GE patent dropped from Access Advance HEVC pool after successful Unified challenge

Some patent holders and pools designate their patents as relevant or essential to a standard without proper scrutiny or analysis. As part of an ongoing series examining this dubious practice, we highlight U.S. Patent 10,057,603. The ’603 patent is owned by GE Video Compression. Access Advance LLC had identified this patent as purportedly essential to the H.265 (HEVC) standard as part of the Access Advance Patent Pool. But after an ex parte reexamination initiated by Unified Patents led to a significant narrowing of the claim, Access Advance no longer lists this patent as essential. 

Access Advance had identified claim 1 of the ’603 Patent as allegedly essential. That claim recites:

1. A decoder for decoding a data stream including encoded data of a video, the decoder comprising:

an entropy decoding engine configured to decode data from the data stream based on an arithmetic decoding scheme to obtain a sequence of symbols, 

wherein, with respect to at least one symbol of the sequence of symbols, the entropy decoding engine is configured to:

select a context corresponding to the at least one symbol, and 

entropy decode the at least one symbol using the selected context based on the arithmetic decoding scheme, which includes updating a probability model associated with the selected context at one of a first update rate under a high-efficiency mode of entropy decoding and a second update rate, that is lower than the first update rate, under a low-complexity mode of entropy decoding; and

a reconstructor configured to reconstruct at least a portion of the video based on the sequence of symbols.

Unified filed its reexamination request on December 21, 2020, based on prior art that clearly disclosed claim 1. Given the strength of the prior art, the USPTO quickly determined that a substantial new question of patentability had been raised. A formal rejection issued on June 25, 2021, detailing how the prior art rendered the claim invalid. Of importance here, the claims were found to only cover the specific, corresponding disclosures in the specification rather than the broad, functional language that was clearly taught by the prior art. In the following months, the patent owner attempted to dissuade the examiners of this interpretation, but those attempts failed, and the reexamination concluded on January 26, 2022. 

Under U.S. law, a patentee is only allowed to use the broad, functional language at issue here if it is willing to be limited to the specific disclosures in the patent that correspond to the functional language. Patent asserters like Access Advance have tried to shirk this requirement when asserting their patents, taking advantage of claim language that looks broad on its face. Worse, Access Advance kept this patent in its May 2022 list of allegedly-essential patents only to finally remove it from its October 2022 list, nearly 10 months after the reexamination concluded.

Hence, the importance of formal scrutiny is demonstrable. Overbroad assertions of hundreds of patents that allegedly cover critical technical standards can, and should, be meaningfully analyzed. In the end, the public benefits when it is clear which are the truly valid and essential patents. Challenges to such assertions have a proven track record of sifting the wheat from the chaff.

Unified Patents and the Linux Foundation Announce Patcepta, an Open Source Rules Engine for Patent Prosecution

Original article from THE LINUX FOUNDATION | 30 NOVEMBER 2022

Patcepta is a new open source rules engine for improving patent prosecution and management through automation.  Any interested party can join to help foster a new generation of IP management practices using open source software.

Unified Patents decided to work with The Linux Foundation in making the Patcepta project open source to remove critical barriers to entry that attorneys and entrepreneurs face in managing their patent portfolio. This project is the first of its kind in that it provides an open, understandable, and auditable ruleset and toolkit for enabling more efficient and innovative processes and tools for managing IP portfolios.

“We are excited to see this fundamental capability become an open source project for collaboration and shared dependency'' said Mike Dolan, Senior Vice President of Projects at the Linux Foundation. “Jurisdiction rules and a common rules engine are shared challenges faced by in-house and outside counsel trying to manage patent portfolios - a perfect opportunity to develop collaboratively and maintain in an open source community.”

“A key barrier to entry was made very clear in the beginning around docketing rules, which just in the US are over 500, while only about 80 represent almost 80% of the ones used,” said Shawn Ambwani, Co-Founder and COO of Unified Patents. “The number of rules is one of the reasons why the market is so fragmented and why the software is mainly provided as a loss leader to lock in services contracts for paying patent annuities. Another issue IP managers face is concerns associated with bad rules or missing a deadline – now the rules data and code will be transparent and open for any IP manager to see or update.  Finally, integrating such docketing software into larger processes and accounting systems makes switching costs high.  

Software providers, law firms, and even some corporations develop their code and maintain it as the rules change, which can be expensive and repetitive. 

After talking to The Linux Foundation (TLF) and a few members to gauge interest, we decided a potential course would be to help make the rules / code open source so anyone can build on top of it.  In addition, having open source allows for collaboration and updates and, most importantly, allows everyone to see the code to get confidence that it is safe to rely upon.

Ultimately, the goal is to foster better and more innovative patent management processes by eliminating a major barrier.  

Patcepta is now an official project hosted by the Linux Foundation. You can view the project here or go to www.patcepta.org. It is the first legal industry codebase, open rules data, and project ever hosted by the foundation. We hope it will not only complete publishing all the United States rules and code, but there are opportunities for the open source community to add international jurisdictions and perhaps an interface down the road.”

We hope all parties interested in making patent and IP management easier evaluate and contribute to this project and help remove docketing rules as a barrier to managing their portfolio.

An initial kickoff meeting is scheduled for early January so participants can join and help in moving this project forward or getting access to the repository.  Please contact info@patcepta.org for any questions.

