Self-contradiction?

Big tech corporations are worried about their market share (well, at least that's the most important and obvious reason), thus litigation started as a mean to protect market. Patent has became businesses' essential weapon and defense to weed out competition.

Recently, thanks to the emerging patent trolls in the US, they also started the game in the European territory. Since there are so many countries reside, it is indeed so much harder for a healthy united patenting system to enforce the patent justice.

Though tech companies like Apple and Samsung still have several litigation processes pending, they along with other companies agree on the fact that patent troll (aka Patent Assertion Entities, PAEs) problems are yet another emerging problem in Europe, thus hoping for the Unified Patent Court system (UPC) to address the subject matter better which haven't been dealt with in the existing ruling. In the open letter to European policy-makers provided in the article Growing industry coalition urges the EU (again) not to turn Europe into a patent trolls' paradise, one can clearly see the intention of preventing patent trolls from being able to exploit the European patenting system.

With the current ruling, the letter pointed out that PAE may be able to cause an injunction with a patent that was later found invalid. This introduces loopholes in the system that can be easily exploited, gives PAEs more opportunities to play with the patent justice system.

It is arguably true that the completeness of a healthy patent system will eliminate the cost everybody has to pay if it had a place for patent trolls. However, this statement made in the letter itches me a little: "This result unduly reduces competition, can increase the cost of products in the market and reduce product choices, all negatively impacting consumers". For all fairness, these corporations have been exercising "reducing competition", "increasing the cost of production", "reducing product choices", and most importantly "negatively impacting consumers". Imagine billions of dollars were invested in the litigation process for various big tech companies. Legal fees that could've been invested in R&D but didn't, with reducing product selection on the market due to injunction (which we do not really know if a product is really infringing a "valid" patent). It seems like this letter is self-contradicting except for the fact that I agree for patent holding entities that are not exercising production should not even be allowed to play the game.

Philosopher interpretation of patent eligibility

Alice Corp. v. CLS Bank International is a legal case that is brought up in this article on Foss Patents. Though through the brief reading I still get little idea of the real deal of this matter, hopefully through my basic analysis in the writing might bring some hope to the clarity for patent newcomers like myself.

According to Wikipedia, Alice Corp. v. CLS Bank International is a legal case about software patents that presents the issue whether "certain claims" about a computer-implemented services for facilitating financial transaction ineligible for patent protection. In short, the outcome of this legal case will essentially establish a standard/test of patent-eligibility, as well as knowing how a software patent can be infringed under what situation.

Alice Corporation has four patents that specify particular methods for financial-trading system. They discovered that CLS Bank was also using similar technology back in 2002, thus Alice initiated the litigation.

Initially, the Columbia district court ruled that Alice's patents were invalid because their patent claims are abstract ideas, thus those patents were not eligible for patent protection under 35 U.S.C. § 101. Interestingly, the court thought that Alice's patents were practices of "basic business or financial concept", and the computer implementation of such abstract concept is not considered novel. The intention of the court was to protect an abstract idea from being monopolized.

Of course, Alice appealed the case to Federal Circuit, which decided that Alice's patents are indeed patent-eligible unless the claim is evidently an abstract idea. This raised the question to CLS Bank and of course everybody who is in the software-related industry, what kind of test the court should use to absolutely determine whether a computer-implemented invention is a patent-ineligible abstract idea. In addition, does the presence of the "computer" related terms in a claim ever make a patent-ineligible one to be patent-eligible.

I would like to stop here for the sake of information overflow to myself. But this is definitely an interesting topic to look into in the patent wonderland. I feel like I'm almost like a philosopher contemplating the meaning of life.

Android the moat

FOSS Patents posted about Google's once-secret, restrictive Android license agreements with Samsung and HTC published, discussing about Google's Mobile Application Distribution Agreement (MADA) signed by Samsung and HTC, and the reasoning behind this. This article talks about the statement of Android being an open source platform, but with the strategic market control by Google. Last week I discussed Google's public statements after acquiring Motorola, questioning about their true intention behind the statement of "striving for market competition". It described Android as a moat around the Google castle, which I personally like the analogy a lot.

Android comes with components that are available as free open source software licensing terms, as well as the close-d-source commercial software like Google Mail and Google Map etc. The mobile devices manufacturer signs MADA if they would like their customers to use Google commercial software and call it an Android device. OEMs either get all the apps from Google or none, so it's an obvious choice for the manufactures if they rather want to delegate mobile software to Google.

As a software developer myself, I would try to avoid incrementing switching cost when it comes to software choice. Surely enough, Google is a web/software giant that makes great products freely accessible. But also I would like to have as many selections as possible, not to just be lock-in by Google's awesome but not-so-awesome software products. Or maybe, we should train people to think differently when it comes to software product selection. Free software is not always the best solution, paying for a well designed software and using it with no disturbing ads is equally good.

