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PATENTS AND TRADEMARKS

Google & Facebook Take on Patent Trolls
 

Technology giants launch an assault on vague patents that hinder innovation and jack up costs.

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On Friday, December 7, 2012 Google joined other technology giants Facebook, Dell, and Intuit in filing an amicus brief seeking to restrict the validity of certain patents issued by the U.S. Patent and Trademark Office. At issue is whether the U.S. patent protection system should recognize patents for mere abstract ideas in the field of technology.

The brief was filed before the U.S. Court of Appeals for the Federal Circuit in the case CLS Bank International et al. vs. Alice Corp. Pty, Ltd. At issue in CLS is whether a company may secure a patent for an "abstract idea" concerning financial intermediation implemented with a computer. A lower court originally concluded that Alice's claims in their patent were sufficient and, accordingly, held that Alice retained a valid rights allowing them to counter sue CLS in an existing case of infringement. CLS subsequently appealed the ruling to the Federal Circuit, the de facto appellate court for patents in the United States.

Under the Federal Rules of Appellate Procedure a party not involved in a pending appeal may nonetheless file an amicus curie brief when they believe the results of the appeal may have more broad reaching ramifications. Given the potentially far-reaching implications of this case, technology giants jumped at the opportunity to weigh in on the subject.

In short, Google, and those joining them in their amicus brief, have asked that the Federal Circuit reject the notion that technology patents can be issued on what amounts to little more than an abstract idea. The request, in large part, originates from the concept that individuals and companies should not be permitted to secure patent protection for mere general ideas in the absence of more concrete technological claims setting forth how such ideas are, or can be, effectuated.

The broader interest affected is that by permitting rights to be secured in the abstract the rights-holders can potentially abuse the system by using vague patents to bring infringement lawsuits against legitimate innovators who later develop technology that could arguably fall within the scope of aforementioned patents.

Effectively the larger players in the technology industries contend that the allowance of such general patents has created a cottage industry for lawsuits by such patent holders against companies who legitimately invest in and develop their own technology. The result is that when these companies are sued by these so-called patent trolls they must pass the cost on to the end consumer effectively creating a surtax on legitimate innovation while simultaneously discouraging investment the same.

The technology giant's arguments may be ripe for a win. Already this year the U.S. Patent and Trademark Office issued a preliminary ruling declaring a key Apple patent covering touch screen devices invalid along similar lines as are at issue in CLS. Patent number 7,479,949, or the Steve Jobs Patent, is still in effect, but if the U.S. Patent and Trademark Office's ruling is upheld, it could spell trouble for Apple's ongoing patent fights with Samsung and Motorola.

In a larger context, however, the preliminary invalidation of the Steve Jobs Patent may suggest a shift in the way the U.S. Patent and Trademark Office, and federal courts in general, are moving towards in regard to patent protection. The end of the vague patent may be at hand.

Whatever the case, CLS will be closely watched by industry insiders as it may set the tone for a key reform in the patent protection system in the United States for years to come.

Last updated: Dec 20, 2012

MATTHEW SWYERS is the founder of The Trademark Company, a Web-based law firm specializing in protecting the trademark rights of small to medium-size businesses. The company is ranked No. 138 on the 2011 Inc. 500.
@TrademarkCo




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