DOJ's 2015 Business Review Letter for IEEE and 2020 Supplemental Response

By: John Pierce — Legal Intern, Unified Patents

Standard Essential Patents (SEP’s) consist of patents covering technologies that are unavoidable (thus “essential”) in the implementation of new technologies under a standard. Said differently, an SEP is a fundamental piece of an advancing technology that all innovators must use to further develop the technology in accordance with a standard set by the industry. Standard Development Organizations (SDO’s) identify which pieces of an advancing technology will become a SEP. Each owner of a SEP is asked to provide assurance to license the technology under F/RAND (Fair, Reasonable, and Non-Discriminatory) terms. This assurance commits the owner to provide access to their fundamental technologies so that the advancing technology can be further innovated by other members of its tech sector. This method of standardized licensing contracting hopefully provides an increase in continuity and a decrease in patent infringement litigation.

In 2013, the Department of Justice and the U.S. Patent & Trademark Office issued a policy statement on the remedies available for SEP’s that are encumbered by a F/RAND licensing commitment. The policy statement focuses on “patent hold-up” by patent holders. Patent hold-up can occur when an owner of a technology included in a standard gains market power. This increased market power can cause delays in licensing negotiations because the patent owner can potentially gouge the licensee for a higher price because alternative technologies are difficult to implement due to the standard. In summary, this policy statement does not specifically attempt to limit or increase the remedies available to patent owners with SEP’s subject to F/RAND licensing commitments, instead, the policy statement attempts to offer guidance on what important public policy considerations govern when an injunction or exclusion order should be granted. The Department of Justice does however give examples of hypothetical situations where injunctions should or should not be given. However, The Department of Justice seems to stray from this sentiment in the future and specifically attempts to limit the remedies available to patent owners involved in SEP’s with F/RAND licensing commitments.

IEEE is an example of an SDO and the development of IEEE standards and the use of patents is overseen by the IEEE-SA Standards Board. In 2007 the IEEE-SA updated its policy in an attempt to clarify the IEEE RAND Commitment. This update gave technology owners an option to disclose their most restrictive licensing terms. In 2013, the patent committee chair of the IEEE-SA formed an ad hoc committee to address the wide discrepancy held by industry leaders in the meaning of “reasonable rates” for SEP’s as well as other important issues that had come up since the policy’s rollout. IEEE subsequently asked the Department of Justice for a Business Review Letter, analyzing their recent change in policy concerning SEP’s. The Department of Justice determined that IEEE’s changes did not warrant antitrust enforcement.  One of the important policy changes made by IEEE’s policy update was to limit prohibitive orders that could be sought from patent owners. The Department of Justice agreed that limiting prohibitive orders from patent owners could help add clarity and allow parties to reach agreement more quickly. Over the next five years, the Department’s Business Review Letter was cited and applied continually by industry members. Concurrently, the Department of Justice became more involved in pending litigations on the subject. The Department, however, did not endorse the stance it seemingly took in the 2015 Business Review Letter. Specifically, when the Department of Justice became involved in litigations from 2017-2020, it continually stood by the patent owner and did not limit the prohibitive orders that a patent owner could seek. The Department of Justice attempted to clear up this seemingly contradictory behavior in 2020 with a “Supplemental Response” on its Business Review Letter from 2015.

The 2020 response essentially vacated the stance the Department of Justice held in its 2015 Business Review Letter. This stance was consistent with the way the Department of Justice had conducted itself since the Business Review Letter. However, seven months later, the Department of Justice reclassified the Supplemental Response as “advocacy” rather than “formal guidance.” This action effectively recertifies IEEE’s Business Review Letter as good policy. The motion to re-adopt the 2015 Business Review Letter coincides with the Biden administrations tougher antitrust stance.

What does this history mean for us now?

Currently, it is not clear how exactly the current administration will handle antitrust issues with SEP’s. The way the Department of Justice has handled the 2015 Business Review Letter for IEEE is an indication of how uncertain the future is for this area of regulation. Not only substantively but also procedurally, giving many a reason to call into question the BRL process. Specifically, the 2015 BRT prohibits the holding up of the licensing process by patent owners by limiting the prohibitive orders they can receive while the 2020 supplement turned its gaze towards the holding up of the licensing process by licensees. For now, it seems the Department of Justice is taking a tougher stance on antitrust issues involving SEPs, but until there is a new exclamation of the current state of the law, the question remains: Will the Department of Justice intervene and act according to the 2020 supplement or sit on the side line and stand by the 2015 BRT? In this connection, on July 9, 2021, White House issued an executive order, asking the Attorney General and the Secretary of Commerce to “consider whether to revise their position on the intersection of the intellectual property and antitrust laws.”  July 9, 2021 Executive Order on Promoting Competition in American Economy, Section 5(d).  In particular, the executive order asked them to consider “whether to revise the Policy Statement on Remedies for Standards-Essential Patents Subject to Voluntary F/RAND Commitments issued jointly by the Department of Justice, the United States Patent and Trademark Office, and the National Institute of Standards and Technology on December 19, 2019.”  Id.  Despite uncertainty, interesting developments are anticipated in this area. 