Patent reform

We have examined lots of litigation fights amongst big corporations as well as patent trolls. In the last lecture, we talked about patent trolls NTP tricked Motion Ltd. into paying them 625 million dollars by using completely bogus patents. The number of patent trolls have grew in years to extract money out of litigation. Larger corporations continue to fight patents for market share in the court. As a result, patent reform bill serves as a way to possibly lessen the negativities, encourages innovation instead of litigation.

PatentlyO posted White House Fact Sheet on Patent Reform to forward the updated facts about the patent reform act. There are few points worth mentioning:

• Making Patents Clear - The patent examiners need to be more careful about patent claims to ensure that it is consistent throughout the litigation process
• Crowdsourcing Prior Art - Make the new patent validation process informative and be conscious about prior art
• Transparency in Patent ownership - make the ownership of the patent transparent within litigation process, so that involved parties cannot hide behind shell companies

However, The Small Business Technology Council (SBTC) do not take the reform act as positive note. In an open letter to US Small Business Administration, SBTC think that legislation disincentives capital investments, which resulting in loss of money and jobs. SBTC stated that the disclosure of all plaintiff interested parties would give investors less incentive to invest in smaller companies because of the lack of anonymity. In short, SBTC is worried about the new patent reform favoring larger corporations by setting up more entry barriers. They also argue that the results of the previous patent related legislation are still undetermined, the Senate should not take more action before understanding the effectiveness of the legislation.

While with little knowledge about the current patent reform bill. It seems like the bill is favoring larger corporations as they've been annoyed by patent trolls and are seeking ways to eliminate the need to deal with such situation. Patent trolls are mostly small businesses with less people operating, similar to most of the smaller scale corporations. It is definitely worrying that those non-patent-trolls will be targeted as one in terms of involvement in innovation and patenting. Large companies definitely have more resources to lobby congress, especially when it comes to a crucial topic like patenting.

However, with the clearly stated focus on the bill, the Senate strives to make patenting clearer with technical professionals take part in the process. With less specific rules enforced on patenting, it is easier for patent trolls to take advantage of the borderline. Therefore, I believe the bill will definitely help improve the clarity on the patenting system.

Divergent Ecosystem enforced by Google

Recently Google sold Motorola to Lenovo for about $3 billion, but we all know Google bought it for $12.5 billion, why is that?

The first reaction of Google's move is surprised and confused. Think about it, $12.5 - $3 = $9.5. Doesn't this tell us Google lost $9.5 billion dollars in two years, are they out of their mind?

Nop, Google is still sane. Shortly after Google acquired Motorola, they put up this website stating their reasoning and the future plan clearly: "Google is great at software; Motorola Mobility is great at devices. The combination of the two makes sense and will enable faster innovation". People interpreted it as Google's first step into the manufacturing game, resulting stock pricing surge. However, Google didn't take any meaningful action with regard to compete against their own customers like Samsung or HTC. In fact, Google is not stupid enough to make their customers feeling betrayed. Their sole focus has always been on strengthening the Android market.

This article talked about how this is not a bad deal for Google. It turned out that Motorola still had $3 billion in cash after acquisition, and the fact that Google retained majority of the patents that probably worth hundreds of million if not few billion dollars. On top of that, Lenovo bought it for $3 billions total up to $9 billions, Google probably only lost around $3 billion dollars. Furthermore, maybe Google consider that $3 billion as an investment in expanding Android market. Lenovo is reputable for their durable laptops like ThinkPad in the PC industry. The Chinese computer manufacturer will certainly be a strong candidate to produce quality mobile devices for the US market. In addition, Google favored free competition in the market, at least in the hardware world. They can certainly form a stronger partnership with different manufacturers to fight against the patent attack.

It's definitely interesting to see yet another foreign manufacturer come in the US market to play. Just like the diversity of race I see walking in UC Berkeley campus. Biology taught me the importance of a divergent ecosystem ensures the robustness of the environment. At least in hardware landscape, Google is making great contribution to maintain market health.

People love being liberal

In the last class we discussed about various reasons of Google buying Motorola Mobility for 12.5 billion dollars, I would like to identify key insights about this matter from different perspectives presented through online community.

When one can team up with the secondary competitors to drive the biggest competitor out of the sight, it is considered a reasonable move for anyone who is worrying about being defeated by the biggest enemy, especially when the enemy grows steadily.

Google made a clear statement acknowledging that "a hostile, organized campaign against Android by Microsoft, Oracle, Apple and other companies, waged through bogus patents". CPTN and the Rockstar bonding together to sue Android device manufacturers is not news. In the previous articles I talked about Apple suing over HTC for 10 patents. This time Google is finally taking the defensive action by acquiring Motorola Mobility, especially targeting at its patent portfolio. Google pointed out in the article about the group tried to impose a tax for any manufacturer that chooses Android as the operating system. This not only gives less incentive for the mobile device manufacturers to use Android, but gives Microsoft more opportunity to gain traction for its operating system.

