Friday, September 12, 2014

U.S. patent office upholds one half of Apple patent on missed telephone call management

There continues to be a discrepancy between Apple's ability to have its patents upheld on its home turf and the fate that its patents suffer in other jurisdictions, particularly in Europe. The last two posts showed this again: Judge Koh declined to hold even the slide-to-unlock patent invalid despite prior art that convinced ten (of ten) European judges to invalidate the European member of the same patent family. That decision may well represent a new low in patent quality standards in the Northern District of California, and it comes from a judge who's not biased in Apple's favor with respect to permanent injunctions and engaged in downright blasphemy by Silicon Valley standards when she recently wrote in the "no poaching" case that "[t]here is substantial and compelling evidence that Steve Jobs [you know, the one who wanted to wage thermonuclear patent war on Android] was a, if not the, central figure in the alleged conspiracy." In retrospect it's ridiculous that Steve Jobs reportedly even threatened another industry player (Palm) with patent assertions should they continue to poach Apple employees -- after Apple's patents turned out far weaker than Steve Jobs thought, I doubt that this threat would impress anyone today. Anyway, Judge Koh does seem to consider Apple's patents more sacrosanct than the memory of Steve Jobs no matter what record those claimed inventions have in the rest of the world or what evidence is presented.

A day earlier I had reported on a preliminary opinion by the European Patent Office that Apple's iconic "rubberbanding" (or "overscroll bounce") patent is invalid as granted. As a Europe-based Android user I now have hopes that the feature may be reactivated here at some point (for example, after the EPO decision in March 2015, or maybe after the related appeal). Last year the USPTO had upheld three of its claims, including the one asserted against Samsung in the first California case.

Now there's good news for Apple again on the validity side, and as always, in the United States. Last year the USPTO decided to reexamine U.S. Patent No. 8,014,760, an Apple patent on missed telephone call management, further to an anonymous reexamination request. A few months later, in September 2013, Apple dropped that patent from its second California case against Samsung well ahead of the spring 2014 trial. At the time I speculated that Apple might have wanted to avoid the negative effects of bad news from the reexamination front on the infringement case. In fact, that's what happened to a patent Apple elected not to withdraw: last month it became known that the USPTO has (on a non-final basis) rejected various claims, including the asserted claim, of the autocomplete patent.

Before Apple withdrew this patent from the second Samsung case in California, it was asserting its claims 10, 11, and 19. Late in August, the USPTO has now issued a reexamination certificate upholding claims 1-11 and canceling claims 12-22. Therefore, two of the three claims Apple had in the California case (claims 10 and 11), have actually survived and now enjoy an enhanced presumption of validity over the prior art presented to the USPTO.

The withdrawal in the first one was without prejudice, but in order to benefit from the enhanced presumption of validity, Apple would have to bring a new lawsuit. At this point there appears to be too much litigation fatigue to do this. The parties' priority is currently on various appeals, including a couple (resulting from the second California case) that have yet to be filed.

There's no European decision on Apple's autocomplete patent, but the pattern is always the same: Apple's patents do way better in the U.S. than elsewhere. In Judge Koh's case, it's not a bias in Apple's favor (for the reasons I outlined further above and many more), but with her approach the Northern District of California becomes a nature reserve for weak patents. The USPTO applies the rules it has in place. The patent reform movement has for a long time been arguing that it must be easier to shoot down weak patents. It's not clear yet where Apple stands on this question. On the one hand, it joined a lobbying group that opposes such reform. On the other hand, it announced an intent to work with Google on patent reform, and Google is on the good side in this context (as well as in some but not all others).

There's an interesting parallel between Apple's approach to the Samsung litigation -- withdrawing cases in all other jurisdictions but fighting on in the U.S. -- and its product and services strategy. I liked the stuff I saw at this week's Apple presentation, though there was nothing there that got me absolutely excited (to me the best news Apple delivered this year was the Swift programming language). I think the Apple Watch will do better than other smartwatches, just that it's hard to predict how much better. The iPhone price still seems very high to me. Apparently the U.S. and Japan are the only markets in which Apple can stil have a high market share despite those price points, while Android has a worldwide market share of 85%. Is Apple's focus increasingly on maximizing U.S. revenue while giving up entire continents -- almost the whole rest of the world -- to Android? Apple Pay is the most America-centric service Apple has ever launched (though it may at some point also find partners in the rest of the world, despite its very limited market share in places like Europe). I don't remember where I saw it, but somewhere on the Internet someone commented on a study that attributed U.S. economic growth mostly to Apple and other tech giants and said that "Americans get rich selling themselves gadgets made in China." That was obviously just a joke and doesn't consider that the real value is not in manufacturing. Still, if the trend continues in the rest of the world, Apple's success story will increasingly be one of Americans selling themselves their products -- and protecting that market with American patents upheld by American judges and patent examiners but not in the rest of the world.

Finally, a hat tip: I wish to thank an anonymous reader for drawing my attention (via my contact form) to the 8,014,760 reexamination certificate but reply here (since I can't contact him directly) to his assertion that I "don't post anything about the Apple patents that survive reexamination or the Samsung, Motorola, HTC, Xiaomi, Microsoft patents that are killed." That is absolutely not true. Whenever I became aware of a reexamination (or similar) kind of decision involving a patent-in-suit in the cases I watch, I reported on it, and that will continue to be the case. The problem is just that there are way too many patents for me to keep track of everything proactively. I now spend significantly less time on this kind of research than in the past because of my focus on app development, so I depend to a greater extent than before on official notices parties file with district courts about reexamination decisions (which didn't happen here because Apple had withdrawn the patent).

I really do appreciate heads-ups of this kind (even more so if allegations of bias are left out because they are unfounded) regardless of who loses a patent, provided that it's a major player (not just a troll) and that the patent was asserted in at least one "big company vs. big company" dispute I cover(ed) on this blog. Xiaomi patents aren't of interest to me because I haven't blogged about any patent case involving them, and HTC has settled with Apple and Nokia and took a license from Microsoft a long time ago, so HTC's patents are not of interest to me either at this point. But if any Samsung, Motorola or Microsoft patents-in-suit are invalidated or rejected, please do -- do -- do let me know. On October 1 I will publish a blog post on the outcome of the major cases I've watched so far, and it will show that none of those major players has established in court an entitlement to huge balancing payments in cross-license deals with other major players, suggesting that large players should return to (more or less) zero-zero cross-license deals between them. My overview of what happened to all those lawsuits will show that everyone's offensive cases have been a disaster, at least so far, with very few assertions having had merit at all and with workarounds having prevented significant commercial impact.

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