The Impact of Arthrex on Discretionary Denial of IPR Petitions

By: Tova Werblowsky — Legal Intern, Unified Patents

The institution of the inter-partes review (IPR) process established in 2012 by the passing of the Leahy-Smith America Invents Act (AIA) created tremendous opportunities for post-grant challenges of weak and unused patents.[1] The frequent use of these patents as powerful legal weapons wielded by non-practicing entities in costly infringement lawsuits has resulted in clogging of the Federal court system, huge litigation costs for large and small companies, and disincentivization of technological innovation and development. The passage of the AIA eased the way for third party challenges of patents through an adversarial procedure at the USPTO’s Patent Trial and Appeals Board (PTAB), based on defects in novelty (§102) and obviousness (§103) features.[2] To initiate an IPR procedure, a third party challenger is required to show a reasonable likelihood of ability to prevail with respect to at least one claim of the patent, and is subject to denial of the challenge based on merit if this bar is not met.[3] In addition to merit-based denials, the Board can also deny requests based on purely procedural issues.[4] Congress has given the Director of the USPTO complete discretion with respect to institution or denial of an IPR petition,[5] but by  regulation, the  Director  has  delegated  this authority to the Board itself to which he appoints administrative patent judges (APJs).[6]  The Board then determines whether institution or denial of the petition would promote efficiency and fairness in each case, in light of its substantive merits. A recent set of precedential decisions based on the presence of parallel concurrent litigation of the same patents in the Federal District Court system NHK Spring Co. v. Intri-Plex Techs., Inc.[7] and Apple Inc. v. Fintiv, Inc. [8] discussed both the relative timing of the Federal court and PTAB case filings in addition to issue/party overlap and prior investment of the parallel court and parties among other factors. In Fintiv, a procedural hurdle was created for IPR challenges by subjecting petitioners to respond in detail to a 6-factor test upon a request by the patent owner for discretionary denial, which would allow the PTAB to determine whether pending parallel district court litigation of the patent should disqualify the challenger from a concurrent IPR.[9]

The decision by the Board is the last word with respect to the Patent Office decision- the Director has no control over the final outcome. The only recourse for a party who is dissatisfied with a final PTAB decision is to seek judicial review in the Court of Appeals for the Federal Circuit, at which point the Director is able to intervene before the court to defend or disavow the Board’s decision.[10]

The statistics since Fintiv have already shown that discretionary procedural denials of IPR review are increasing and will likely continue to do so as a result of the subjectivity of the requirements introduced by this precedent case.[11] This outcome seems to run counter to the goal of post grant review, which is to prevent the proliferation of bad patents, and thereby to discourage excessive litigation and encourage innovation.

The recent landmark Supreme Court decision, U.S. v. Arthrex, offers a new potential avenue for solution of this problem by forcing a rebalancing of power within the USPTO itself. The Arthrex case questioned the fundamental validity of the IPR process by challenging the authority of the APJs to make final decisions regarding patent validity on behalf of the Executive Branch of the government. The argument by the patent owner in Arthrex was that any Board decision is ultimately delegated directly by the President and therefore can only be made by “superior officers” of the Executive branch, who are appointed directly by the President and confirmed by the Senate, as Constitutionally required by the Appointments Clause. While the Director of the PTAB is appointed by the President with Senate approval, the APJ’s are appointed by the Secretary of Commerce, placing them in the role of “inferior officers” of the Executive Branch who therefore should not be allowed to make final, incontestable decisions. The patent owner in Arthrex argued that since APJs are inferior officers the entire structure of the IPR process is therefore inherently unconstitutional.[12] The Supreme Court majority in Arthrex held that the remedy for this status discrepancy would be to give back the power of review of all Board decisions to the Director of the USPTO, and this way “the President remains responsible for the exercise of executive power—and through him, the exercise of executive power remains accountable to the people.”[13]

The implications of the Arthrex decision for Fintiv-like procedural denials are tremendous: removing sole discretion for denial of an IPR petition from the Board and placing review power back into the hands of an appointed official means that the public­—and therefore patent owners and corporations—can once again have a say in the institution of patent review through the democratic process. The subjectivity of the 6-factor Fintev test for individual cases can be mitigated by placing ultimate control back in the hands of the Director, who is not necessarily the technical expert but who can assess the overall ramifications of IPR denials in the broader political and technological landscape. By doing so, the goals of the AIA and IPR process can be better achieved, while at the same time conforming to the Constitutional aims of democratic process.

