Greg Aharonian Discussed the WSJ’s “Idiotic Article on Patent Tr-lls”

By Greg Aharonian [LINK]

The 11 August 2008 edition of the Wall Street Journal, page R6, has an idiotic article on patent licensing, starting with a review of the Microsoft v. Avistar squabbles. Microsoft earlier was in talks with Avistar to license its technology, but in the midst of discussions, filed reexam requests challenging 29 Avistar patents, causing Avistar a month later to fire 25% of its workforce (27 employees). Avistar is crying foul, while Microsoft is arguing it found legitimate prior art that the PTO must use to reassess the validity of the patents.

I looked at a few of Avistar’s patents (7412482, 7398296, 7152093 – some of the earlier patents are assigned to Collaboration Properties or Vicor Incorporated). On the side of Avistar, many of their patents cite an excellent amount of patent and non-patent prior art. On the side of Microsoft, the patents are in the crowded area of network communications, so a priori I would not be surprised if a company like Microsoft that can afford to spend tons of money for prior art searching has found additional prior art to use in the reexam requests. Unless the prior art they cited is bogus in order to cause delays to squeeze Avistar, I would say that Microsoft’s countermove is a legitimate tactic.

In short, this is a case that has little to do with tr-lls, but rather is a case that should be the basis for an article on the tactics of prior art searching (how much should small companies spend on searching during patent prosecution versus how much should they spend before entering into negotiations or litigation?). Indeed, if anyone has seen any of the Microsoft reexam requests, I’d be interested in knowing the quality of the new prior art that they found. But the article uses this squabble as an intro into the ill-defined, made up problem or tr-lls (tr-lls being the restless-leg-sydrome of the IP world). The author of the article, not wanting to do much thinking, sets the stage of the article as follows:


At the epicenter of the struggle are so-called ‘patent tr-lls’, a derogatory term for small firms whose only business is to buy patents and assert them in court in hope of obtaining large settlements or damages.

This is a sentence of economic nonsense. First, is ‘tr-ll’ really a derogatory term if tr-lls are using the same tactics as the infamous non-tr-ll tr-ll, IBM? If, when IBM was doing this, it didn’t earn the label of derogatory, it shouldn’t be applied now except as a compliment.

Worse, this paragraph completely betrays free markets (something the Journal is glad to do when it is in the interests of its big company buddies), because it forgets the fact that a patent is an asset created by the government in exchange for an inventor’s public disclosure of a new and useful invention. When the asset is so created, there is absolutely nothing freakin wrong with people doing with patents what they do with all other financial assets – buying, selling and exploiting them. To attack this practice is to attack free market economics. If an inventor doesn’t have enough money to fully enforce his or her patent, it is pure free market economics for that inventor to sell the patent (for a fixed sum and/or royalty) to another economic player who can fully enforce the patent. To complain about this is to attack free markets (something too prevalent in big increasingly-uninnovative companies).

Speaking of which, the article quotes head abuse-patent-reform leader Mark Chandler of Cisco (who I would be glad to debate this issue with, while I am totally drunk, and still win):


Mark Chandler, general counsel of Cisco Systems, says companies that don’t produce anything can buy low-cost patents, hire contigency fee lawyers and file lawsuits seeking massive damages for patents that contribute negligible value to a product. Proposed patent reform that links damages to the economic value of the patent would help solve the problem, he says.

Again, Chandler is attacking free-market economics, in that there is absolutely nothing wrong with companies raising funds to help enforce patents where the original inventor does not have the financial resources to do so. And I don’t think that is what Mark is whining about.

Rather what I think he is whining about is that a) companies like Cisco refuse to spend much time and money monitoring issued patents in their field to anticipate such problems (something the bio-pharma-chem companies, acting like grownups, routinely spend lots of money doing so), and b) companies like Cisco (and most of Silicon Valley) refuse to pool their monies and talents to build prior art resources and tools to help kill much of the crap being issued by the PTO that is used to harass children such as Cisco. I have asked around for 15 years in Silicon Valley for funding to build two prior art collections, one to remain in the Valley for everyone’s use, and the second to be donated to the PTO for examiner’s use. No interest whatsoever, and not just no interest in not funding me (hey, I know I am a jerk), but they don’t want to fund anyone to effectively solve the prior art problem. Because the large companies like Cisco (lead by …. IBM) want to continue to get their crappy patents (which would be threatened by any serious prior art effort – that patent peer review project being a logistic scam at IBM’s behest to prevent serious treament) while whining about smaller companies’ crap.

So anyone use the full word ‘tr-ll’ with the ‘o’ in the patent world is either an idiot or a liar. Or both. No crappy patents should be asserted in courts for only one reason – that such crappy patents don’t issue in the first place. But will companies’ like Cisco use their clout to get Congress to investigate incompetent and corrupt PTO management? NO. Until they do, they should stop whining. If someone gives me his address, I will send Mark a pink blankee he can wipe his tears with.

Notes:

184 thoughts on “Greg Aharonian Discussed the WSJ’s “Idiotic Article on Patent Tr-lls”

  1. pds says: “the pto higher ups aren’t required to follow the law, they just should because I want them to and it’s the right thing to do”

    Well ok then, that’s the answer to the question!

    Glad to have someone tell us officially.

    Let’s be clear though, that’s kind of what I figured. I’m glad to see you agree with guys like this: link to adventuresinlegalland.com
    where they go into some detail about how our government is nothing more than a nice form of bullying. I don’t know if I agree with you on that. In my opinion the country just hasn’t developed it’s system of laws sufficiently to provide for two things:

    1. A way to “join the country” or “become a citizen” at age 18 or so. Your choice. If you don’t want to join, you don’t have to, but you get no help from our gov. and if you do something physical against someone here you may meet the military.

    2. A requirement to obey the laws in order to continue to be a citizen. And some kind of thing for kids.

    On a side note, I have an unpaid parking ticket from a long time ago, I wish they would just garnish it out and save me the trouble of dealing with it. If the sheriff wants to come and take my old tv so I have an excuse to get a new flat screen, that’ll work too.

  2. “I still do not see even one portion saying that laws must be obeyed. And thats not saying there isn’t one.”

    Nobody is applying “mind control” on you to obey the laws. However, you (or anybody else) just have to face the consequences if you don’t. Sometimes those consequences are minimal or absent altogether, in which case few people have any incentive to obey the laws. However, in many cases, the laws are enforced, and people are forced to face the (sometimes serious) consequences.

    You may ask what laws say that you have to obey the law that says that you will go to prison for 1st degree murder. However, when the 250lb guard puts you in shackles and shoves a baton up where the sun don’t shine, you’ll find yourself walking into jail regardless.

    You may also ask what laws say that you have to pay some fine imposed by some court. It really doesn’t matter when your wages are garnished and the sheriff shows up at your house to collect your belongings to be auctioned off.

    Then again, most fifth graders, after taking social studies, would figure this out. Then again, I don’t think you are smarter than a fifth grader.

    I think your logic would find better purchase in a blog full of anarchists.

    Fukc with the law long enough, and the law will fukc with you. That is all the law you need to know.

  3. Looks like Chaon beat me to it. But, tell you what, since JD seems to believe he can, after having pumped himself up with the “I think I can” method, go ahead JD cite me some Articles. Article 1 Section 8? To make rules for the government and regulation of the land and naval forces? To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the US, or in any Dept. or Officer thereof? All very nice, but I still do not see even one portion saying that laws must be obeyed. And thats not saying there isn’t one.

  4. Tyrone Slothrop discussed Patently-O’s Idi0tic blog-thread “Greg Aharonian Discussed the WSJ’s “Idi0tic Article on Patent Tr-lls”

    “It started off quite interesting, but now it’s becoming idi0tic”, he said.

  5. I really like the idea tarring and feathering, but that is just me. [We also have great majestic avenues here in DC to line up alongside and torment the lawbreakers as we force them to parade.]

  6. e6k, are you one of those young whippersnappers who went to school when 4th grade civics class was so sophisticated that they forgot to tell you that good citizens obey the law?

  7. I am starting a rumor:
    If McCain wins the election, e6k will become head of the PTO.
    If Obama wins, it will be pds.

  8. Paul Morgan “*This same article notes, as a fairly typical example, the fact that Cisco has gone from defending against only two patent suits in 1998, both from actual competitors, to now defending against 32 patent suits, NONE by companies making any products.”

    uhhmmm … that is because in 1998 cisco used overinflated stock, mostly to swallow companies – where is the stock now? how have they performed without a dot com bubble? …

    more to the point >>> the amount of moneys paid out in settlements and judgments is *unchanged* and ranges around 0.11% of revenues for companies that are part of the “coalition for patent fairness”- including cisco – that doesn’t look like a lot of “shrink” for any business (0.11% !!) let alone those companies which repeatedly LOSE …

    it is a lot easier to bet 4-5 mil if you are a big copyists than a small entity with nothing but your patent assets.

    did the article note the anti-trust free passes handed out to these same companies by the doj over the past 8 years? the same ones that are being denied in “old europe” which somehow sees anti-trust issues all over the technical landscape where we see none.

    did the article mention the number of companies swallowed by cisco which may have had higher premiums if the value of the IP was more liquid or had separate enterprise value – as opposed to being forced to negotiate with a monopsonist? 1998 was the year around which Juniper started (there are no other serious challengers to cisco’s marketshare, are there?)

    how about any word on the overlap between doj & issues such as wiretapping? network neutrality? the drop in the US position in broadband deployments? what about the motivations of the cisco “patent troll tracker”?

    just curious – patents are values not expenses – you do not see the journal talk about the downside of copyright suits in the same breadth, even trademarks get more kudos? – & you do not see the narrative that at 4-5 mil per patent case these are real deals – did anyone blink when any of the majors litigate each other MSFT ATT? Broadcom Qualcomm? Any mention of the number and pervasiveness of patent pools as quasi-industry standards?

    greg gets it right, the narrative is a red herring that obscures all the moneys spent lobbying for reform, fairly simple political battle & yet the more the public understands the less it views the “trolls” and the “small entities” with animus say akin to that afforded the riaa or mpaa …

    this is plain politics not innovation – and we can all use the stock prices of these companies as a better ruler – 0.11% infringement pay-outs is not going to move a stock by any significant amount – which is the point of the patent reform act, isn’t it? expense innovation – cap it?

  9. “Uhm, I think it’s called the Constitution, aka, the supreme law of the land. You’ll learn about it in law school. Then again, maybe you won’t.”
    —————————-

    Where’s the law that says I have to obey the Constitution?

    AHA! Caught you the in the icy grip of irrefutable logic!

  10. As an American, I can break the law all day long, as long as I’m willing to pay the consequence.

    American officials, who take oaths, on the other hands, are duty bound by their oath.

    If an American official breaks the law, s/he is to be held accountable to the highest standard – e.g., public tar and feather, or
    “Off with Their Heads: Traitors, Crooks, and Obstructionists in American Politics, Media, and Business”—

    link to amazon.com

    ___________________________________
    Notice: The information contained in this e-mail transmission, including any document that may be attached, may contain privileged and confidential information. It is intended only for the use of the person(s) named above. If you are not (one of)the intended recipient(s), you are hereby notified that any review, dissemination, distribution or duplication of this communication is strictly prohibited. If you are not (one of) the intended recipient(s), please destroy all copies of the e-mail and contact the sender, Jaoi(TM), by carrier pigeon. Thank you.
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  11. “… can’t even show us the law that says the higher ups have to obey the law.”

