The "good and bad" of patent reform
Good and bad, I define these terms
Quite clear, no doubt, somehow
In a recent piece on TheHill, Congressman Dana Rohrabacher noted of the current push for HR 9, the Goodlatte Innovation Act:
the “troll” narrative was always a sideshow, a phony pretext. The real goal is to make it easier for “patent thieves” to steal another’s intellectual property, using “trolls” as the excuse to make wide-ranging changes in patent law seem urgent.
Patent reformers use the name "troll" to indicate something bad, but opponents to HR 9, such as Rohrabacher, see patent assertion entities as sometimes bringing good to the innovation system. The true issue is not "who" brings a litigation action, but rather whether the underlying claims are valid and cover the accused product or process. But even here, the idea of good and bad is not so clear.
For example, in a recent decision in ND Cal, U.S. District Judge Beth Labson Freeman invalidated four patents of Hewlett-Packard, who had been suing a smaller competitor, ServiceNow. The US Patent Office, in issuing the claims, found them "good," but the district court, in invalidating them, found them "bad." We do not know what the CAFC will do.
This case does not fit into the narrative of the patent reformers talking of the danger of trolls, or of Congr. Rohrabacher's response, unless one deems H-P a troll. But H-P makes its own products. The story does fit into a picture of a larger company using patents against a smaller competitor, and utilizing its larger resources to inflict patent litigation expenses on a smaller entity.
If the fee-shifting provision of the Goodlatte bill were in place, ServiceNow might recover some litigation money. But this case does fit the evidence that most patentees lose infringement cases. As Congressman Rohrabacher points out, this will be a problem for the small company patentee: " HR 9 will completely reshape the already-uphill economics surrounding inventing and, just as important, discourage anyone from investing in pioneering “little guy” innovations."
The final text of the ServiceNow decision, which found claims of four patents of H-P invalid:
ServiceNow's motion for summary judgment of invalidity on the asserted claims of U.S. Patents 8,224,683; 6,321,229; 7,890,802; and 7,610,512 is GRANTED.
Yes, the Alice decision of the US Supreme Court was mentioned:
Section 101 of the Patent Act defines the classes of patentable subject matter: "Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title." 35 U.S.C. § 101.
Despite the apparent breadth of this language, § 101 has long contained "an important implicit exception: Laws of nature, natural phenomena, and abstract ideas are not patentable." Ass'n for Molecular Pathology v. Myriad Genetics, 133 S.Ct. 2107, 2116 (2013) (quoting Mayo Collaborative Services v. Prometheus Laboratories, 132 S.Ct. 1289,1293 (2012)). The Supreme Court recently reaffirmed this principle in Alice Corp. v. CLS Bank Int'l, 134 S.Ct. 2347 (2014). The "concern that drives this exclusionary principle [is] one of pre-emption. . . . Monopolization of [laws of nature, natural phenomena, and abstract ideas] through the grant of a patent might tend to impede innovation more [*11] than it would tend to promote it, thereby thwarting the primary object of the patent laws." Id. at 2354.
The matter of "idiosyncratic names" arose in the discussion of US '229:
ServiceNow contends that the '229 patent attempts to claim the abstract idea of categorizing and organizing information into a hierarchy. Opening Brief at 16, ECF 70. If this characterization of the claims at issue is correct, there is little doubt that the claims are invalid as being directed to patent-ineligible subject matter. Claiming the abstract idea of organizing information into a hierarchy would preempt any other inventor from creating a computer-based method for categorizing and organizing information by classification, no matter how the inventor achieved this result. See, e.g., Cyberfone Sys v. CNN Interactive Grp, 558 F. App'x 988, 992 (Fed. Cir. 2014); Digitech Image Technologies v. Electronics for Imaging, 758 F.3d 1344, 1351 (Fed. Cir. 2014).
HP does not dispute that such abstract ideas are patent-ineligible, but rather disputes ServiceNow's characterization of the '229 patent's claims. According to HP, the '229 patent claims something much more specific and concrete than ServiceNow suggests. Opposition Brief at 14, ECF 79 ("The '229 Patent is directed to an apparatus and method that uses specialized data structures . . . ."). Specifically, HP points to the fact that its claims are limited to implementations that use "derived containers" and "container definition nodes." Opposition Brief at 15.
If HP is correct that "derived containers" and "container definition nodes" really are specific, specialized data structures, rather than functionally defined generic computer components, then the '229 patent's claims are distinguishable from those at issue in Cyberfone and Digitech and may be patent-eligible. However, ServiceNow disputes HP's characterization of the claimed data structures as "specialized." ServiceNow argues that the claims of the '229 patent simply use idiosyncratic names to identify what are actually "generic computer structures." ServiceNow's Supplemental Brief at 5, ECF 91; see also Alice, 134 S.Ct. at 2360 (holding unpatentable "system claims recit[ing] a handful of generic computer components configured to implement the [abstract] idea" because the recited computer component limitations were "purely functional and generic").