Motorola has around 24,5000 patents. After losing its pi billion bid on Nortel, Google got worried about the whole Android system and did not give much thoughts on acquiring Motorola for $12.5 billions. Instead of paying for imposed taxes, Google would rather spend this amount of money just to protect their business. This is just like me never wanting to rent textbook, because those textbook rental services can make so much more in the long run just for one book. Maybe this isn't a perfect example, but I argue that Google's move is on the right direction but with the wrong bid.

I wonder why the success of Android system is threatening the other businesses? Because Android is too good to be true. It is free and open-sourced. It gives manufacturers no second thought on choosing an operating system for their devices. Thus, Android is owning the mobile operating system market and growing in a steady pace. For Microsoft, since they entered this mobile territory late, so they have so little market share that the network effect is kicking in by the success of Android. For Apple, they just detest any threat that will hinder their revenue.

However, is that the whole story?

Why is consumer preferring Android over Windows Phone? Is it simply because Android is free and open-source with the early emergence in the mobile market? Or is it because Microsoft cannot keep up with the game that they cannot impress consumers with their precious operating system? I've never used their phone, so I can't speak for Windows Phone user. But I know people tend to embrace open operating system with community care, just as why we have a liberal society here at USA.

My other different take on the same topic is in this video:

Apple cannot always be the plaintiff

Patent wars are everywhere, they are not news but rather a trending fashion everybody loves to follow.

As a naive end consumer, all of this patent disruption originated from this so called "Evil Empire", namely Apple Inc. It's just like how it started with the first world war. It's all about the money and the benefits that one can gain from a war. I wonder whether no one can be made better off by making others worse off, and how would Apple react to a war it started? So I'd like to investigate a case which Apple's newest A7 processor possibly infringed a patent that the Wisconsin Alumni Research Foundation (WARF) filed.

I use an iPhone, because it has sexy battery life with responsive user interface. Mobile CPU chip plays an essential role in developing a device. Apple is making lots of effort on taking their technology to the next level, which I as a consumer greatly appreciate.

This patent lawsuit just started few days ago, thus there isn't much information available on the Internet at the time of writing. But this is going to be a very interesting case to follow. Because data shows that Apple acknowledged the prior art existed from the WARF's patent, but the company policies restrict licensing from outside entities. Therefore, WARF has the reason to take action in such case. WARF asked for triple the price of the damage Apple caused to the organization as well as licensing fees.

Very likely though, I believe that Apple will happily to resolve this lawsuit by making a settlement with WARF. WARF is not a corporation, so Apple has no incentive to waste resources on a party that's not even a competitor.

It's really interesting to view a different kind of patent infringement case. We all heard Samsung, Apple, HTC, etc. fighting against one and another. Academic organizations also drive innovation, they definitely won't be left out in this game.

Well played, WARF.

Source

• Apple's A7 Processor Targeted in new Patent Lawsuit
• Apple sued over A7 processor design by University of Wisconsin patent enforcer

Apple versus HTC, but Android isn't going to surrender

The last memorable patent lawsuit for me was back in 2012, when International Trade Commission (ITC) ruled that HTC had infringed one of Apple's patent. As a result of this decision, HTC's shipment had been held for a while before they worked around Apple's patent.

Partial from the statement HTC gave to Android Central, they stated "the '647 patent is a small UI experience and HTC will completely remove it from all of our phones soon". Which it tells me no matter how small a patent is, as long as it can be put in the court to make a case, it is still a patent. Luckily it was only a small UI infringement, which HTC could just remove all relevant infringed components out of the interface. I could not imagine how bad it can get if HTC had infringed a hardware patent.

Not long after HTC infringed on Apple's patent, two companies finally settled on an agreement to not fight against each other for a decade. Which sounds like a long time, but HTC's lost cannot be easily recovered in ten years. HTC used to dominate the high-end Android phone market, but it is no longer the case now. Even with its HTC Sense as the killing feature, it can only get harder to reclaim the market back.

Originally Apple sued HTC for ten patent infringement, only one out of ten actually did make an impact on the decision. This means Android as an operating system itself doesn't explicitly violate Apple's patent. That's why the Android phone market is still growing steadily, even with Apple strategically filing patent violations against many other mobile manufacturers. I guess the way to strengthen Apple's market is through innovation, rather than spending money on lawsuits. Or maybe focus more on innovation, and then lawsuit.

Source of the news content

Intro video for week 1

Thanks for watching, I am still learning how to talk to webcam naturally.