Software Patent Litigation: What Have We Learned?

Software Patent Litigation: What have we learned?

Deb NicholsonOpen Invention Network

Linuxcon Europe, Düsseldorf October 14, 2014

I am not a lawyer.

This is not legal advice.

I don't get invited to secret international treaty

negotiations.

The Big Picture

300,000 patents were granted in the US

in the last year

U.S. Utility Patents Issued Over Time, courtesy of www.patentfreedom.com

70% percent of applications were approved

Around 55% percent were “electrical domain”

About 50% percent of those were given to inventors

outside the US

Barristers & Bottomfeeders

Contingent fee representation is on the rise

"Even with a 40% contingent share, we need at least $5

million in damages to break even.”

Smaller firms go after weaker defendants

65% of litigated NPE suits have

software-related claims

New patents are the most litigated.

Litigated patents are more likely to have changed hands

NPE's tend to reuse patents

NPE's are suing users 40% of the time

There is now a post-expiration market

in the US

There are patent trolls in Europe

Trolls are bringing 11% of UK suits

Judges & Juries

In the 90's defendants needed to find prior art or prove that their work was out of scope

Non-patentable subject matter was responsible for 54% of

suits won by the defendant.

Alice v. CLS Bank ruling: generic computer implementation

isn't patentable

Indefiniteness is responsible for 17% of defendant wins

Nautilus v. Biosig ruling: vague patents aren't enforceable

Tunnel vision vs. Specialization

Experience has a certain effect

More experience with patent suits makes judges less likely

to rule for patent-holders

And Attorney Generals in New York and Vermont

Juries are another story...

Judges tend to rule for the patentee only half the time

Juries rule for the patentee over two-thirds of the time

Today over 70% of patent cases are heard by juries

It used to be closer to 5%

Globally Speaking

Let's take a look at patent applications by country

From lens.org

US 1,843,260

Australia 160,672

European Patent Office 125,604

China 67,265

Japan 55,403

Patenting in China went up 32% annually from 1999-2006

Trolls are bringing 11% of UK suits

Foreign inventors are very successful in the US courts

Getting sued sucks, even if your chances of

winning are decent

What's working

No more joinder

Operating Company Parties in NPE Lawsuits Over Time,courtesy of www.patentfreedom.com

++Transparency

Courtesy of patentprogress.org

States Acting Against Bad Faith Patent

Infringement Assertions (as of 10/08/2014)

Germany and New Zealand have put strict limits on

patentability

Open Invention Network's mutual non-aggression pact

Over a thousand FLOSS companies and projects that

don't sue each other

We also coordinate defensive resources

Better collection of prior art

Newer efforts to control the passage of patents to NPE's

Homework

Coordinate globally

Patent-busting siteshttp://linuxdefenders.org/https://trollingeffects.org/

http://patents.stackexchange.com/

Join the Open Invention Network

Keep talking to your neighbors and colleagues

Further reading Markets and Patent Enforcement: A

Comparative Investigation of Non-Practicing Entities in the United States and Europe by

Stefania Fusco (2014)

Understanding the Realities of Modern Patent Litigation by Allison, Lemley and Schwartz (2014)

The Rise of Contingent Fee Representation in Patent Litigation by David L. Schwartz (2012)

Startups and Patent Trolls by Colleen C. Chien (2012)

Go to Lens.org

Picture creditsUS Transparency Legislation, courtesy of www.patentprogress.com

U.S. Utility Patents Issued Over Time & Operating Company Parties in NPE Lawsuits Over Time,

courtesy of www.patentfreedom.com

CC.BYBlackboard by J. Neuber – Ambulance In Motion by Benjamin Ellis – Chalk Flag by Eric Herman – Hedgehog by Sarah McManiman – Chalkzilla by Alexander Affleck – Butterfly on Bed by Maxintosh

(all from Flickr)

CC.BY.SAPurple Haze by Joey Gannon (from Flickr)

Fair UseThe Incredible Hulk and Bruce Banner both belong to Marvel, Benedict

Cumberbatch as Sherlock also doesn't belong to me

Public DomainAmerican Gothic by Grant Wood from the Google Art Project

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