---

[1] https://www.uspto.gov/sites/default/files/aia_implementation/20110916-pub-l112-29.pdf

[2] https://www.uspto.gov/patents/ptab/trials/inter-partes-review.

[3] 35 U. S. C. §314(a).

[4] Id.

[5] Id.

[6] 35 U.S.C. §143.

[7] IPR2018-00752 (Paper 8) at 20 (P.T.A.B. Sept. 12, 2018)

[8] IPR2020-00019, Paper 11 (P.T.A.B. Mar. 20, 2020)

[9] Id. at 6.

[10] 35 U.S.C. § 143

[11] https://www.unifiedpatents.com/insights?offset=1625698876172

[12] U.S. v. Arthrex 594 U.S. 594 (2021

[13] United States v. Arthrex 594 U.S. 617 (2021)

Non-Compliance with §112(b) is More Than a Gamble for Claiming Computer-Implemented Inventions

By: Alexander Cullen — Legal Intern, Unified Patents

For those seeking to file applications for computer-implemented inventions, it pays to be aware of some lesser known requirements for such inventions before casting the die. In July of 2000, the United States Patent Office (USPTO) issued a patent for an electronic slot machine designed to appeal to players by allowing the conditions for payout to be selected by the players. Patent 6,093,102 (`102 Patent), assigned to Aristocrat Technologies Inc., comprised of the conventional slot machine set up plus a display screen whereby players can select their own winning combinations. The intended result is a perception of increased winning opportunities incentivizing slot players into preferring to play the machine. However, after filing suit for patent infringement against International Game Technology of `102 Patent in 2006, Aristocrat would find themselves in the position of those who use their alleged invention; the odds not being in their favor.

On summary judgment the United States District Court for the District of Nevada found the `102 patent invalid for indefiniteness under 35 U.S.C. §112(b). Aristocrat Techs. Austl. Pty v. Int'l Game Tech., No. 2:05-CV-00820-BES (LRL), 2007 U.S. Dist. LEXIS 98916 (D. Nev. Apr. 20, 2007). The house would later go bust as the United States Federal Court of Appeals for the Federal Circuit affirmed the `102 Patent’s invalidity. Aristocrat Techs. Austl. Pty. Ltd. v. Int’l Game Tech., 521 F.3d 1328, 1338 (Fed. Cir. 2008). Had the specification’s disclosure contained an algorithm, it may have been sufficient, and appeal would have been a gamble Aristocrat never had to make.   

In computer-implemented inventions, mean-plus-function claim limitations under 35 U.S.C. §112(f), are effective for claiming a function without limiting it to a particular piece of hardware. Functional claims recite performing a function without reciting structure, materials or acts that perform the function. Claiming a function itself expands the scope of the claim for the invention and prevents potential infringers from navigating around claim limitations by using alternate components. But 112(f) also requires that for means-plus-function limitations, the patent specification disclose corresponding structures to perform all the claimed functions or the claim be found indefinite. To the rue of Aristocrat, for computer-implemented functions the structure disclosed in the specification must be an algorithm.

On appeal, Aristocrat argued that disclosure of a programmable microprocessor ought to have been sufficient to satisfy definiteness related to a “game controls means” claim. Aristocrat Techs. Austl. Pty. Ltd. v. Int’l Game Tech., 521 F.3d at 1336. The control means in the slot machine functioned to present symbols on the display, operate win conditions, and service payouts. Presented in support were the mathematical equations for performing the functions, arrangements describing the operation of the game, and written descriptions. Id. at 1334. In combination, Aristocrat argued that to one of reasonable skill in the art these implicitly disclosed sufficient corresponding structure to satisfy definiteness. Id. at 1336. Aristocrat further claimed a particular algorithm is not necessary to disclose sufficient structure for a mean-plus-function limitation. Id. at 1335.

