EasyTracGPS is a family-owned business that provides GPS tracking solutions to commercial shipping fleets. Recently, EasyTracGPS faced a litigation threat from Inventergy LBS, LLC, which accused it of infringing U.S. Patent No. 8,760,286. That patent supposedly claims a “[s]ystem and method for communication with a tracking device,” but like so many patents, actually claims generic steps of data collection and processing that any computer could perform. This is not the kind of invention that can be patented.
EFF represented EasyTracGPS pro bono, writing Inventergy a letter explaining that its patent was invalid, and that its bad faith assertion of patent infringement violates state law. Inventergy withdrew the lawsuit the same day it received the letter.
As we explain in our letter, Inventergy’s patent should be declared invalid under one of the basic building blocks of US patent law, 36 U.S.C. § 101. In the groundbreaking decision Alice v. CLS Bank, the Supreme Court confirmed that Section 101’s prohibition on patents for abstract ideas still applies to patents that describe performing an abstract idea on a computer. As we wrote in our letter:
In Alice, the Supreme Court also confirmed that methods of organizing human activity qualify as ineligible, and that abstract ideas, see id. at 220 (affirming that claims previously held ineligible involved “a method of organizing human activity”), even if they require computers, see id. at 223 (“merely requiring generic computer implementation fails to transform that abstract idea into a patent-eligible invention”). As a result, claiming steps that humans can and do perform without technological intervention and adding generic networked devices is not enough to render claims eligible for patent under § 101.
Since the Alice decision, dozens of “do it on a computer”-style patents have been invalidated in court. These types of patents are like catnip for patent trolls like Inventergy, because they can so easily be used to extract money from dozens of practicing companies.
Of course, Inventergy knew that it didn’t have much of a legal case, but it filed it anyway in order to pressure EasyTracGPS to settle out of court. Fortunately, EasyTracGPS has operations in Georgia, one of several states to have passed a state law to tackle bad-faith patent infringement assertions. Laws like that give practicing companies more tools to defend against wrongful accusations of infringement. For example, it makes a patent owner’s failure to provide “allegations concerning the specific areas in which the target's products, services, and technology infringe the patent or are covered by the claims in the patent” evidence of bad faith assertion. See Ga. Code Ann. § 10-1-771(b)(1)(C).
Fortunately for EasyTracGPS, Inventergy has backed down, but we don’t know how many other companies it successfully demanded payments from. Low-quality software patents like the ’286 patent can wreak havoc on an entire industry before someone fights back in court. In our interview with small business owner Justus Decher, Decher explains how before he fought back, several other companies in his field had already paid up.
Today, Congress is considering making a major change to the patent system that would undermine one of patent law’s most basic principles, that patents should be on “new and useful” inventions. If the Tillis-Coons proposal becomes law, it could bring a flood of new, low-quality software patents. Please write your members of Congress and urge them to protect innovation.