The court concludes, as an initial matter, that the patentability of the invention claimed by the '229 patent turns on whether "container definition nodes" and "derived containers" are idiosyncratic names for generic computer data structures. If they are indeed generic computer data structures, the meaningful limitations of Claim 8 are merely:
1. Creating a hierarchy of data structures, with each data structure corresponding to:
a. a definition for that data structure; and
b. a category of information stored in the repository
2. Displaying one or more of these data structures (i.e. categories of information)
3. Displaying the content of one of these data structures upon selection by the user (i.e. displaying the corresponding category of information)
In short, taken together, the container definition nodes and derived containers are nothing more than a data structure containing information for accessing the information repository hierarchically and a data structure for using that information. This describes every conceivable implementation of the abstract idea. Accordingly, the court concludes that the claims of the '229 patent are drawn toward an abstract idea.
Having found that this claim is directed to an abstract idea, the court must now search the claim limitations for an "inventive concept" to ensure that the patentee is claiming a patent-eligible application of this idea, rather than attempting to patent the idea itself. The only limitation in the claim beyond what was determined above to be a purely abstract idea is the requirement of "a number of computer readable media." '229 Patent at Claim 8. This limitation clearly does not supply any inventive concept, but rather merely [*24] limits the abstract idea to the context of computers. Similarly, there is no inventive concept in combining computer readable media with the idea of categorizing and organizing information hierarchically. Accordingly, the court finds the asserted claims of the '229 patent to be invalid under § 101 for failing to claim patentable subject matter.
The matter of legal conclusions within a declaration arose:
ServiceNow objects to HP's submission of the declaration of Dr. Daniel A. Menascé on the basis that the declaration is directed to legal conclusions, which fall exclusively within the province of the court. The court agrees with ServiceNow that much of the declaration is directed to impermissible legal conclusions. However, the objection is OVERRULED on the basis that the court is capable of considering the declaration for its factual content while ignoring any impermissible legal conclusions. The court has reviewed Dr. Menascé's declaration and has considered his conclusions to the extent they are properly characterized as factual rather than legal See Accenture Global Servs., GmbH v. Guidewire Software, Inc., 728 F.3d 1336, 1340 (Fed. Cir. 2013) (recognizing that " [p]atent eligibility under § 101 presents an issue of law" that "may contain underlying factual issues"), cert, denied, 134 S. Ct. 2871 (2014).
As to the '802 and '512 patents:
To support the validity of the patents' claims, HP points to the fact that " [t]he invention has also been a success in the industry, thereby demonstrating that the claims represent an improvement over conventional practice." Opposition Brief at 12, ECF 79. This argument misses the point, directing itself to novelty and obviousness rather than the patentability of the subject matter. See Diamond v. Diehr, 450 U.S. 175,189-91 (1981) (distinguishing patent-eligibility under § 101 from novelty and obviousness under §§ 102,103). For example, a self-driving car might be very successful commercially. It might be novel and—its implementation, at least—non-obvious. But that doesn't make the concept of a self-driving car any less abstract. The first inventor to successfully create a self-driving car might be able to patent his specific implementation of the idea with appropriately narrow claim language, limited to the inventor's particular implementation. But the inventor could not [*30] patent self-driving cars in the abstract, no matter how novel or successful his particular self-driving car might be.
Thus, even accepting that HP was the first entity to successfully automate the resolution of IT incidents, this does not entitle HP to a patent on (the abstract idea of) the automated resolution of IT incidents. The '802 and '512 patents' specification may contain somewhere a specific, patentable implementation of automating the resolution of IT incidents. But for purposes of § 101, the claims themselves are what matter, and what is claimed is far too broad to constitute a specific implementation of automated resolution of IT incidents. Rather, the claims generically claim any computer-implemented automation of resolving IT incidents. This is an abstract idea and thus is not patentable.
This conclusion is buttressed by concerns of preemption. Granting HP a monopoly on a very specific implementation of computer-automated resolution of IT incidents would spur innovation, by creating an incentive for others to develop a different implementation in order to avoid HP's patent. But the claims in the '802 and '512 patents would have the opposite effect. They are framed in such broad, functional language as to cover any conceivable computer-automated system for resolving IT incidents. By broadly preempting any computer-automated system for the resolution of IT incidents, these patent claims would inhibit innovation, because there is no incentive to develop new systems of computer-automated resolution of IT incidents—any new system that gets developed would incur not only the cost of development, but also the cost of licensing HP's invention.
The article on TheHill
Patent trolls, patent thieves, and the future of innovation