Toronto Globe reports on Unified's in-depth portfolio analysis of Blackberry and its delayed sale to NPE

At the beginning of 2022, BlackBerry announced that Catapult IP Innovations Inc. had agreed to buy several patents in a deal worth over $400-million dollars, but by June, the deal was off. Unified’s Director of Analytics, Sam Baird, analyzed the potential value of the divested portfolio of 37,175 patents, which would be one of the largest patent deals in the past decade. Mr. Baird has noted the buyer’s cost could exceed $900 million USD, including related maintenance costs, prosecution fees and litigation costs.

The Toronto Globe has reported on the analysis done, but you can read through the two-part series below:

Catapulting BlackBerry: A Data-Intensive Look – Part I, Quantity

Catapulting BlackBerry: A Data-Intensive Look, Part II

VLSI/Fortress IP Patents Likely Invalid Despite OpenSky’s Bad Behavior

Below is an except of an opinion piece written by Unified’s CEO and Co-Founder, Kevin Jakel, for IPWatchdog.com.

“[The PTAB] has been successful over the years in checking significant numbers of asserted invalid patents, by some measures saving the U.S. economy billions of dollars over…. And yet, many self-interested parties would rather the PTAB not exist, and are suggesting the OpenSky email is evidence of systemic malaise.”

You’ve probably heard about all of the VLSI drama: the eye-popping $2.18 billion judgment won by non-practicing entity (NPE) VLSI (funded by Fortress IP), mysterious post-judgment inter partes reviews (IPRs) filed against the VLSI patents, and finally the now-notorious email from OpenSky offering to disrupt their own IPR in exchange for a fee. Folks have jumped all over the email from OpenSky for its obvious bad behavior, but they are also using it as an indictment of the entire Patent Trial and Appeal Board (PTAB). What is noteworthy here is not the email—this type of behavior is extremely rare. The real story here is what the system got right, and where it failed.

To read the entire article, click HERE.

FTC Highlights SEP Antitrust Abuses

The recent remarks of FTC Commissioner Rebecca Kelly Slaughter on standards essential patents (“SEPs”) are commendable, as is her emphasis on the role antitrust law plays in curtailing anticompetitive abuses of them. The abuses Slaughter highlights mostly impact small- and medium-sized businesses, “the ‘little engines that could’ of our economy,” who lack the resources to navigate complex legal issues and are “more likely to cave to supra-FRAND rates out of fear of exclusion.” Patents do not grant companies a free pass to abuse their dominant market positions through anticompetitive means.

Commissioner Slaughter emphasized that patents are not—and cannot become—an absolute shield for anti-competitive conduct by SEP holders: “When patent holders obtain market power by virtue of being included in standards, the way they exercise that market power is not immunized from the antitrust laws merely because patents are involved.” Specifically, owners of SEPs are obligated to license their patents to willing licensees on fair, reasonable, and non-discriminatory (“FRAND”) terms, and U.S. antitrust policy plays an important role in policing those matters.

Clear antitrust policies are imperative to ensure sincere FRAND licensing practices. Without definite antitrust policies, SEPs can skirt FRAND requirements, leading to “holdup,” or the practice of prohibiting businesses from implementing technologies that implement standards unless they agree to higher royalties and more unfavorable licensing terms than the SEP owner could have obtained before the standard was set, when alternative technologies were available.

Commissioner Slaughter identified three examples of holdup evincing anticompetitive conduct: (1) refusing to license a SEP to any willing licensee in violation of a FRAND  commitment, (2) conditioning an SEP license on taking or giving a cross-license to non-essential patents or that are SEPs of unrelated standards (i.e., bundling), and (3) requiring a license to a portfolio where some or all of the patents are not even identified, let alone provided with the relevant information needed by a potential licensee to assess whether the patents under negotiation are valid, enforceable, and essential to the standard’s implementation, or offered on non-discriminatory terms.

This disproportionately affects small businesses, who lack the bargaining power to negotiate with SEP owners and the resources to defend against SEP assertions. Theoretically, federal judges occasionally enforce FRAND terms in patent cases, but as Commissioner Slaughter pointed out, that case needs to first get to court and continue on to a point to reach such a decision, and “if small and medium entities are agreeing to supra-FRAND terms because they are afraid of the threat of exclusion after litigation, there necessarily will not be a high volume of cases challenging licensing demands.”

Commissioner Slaughter also underscored the role that standards-developing organizations, or SDOs, have in setting policies that would facilitate licensing and prevent inefficient litigation. SDOs can institute policies that mitigate the harms of holdup by mandating commitments from participants to disclose and/or license standard-essential patents on FRAND terms. SDO policies can also clarify how a reasonable rate may be determined. For example, SDOs may specify a narrow set of circumstances in which injunctive or other exclusionary relief may be an appropriate remedy for “holdout,” i.e., when a potential licensee unilaterally refuses to take a license or unreasonably delays in  doing so.[1]

Commissioner Slaughter’s message that “antitrust laws have an important role to play in the standard-setting context, including conduct related to the use or abuse of SEPs” is laudable. The application of antitrust law in congruence with sound SDO policies to promote “widespread and efficient licensing” at “actual FRAND rates” can reward genuine innovation while also preventing abuses by SEP holders, including assertion of poor-quality, SEP-questionable patents.

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[1] As Commissioner Slaughter pointed out, absent collusion, holdout does not pose the same concerns from an antitrust standpoint as holdup, which has the potential to exclude firms from implementing a standard and hurting customer choice among competitors. While competition and consumers are harmed indefinitely when market power is exploited to engage in holdup, there are remedies for holdout.