    Uhm, I think it’s called the Constitution, aka, the supreme law of the land. You’ll learn about it in law school. Then again, maybe you won’t.

  12. So wait, enforcement actions have nothing to do with patents? Duh? Wait a minute…

    “It doesn’t appear all that LSAT studying is doing any good.”

    It doesn’t appear those years in practice and going to law school did any good … can’t even show us the law that says the higher ups have to obey the law. Come on, you can do it JD! Repeat after me, “I think I can, I think I can”.

  13. “I wonder how many of these 32 suits could have been avoided by more carefully designing products to avoid existing patents, by use of reexams to invalidate/narrow third party patents and/or by taking out licenses where the patents were likely to be held to be valid and infringed.”

    So, the reason more patents are being filed and issued and asserted by patent holding companies now than ever before is because many previously law-abiding companies decided to become patent outlaws or simply stopped caring one way or the other? That’s a new one. I think you just made Occam’s razor cry.

  14. Nice try Mooney, all your comparison shows is that the change in the “business cycle” has caused many to begin enforcement actions. Is this some kind of revelation? I’d have to give it a rousing “duh.”

  15. “*This same article notes, as a fairly typical example, the fact that Cisco has gone from defending against only two patent suits in 1998, both from actual competitors, to now defending against 32 patent suits, NONE by companies making any products.”

    I wonder how many of these 32 suits could have been avoided by more carefully designing products to avoid existing patents, by use of reexams to invalidate/narrow third party patents and/or by taking out licenses where the patents were likely to be held to be valid and infringed.

    I also wonder whether the growth and number of products Cisco is selling/manufacturing today compares with those in 1998.

  16. Paul Morgan: “This same article notes, as a fairly typical example, the fact that Cisco has gone from defending against only two patent suits in 1998, both from actual competitors, to now defending against 32 patent suits, NONE by companies making any products.”

    AllSeeingEye “There was only a change in the business cycle that had nothing to do with patents.”

    One of these commenters is full of it.

  17. This thread is probably too long for anyone to read already. However, let’s attempt to get back to its actual subject, which was a criticism of a Wall Street Journal article.
    I think the criticisms of this article are off-point, and do not support many of the above editorials. The point of the article was NOT just another attack on patent trolls, and NOT opposing the sale of patents. It was that major companies [and the Supreme Court] have taken a stronger defensive position againt ALL patent suits, and that this is hurting licensing by legitimate R&D developers or manufacturors.
    The article suggests that one reason for this [incontestable] development is that companies actually making or selling products have been burned for huge increases in patent litigation expenses. That is an incontestable fact.* [There has also been adverse media publicity about the quality of some of the patents being sued on]. I.e, the clearly demonstrated fact that there has been hugh increase in the number of patent suit defendants sued by companies [many owned and controlled by litigation attorneys] which do NOT invent, use or sell patented inventions and are formed solely for threatening and bringing lawsuits.

    *This same article notes, as a fairly typical example, the fact that Cisco has gone from defending against only two patent suits in 1998, both from actual competitors, to now defending against 32 patent suits, NONE by companies making any products.

  18. “http://www.opm.gov/constitution_initiative/oath.asp”

    So you’re saying if the higher ups support the constitution then they are required to obey the laws?

  19. “But it’s an example of much more than that besides.”

    Agreed. They are prime examples of cases you whine about being so obvious, and non-statutory under 101, yet the PTO can’t seem to cobble together a rejection even close to a prima facie case.

    BPAI has reversed the examiner twice in 09/193,787. At what point is the PTO going to admit that despite their best efforts, which ain’t saying much, they should issue the case.

    Your arguments that the number of inventors listed, the number of continuations filed, the supposed “breadth” of the claim, etc. should be considered when determining whether the claimed invention meets the statutory requirements for patentability are foolish. Even coming from you. If the claims are not patentable, please explain why the PTO can’t make a rejection that sticks.

    You won’t, because you can’t. Neither can they.

    “In any meantime, please continue whining about how the PTO is denying you a patent on an invention that you refuse to identify.”

    I’ve identified two. Neither are mine, but what does that matter?

    You really should crawl out of the world of protein fragments, or whatever technical niche it is, that you’re currently ensconced in. It’s a wide world out there. You may find that the PTO’s current disregard for the law extends to more than just “business method” patents. Just hope it doesn’t find its way to your molecules, or whatever it is you supposedly prosecute.

  20. QUESTION: “And why do I care about this case? Why should anyone care about THIS case? You need to be able to answer that question.”

    ANSWER: “You should care about this case because it is an example of the lawlessness that pervades the examining corps”

    But it’s an example of much more than that besides. That’s why it’s a poor ‘poster boy.’

    I wonder why nobody bothers to simply find a good ‘poster boy’ of the sort I described upthread. You know, one that very clearly shows the PTO behaving in an arbitrary way to prevent the issuance of some narrow claims in a non-dubious art. That way we could all get behind the application and maybe force something to happen.

    See where I’m going with this?

    In any meantime, please continue whining about how the PTO is denying you a patent on an invention that you refuse to identify.

  21. “Oh and why does the US not have an ‘obligation to exploit’ requirement that a lot of other countries seem to have. Would this not help in battling the trolls?”

    The long-agreed upon quid pro quo is disclosure for a patent, not practice for a patent.

    Also, the obligation to exploit (improperly) presumes one is capable of exploiting the invention. If you have a patent that is also covered by a senior patent and you get a license from the patent holder of the senior patent, then you, by law, cannot exploit your patent.

  22. Oh and why does the US not have an “obligation to exploit” requirement that a lot of other countries seem to have. Would this not help in battling the trolls?

  23. Nice laws, both of those, now where is the law that says the higher ups must obey the law? Still waiting …

    Though, to be honest, even in the worst cases of examination both of those laws are being followed. Examination is carried out, and if it appears (to the examiner) that the application is in condition for allowance then it is allowed. If it doesn’t … well you get the picture. So then your argument is that the higher ups do obey the law?

  24. e6k, here is some law you are supposed to obey (notice the use of the word “shall,” which is usually interpreted as being a command):

    35 U.S.C. 131 Examination of application.
    The Director shall cause an examination to be made of the application and the alleged new invention; and if on such examination it appears that the applicant is entitled to a patent under the law, the Director shall issue a patent therefor.

    37 CFR § 1.104 Nature of examination.
    (a)Examiner’s action.
    (1)On taking up an application for examination or a patent in a reexamination proceeding, the examiner shall make a thorough study thereof and shall make a thorough investigation of the available prior art relating to the subject matter of the claimed invention. The examination shall be complete with respect both to compliance of the application or patent under reexamination with the applicable statutes and rules and to the patentability of the invention as claimed, as well as with respect to matters of form, unless otherwise indicated.
    (2)The applicant, or in the case of a reexamination proceeding, both the patent owner and the requester, will be notified of the examiner’s action. The reasons for any adverse action or any objection or requirement will be stated in an Office action and such information or references will be given as may be useful in aiding the applicant, or in the case of a reexamination proceeding the patent owner, to judge the propriety of continuing the prosecution.

  25. “How does that catch-22/mexican standoff get resolved?”

    Get rid of the current corrupt mismanagers, i.e. the political appointee hacks and lifers.

    Replace with people who understand it’s not their job to pick and choose which applicants and applications they like and don’t like, and who have respect for, and will obey, the law.

    “Presumably, the USPTO’s opinion is that they are.”

    I’m sure they do. But given their (mis)understanding of the law (take your pick – the current continuation and claims rule fiasco, the proposed Markush rules, etc., etc., etc.) their opinion is beyond meaningless.

    Remember, these are the same people who were told, in several hundred comments, that they don’t have the authority to limit continuations and who responded, “Yes we do. See Bogese and Symbol Technologies IV.”

    These legal masterminds are running the PTO.

    Good grief.

  26. John, I agree with you. One thing I can’t get my head around is the whole “adherance to the law/breaking the law” argument.

    It’s your opinion that the USPTO are not complying with the law. Presumably, the USPTO’s opinion is that they are. How does that catch-22/mexican standoff get resolved? There is always the BPAI option, although it seems to me that it’s fairly common for the BPAI to back up the examiners.

    When you read the comments from e6k, who, lets face it, has about as much intelligence as a sack of hammers, and seems to enjoy saying no for the sake of saying no, it’s not hard to see how you have ended up in the position you are in.

  27. JohnDarling — you are correct “The PTO’s job is to search the application, examine the application, make a prima facie case of unpatentability, and if they can’t, issue the patent.”

    If they had been doing this the past five or so years the backlog would be decreasing, not increasing.

  28. “Maybe not but it sure would help. And why do I care about this case? Why should anyone care about THIS case? You need to be able to answer that question.”

    You should care about this case because it is an example of the lawlessness that pervades the examining corps and is the result of the mismanagement by those who do not regard adherence to the law to be part of their job requirement.

    As I said, the law is clear. The PTO’s job is to search the application, examine the application, make a prima facie case of unpatentability, and if they can’t, issue the patent.

    The PTO doesn’t get to decide if they like the subject matter of the claims, or the number of inventors who are listed, or the number of applications claiming priority to, or from, the application and then break the law if they don’t like any of those factors.

    You should also care because the corrupt mismanagement of the PTO keeps telling us that the backlog and pendency are 100% the fault of applicants and the patent bar. But how many applications are the examiners of these two cases not examining because they are churning these two over and over and over and over?

    It’s simple: search the application, examine the application, make the best case of unpatentability that can be made, let BPAI decide. If affirmed, hurray for them, if reversed, issue it. Let it be subjected to your fool proof invalidity defense of, “Oh, come on your honor, this is clearly invalid!!! It’s so obvious nobody ever even bothered to write it down!!!”

    “They would never do it to one of my cases. Seriously. It would never happen because I wouldn’t let it happen. I do not know what it is going on with those particular cases but even the worst prosecution histories and PTO clean-up incidents I was unfortunate enough to have witnessed look nothing like that.”

    That’s nothing more than the usual silly bravado we get from you.

    I’m starting to believe pds is right. I don’t think you’ve ever prosecuted a patent application.

    Keep up the hilarious posts.

  29. Are you trying to backpeddle Mooney MacMonkey?

    You always talk about a “patent bubble” but there never was a patent bubble. There was only a change in the business cycle that had nothing to do with patents. There will be no “cleanup” because there is nothing to clean up, except for your noxious presence.

  30. pds :: bravo !! can someone point out where their clients’ products are manufactured? How about the % requirements artificially imposed by governments & incumbent trade groups to meet a “made in …” “swiss made” … “made in china” label – gee – bubba – here is a trade name argument – is it really made in switzerland if the movement of the watch uses only 20% of parts actually made in switzerland by one company, say ETA??? last i checked over 70% of all value in equity in our stock exchanges (American) is attributable to intangibles not tangibles – is is made elsewhere … and … caveat … lots of the intangibles are held overseas for tax efficiency … taxation without representation … if the inventors can be fairly identified as the tax payers, the folks who make things here including invention, say IC mask sets, who is representing them?

    equity means you work for yourself … debt means you work for someone else

    “Hmmmmm … what about companies that buy a strip mall and get money (in the form of rent) from the tenants? The owners of the strip mall didn’t create or sell anything. Shouldn’t we treat them the same way as patent holders that don’t make the patented product??

    As for the difference between those create the technology and those that make/sell the things, in the USA, I think we should be more concerned about those that create the technology. The making/selling of things are likely going to happen overseas. As such, if the USA loses the competitive advantage with regard to innovation (by watering down the patent system), then the ones who will most likely benefit won’t be from the USA.”

    AGREED rent should come to inventors who successfully patent that which can be sold as products and services … the true innovations become industries in and of themselves … the time lag between “good patents” & revenues worth litigating is worth a looky-see …

    our patent system is our industrial policy & making sure the real innovators get protection is not a terribly difficult concept to understand in light of historical precedence and the huge success of the US system even with the “harmonization” of 1995 & 1999 …

    caveat … random thoughts … let alone attribution for their contribution & time value & opportunity cost in getting it right “enough” for others to follow – competition IS good & the patent becomes public domain in a 20 year time limited period – so all cannot be lost even with the silliest & worst patents – i’ve had worse educators compared with reading what some call “bad patents” – luck, serendipity, flash of genius, if we knew the hits … we could just take orders and sell …

  31. Bubba?? “A common theme on this and other blogs is that the count system screws things up and provides incentives for gamesmanship.

    The Trademark office has examiners, office actions, final refusals, appeals etc. and does not seem to be so plaqued by the same problems that the patent side does. Anyone care to comment as to why? What could the patent side learn from the trademark side that would be useful?”

    well generally – a patent is used to encourage public disclosure by an inventor who believes his metes & bounds have yet to be disclosed by another using the standard of novelty & non-obviousness in meeting definiteness & description requirements (this is oversimplification) … he discloses (she is her own “lexicographer”) because of the consideration the government provides for that disclosure, presumably – why define or teach anything that you have 20 yrs of protection for? and, how long does trademark protection last?

    And, what is the cost of trademark litigation? Better yet, where does employment and industry creation come from primarily? naming? advertising? which 50% of that advertising has anything to do with the innovation embodied by a patent?

    … so are you saying that we should apply a “confusingly similar” standard (again, oversimplification) to reject “defensive patents” filed in alleged response to innovative disclosure of “good patents” (insert some definition here)? – so, who is “confused”? a PHOSITA? or better yet, make companies who have large staff filing said defensive patents to show diligence in doing prior art searches that are commensurate with their own filings in their entirety? you know using lots of different firms who do not know what other firms representing the same party at interest are doing?

    more simply – there may be no “trade” yet ! (a trademark examiner would probably reject on that basis alone, no?) – there is no product or service that can be identified or alleged to be confusingly similar to “consumers” – or is it a PHOSITA …

    how much public policy is spent on protecting trade names versus invention … open question for the academics out there that talk about these very confusingly similar concepts …

  32. “There was an economic shift around 2000, but it appears by the many graphs posted on PatentlyO that there was no change in the number of filings.”

    Yes, that’s why I said the cleanup would take 50 years.

    Oh and congrats on “tardlicking.” I’d not heard that term before you brought it to my attention and I suspect you’ve heard others say the same thing.

  33. “the bubble burst… blah… blah… blah”

    Mooney, there WAS no bubble, or do you have a problem reading graphs? The number of patents has been on a fairly unremarkable trend of expansion for the last 4 or 5 decades and possibly more. There was an economic shift around 2000, but it appears by the many graphs posted on PatentlyO that there was no change in the number of filings.

    When will you tire of your shrill hyperbole, and narcissistic tardlicking? We all have.

  34. Actually LH the code specifically identifies gov. employees as having to pay taxes. Now, so far as I can tell if I didn’t work here I might not have to. The gov. makes a big enough stink about you not paying them that it’s worth it though.

    “In response to your last post, everyone is required to obey the law. Why would you assume otherwise?”

    I assume we’re all people living on earth. You’re the one assuming we are all required to obey the law.

  35. Leopold:

    I am working on a response to a Final Rejection where the examiner essentially said only that all of her prior rejections were repeated. She did not respond to any of my prior arguments where I had argued for some of the independent claims that specific limitations were not taught and for other of the independent claims that other specific limitations were not disclosed in the references as she contended.

    HONK! HONK!

  36. Malcolm,
    Sorry if my whining bothers you.

    pds, with regards to your advice, I appreciate it. At the risk of being accused of whining, however, it’s the “repeat as needed” that is driving up costs for my client. My guess is that it’s a lot easier to do the cut-and-paste job that some examiners like to do, where they simply copy an old office action and splice in a new secondary reference for some unimportant feature. Then they say that my previous arguments explaining why the primary reference teaches exactly none of the features of the claimed invention are “moot” in view of the new grounds of rejection. Honk if you’ve seen this before… Of course, since I’m not posting an application number, I’m probably just making all of this up.

  37. “I guess you have no problem with the PTO’s handling of this case. So you wouldn’t mind if they did it to one of your cases.”

    They would never do it to one of my cases. Seriously. It would never happen because I wouldn’t let it happen. I do not know what it is going on with those particular cases but even the worst prosecution histories and PTO clean-up incidents I was unfortunate enough to have witnessed look nothing like that.

    99.999% of prosecutors do not get themselves into such situations. What is that guy’s problem?

  38. e6k,

    In response to your last post, everyone is required to obey the law. Why would you assume otherwise?

  39. “It just makes me laugh that anybody would hold up that ’337 app as some wonderful example of a poor inventor being treated oh so unfairly by the big bad PTO.”

    I never held them up as poster children for some wonderful example of a poor inventor beign treated oh so unfairly by the big bad PTO.

    I cited them as poster children for the endless loop of withdrawn rejections being followed by equally bad, or worse rejections.

    For somebody who blows a gasket whenever he feels he’s been misquoted, you got a funny habit of doing the exact thing to others.

    Thanks for answering my questions. I guess you have no problem with the PTO’s handling of this case. So you wouldn’t mind if they did it to one of your cases.

    Oh, I’m sorry, I forgot, you’re the only patent attorney who’s ever filed an application for an actual invention. And who’s never filed a continuation. And who’s never committed inequitable conduct.

    Preach away, brother Malcolm.

  40. e6k,

    Examiners are required to follow the law like everyone else. It appears thatyour issue is that there is no apparent mechanism to ensure compliance.

    There are no patent police. If you don’t follow the laws you will continue to perform incompetently and you should ultimately be fired. The BPAI is generally pretty good about following the law and you will get smacked down.

  41. So … what exactly is requiring us to obey the law? Can you point me to that law or where it is otherwise required? Perhaps you are source of this requirement for the office to obey the law?

    In your 65 mph example I’m pretty sure (I’ve seen the one for VA) that there is a law that specifically states that it shall be unlawful for motorists to operate their vehicle over the posted speed. Where is the analogous law for the PTO higher ups or examiners?

  42. “Hmmmmm … what about companies that buy a strip mall and get money (in the form of rent) from the tenants?”

    What about sticking to the subject. Geezus.

  43. “You don’t have to like the invention, the claims, the inventors, the number of continuations, or whatever to conclude that the PTO’s handling of this case is despicable.”

    Maybe not but it sure would help. And why do I care about this case? Why should anyone care about THIS case? You need to be able to answer that question.

    Or come up with better cases. I suggest coming up with a LOT of better cases.

    Good luck with that. In the meantime, I’ll just sit here and let the examples of absurdly broad claims (asserted to be inventive by knowledgeable applicants UNDER OATH) continue to simply fall into my lap. Remember the application file a couple years ago by lawyer with 958 claims that read on sonar? That was funny.

  44. “How about a company that does nothing EXCEPT buy patents and assert them against companies that do manufacture and sell products to the public? How should the public “perceive” that sort of company relative to the companies that are actually making and selling things? I view this as a rhetorical question.”

    Hmmmmm … what about companies that buy a strip mall and get money (in the form of rent) from the tenants? The owners of the strip mall didn’t create or sell anything. Shouldn’t we treat them the same way as patent holders that don’t make the patented product??

    As for the difference between those create the technology and those that make/sell the things, in the USA, I think we should be more concerned about those that create the technology. The making/selling of things are likely going to happen overseas. As such, if the USA loses the competitive advantage with regard to innovation (by watering down the patent system), then the ones who will most likely benefit won’t be from the USA.

  45. “While you’re at it, please explain how the number of inventors has anything to do with the examination of an application.”

    We weren’t talking about examination of applications. We were talking about “poster boys” for bad PTO behavior. Did you ever hear the story about the poster boy for Issue du Jour where the poster boy turned out to be a child murderer? There’s a reason for that.

    It just makes me laugh that anybody would hold up that ’337 app as some wonderful example of a poor inventor being treated oh so unfairly by the big bad PTO. Try a little harder, mkay? Or maybe just reconsider the premise.

  46. e6k,

    The answer to this is fairly obvious. Examiners and higher ups are required to obey the law. Whether they are compelled to obey the law is another matter entirely.

    Simple example: I am required on most highways to limit my speed to 65mph. I am not compelled to do so. If I do not obey the speed limit, I will be fined (or perhaps worse). This does not compel me to obey the speed limit, but merely gives me a reason to do so.

    Unfortunately, nothing at the moment hinders the PTO examiners and higher ups from not obeying the law. You should choose to do it because it is your job to do so.

  47. A common theme on this and other blogs is that the count system screws things up and provides incentives for gamesmanship.

    The Trademark office has examiners, office actions, final refusals, appeals etc. and does not seem to be so plaqued by the same problems that the patent side does. Anyone care to comment as to why? What could the patent side learn from the trademark side that would be useful?

  48. “As a practical matter, I do not see any way to force someone to do their job if I have no ability to affect that job.”

    Au contraire my friend, appeal and when the examiner reopens prosecution with a worse reference, put them back again (repeat as need). Eventually, the examiner is going to get really, really tired of writing responses and not getting any counts. A count is the life blood of an examiner. Ensure that the examiner doesn’t get any counts for crappy work, and the examiner will eventually come along.

    It may not be “forcing” the examiner, but it can be a very powerful persuasion.

  49. JD: “It’s very clear that the current crop of political appointee hacks and lifers who are (mis)managing the PTO believe that they are not required to obey the law,”

    Me: “Can you point me to the law that says that they must obey the law? ”

    JD: “To answer your question, there’s nowhere you can go to actually compel the examiner to follow the law.”

    Ok, so, just so we’re clear, examiners aren’t required to obey the law, but the higher ups are? At what specific level does one become high up enough that you are required to obey the law?

  50. “Yes, that’s a great poster child for bad PTO behavior. LOL!!!!”

    Good poster children for ‘baseless’ rejections would involve narrow non-obvious claims without the barest hint of a 101 issue, one or two inventors, and an Examiner who’s understanding of the law was axx-backwards to even non-patent attorneys.”

    What does the number of applications claiming priority to 09/077,337 have to do with the PTO’s treatment of that particular case?

    And what 101 issue are you talking about? While you’re at it, please explain how the number of inventors has anything to do with the examination of an application.

    Nice straw men. Pretty weak. Even for you. Then again, you do manage to top yourself on just about a daily basis. I’m sure we’ll see even weaker from you in the not too distant future.

    Let’s see, the first time an appeal brief was filed, the examiner withdrew the rejections and re-opened. But the rejections weren’t baseless, right? Rock solid, lead pipe cinches they were I’m sure.

    The next time an appeal brief was filed, the examiner actually answered. And got reversed. The BPAI spent about 9.5 pages of a 10 page decision summarizing the examiner’s super awesome rejections and then about two sentences explaining why those rejections didn’t pass muster.

    The claims are so obviously obvious, but the PTO some how can’t cobble together something that they either feel confident taking to the BPAI, or that can actually get affirmed. But everybody knows that sh#t ain’t patentable, right? It’s so old and well known, nobody ever bothered to write it down. That’s the ticket. Why didn’t the PTO just go to the BPAI with that argument? It’s clearly a winner. Mooney uses it every day here. How many patents have you got invalidated with that argument? The number must be legion.

    I don’t see any comment from you on the two suspensions of actions, and the bullsh$t request for information, which was in violation of the actual rule, and the PTO’s own policies as set forth in the MPEP. Let’s not forget about the first suspension and the outcome of the mysterious interference that was going to have an impact on the prosecution of the case, but which turned out to be a big fat lie. Oh, and how about the second suspension?

    How about the fact that applicants responded 14 MONTHS ago and the PTO has done nothing in response?

    All of it completely against the rules. But hey, rules are meant to be broken, right? PTO don’t need no stinkin’ rules. Rules are for s#ckers. Like applicants.

    You don’t have to like the invention, the claims, the inventors, the number of continuations, or whatever to conclude that the PTO’s handling of this case is despicable.

  51. “Asserting a patent as a non-practicing entity should have no consequence as how your company is viewed perceived by the public.”

    the reality is that we live by the narrative & die by the narrative – “patent troll”? respectfully, so-what, it was coined by folks at a well-known IT company, some of them are engaged in the practice today – the older term that can be used in response is “patent pirate” (1845?). ask anyone what a pirate is and they get it … see below about napster in that context

    whether they are copyists, vulture capitalists, car salesmen, ambulance chasers, nouveau riche, does it really matter if the truth always lies somewhere in between? there is lots of money involved and there are “words that work” (frank lutz) – it cannot be denied … i mean what is the difference between blog & journalism?

    pointing out the positives – like the fact that inventors actually create jobs & getting that message across is far more likely to get the public to understand just what a patent is & more importantly why the US patent system has been a boon for all of America.

    again and again, there is no RIAA or MPAA for inventors … there are groups whose interests rightfully deal with attorneys & agents but how many large firms actually take on small entities these days? why not? how about 10% of billable hours given to individual inventors? on a local scale, even with local focus on industries that may have local competitive advantages – better ski boarder innovation – emphasize in CO & WY in areas near sky resorts? what about efforts by firms to make the MPEP more readable to any inventor? that seems to always fall on deaf ears as it is not “law” but without some objective manner to make the knowledge accessible – words matter more …

    with all kinds of ridiculous academic studies that allege better patent processes based on theories that are divorced from the reality of the system as argued and debated by practitioners & examiners here & else where … you would think that making the system more approachable to the people & their elected representatives would be the most basic and easiest message to manage – entrepreneurs take risks and create jobs, they need protection against those who infringe – litigation is cheaper than r&d, etc etc

    we have ourselves to blame but then again who knew much about copyrights (or still do) when napster captured the front page for many many publications for days & weeks at a time …

  52. “Asserting a patent as a non-practicing entity should have no consequence as how your company is viewed perceived by the public.”

    I don’t know if it should or shouldn’t. That’s up to the public.

    And again: I’m not aware of anyone saying that any company is a troll that doesn’t practice X but asserts a patent that claims X. I think there’s more to it than that.

    How about a company that does nothing EXCEPT buy patents and assert them against companies that do manufacture and sell products to the public? How should the public “perceive” that sort of company relative to the companies that are actually making and selling things? I view this as a rhetorical question.

    Most Americans will assert that they prefer capitalism to the alternatives. But most Americans work for a living at jobs that are not easily characterized as “money-making schemes for clever opportunists.” When such clever opportunists appear, most Americans are intrigued but that honeymoon doesn’t last long. The bubble burst almost a decade ago. The clean-up will take fifty years, probably.

  53. Malcom, I agree the term is devoid of legal significance. But that is not the issue. The issue is the term is used by the media to evoke a negative inference on the company labeled as such.

    As for “who cares” whether you are a troll or not, it appears that many that comment on this board do (as well as the community). Otherwise there wouldn’t be so much fuss about the word and its implication,

    Asserting a patent as a non-practicing entity should have no consequence as how your company is viewed perceived by the public.

  54. “According to some on this thred, a company can file a patent infringement suit only using those patents that cover their own product(s). Otherwise, your a troll.”

    I don’t recall anyone saying that. Who said that?

    Besides, “troll” is just a word devoid of any legal significance. Who cares?

  55. AMEN! Thanks for the great article, Greg!!!!

    And, thanks Denis for allowing Greg the bandwidth and your channel for “soapboxing” his perspective.

    (I want to be in on the debate with Mr. Chandler, there are some issues that he has raised that are not covered in this coverage – I’ll pass on the alcohol)

    (in the interests of “transparency & disclosure” i was a client of Greg’s in the early to mid 1990s & utilized his search services extensively. some of the patents that included those search results have just issued. for that reason and the value of time considered, i now believe congress should reverse both the 1995 & 1999 changes to the patent act. more importantly i respect greg’s honest intellect & work ethic. yet, he does not know my name & i am posting this under a pseudonym likely resulting from the unfortunate statutory, judicial & societal changes in the patent prosecution environment, how IRONIC & sad)

  56. “Dennis, here are two good poster children for you: 09/193,787 and 09/077,337.”

    Those aren’t good poster children. Good poster children for “baseless” rejections would involve narrow non-obvious claims without the barest hint of a 101 issue, one or two inventors, and an Examiner who’s understanding of the law was axx-backwards to even non-patent attorneys.

    Good luck finding that poster child. Complains like Leopold’s are just profoundly silly without any facts. Let’s have the application numbers for those cases, Mr. Bloom. Then we call all join in collective shock at how unfairly you and your client are being tretaed. Without that information, the whining is just that: whining. Nothing more. And I’m not just saying that to be a jxrk. It’s a fact.

    As for 09/077,337: link to 271patent.blogspot.com

    Yes, that’s a great poster child for bad PTO behavior. LOL!!!!

  57. According to some on this thred, a company can file a patent infringement suit only using those patents that cover their own product(s). Otherwise, your a troll. That’s akin to limiting the ability of pharmaceutical companies to sue potential infringers based only on the patents that they have listed in the Orange Book. For all of those who practice patent law (prosecution or lititation) on earth, consider all those “non-product” patented inventions you have seen. They are now worthless.

    I believe its now time to take off our short-sighted glasses.

    By the way, litigation is a tool. Savy companies use it wisely. Suing for the sake of suing doesn’t generate income for your investors.

  58. According to some on this thred, a company can file a patent infringement suit only using those patents that cover their own product(s). Otherwise, your a troll. That’s akin to limiting the ability of pharmaceutical companies to sue potential infringers based only on the patents that they have listed in the Orange Book. For all of those who practice patent law (prosecution or lititation) on earth, consider all those “non-product” patented inventions you have seen. They are now worthless.

    I believe its now time to take off our short-sighted glasses.

    By the way, litigation is a tool. Savy companies use it wisely. Suing for the sake of suing doesn’t generate income for your investors.

  59. “Dennis, Leopold’s question, as copied below, would be a good topic for a PATENTLYO article and discussion.”

    ‘Seriously, I’d like to know. I’m now prosecuting more than a few cases stuck in an endless loop of withdrawn final rejections followed by equally baseless rejections. When I appeal, the rejections are withdrawn and followed by more baseless rejections. Where do I go to actually compel the examiner to follow the law?’

    Dennis, here are two good poster children for you: 09/193,787 and 09/077,337.

    Leo,

    To answer your question, there’s nowhere you can go to actually compel the examiner to follow the law.

    David Boundy can elaborate.

  60. “I’m but a lowly examiner who hasn’t started a law education just yet …”

    Gee, none of us woulda ever guessed that.

  61. “This is especially true as the higher ups have instigated the feeling that no rejection is a bad rejection and all the problems are due to the applicants approach.”

    Wow, e6k in a nutshell.

  62. Leopold,

    I think I misunderstood due to problems with the English language. The correct question, you pointed out, should not be why should one follow the law (which is more of a philisophical question) as what compels one to follow the law. For the individual, it is the threat of civil or criminal proceedings that would cause loss of liberty or property. For the PTO examiner it appears to be … nothing. No recourse (get crappy rejection, file an appeal, spend mucho dinero, win, repeat!) as there are many incinentives and few disincentives for bad rejections. This is especially true as the higher ups have instigated the feeling that no rejection is a bad rejection and all the problems are due to the applicants approach.

    As a practical matter, I do not see any way to force someone to do their job if I have no ability to affect that job.

  63. There is no law that says you have to follow the law, there are only consequences for not following it. Sometimes. For some people. If you get caught.

  64. pds will recognize this discussion as being the same one we had awhile back. LB, I believe that one recourse is to go to the District Court and get the judge to give the Director the go ahead to issue a patent. Of course, from what I read in the patent laws he still doesn’t have to.

    Let’s face it, this is our flag.

    link to patenthawk.com

    That’s my new background btw. Pretty awesome isn’t it? I wish I had a hi rez version though.

  65. Dennis, Leopold’s question, as copied below, would be a good topic for a PATENTLYO article and discussion.

    “Seriously, I’d like to know. I’m now prosecuting more than a few cases stuck in an endless loop of withdrawn final rejections followed by equally baseless rejections. When I appeal, the rejections are withdrawn and followed by more baseless rejections. Where do I go to actually compel the examiner to follow the law?”

  66. “So, what’s the law that says he has to follow the law?”

    Well, there’s always the law of the jungle. Maybe wait for your client to broach the subject first.

  67. “The (short) answer is that when the PTO promulgates rules and regulations, it does so under the authority vested in it by Congress (whose authority was given by the Constitution). Thus, any rules or regulations must be within the authority vested by a) Congress and b) the Constitution. The rules or regulations (and thus the authority vested) can be qualified in the court system.”

    You just explained how to determine whether rules/regulations/actions from the PTO are valid. But you haven’t explained why e6k has to care. As he said, the fact that someone can reverse you doesn’t compel you to follow the law. So, what’s the law that says he has to follow the law?

    Seriously, I’d like to know. I’m now prosecuting more than a few cases stuck in an endless loop of withdrawn final rejections followed by equally baseless rejections. When I appeal, the rejections are withdrawn and followed by more baseless rejections. Where do I go to actually compel the examiner to follow the law?

  68. MaxDrei:

    I agree with you that it is wishful thinking for the PTO, or anyone else, to resolve arguable patent infringement claims on the cheap. Lawyers are expensive and properly challenging (or defending) a patent takes considerable effort. Any system that dramatically cut costs would also likely restrict a party’s ability to present their case.

    What you say is exactly true; cheaply resolving obviously frivolous litigations is a solvable problem (which is why I included the “obviously frivolous” term in my earlier comment). The only solution that comes to mind with arguable cases is a loser pays the winners legal fees system, but that has its own problems.

  69. e6k,

    The (short) answer is that when the PTO promulgates rules and regulations, it does so under the authority vested in it by Congress (whose authority was given by the Constitution). Thus, any rules or regulations must be within the authority vested by a) Congress and b) the Constitution. The rules or regulations (and thus the authority vested) can be qualified in the court system.

    Until the courts weigh in (as seen by the recent drubbing of the attempted rule changes in court), it is assumed that the agency is following the law. If the courts decide that the rules or regulations of the agency do not follow the law (and thus the authority has not been given by Congress or the Constitution), the rules or regulations must change. As the director (and other managers) are members of the agency, they must obey the law.

    There is obviously much more to be said, but I think this may help you.

    BTW there are a number of other articles out there which may be better. Google (and any crappy? toolbar patents from other parties that may issue from the PTO) to the rescue.

  70. e6k, how about the PTO brass has to obey the law because they are a subset of “everybody,” and everybody has to obey the law. Even Richard Nixon learned that eventually.

  71. At work now so I can’t post much, but my previous remark may have been half jest half earnest question. As to your answer, I fail to see how the review of agency actions relates to why they must obey the law. Perhaps you’re arguing that because they can be reviewed then they must obey the law? Keep in mind, I’m but a lowly examiner who hasn’t started a law education just yet (I’m studying for the LSAT actually) but so far as I can see someone being able to reverse what you do doesn’t mean that you have to do a certain thing.

    I think MM understands the rhetorical question.

    Although, retiring to my own island does sound nice. Did anyone hear about the guy that broke his little 1 sqr mi island away from England’s rule a few months back? He just started squatting (iirc) on the island 30 yrs or so ago and sent a letter to the queen claiming the island was never legitimately a part of England anyway so he was leaving and starting his own country. He invited everyone who wants to to come down and chill with him.

  72. So, Jonesie, the USA has a problem with “obviously frivolous” vexatious litigants, does it? That’s the easy problem to solve, I should have thought. Got any solutions for the much harder one, where both sides have a case that does actually rise to the level of “arguable”. I say that it’s wishful thinking of our correspondent pds to assert that the PTO can sort those ones out. You?

  73. Bubba’s cousin:

    I wasn’t trying to imply that only small entities use the high cost of litigation as a coersive tactic. I’m as opposed to this practice when performed by “old, well known, large companies” as when performed by small entities.

    I do agree that low cost alternatives to litigation that could be used to counter obviously frivolous infringement accusations would help lower the amount that trolls could extort.

  74. “what distinguishes a troll is that a troll uses the high cost of litigation to extort more money than his patent is worth (which may or may not be zero).”

    Many a big company relies on the high cost of enforcing patents to steamroll over patent owners and other inventors. Many times clients have said, “well, what is the point of getting a patent; I can’t afford to enforce it.” That same high cost of litigation is being used by infringers (such as big companies) to be “unfair” to the little guys. A little tit for tat seems about right.

    Also, I have small company client right now who is having to defend a patent infringement litigation brought by an old, well known, large company who is clearly using the high cost of litigation as a coercive tactic.

    Paul Morgan has been posting that the smart solution is to find ways to lower the cost of litigation, such as by reexamination. I have to concur with that.

  75. I agree with Anonymous, to me what distinguishes a troll is that a troll uses the high cost of litigation to extort more money than his patent is worth (which may or may not be zero).

    My guess is that most trolls never intend to litigate (too expensive) but hope that the threat of litigation is sufficient to deliver an unearned payday.

    The problem is, it is very difficult to distinguish groups using the patent system in good faith from those that abuse the system, and because of this the troll label gets thrown around way too much.

  76. E6k,

    I don’t know if your comment was in jest or serious. If the former, it was very droll (for this blog). If the latter, you seriously need to consider retiring to your own little private island, or at least leaving the public sector.

    Administrative review by the courts is rooted in the Constitution as part of the system of checks and balances. Note that administrative agencies are arms of the various forms of the government and thus under about 200 years of American jurisprudence both agency decisions and individuals acting under agency authority are subject to the decisions of the appropriate court. I could go on but here is an article to get you started (check out, especially pages 1319-1334).

    link to yalelawjournal.org

  77. Thanks for that, Malcolm. Without your caustic insights this blog would be only half what it is. Jay Bybee’s an Appeal Court Judge now, isn’t he? Maybe he can team up again with Professor Yoo, this time to help 6k?

  78. link to bailii.org

    ..is my answer to pds. Here we have what you might call a 101 or 112 Decision of the English Patents Court, that runs to 328 paragraphs. We see Eli Lilly using a common law jurisdiction to revoke the Human Genome Sciences European Patent 939,804. You lot all have me tagged as a civil law EPO-lover. Well, take a look at this common law Decision of the court in London and tell me: 1) is it imaginable at the EPO, in opposition procedings 2) is it imaginable in the USA either at court or at the PTO 3) is there even one of its 328 paragraphs that is superfluous (given that the Decision must address all issues in dispute, that it be appeal-compatible) and 4) pds tell me again, that i) cross-examination is a dispensible part of patent revocation proceedings and that ii) the Patent Office can do it all. I’m keen to learn, but I wager that you don’t know any more about English patent litigation than I know about patent litigation in the USA. At least I have this blog, to help me learn more.

  79. “Can you point me to the law that says that they must obey the law?”

    Professor Yoo called. He wants his argument back.

  80. “‘Trolls’, on the other hand, typically (not always) have a different M.O. They tend to do high-level analysis of claims vs product, at best, and make far-reaching and often near-baseless claims as to what their claims cover. If they contact a target at all, it is with few details and exorbitant demands. Often they simply file suit and rely on the expense, time and distraction associated with defending a suit to convince the target to write a check – often larger than the patent would legitimately call for.”

    “That m.o. is what sets the ‘trolls’ apart and what upsets so many people about their practices.”

    Interesting take, Anonymous, and even somewhat true. However, as one who routinely represents so-called trolls, I know first-hand the m.o. has largely been thrust upon us.

    In the recent past, most of my clients tried for years get the attention of infringers (I’m sorry, “potential licensees”) only to be ignored. In today’s climate, a letter simply inviting licensing discussions is likely to trigger a DJ action. Filing suit first has the twinfold advantage of (1)providing choice of venue and (2) signaling the matter is serious. From my no-doubt biased point of view, this reality — the m.o. as you put it — has largely been spawned by the unauthorized users of patented technology, not the “trolls” who own it.

    From a pure self-interest standpoint, any contingency fee lawyer with half a brain would much prefer to resolve a case with an exchange of a few letters, the negotiation of a fair license, and, perhaps, a hand-shake and drink with opposing counsel afterward. Unfortunately, this rarely (I said, “rarely” not “never”) happens. Why is that?

    As to making “near baseless” claims, there’s no percentage in that. A stronger case can be made that the hourly lawyer who encourages his client to vigorously fight even meritorious claims is far more likely to reap an economic benefit than the contingent fee lawyer who brings baseless claims.

    Still, it’s instructive to learn what the “other side” is thinking. Thank you for a thought provoking comment.

  81. “It’s very clear that the current crop of political appointee hacks and lifers who are (mis)managing the PTO believe that they are not required to obey the law”

    Can you point me to the law that says that they must obey the law?

  82. BigTech figures that it is cheaper to lobby our legislators to shut down the patent system than to monitor and quit their infringing activities.

    BigTech already has market power so they don’t need the patent system (or at least they don’t think that they need it).

    China and similar countries are probably licking their chops waiting for us to shut down the patent system so they can take advantage of our R&D and freely copy our innovative products.

  83. “Mr. Aharonian now expands his attack to add corruption to the insitutional incompetence at the management level. Most of you guys post anonymously. If corruption now exists, please educate me with some examples.”

    As Malcolm would say: Open sand. Insert head. Repeat as necessary.

    If the lies/omissions/obfuscations/etc. perpetrated by PTO (mis)management during the slew of recent proposed rule changes are not enough examples for you, I’m not sure what else you would need.

    It’s very clear that the current crop of political appointee hacks and lifers who are (mis)managing the PTO believe that they are not required to obey the law, whether it’s the notice and comments requirements for rule changes or the requirement that examination be conducted lawfully. Remember, these are the guys/gals who’ve brainwashed about 3,000+ examiners hired in the past 4 years that “quality = reject, reject, reject” and brought you second pair of eyes to ensure that “quality = reject, reject, reject.”

    That’s corruption.

  84. Amazingly, I agree with Aharonian and he makes some excellent points. The WSJ and the patent system have coexisted for a century or more without the word “patent” appearing in the Journal more than cursorily, until late. I often say (and I generally like the WSJ) that when the WSJ starts writing articles and editorials about patent law and patent reform, we have witnessed the first sign of the patent apocalypse.

    There are some definite flaws in software patents, caused mostly by the fact that the industry failed to document itself well or at all until effectively forced to by Diamond v. Diehr (hey, look, patents serve a salutary purpose!). Even so, the industry, including hardware spinoffs, largely behaved and behaves like Aharonian describes Cisco.

    Many very innovative companies in many fields operate just fine with our existing patent system. To massively reform it at the behest of BigTech is throwing the baby out with the bathwater. And BigTech better examine their bread a little more carefully to ascertain on which side it is actually buttered. Seems to me that BigTech is most at risk to have their entire industry “offshored,” and the defenestrated patent system that they so covet will be of no assistance to them if and when that takes place.

  85. I agree with the basic premise that Patent Trolls are simply operating within the free market economy as it is currently defined. They are exercising their rights as patent holders.

    However, Mr. Aharonian runs astray when he says that IBM, or most other large patent holders with licensing programs, are just like the trolls. Most patent holders work within the system in good faith. They do due diligence by analyzing their issued claims against target products; they contact targets and provide the analysis; they engage in licensing discussions and negotiations in an attempt to reach agreement on a reasonable royalty, etc.

    “Trolls”, on the other hand, typically (not always) have a different M.O. They tend to do high-level analysis of claims vs product, at best, and make far-reaching and often near-baseless claims as to what their claims cover. If they contact a target at all, it is with few details and exorbitant demands. Often they simply file suit and rely on the expense, time and distraction associated with defending a suit to convince the target to write a check – often larger than the patent would legitimately call for.

    That m.o. is what sets the “trolls” apart and what upsets so many people about their practices.

  86. “In my book, the only cases that should take up the valuable time of the courts are cases where both sides (patent owner and accused infringer)think they ought to win.”

    Again, we are talking about issues that should be addressed in the broader context of litigation in general and not just patent litigation. Some plaintiffs (and defendants) settle cases that have a good chance of winning and litigate cases that are unlikely to be won. There are just way to many variables to simplify a decision as to litigation as you have regardless of the type of claim.

    “And such cases can’t be decided fairly till you have seen the opposing technical experts being cross-examined by the other side.”
    Technical experts may be nice, but not necessary. Also, declarations can be filed by experts. In case you’ve forgotten, the alleged purpose of an inter-partes reexam is lower cost, which precludes many of the tools found in litigation (e.g., discovery, depositions, cross-examination, etc.)

    “”Parameteritis” is a disease suffered by corporate Applicants, who define a way of measuring some fancy characteristic like “pushability” or torquability” essential for the product (say a PTCA catheter) then recite in their claim a numerical range of it. They can easily prove that the accused embodiment falls within that range.”

    You parameter better be able to be measured … otherwise you are faced with a 112 second paragraph problem (i.e., indefiniteness). If the parameter can be measured, then some expert can measure existing prior art devices to determine if they have that feature. Problem solved.

    “Finding a prior art product within that range is now the burden of the accused infringer.”
    And how is that different from any other claimed feature? If the alleged infringer wants to establish anticipation/obviousness, they have to finding some reference (or product) that has the feature.

    “I’m glad to learn from you that the USPTO filters out such claims, before they get to issue, but maybe you can concede that they have been known to get through, on accasion, in the recent past?”
    DooDoo (MM’s TM’d phrase) gets by all patent offices, including your beloved EPO, and in all arts. However, as mentioned above, you cannot have 100% perfect patents issued from the patent office. The price of perfection is just way too much. However, here are alternatives to litigation, which have already been discussed in this thread, to address those imperfect patents.

  87. The USPTO Quality Statistics noted above are necessarily based merely on application file contents, and thus of little relevance. Most patent quality issues are due to the fact that USPTO examiners have only a few hours to do (by computer only) a limited prior art search, and then must also do claim comparisons, even though prior art is expanding exponentially in volume and complexity. Furthermore, there no way for examiners to even search for many statutory bars and other unpublished prior art. The great expense of a really thorough prior art search for every patent application could not be politically or economically justifed* especially since only a very small percentage of issued patents are ever asserted.

    *e.g., multiply $20,000. for an only reasonably good prior art search times 500,000 patent applications per year. [Even in D.C. that would be "real money."] Who, other than prior art searchers and perhaps a few academics would support a $20,000. per application fee increase?

  88. pds: OK, so the solution, when you get sued for infringing an invalid claim is to request re-examination, where the standard of evidence is a preponderance. Next question: in inter Partes re-exam, do you have x-exam of tech experts because, if not, I don’t see how re-exam is a fair way to decide validity in cases where both sides sincerely believe they are in the right. In my book, the only cases that should take up the valuable time of the courts are cases where both sides (patent owner and accused infringer)think they ought to win. Such cases exist. And such cases can’t be decided fairly till you have seen the opposing technical experts being cross-examined by the other side. “Parameteritis” is a disease suffered by corporate Applicants, who define a way of measuring some fancy characteristic like “pushability” or torquability” essential for the product (say a PTCA catheter) then recite in their claim a numerical range of it. They can easily prove that the accused embodiment falls within that range. Finding a prior art product within that range is now the burden of the accused infringer. I’m glad to learn from you that the USPTO filters out such claims, before they get to issue, but maybe you can concede that they have been known to get through, on accasion, in the recent past?

  89. “Are you sure about that? I would have thought that the moral hazard risks are so great no insurance company would touch it (or would charge prohibitive rates for inadequate coverage).”

    Let me think …. hmmmmm …. I did do the due diligence recently to obtain said insurance, so I would think that …. yes, I’m sure about it.

    BTW: If you don’t know about it and you aren’t mentioning to your clients, you need to do a little research before your malpractice carrier get a little hot under the collar.

  90. “Simply put, its intent is to legalize theft.”

    I just cannot agree with this. In most cases, the defendants have never even heard of the plaintiff or the patent before getting sued in E.D. Tex. 10 years after a company implements a product (which they independently developed), they get hit up by someone who has spent the last 10 years using continuation practice to stretch their claims to specific cover the product.

    Theft? Hardly. And anyway, we have a remedy for the theft case. It’s called willful infringement.

  91. “Actually, pds, the “squawkers” around here have historically held the contrary position and “squawk” when other commentators remark on the breadth of asserted claims or the weak infringement arguments of patentees, typically after the claims have been shot down at both the district court and CAFC.”

    Actually MM, I didn’t write the commment. Reading comprehension not your forte?

    “Open sand. Insert head. Repeat as necessary.”
    Well practiced at that, aren’t you MM?

    “The indisputable fact that you clearly can not abide is that there are enough shockingly broad and bogus claims out there, particularly in the software, business method and computer-implemented fields, to keep this blog interesting for the next couple decades. Think you can handle it?”
    I’m not the one who has a hissy fit everytime one of those types of claims are mentioned.
    BTW: There is nothing wrong with a “broad” claim. If you were a patent attorney (which I very much doubt that you are), you would know that getting broad claims is what a patent attorney strives for and what a client pays you for. As for me, I’ll be making some nice coin getting my clients broad (and valuable) claims over the next decade or so.

    As for “bogus” claims, when you produce the art, then I’ll agree that they are bogus. But until then, they are PRESUMED valid, and that is something you are going to have to deal with for the next couple of decades. Can you handle it????

  92. The problem is crap patents being issued by the PTO. It allows everyone and their mother to put a patent tax on corporate America.

  93. I agree with Greg. All this talk about “patent trolls” is pure hype. If you will look at the 1898 Rude et al. v. Westcott et al. SCOTUS case [130 US 152, 9 S Ct 463, 32 L Ed 888] you will see that at least since 1874 inventors have been selling and partnering with other parties to enforce their patents. Without doing so, few inventors can afford to enforce their patents, meaning larger competitors can easily beat them out of the market they created and run them into bankruptcy. Therefore, all this present day discussion of “trolls” is a hoax whose only intent is cut off inventors and small entities support network and deny them any profit from their creations. Simply put, its intent is to legalize theft.

  94. pds “If you listen to some of the squawkers around here, you’d think that every infringement case that was ever filed was bogus and every patent claim ever prosecuted was obvious.”

    Actually, pds, the “squawkers” around here have historically held the contrary position and “squawk” when other commentators remark on the breadth of asserted claims or the weak infringement arguments of patentees, typically after the claims have been shot down at both the district court and CAFC.

    The indisputable fact that you clearly can not abide is that there are enough shockingly broad and bogus claims out there, particularly in the software, business method and computer-implemented fields, to keep this blog interesting for the next couple decades. Think you can handle it?

  95. “BTW: A business can protect themselves with insurance from patent law suits.”

    Are you sure about that? I would have thought that the moral hazard risks are so great no insurance company would touch it (or would charge prohibitive rates for inadequate coverage).

  96. “Do “bad claims” get through prosecution? Of course. Do they become the subject of drawn out litigation? Hardly.”

    Open sand. Insert head. Repeat as necessary.

  97. “And if the projected costs of the litigation are several years of sales of the allegedly infringing product? He rolls over. If the allegedly infringing product is so vital to his company that he can’t afford to risk your 10% chance of winning in court? He rolls over. It’s not law, it’s simple math; and everybody can do it.”

    That is what inter-parte reexams are for.

    Also, you forget that there are two-sides to every litigation equation. If you only have 10% chance of winning, who is going to pay the litigation bill?

    You????? You might as well take your litigation money to Vegas and put it all on black for one spin of the wheel.

    Your litigaton attorneys in the form of a contingency fee arrangement??? Good luck with that. If somebody approached my firm and we thought that we had a 90% chance of losing, I would kick any partner in the ass for even considering taking on the case. Associates/paralegals who work on these cases cost real money.

    BTW: A business can protect themselves with insurance from patent law suits.

    It seems to me that frivolous law suits aren’t the sole province of patent law.

  98. “What about all those method claims and product claims that deliberately rely for patentability on a numerical range of a fancy parameter chosen for the purpose of taking the claim through to issue (I see them most every week).”

    Oh come on … enough with the hyperbole. If you think some numerical range alone is going to easily get you patentable claims in the US, then you are ignorant.

    As for a “fancy parameter,” you are going to have to elaborate on that a bit. Exactly what is a fancy parameter?

    “Inter Partes proceedings are what’s needed, to kill the mischief of such claims.”
    Which already exist …. do you really think you have the knowledge to opine on US law?

  99. “Everywhere except in the USA, bad claims are invalidated on a preponderance of evidence.”

    What is the standard at the USPTO?

  100. Thanks to the above commentator who helpfully notes that: “I have to take issue with the comparison between pharma and “Cisco (and most of Silicon Valley)” with regard to identifying patents in their field. In many instances, it is exponential more difficult for a tech company to monitor issue patents in their field. Not only is the field broader, any given product can employ hundreds (if not more) of different technologies from the hardware to the software.”
    This is a very important distinction that even some AIPLA officials failed to note in Congressional testimony three years ago. A full pre-product-launch infringement search for the frequent and rapid launches of such modern high tech products would require the company to review hundreds of thousands of patent claims for each product, which is practically and economically impossible. If attenpted, the company would then have to decide what to do about the hundreds of PTO-issued over-broad claims that would be found, even though only a small fraction will ever be enforced, or even have their maintenance fees paid.

    As to another comment above (an assumption that no attorney for any patent owner would bring suit on over-broad and/or dubious validity patent claims) this is clearly disproven by patent litigation outcome statistics. Most importantly, it ignores the important fact that such attorneys, especially troll attorney-owners, know that more than 97% of all patent suit defendants will settle before any trial, commonly by paying off the patent owner for up to the several million dollars that further litigation would cost them.
    In contrast, major companies with actual products are strongly deterred from such activities by the danger of counter-suits, with potential injunctions, against their own products.

  101. Eye, I agree that the PTO should filter out claims that re an affront to common sense. But that’s the easy bit. What about all those method claims and product claims that deliberately rely for patentability on a numerical range of a fancy parameter chosen for the purpose of taking the claim through to issue (I see them most every week). Such claims are hard for an Exr to refuse, because the Exr doesn’t have the resources to prove that the parameter is inherent in the art, nor the common general knowledge (cgk) of the PHOSITA, and can’t find that cgk in the patent publications retrieved by the PTO search. Inter Partes proceedings are what’s needed, to kill the mischief of such claims. The Office can’t do it unaided. As the other contributers are explaining above, a presumption of validity, the need for clear and convincing evidence, grotesquely long and expensive court proceedings, and no loser pays rule, is a seductive combination for the extortionists and blackmailers.

  102. AllSeeingEye, what I am saying is that size, money, and a willingness to go to trial can take a case from something that nobody in their right mind would want to litigate to something that makes very good business sense to litigate. All you have to do is have some arguments that will get you past summary judgment and some bloodthirsty litigators, and you have the ability to hit the defendant with horrific expenses of cash, time, and resources if he wants to defend the ridiculous suit you’ve brought. And if the projected costs of the litigation are several years of sales of the allegedly infringing product? He rolls over. If the allegedly infringing product is so vital to his company that he can’t afford to risk your 10% chance of winning in court? He rolls over. It’s not law, it’s simple math; and everybody can do it.

  103. Regarding Mr. Aharonian’s statement: “Unless the prior art [Microsoft] cited is bogus in order to cause delays to squeeze Avistar, I would say that Microsoft’s countermove is a legitimate tactic” . . .

    I thought that the PTO summarily denied at least 14 of Microsoft’s requests for reexam ov the Avistar patents. (link to reuters.com). If so, this would appear to call into question whether the requests for reexam are frivolous, and if so, what recourse might be available when an abuse on such a scale occurs. Does anyone know if something along the lines of 28 USC 1927 may be asserted against a frivolous filer? Does this fall afoul of anticompetition or unfair competition laws?

  104. I’m sorry Chaon, am I missing something? Isn’t Monster Cable about venue/forum selection? While choice of venue may have adverse affects on your competition, I could hardly see filing an underlying case in a primarily venue transfer case that had absolutely no colorable merit. It can happen, but cases like that usually get dispensed of quickly.

    If you listen to some of the squawkers around here, you’d think that every infringement case that was ever filed was bogus and every patent claim ever prosecuted was obvious. If you’re smart, you won’t buy into it. If you do buy into it, be prepared for a life of bitterness and misery (and white wine).

  105. Max the place to truly “invalidate” the kind of bad claims you are referring to is during prosecution. Do “bad claims” get through prosecution? Of course. Do they become the subject of drawn out litigation? Hardly. Despite what Malcom Duckworth McBloom might try to convince you of with his many sleepy personalities.

  106. The Eye reports that: “If patents were that easy to invalidate, nobody would pay to get them.” Could he fill that out a bit? Everywhere except in the USA, bad claims are invalidated on a preponderance of evidence. Yet the major non-US Patent Offices of the world have filing loads just as heavy as the USPTO. Probably heavier, if you factor in all the non-technical borderline 101 stuff filed at the USPTO but nowhere else in the world. I should have thought the Founding Fathers would be all in favour of easier invalidation of bad claims, given that they felt it necessary explicitly to state that the Congress shall have the authority to put constraints on free competition by implementing a patent law. Exceptions should be drawn narrowly, no?

  107. —Contingency or not, no patent litigator in their right mind would sue someone when there was “no reasonable basis to conclude that the patent was infringed,” unless of course their client had a “harassment budget.”—

    They are called “legal budgets”, and when other companies are vulnerable in some way, those budgets and I.P. assets are used to harass and extort. See Monster Cable.

  108. Did I miss something or did the word “troll” become politically incorrect? Is that why “tr-ll” is being used?

    (One person’s monster is another person’s cute and furry beastie.)

  109. When you know what you’re doing, like many of us here, but apparently not you, you know how to significantly reduce the chance of your client’s patents being invalidated in litigation. Like citing foreign office actions in co-pending U.S. cases (apparently not something you think is necessary). I would not characterize invalidation as something that ALL patents have a GOOD chance at experiencing. If patents were that easy to invalidate, no one would pay to get them.

    As to the “ones that shouldn’t have issued,” this is the same kind of ex-post BS that you keep trying to push along with your armchair obviousness determinations. The fact is we live in an imperfect world. There is no such thing as a perfect patent. Just as you would not spend an infinite amount of time for an outside counsel to make sure there were zero mistakes in a specification, the PTO cannot and should not spend an infinite amount of time to make sure that there are absolutely zero prior art references upon which the claims read. Since there is a rule against cumulative rejections, the PTO knows darned well that notwithstanding a good rejection, there may be other good rejections out there.

    Astute patentees realize that litigation is not an indication of failure of the PTO, but rather is a welcomed chance to “perfect” their claim. It is well known that a previously litigated patent that survives is the next best thing to the perfect patent.

  110. Oh yes, in the spirit of Greg’s article, it makes total economic sense to go around suing people when you’re not quite sure that your patent is infringed. Contingency or not, no patent litigator in their right mind would sue someone when there was “no reasonable basis to conclude that the patent was infringed,” unless of course their client had a “harassment budget.” And if you don’t like the idea of that, which I presume Mooney McBloom does not, you may as well rail against companies with lobbying budgets.

  111. “I don’t know about the rest you, but I wouldn’t be interested in footing the bill to litigate a patent that has a good chance of being invalidated.”

    They all have a good chance of being invalidated in litigation. The point (again) is the cost, in terms of time and money, of invalidating the worst ones that should never have been issued in the first place.

  112. “I don’t get how suing on a valid patent is “baseless.”"

    I’ll take a stab at this one: how about suing on a patent that there is no reasonable basis to conclude the patent is infringed. Wouldn’t that be baseless?

  113. “However, that doesn’t mean that Cisco hasn’t been sued with baseless infringement claims. Note that a baseless lawsuit doesn’t necessarily mean that the subject patent is invalid, although some almost certainly are.”

    Thank you for this bit of wisdom Mooney, er I mean “Leopold Bloom.” I don’t get how suing on a valid patent is “baseless.” Although I’m sure you will try to tell me with endless streams of glib platitudes. Or maybe duckworth will tell me on your behalf.

    Also, I’m not sure what Chandler’s “low cost patent” is and why the idea of someone buying a “low cost patent” and suing him (Cisco) on it is scary to him. I agree with Ahronian that Cisco should have “grown up” a long time ago and instituted meaningful policies to deal with whatever barrage of infringement accusations they faced.

  114. “Aproximatly 1.6 million patents were in force in 2005 in the US. Assuming the 5% error rate above there are 80,000 patents that might be being enforced right now that got through as a result of USPTO mistakes. (And probably several times that number that got through as a result of incomplete or incompetent searches).

    Query whether those patents are more likely or less likely to be overbroad, and more or less likely to be asserted by various entities who habitualy reside under your local bridge. Almost makes one want to question the presumption of validity.”

    Assuming your ultimate number (i.e., the 80K bad patents) is correct, which for many reasons I believe it isn’t, you forgot to account for the very low percentage of patents that actually get asserted. Moreover, a vast number of patents aren’t even licensed.

    Although some people here might disagree, I would expect an overly broad patent to be less likely to be asserted than a “good patent.” Unless the troll happens to have deep pockets (which would likely mean that the troll actually has revenue, which likely means that the alleged troll is not a troll), any patents getting asserted will be done on a contingency basis. I don’t know about the rest you, but I wouldn’t be interested in footing the bill to litigate a patent that has a good chance of being invalidated. Some desparate fools might, but most attorneys would not.

  115. “Right now that stands at 90% on a per office action basis (90% of office actions do not have signficant error that would have an adverse action on prosecution) and has been increasing to meet increasingly higher targets. I believe that management compensation is based in part on meeting the targets.”

    Of course the 90% is based upon what happens when the inmates get to run the prison. Also, apparently a claim that gets rejected and the rejection subsequently gets withdrawn without amendment is NOT “an adverse action on prosecution.” If so, that 90% would be closer to sub-50% (if not MUCH lower).

  116. “Don’t change the subject.”

    …. like the pot calling the china black. Come on, you are king of the thread hijack. The comment wasn’t specific to business methods, computer-implemented inventions, software, etc.

    “Yes, but conclusions can be drawn that no reasonable beholder can dispute.”
    Assuming that logic to be true, why in the world would we need litigators????

  117. “I wonder what the percentage of district court decisions that are reversed on appeal is?”

    Last year I remember reading a law review article (can’t recall the author, but it was somebody well known, either a professor at a top-ranked law school or a federal judge–it may have been Prof. Lemley but I’m not sure) that studied this question empirically in the context of claim construction and Markman hearings. I think the reversal rates were at least 30-35% and up to 50% in some cases, depending on various classification criteria.

  118. Yes, Anon, the math is very simple and speaks for itself: it’s not the percentage of bad patents that is the problem. It’s the absolute number.

    “Assuming the 5% error rate above there are 80,000 patents that might be being enforced right now that got through as a result of USPTO mistakes. (And probably several times that number that got through as a result of incomplete or incompetent searches).”

    And let’s also recognize this basic fact: broad claims that “got through as a result of incomplete or incompetent searches” are far more likely to be asserted than narrow claims, for obvious reasons.

    It’s a good thing we have a “free market”. We can stop supporting the USPTO and send our business to the other Patent Office, the USTPO, that does such a better job.

    The USTPO? Heh. I made a funny.

  119. “Let us assume that the USPTO error rate is only 10%, and say 1/2 of those are in the applicant’s favour and 1/2 are not. Then roughly 5% of patents that issue shouldn’t issue in their current form, based on the prior art that was before the examiner.”

    Not so fast. First, that 90% figure was per Office Action, not per application. Second, you’ve ignored the second set of (all-seeing) eyes, which lives to review ONLY allowed applications for reasons to revoke said allowance.

  120. Let us assume that the USPTO error rate is only 10%, and say 1/2 of those are in the applicant’s favour and 1/2 are not. Then roughly 5% of patents that issue shouldn’t issue in their current form, based on the prior art that was before the examiner. (The actual error rate would be much higher as even when the patent office does their job perfectly they will still miss some relevant prior art some of the time).

    Aproximatly 1.6 million patents were in force in 2005 in the US. Assuming the 5% error rate above there are 80,000 patents that might be being enforced right now that got through as a result of USPTO mistakes. (And probably several times that number that got through as a result of incomplete or incompetent searches).

    Query whether those patents are more likely or less likely to be overbroad, and more or less likely to be asserted by various entities who habitualy reside under your local bridge. Almost makes one want to question the presumption of validity.

  121. “Right now that ALLEGEDLY stands at 90% on a per office action basis (90% of office actions ALLEGEDLY do not have signficant error that would have an adverse action on prosecution) and has been increasing to meet increasingly higher targets. I believe that management compensation is based in part on meeting the targets.”

    Mark, I assume that you’re simply reporting what the PTO says. Accordingly, I’ve corrected the statement, since it is FAR out of touch with what I’ve seen.

    I assume that at least some of the same management that is rewarded for meeting the targets is also responsible for measuring the error rate?

  122. “Is the PTO liable for the quality of its performance?

    USPTO quality is measured with a “Patent In-Process Examination Compliance Rate “. See link to uspto.gov (“Compliance is the percent of office actions reviewed and found to be free of any in-process examination deficiency (an error that has significant adverse impact on patent prosecution”)).

    Right now that stands at 90% on a per office action basis (90% of office actions do not have signficant error that would have an adverse action on prosecution) and has been increasing to meet increasingly higher targets. I believe that management compensation is based in part on meeting the targets.

  123. I don’t think this is a helpful post. Granted, there is some fuzzy boundaries regarding what constitutes a patent troll, but every term defining a set of entities has fuzzy boundaries. A patent troll can be usefully said to be a (1) non-practicing entity that (2) enforces patents (3) that were obtained with little research or innovation but (4) are incorporated into products that have high sunk costs (5) by accidental infringers who independently invented the same thing.

    I don’t disagree that large companies can engage in asserting bad patents in the same way as small companies, though they probably do so less often because they have better things to do with their time (like, e.g., actually making products). The other thing that Greg Aharonian is apparently frustrated about is that tech companies refuse to devote much resources to monitoring patents the way that pharma companies do. There is a huge difference between the two industries. In pharma, the number of patents is relatively small, and it is feasible to monitor. In tech, the number of patents is very large, and a patent monitoring regime will only increase your potential liability for willful infringement without really helping to avoid accidental infringement.

  124. I have a question based solely out of ignorance.

    Greg quotes Mark Chandler: “Proposed patent reform that links damages to the economic value of the patent would help solve the problem”

    I am also aware that this is part of pending legislation, but isn’t the contribuion of the patent already considered when assigning damages? Aren’t factors such as marketing/advertising by the seller, how central the subject matter is to the product being sold, what other technical contributions were made by the seller, etc., considered when a court determines the patent owner’s damages?

  125. “Obviousness, however, is an entirely different question altogether. In the non-biotech world, we are almost entirely workig wih old elements and combining them in new ways. As such, the conclusion becomes much more difficult.”

    I agree that reaching of a conclusion of non-obviousness becomes more difficult. And yet the filings (and issuance) of easily tankable garbage continue apace. Look at the claims we were discussing here last week. The prima facie case for obviousness practically writes itself. There are zero credible rebuttal arguments for unexpected results or lack of expectation of success or teaching away because the claims are absurdly broad. All that’s left is the worthless broken record: “if it were so obvious then why didn’t someone invent it before?”

    “most clients don’t have MM as an attorney, so they are stuck going through the entire process”

    How long and arduous exactly was that process for the toolbar patent we were discussing? I mean, not including the **years** of sweat and labor it took to come up with that fantabulous, groundbreaking invention. Answer: not very long at all. It’s like fishing. Sometimes you put your sad little worm on the hook and come back with nothing. Other times you get a bite immediately, and every once in a while it’s a big fish. When you come back with your big fish and someone says “that didn’t take long!”, do you reply “What do you mean? It took my entire life!” No, unless you’re an obfuscating smarty pants.

    “Like broad patents don’t issue in any other technology space …”

    Don’t change the subject. When the WSJ starts reporting regularly that Parker Brothers and HasBro start getting shaken down for tens of millions of dollars by patent holding companies asserting broad patents on the nation’s hottest new board games, we can talk.

    As you know, I’m happy to discuss the validity of broad patents in biotech and I often do. For logical reasons that have been discussed here ad nauseum, the problem of bad patents seems especially prevalent in the fields of software and computer-implemented business methods.

    “incredibly broad” is in the eye of the beholder.”

    Yes, but conclusions can be drawn that no reasonable beholder can dispute.

  126. “And there we have the attitude that is rotting out the system from the center. Nothing is obvious!!! If there isn’t 102 prior art reading on a claim, then by golly it’s your invention and you deserve a patent.”

    The reason I said 102 instead of 102/103 is that anybody (even non-patent attorneys such as yourself) should be able to identify whether their claims read upon a single piece of prior art and, thus, are anticipated. Obviousness, however, is an entirely different question altogether. In the non-biotech world, we are almost entirely workig wih old elements and combining them in new ways. As such, the conclusion becomes much more difficult.

    Although not perfect analogies, with 102, the question is to be answered is “is it black or white?” However, with 103, the question is at what shade of gray is the examiner/BPAI/Court/Fed. Cir going to draw the line and does your claim fall on one side or the other. As such, making a determination of obviousness is much more difficult than that of anticipation, unless your attorney is MM, who can make an obviousness determination based upon the claims alone. Of course, most clients don’t have MM as an attorney, so they are stuck going through the entire process needed to determine whether or not an invention is obvious or not.

    IMHO, any attorney that can say, without condition or equivocation, that a claim is either obvious under 103 or not is inviting a suit for malpractice. Although I don’t litigate much, I have been involved with a few litigations, and no attorney I have met would be willing to give the “all is clear” signal (not counting non-prior art issues) to a client sued for infringment without the possession of 102 art. The application of 103 is just too unpredictable. Of course, if MM had much experience, he would already know that.

    “if the larger entities were sincerely concerned about the evils wrought by tr-lling, they would be working to eliminate the issuance of ridiculously broad business method, software and computer-implemented patents.”
    Like broad patents don’t issue in any other technology space …. it is comments like these that cause you to lose any credibility you have.

    “Should you file a patent on incredibly broad computer-implemented concept X? Depends. Do you have any 102 art reading on that incredibly broad claim? No? THEN FILE AWAY!!!”
    Just let me know the name of your malpractice carrier. If they are a publicly traded company, I’ll start shorting their stock. No doubt, you are much more a pundit than an attorney.
    BTW: “incredibly broad” is in the eye of the beholder.

  127. “I haven’t read the WSJ article. Does every re-exam filed at the PTO lead to the termination of employees at the patent holder’s company, or this is just a unique policy of Avistar’s? ”

    I was wondering about the same thing. I assume they mean that they fired those people so they could hire a few attorneys.

  128. “Microsoft earlier was in talks with Avistar to license its technology, but in the midst of discussions, filed reexam requests challenging 29 Avistar patents, causing Avistar a month later to fire 25% of its workforce (27 employees).”

    I haven’t read the WSJ article. Does every re-exam filed at the PTO lead to the termination of employees at the patent holder’s company, or this is just a unique policy of Avistar’s?

    Also, if Avistar goes under, will that impact the rate at which I can download an mp3 of John Aschroft’s “Let the Eagle Soar”?

  129. “In many instances, it is exponential more difficult for a tech company to monitor issue patents in their field.”

    That is a common assumption but not the case. We have several monitoring programs running for tech clients that are sufficiently broad yet focused enough to deliver key references without the noise. Our monitoring plans demand more hands-on attention than a simple email alert system but there’s no significant reason why a tech company can’t receive a weekly or monthly report on what’s happening in their own backyard.

  130. bgh “”Mr. Aharonian’s defense is the same as that of a criminal lawyer who argues that his client should be acquitted of burglary because the homeowner left his front door unlocked.”

    The only additional “fact” I’d add to the analogy is that the accused saw a bunch of other people walk into the house and leave with stereo equipment in broad daylight, in front of other folks in the neighborhood, and “nothing happened to them.”

    pds: “Unless the patent holder knows of the existence of 102 art, they are working under the assumption that they they have a broad/valuable patent.”

    And there we have the attitude that is rotting out the system from the center. Nothing is obvious!!! If there isn’t 102 prior art reading on a claim, then by golly it’s your invention and you deserve a patent. The hilarious thing is watching patent attorneys practice who counsel their clients this way. Should you file a patent on incredibly broad computer-implemented concept X? Depends. Do you have any 102 art reading on that incredibly broad claim? No? THEN FILE AWAY!!! Sure, I can tell you why it’s obvious and why the CAFC will never uphold the claim in a million years but you don’t want to pay me for that (even though it costs less than preparing, filing and prosecuting the patent by at least an order of magnitude). After all, you just *might* sneak it through and then the sky is the limit. File 200 puppies like that one and at least 20 are bound to issue. Then we take our pile to the Big Boys and threaten to shut down their product launch. Awesome! Why does the WSJ want to take away our freedoms?

  131. We don’t have anything close to a “free market” system in the United States. If that were the case, Fannie Mae and Freddie Mac would be belly up right now. The idea that passing a law to minimize windfalls arising from the assertion of a garbage patent by a non-practicing entity is an “attack on the free market” is absurd. The power of groups to lobby and pass regulatory laws is part of the “free” market in this country.

    All that said, I’ve long been in agreement with Greg on two points that he has been articulating in his inimitable fashion for many years now: (1) tr-lling is not limited to small entities and (2) if the larger entities were sincerely concerned about the evils wrought by tr-lling, they would be working to eliminate the issuance of ridiculously broad business method, software and computer-implemented patents. Greg’s proposal of a prior art database seems reasonable to me although “better late than never” may no longer be applicable.

    The thing is: eventually this problem will take care of itself because far more people read the WSJ than this blog or Greg’s blog (or is Greg simply sending out those emails like he used to)? Thanks to Greg and others who keep track of such things, the public will slowly but surely become increasingly aware that they are paying a price for Silicon Valley patent shenanigans that is not reflected in the quality of new computer products but rather in the quality of San Francisco sushi dinners consumed by patent attorneys.

  132. But I also think that judges already have the tools to deal with [baseless lawsuits] – they just appear to be reluctant to use them.

    Good point. In many of these cases the main entity that appears to not be doing its job is the court.

  133. “How about the criminal defense lawyer who argues against attempts to pass a statute that overrides common law burglary (which requires “at night”) because the criminal defense lawyer wants the status quo that benefits his clients who enter during the day?”

    I asked for better analogies, not worse. In either instance, the client is charged with a crime, albeit different crimes. I’m unclear as to the relevance of this insight to the issues being discussed.

  134. “You need better analogies.”

    How about the criminal defense lawyer who argues against attempts to pass a statute that overrides common law burglary (which requires “at night”) because the criminal defense lawyer wants the status quo that benefits his clients who enter during the day?

  135. “Can one sue the PTO for litigation expenses if one suffers because the PTO allowed a poorly examined patent to issue?”

    One can always sue. But in this case, you’re likely to be thrown out of court after a single motion.

  136. Current calls for patent reform are merely calls to replace one less-than-free market having a first set of patent remedies with a different less-than-free market with a different set of patent remedies. What does a “free market” have to with anything?

  137. “If there are 1000 patents ‘covering’ a Blackberry and every patent owner wants a 1% royalty on the value of the Blackberry, the price of the Blackberry just increased ten fold.”

    Hmmm… I suppose that depends on what you mean by “value”. If I’m the licensor of one of those patents, I want that value to be defined as including the license fees for all of those other 999 patents. If the other licensors feel the same, then that means that you have to raise your price to infinity to break even…

  138. Dear Mark Nowotarski,

    Can one sue the PTO for litigation expenses if one suffers because the PTO allowed a poorly examined patent to issue?

    Is the PTO liable for the quality of its performance?

  139. Another problem is patent valuation.

    If there are 1000 patents “covering” a Blackberry and every patent owner wants a 1% royalty on the value of the Blackberry, the price of the Blackberry just increased ten fold.

    If ONLY the limitation on royalties to the value of the component instead of the value of the entire product portion of the patent reform bill was enacted most of the “troll” business would go away.

  140. In our latest issue of the insurance IP Bulletin

    link to marketsandpatents.com

    We link to a letter by Tom Bakos FSA MAAA to Jon Dudas emphasizing the need for better patent examination in the business method area and several constructive suggestions for achieving this. We also link to the Director’s Office’s reply.

    What prompted this was the insurance industry is facing several patent lawsuits based on poorly examined patents. Our position is that if the patents had been properly examined, either they never would have issued, or what did issue would have been respected.

  141. “Mr. Aharonian’s defense is the same as that of a criminal lawyer who argues that his client should be acquitted of burglary because the homeowner left his front door unlocked.”

    Come on … even for hyperbole, that is over the top. Unless the patent holder knows of the existence of 102 art, they are working under the assumption that they they have a broad/valuable patent.

    “when they try to extract hundreds of millions of dollars from a successful company simply because their particular piece of crap covers some minor feature of a valuable product”
    Again, your comment is an exageration. If the patent cover “some minor feature,” and the patent holder is asking for “hundreds of millions,” then the alleged infringer will simply drop the feature from the product. It is a simple cost-benefit analysis with the potential cost definintely outweighing the benefit.

    You need better analogies.

  142. if the patent should not have issued, it should not matter who is trying to enforce it IMO.

    Also, accused infringers should use the reexam process more frequently.

  143. