December 20, 2016
IPWatchdog has compiled some 2016 IP highlights and 2017 forecasts. They highlight PTAB refinements such as Cuozzo where the federal circuit began to push back on PTAB decisions. Also highlighted is how, after 2015 was a tough year for software patents, 2016 showed contrasting fortunes for patents. The Federal circuit posted guides to software eligibility, plus there was the software patent lifeline of the Enfish verdict, which ruled that software patents that are related to the improvement of a computer system are in fact valid. Additionally, there was the DDR Holdings vs Hotels.com verdict that the implementation of the idea isn’t invalid under Alice if it goes beyond the conventional means.
For 2017, there is a lof of uncertainty in regards to the US patent system. President-elect trump has yet to announce a PTO head. With potential pro-patent reforms touted by many, only time will tell what Trump’s stance on the matter is. The other big question mark is what comes of design patent litigation. This is likely to be strongly influenced by the big case of Samsung vs Apple for design patent infringement, for which the Supreme Court just overturned the verdict. The Federal Circuit will now have to come up with a new test to satisfy the supreme court for design patent infringement standards, which could change design patent litigation.
Why it Matters
With 2016 returning some value back to software patents, could 2017 be the year that shakes up design patents? Only time will tell.
The latest statistics from WIPO show that patent applications totaled 2.9M in 2015, with the Chinese patent office achieving the landmark of more than a million filings. This shows the great shakes that China can bring to the IP world, especially with the US system having numerous question marks around its future direction. Also of note was that Chinese companies filed only 42k overseas applications. This is in stark contrast with how western companies operate, with US companies filing nearly a quarter of a million foreign applications. The Chinese IP system is clearly becoming an attractive proposition to foreign companies, with reports coming earlier this year of a perfect 65-0 success rate for foreign plaintiffs in China. This may be due to the special principles that apply to Chinese cases with a foreign party, “The principle of national treatment, the principle of minimum protection standard and the principle of public interest” which, when combined with the statistics, looks as though they tilt the playing field in favour of the foreign plaintiff. It clearly made an impression on NPEs, as WiLAN recently filed a case in China against Sony, which could be a sign of things to come from other NPEs.
Why it Matters
China is expected to be a major IP market, both in terms of western companies trying to get a foothold in China, and Chinese companies expanding into other markets. These statistics show that the investment is being made, but that the infrastructure may not be fully mature yet.
East Texas has traditionally been the favoured court for NPEs. RPX reported that in 2015, the court accommodated 64% of all NPE litigation, due to its reputation as being a preferred environment for NPEs. Indeed, when looking at Alice invalidations, east Texas granted Alice petitions in only 27% of requests, compared to other courts which granted the petitions for over 70% of requests, which shows that East Texas was applying Alice in a way that was more favourable to patent owners. Another factor is that discovery rules are thought to be particularly hard on defendants here. However, this could all be about to change, as the supreme court is reviewing the patent venue case TC Heartland v. Kraft Food. If the federal circuit does get overturned, then this could see patent cases redistributed away from East Texas, and instead more in line with the original guidelines of using courts which are either where the defendant resides, or where the defendant has a regular and established place of business and have committed the acts of infringement.
Why it Matters
This could be yet another hurdle for NPEs looking to sue in the US and could be another factor in the migration of the NPE business model to other jurisdictions, which would be a new risk for operating companies.
Last week ClearViewIP Senior Analyst, Jacob Blamey, published an article about using financial models to inform strategies around various licensing scenarios. ClearViewIP creates interactive tools to help our clients make strategic business decisions with their IP. Using a model like this allows decision makers to evaluate potential scenarios and outcomes and compare them in real time. Financial models can be more than decision-making support tools. We can build them to be used dynamically during the whole monetisation journey to help negotiators assess their options and strike the best deals.