The Federal Circuit rejected Aristocrat’s arguments. Id. at 1338. It upheld the district court’s finding of indefiniteness because rather than disclose the structure of an algorithm capable of performing the functions, the specification only repeated aspects of the game like betting odds. Id. at 1332. The court agreed with Aristocrat that the disclosures could enable one skilled in the art to devise an algorithm sufficient to support the function claim but, the question of definiteness in this case was whether an algorithm had been disclosed at all. Id. at 1337. The court then subsequently rejected the assertion an algorithm was unnecessary for disclosing structure in computer-implemented inventions. Id. at 1338.

This case provides insight and warning about satisfying definiteness in computer-implemented means-plus-function claims. As per Aristocrat’s own example, for inventors seeking to patent computer-implemented-inventions, understanding why 112(b) specifically requires an algorithm for corresponding structure can be vital. The answer: preventing “pure functional claiming” and promoting patent quality.

As to why, the USPTO’s 2019 examination guidance action on patent examinations of computer-implemented inventions with functional claims elaborates. First, pure functional claims raise an issue of indefiniteness because they claim an abstraction without description of how the result is achieved. Second, without disclosure of the structure performing the claimed function, the scope of the claim is implicitly ANY structure capable of performing the function and the function itself. The result of both is indefiniteness because there is a function without adequate limitation to structure. Thus, requiring an algorithm prohibits overly broad and indefinite claim scoping. 

It should be noted, definiteness for computer-implemented functional claims does not necessarily require disclosing a highly descriptive algorithm, only one sufficient in structure to enable the function. Aristocrat Techs. Austl. Pty. Ltd. v. Int’l Game Tech., 521 F.3d at 1338. Specifications may disclose the algorithm in terms of mathematics, language, flow charts, or any means conveying understanding to those of ordinary skill in the art. Id. at 1337. Aristocrat’s slot machine only disclosed a microprocessor as structure for its game control function, by consequence any algorithm that achieved the results of the game control by microprocessor would be infringing. Said otherwise, it was a purely functional claim citing a goal rather than one reciting with specificity how said goal is achieved.

Necessarily, compliance with section 112(b) definiteness requirement should be of concern for those seeking to patent computer-implemented inventions with functional claims. Disclosure of algorithms providing sufficient structure to accomplish the claimed function is essential to avoid a finding of indefiniteness. 

Denials of Transfer Motions in Western District of Texas and Mandamus Reversals by Federal Circuit

By: Kassidy Schmitz — Legal Intern, Unified Patents

It is no secret that the district court in the Western District of Texas (WDTX) in Waco, TX, before Judge Alan D Albright, is currently the most popular court for patent litigation. However, it is not always the most convenient court. Motions to transfer are filed frequently and are almost as frequently denied by Judge Albright. Defendants are consistently petitioning the Federal Circuit and, surprisingly, receiving support.

Writs of mandamus are exceedingly rare and reserved for “extraordinary causes.”[1] They can be granted only if there is a clear showing that the transferee forum is clearly more convenient, taking into consideration relevant public and private forum non conveniens factors,[2] and that there was a clear abuse of discretion by the district court in denying the motion.[3] Nevertheless, since July of 2020, the Federal Circuit has granted nine of the twenty petitions for writs of mandamus filed on Judge Albright’s denials.

In one of the earliest granted petitions, In re Adobe,[4] Judge Albright ruled against transfer despite the evidence that Northern California more convenient because both Adobe and the inventor were in Northern California, and Adobe had multiple witnesses were in Northern California. The Federal Circuit determined the district court failed to give appropriate weight to the convenience and willing witness factors, erroneously basing the denial solely on his “perceived ability to more quickly schedule a trial.”[5] The Court pointed out that this factor was explicitly at issue in Genentech, and it was determined that if several factors weigh in favor of transfer, then “the speed of the of the transferee district court should not alone outweigh” the other factors.[6]

The speed of the district court as a determining factor was again called into question three months later in both In re Nitro Fluids, L.L.C.[7] and In re Apple.[8] In In re Nitro Fluids, L.L.C., Judge Albright reasoned that the WDTX would be able to hear the case faster than the SDTX because the WDTX has a patent-specific Order Governing Proceedings.[9] The Federal Circuit found this reasoning was flawed as the focus needed to be on whether there was “an appreciable difference in docket congestion between the two forums.”[10] The potential difference between the two courts’ abilities to schedule a trial would not be related to the potential appreciable difference. The Federal Circuit also found that district court erroneously relied on the assumption that it could move faster and had made more progress on the current case than the SDTX had on the co-pending case to deny the first-to-file claim. The basis of first-to-file is to alleviate the issue of two courts resolving overlapping issues, not which can make it to the finish line first.[11] If the balance of transfer factors favors keeping the case in the second-filed court, which is rare, then the case should stay; otherwise, the case should be transferred to the first-filed court.

