Software Patent Litigation: What have we learned? Deb Nicholson Open Invention Network Linuxcon Europe, Düsseldorf October 14, 2014

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1 Software Patent Litigation: What have we learned? Deb Nicholson Open Invention Network Linuxcon Europe, Düsseldorf October 14, 2014

2 I am not a lawyer.

3 This is not legal advice.

4 I don't get invited to secret international treaty negotiations.

5 The Big Picture

6 300,000 patents were granted in the US in the last year

7 U.S. Utility Patents Issued Over Time, courtesy of

8 70% percent of applications were approved

9 Around 55% percent were electrical domain

10 About 50% percent of those were given to inventors outside the US

11 Barristers & Bottomfeeders

12 Contingent fee representation is on the rise

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14 "Even with a 40% contingent share, we need at least $5 million in damages to break even.

15 Smaller firms go after weaker defendants

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17 65% of litigated NPE suits have software-related claims

18 New patents are the most litigated.

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20 Litigated patents are more likely to have changed hands

21 NPE's tend to reuse patents

22 NPE's are suing users 40% of the time

23 There is now a post-expiration market in the US

24 There are patent trolls in Europe

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26 Trolls are bringing 11% of UK suits

27 Judges & Juries

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

29 Non-patentable subject matter was responsible for 54% of suits won by the defendant.

30 Alice v. CLS Bank ruling: generic computer implementation isn't patentable

31 Indefiniteness is responsible for 17% of defendant wins

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

33 Tunnel vision vs. Specialization

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35 Experience has a certain effect

36 More experience with patent suits makes judges less likely to rule for patent-holders

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38 And Attorney Generals in New York and Vermont

39 Juries are another story...

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41 Judges tend to rule for the patentee only half the time

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

43 Today over 70% of patent cases are heard by juries

44 It used to be closer to 5%

45 Globally Speaking

46 Let's take a look at issued patents by country

47 US 1,843,260 Australia 160,672 European Patent Office 125,604 China 67,265 Japan 55,403 From lens.org

48 Patenting in China went up 32% annually from

49 Trolls are bringing 11% of UK suits

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51 Foreign inventors are very successful in the US courts

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53 Getting sued sucks, even if your chances of winning are decent

54 What's working

55 No more joinder

56 Operating Company Parties in NPE Lawsuits Over Time, courtesy of

57 ++Transparency

58 States Acting Against Bad Faith Patent Infringement Assertions (as of 10/08/2014) Courtesy of patentprogress.org

59 Germany and New Zealand have put strict limits on patentability

60 Open Invention Network's mutual non-aggression pact

61 Over a thousand FLOSS companies and projects that don't sue each other

62 We also coordinate defensive resources

63 Better collection of prior art

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

65 Homework

66 Coordinate globally

67 Patent-busting sites

68 Join the Open Invention Network

69 Keep talking to your neighbors and colleagues

70 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

71 Picture credits US Transparency Legislation, courtesy of U.S. Utility Patents Issued Over Time & Operating Company Parties in NPE Lawsuits Over Time, courtesy of CC.BY Blackboard 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.SA Purple Haze by Joey Gannon (from Flickr) Fair Use The Incredible Hulk and Bruce Banner both belong to Marvel, Benedict Cumberbatch as Sherlock also doesn't belong to me Public Domain American Gothic by Grant Wood from the Google Art Project

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