April 30, 2015 | By Daniel Nazer

Stupid Patent of the Month: Eclipse IP Casts A Shadow Over Innovation

Imagine you’re on your way to deliver a case of beer to a party. Before you get there, your boss sends you a text: They want 2 cases now. You read the text while driving (don’t do that), so you deliver an extra case when you arrive. Having successfully completed that task, you leave for your next delivery.

Congratulations! You might get sued by the owner of April’s stupid patent of the month.

This month’s winner, US Patent No. 9,013,334 (the ’334 patent), has the prosaic title: Notification systems and methods that permit change of quantity for delivery and/or pickup of goods and/or services. It issued just last week, on April 21, 2015. As its title suggests, the patent claims a “method” of updating delivery information. It belongs to Eclipse IP LLC, one of the most litigious patent trolls in the country. Eclipse belongs to an elite group of trolls (such as Arrivalstar and Geotag) that have filed over 100 lawsuits.

Eclipse owns a patent family of more than 20 patents, all of which claim priority back to a single 2003 provisional application. These patents claim various closely related “notification systems.” Eclipse interprets its patents very broadly and has asserted them against a wide range of mundane business practices. For example, in January it sent a letter claiming that Tiger Fitness infringes one of these patents by sending emails to customers updating them about the status of orders. This letter explains that “Eclipse IP aggressively litigates patent infringement lawsuits” and that “litigation is expensive and time consuming.” The letter demands a $45,000 payment.

We think that all of Eclipse’s patents deserve a stupid patent of the month award. But the ’334 patent is especially deserving. This is because the Patent Office issued this patent after a federal court invalidated similar claims from other patents in the same family. On September 4, 2014, Judge Wu of the Central District of California issued an order invalidating claims from three of Eclipse’s patents. The court explained that these patents claim abstract ideas like checking to see if a task has been completed. Judge Wu applied the Supreme Court’s recent decision in Alice v CLS Bank and held the claims invalid under Section 101 of the Patent Act.

All of Eclipse’s patents were both “invented” and prosecuted by a patent attorney named Scott Horstemeyer (who just so happens to have prosecuted Arrivalstar’s patents too). Patent applicants and their attorneys have an ethical obligation to disclose any information material to patentability. Despite this, from what we can tell from the Patent Office’s public access system PAIR, Horstemeyer did not disclose Judge Wu’s decision to the examiner during the prosecution of the ’334 patent, even though the decision invalidated claims in the patent family. While Horstemeyer has not made any genuine contribution to notification “technology,” he has shown advanced skill at gaming the patent system.

 Judge Wu’s reasoning applies directly to the ’334 patent. While one claim in the ’334 patent expressly requires “computer program code” executed to carry out the method, this does not make a difference. Indeed, Judge Wu explained that, under Alice, it is not enough that the claimed methods must be performed by a "specially programmed" computer. It appears Horstemeyer hoped the Office would not notice this decision and would simply rubber-stamp his application. Sadly, that is exactly what happened. The Patent Office issued the Patent No. 9,013,334 without raising Alice or Section 101 at all. We believe this is part of a disturbing trend of Patent Office decisions that ignore Alice where courts have struck down almost identical claims.

Trolls like Eclipse will continue to thrive as long as the Patent Office gives them stupid patents and courts allow them to use the cost of litigation to extort settlements. Reform such as the Innovation Act will make abusive patent litigation less attractive. But we need broader reform to stop the Patent Office from being a rubber stamp for vague and overbroad software patents.

Late breaking addition: As if to drive home just how much of a rubber stamp it is, the Patent Office issued yet another patent to Eclipse yesterday. Patent No. 9,019,130 is almost identical to the ’334 patent, except it deals with updating “time” information instead of “quantity” information.


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