other database products and combining them into a single user-friendly package. This is somewhat akin to a car company patenting the idea of a car that has anti-lock brakes, an onboard navigation system, and remote keyless entry. The patent could have glossy color pictures of the vehicle and describe in great detail how seamlessly the features work together, but it still wouldn’t be an invention worthy of patent protection. Combining several previously-known features into one product isn’t innovative, even if the new product allows you to do things the old one didn’t.
I suspect that this is a rare case where the only realistic chance of reform is for Congress to get involved. The Supreme Court has too much on its plate (and is likely too wedded to stare decisis) to untangle the mess the Federal Circuit has made of the patent system.
Novell and Microsoft have been spending the last few days releasing dueling statements concerning the implications of their recent agreement. Novell insists that Linux doesn’t infringe any Microsoft patents, and that their patent agreement with Microsoft shouldn’t be interpreted as an admission to the contrary. Which raises the question of why you’d pay $40 million for superfluous protection. Microsoft says that they “have agreed to disagree” on the subject.
It’s not clear where this is going to end up, but one thing that’s absolutely clear is that this has become a PR nightmare for Novell. A lot of people in the Linux community seem to feel betrayed by Novell’s behavior. The agreement has already done damage that will take months for Novell to repair.
Braden asked on Monday how “a boycott would materially hurt Novell.” Below the fold, I’ll see if I can elaborate a bit more on why I think the open source community has so much leverage in this sort of situation.
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One of the most important lessons of politics in recent years is that language matters. The words we use to describe the policies we advocate have a profound effect on how we think about them. Our choice of language has powerful effects in framing how we think about a subject. Sometimes, this effect can be benign or even beneficial. As a libertarian, I like the political implications of the terms “death tax” and “undocumented worker.” I’m not so crazy about the terms “gun control” and “war on terrorism.”
I’ve become convinced that the phrase “intellectual property” is a particularly potent bit of framing. And, in my opinion, it has become a serious obstacle to thinking clearly about the legal regimes of copyrights, patents, trademarks, and trade secrets. There are often debates, on TLF and elsewhere, that are framed in terms of whether we should be “for” or “against” intellectual property. This, it seems to me, completely obscures the real issues in the “intellectual property” debate. No one (even Levine and Boldrin) is in favor of abolishing the trademark system. Likewise, no one is in favor of extending “intellectual property” into every conceivable area of our lives (consider David Friedman’s silly proposal to give people ownership of words). Everyone believes that “intellectual property” is appropriate for some areas of the economy, and inappropriate in others.
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