In In re Apple, the speed of the court was only one of a myriad of factors the Federal Circuit determined the district court weighed incorrectly. In this case, the district court acknowledged, and the Federal Circuit agreed, that the Northern District of California (“NDCA”) historically had a shorter time to trial for patent cases than WDTX.[12] The district court’s argument that the NDCA had a more congested docket did not outweigh the fact that both courts can reach a decision at about the same rate.[13] Other factors the Federal Circuit discussed were relative ease of access to sources of proof, cost of attendance for willing witnesses, and local interest. For the sources of proof factor, the district court found that it weighed slightly in favor of a transfer by looking at the location of witnesses and location of documents. The Federal Circuit noted that the district court erred in ignoring Apple’s sources of proof in NDCA and overemphasized the sources of proof in or nearer to WDTX. The place where the defendant’s documents are kept, especially in patent infringement cases as the bulk of relevant evidence usually comes from the accused infringer, weighs in favor of transfer to that location. For the willing witness factor, the Federal Circuit determined that the district court applied the Fifth Circuit 100-Mile Rule too rigidly as the witnesses would need to leave home for an extended period of time regardless of where they traveled to. In addition, the most relevant party witnesses for all the parties would be in NDCA. The combination of these factors weighed in favor of transfer. The Federal Circuit found that the district court misapplied the law for the local interest factor by incorrectly focusing on the purported tax benefits of Apple’s presence in WDTX. The factor is more importantly focused on the “significant connection between a particular venue and the events that gave rise to a suit,”[14] not just the parties’ significant connections to each forum. The accused products were designed, developed, and tested in NDCA, and Uniloc has a presence in NDCA and not WDTX, thus the factor weighs in favor of transfer.

The speed of the court, or rather lack thereof, was the reason the petitions were filed in In re SK Hynix[15] and In re TracFone Wireless, Inc.[16] In both cases, the petitioners waited almost eight months for the district court to rule on a motion to transfer before filing their petitions. In the meantime, the district court continued to conduct proceedings, such as Markman hearings and issuing claim construction orders. The Federal Circuit called the district court’s handling of the motions an “egregious delay and blatant disregard for precedent.”[17] The Court reiterated their position in Apple that while district courts have discretion as to how they handle their dockets, a transfer motion should “unquestionably take top priority.”[18]

Three days after the Federal Circuit ordered the district court to make a ruling on TracFone’s transfer motion, the district court denied the motion based almost entirely on the willing witness factor; TracFone filed a second petition.[19] Similar to Adobe, there were no witnesses identified by either party that resided within or even close to Waco, Texas. As in Apple, the Federal Circuit determined that the district court misapplied the 100-Mile Rule by saying that doubling the distance traveled by non-party witnesses in Arizona and Minnesota would double the inconvenience. While that was originally how the rule was applied,[20] the court in Genentech held that rule should not be rigidly applied where witnesses will be required to travel a significant distance regardless of where they testify.[21] The Federal Circuit held that the district court “clearly abused its discretion” in reaching the conclusion that the willing witness factor weighed against transfer.

The willing witness factor was again at issue in the most recent cases of In re Samsung Electronics[22] and In re Uber.[23]  In both cases, as in TracFone, there were no witnesses located in WDTX and over a dozen located in NDCA. In Samsung, the Federal Circuit chastised the district court for again not giving any weight to the witnesses in NDCA and ignoring the precedent the Federal Circuit set in Apple that those witnesses need to be considered. In a flip of the script from the district court’s typical heavy weight given to non-party witnesses,[24] the Federal Circuit held that the district court did not give enough weight to non-party witnesses, who were also located in NDCA. Similar to Apple, the events that lead to the infringement suit mainly took place in NDCA and not at all in WDTX. The facts and analysis by the district court in Uber were almost identical to those of Samsung.[25] As such, the Federal Circuit again reversed the district court and found that the transfer motion should be granted.

District courts have wide discretion in balancing the factors when deciding to transfer a case. In these eight cases,[26] the Federal Circuit did not mince words; there was clear abuse in each case. When a court continuously rules against transfer and abuses its discretion, especially in the Western District of Texas with its heavy patent docket, it is cause for concern. By forcing parties to litigate in the Western District, it is not only circumventing the venue statutes, but also tipping the scales and potentially affecting the outcome of patent infringement cases. With the rise of arguably abusive litigation of lower-quality patents, having one district court with one sitting judge hear a large number of the cases is dangerous. While it appears the Western District has heeded the Federal Circuit’s warnings on weighing factors in deciding Correct Transmission LLC v. ADTRAN, Inc.[27] and Infogation Corp. v. Google LLC[28] and addressed the speed and congestion issue with the Standing Order issued in March, time will tell if nine granted writs of mandamus were enough to convince the Western District of Texas to stay the course.

---

[1] Ex parte Fahey, 332 U.S. 258, 259-60 (1947).

[2] See In re Volkswagen of Am., Inc., 545 F.3d 304, 311 (5th Cir. 2008) (en banc).

[3] See In re Genentech Inc., 566 F.3d 1338, 1348 (Fed. Cir. 2009).

[4] In re Adobe, 823 F. App’x 929 (Fed. Cir. 2020).

[5] Id. at 932.

[6] Genentech, 566 F.3d at 1348.

[7] In re Nitro Fluids, L.L.C., 978 F.3d 1308 (Fed. Cir. 2020).

[8] In re Apple Inc., 979 F.3d 1332 (Fed. Cir. 2020).

[9] Nitro Fluids, 978 F.3d at 1313.

[10] Id. at 1314 (quoting In re Adobe Inc., 823 F. App’x 929, 935 (Fed. Cir. 2020)).

[11] See id.

[12] In re Apple Inc., 979 F.3d at 1347.

[13] Id.

[14] In re Acer, 626 F.3d 1252, 1256 (Fed. Cir. 2010).

[15] In re SK Hynix, 835 Fed. App’x. 600 (Fed. Cir. 2021).

[16] In re Tracfone Wireless, Inc., 848 Fed. App’x. 899 (Fed. Cir. 2021).

[17] In re SK Hynix, 835 Fed. App’x at 602.

[18] In re Apple, 979 F.3d 1332, 1337 (Fed. Cir. 2020).

[19] In re TracFone, No 2021-136 (Fed. Cir. April 20, 2021).

[20] In re Volkswagen AG, 371 F.3d 201, 203 (5th Cir. 2004).

[21] In re Genentech, Inc., 566 F.3d 1338, 1344 (Fed. Cir. 2009).

[22] In re Samsung Electronics Co., Nos. 2021-139, -140 (Fed. Cir. June 30, 2021).

[23] In re Uber, No. 2021-150 (Fed. Cir. July 8, 2021).

[24] TracFone, No 2021-136; In re Apple, 979 F.3d 1332, 1344 (Fed. Cir. 2020).

[25] See In re Uber, at 2-3.

[26] In re Intel was not discussed as it pertained mainly to the closure of the Austin court due to the COVID 19 pandemic.

[27] Correct Transmission L.L.C. v. ADTRAN, Inc., 6:20-CV-00669 (Order Granting Defendant’s Motion to Transfer)

[28] Infogation Corp. v. Google L.L.C, 6:20-CV-00366 (Order Granting Defendant’s Motion to Transfer)

Is Access Advance Really Checking Essentiality? -- An HEVC Case Study

In most standards-setting organizations, including the ones involved with High Efficiency Video Coding (HEVC) (H.265), participants designate their intellectual property as relevant or essential to practice a portion of the standard without scrutiny.  This has led to widespread inflation of unmerited licensing demands even from well-respected companies.  

This has only been exacerbated by the current patent pool ecosystem, whereby multiple pools purport to each license a single standard. These pools claim to offer thousands or tens of thousands of allegedly-essential patents, both without providing evidence that the patents are, in fact, essential, and generally without evidence of what percentage of the patent landscape the pool actually has power to license. But even a cursory review of many of the patents can lead to a quick conclusion that it should not be designated essential, as the following analysis of U.S. Patent 10,250,913 (part of the Access Advance patent pool) demonstrates. As such, it is important to perform truly objective analyses of standard-essential patents.

SUMMARY

While designated as essential, U.S. Patent 10,250,913 (the “‘913 Patent”) claims a very specific way of dividing an image into blocks for encoding and decoding that is not required by the HEVC standard.  During the prediction and transform encoding steps, the ’913 Patent claims dividing a picture using a nested organizational structure that divides the picture into four using a technique called quadtrees.  The quadtrees are defined, in part, by the “maximum size” of the units in each quadtree.  Beyond that, the claims require that certain quadtree regions are specified by determining if particular quadtree sub-regions exceed a maximum size.  However, the H.265 standard, while specifying that quadtrees are used, does not describe how the quadtrees are specified, much less state any relationship between quadtree regions and certain quadtree sub-regions, as required by claims 1 and 13 of the ’913 Patent.  Thus, the ‘913 Patent claims a very narrow way of using quadtrees that is not even mentioned in the HEVC standard, much less required.  Accordingly, the patent is not necessary nor essential to practice the standard.

BACKGROUND

Encoding video generally involves four distinct steps:

• Partitioning each picture into multiple units called “coding units”

• Predicting each unit using inter or intra prediction, and subtracting the prediction from each unit to find a residual

• Transforming and quantizing the residual (the difference between the original picture unit and the prediction)

• Entropy encoding the residual and other information (e.g., transform output, prediction information, mode information and headers) in preparation for transmission to the decoder. 

Once the encoded bitstream reaches the decoder, the decoder performs the same process in reverse. 

To specify the coding units (or “blocks” in the ’913 Patent), quadtrees are used, as shown below:

U.S. PATENT 10,250,913

The ’913 Patent focuses on the prediction and transform steps, and the patent notes that improvements in coding efficiency can be achieved when the coding unit sizes for prediction differ from the coding unit sizes used for residual transform processing.

For example, the ’913 Patent discloses that prediction and residual blocks may have different sizes:

For transform coding, the blocks (or the corresponding blocks of sample arrays), for which a particular set of prediction parameters has been used, can be further split before applying the transform. The transform blocks can be equal to or smaller than the blocks that are used for prediction. It is also possible that a transform block includes more than one of the blocks that are used for prediction. Different transform blocks can have different sizes and the transform blocks can represent quadratic or rectangular blocks.

’913 Patent at 47:61-65.

To specify the prediction and transform coding unit sizes, the ’913 Patent describes two nested quadtrees that are defined, in part, by the “maximum size” of the coding units in each quadtree. The ’913 Patent describes the two nested quadtrees:

Thus, in accordance with the example presented above with respect to FIGS. 3a to 6a, sub-divider 28 defined a primary sub-division for prediction purposes and a subordinate sub-division of the blocks of different sizes of the primary sub-division for residual coding purposes. The data stream inserter 18 coded the primary sub-division by signaling for each treeblock in a zigzag scan order, a bit sequence built in accordance with FIG. 6a along with coding the maximum primary block size and the maximum hierarchy level of the primary sub-division. For each thus defined prediction block, associated prediction parameters have been included into the data stream. Additionally, a coding of similar information, i.e., maximum size, maximum hierarchy level and bit sequence in accordance with FIG. 6a , took place for each prediction block the size of which was equal to or smaller than the maximum size for the residual sub-division and for each residual tree root block into which prediction blocks have been pre-divided the size of which exceeded the maximum size defined for residual blocks. For each thus defined residual block, residual data is inserted into the data stream.

’913 Patent at 21:44-64.

The concept of nested quadtrees, and the logic that is used to divide the nested quadtrees, is claimed in claims 1 and 13 of the ‘913 Patent shown below, with the key contextual elements in bold and the key claim limitations discussed in this analysis bolded and underlined:  

1. A decoder comprising:

an extractor configured to extract, from a data stream representing encoded video information, information related to first and second maximum region sizes, first and second subdivision information, and a maximum hierarchy level wherein the first maximum region size and the first subdivision information are associated with prediction coding and the second maximum region size and the second subdivision information are associated with transform coding;

a divider configured to:

divide an array of information samples representing a spatially sampled portion of the video information into a first set of root regions based on the first maximum region size,

sub-divide at least some of the first set of root regions into a first set of sub-regions using recursive multi-tree partitioning based on the first subdivision information,

determine whether a size of at least one of the first set of sub-regions exceeds the second maximum region size;

responsive to a determination that the size of at least one of the first set of sub-regions does exceed the second maximum region size, divide at least one of the first set of sub-regions into a second set of root regions of the second maximum region size, and

determine, for each of the second set of root regions of the second maximum region size, whether the respective root region of the second set of root regions is to be sub-divided;

responsive to a determination that the respective root region of the second set of root regions is to be sub-divided, sub-divide the respective root region of the second set of root regions into a second set of sub-regions using recursive multi-tree partitioning based on the second subdivision information and the maximum hierarchy level; and

a reconstructor configured to reconstruct the array of information samples using prediction coding in accordance with the first set of sub-regions and transform coding in accordance with the second set of sub-regions.

Importantly, the bolded/underlined language was added by amendment to secure allowance over prior art, and it is this requirement that is not found in the HEVC standard, as explained below.

FILE HISTORY OF THE ’913 PATENT

During prosecution, the application leading to the ’913 Patent was rejected over prior art that disclosed using a maximum size of blocks for prediction coding and a second maximum size of blocks for transform coding. See Final Rejection Dated October 3, 2017.  This art was consistent with what is described in the HEVC standards documentation.

The applicant responded by amending the claims to add a new limitation for determining whether a size of at least one of the first set of sub-regions exceeds the second maximum region size, and added language to make the “dividing the at least one of the first set of sub-regions into a second set of root regions of the second maximum region size” step responsive to the newly added determination. Office Action Response Dated April 2, 2018.

The applicant further argued that the prior art “fails to teach or discuss a specific operation in which a size of a prediction sub-block in prediction coding is checked to determine whether that size exceeds a second maximum size (e.g., as indicated by the alleged transform size flag) associated with a transform block in transform coding, let alone further dividing the prediction sub-block to the second maximum size based on such size determination.” Id. (emphasis added). 

In other words, the applicant asserted that a “operation . . . in prediction coding” must be used to determine whether the size of a prediction sub-block exceeds a transform quadtree maximum size, and then divide the prediction sub-blocks during the prediction step to fit the maximum size of the transform quadtree. The applicant effectively moved a part of the partitioning of the transform quadtree from the transform step to the prediction step.

THE ’913 PATENT IS NOT ESSENTIAL TO THE HEVC STANDARD

The following sections of the November 2019 version of ITU-T H.265 have been identified by Access Advance as implicating claims 1 and 13 of the ’913 Patent:

• 6.3.2

• 7.3.2.2.1, 7.3.8.2, 7.3.8.4, 7.3.8.5, 7.3.8.8, 7.4.3.2.1, 7.4.9.4, 7.4.9.8

• 8.5.3.1, 8.6.7

A summary of each of these sections from H.265 is provided below, but none of these sections describe in any way or refer to the requirements of claims 1 and 13 of the ’913 Patent that were added during prosecution and require determining whether the size of a prediction sub-region exceeds the maximum size of transform region, and do not describe any logic corresponding to dividing the prediction sub-regions to align with the maximum transform region size at all, much less in a manner responsive to that determination.

Section 6.3.2 is titled “Block and quadtree structures,” and gives an overview of the Coding Tree Blocks (CTBs) used during coding, and indicates that two quadtrees are used, one for the prediction tree and one for the transform tree. However, this section does not describe how the quadtrees are specified, nor does it suggest that transform quadtree regions are specified by determining that a prediction quadtree sub-region exceeds the maximum size of the transform quadtree, as required by claims 1 and 13 of the ’913 Patent.

Sections 7 of the H.265 standard is titled “Syntax and Semantics” and all of Sections 7.3.2.2.1, 7.3.8.2, 7.3.8.4, 7.3.8.5, 7.3.8.8, 7.4.3.2.1, 7.4.9.4, and 7.4.9.8 simply describe the syntax and variable names that are used in H.265. These sections do not describe any logic that would correspond to the requirements of claims 1 and 13 as described above.

Section 8.5.3.1 describes the inputs and outputs for decoding the prediction units in inter prediction mode. For example, it lists the input variables that specify the size, width, height, and index of the current luma prediction blocks, and describes the ordered steps taken to decode prediction units in inter prediction mode. It does not describe the determining steps discussed above.

Section 8.6.7 is titled “Picture construction process prior to in-loop filter process,” and describes the input variables for picture construction, including the variables that describe the predicted and residual samples of the current block. Once again, it does not describe the determining steps discussed above.

Thus, the H.265 sections identified by Access Advance, while generally relevant to describing quadtrees for prediction and transform coding, do not describe or require the logic in claims 1 and 13 of the ’913 Patent.

CONCLUSION

Often, it is easy for practitioners in this field to see whether a patent is essential to a technical standard; that should certainly be the case from companies that participate in the standard-setting process.  Yet most pools lack any analysis whatsoever.  The ’913 Patent is emblematic of a systemic issue in licensing of allegedly standard essential patents within video codec technology and beyond.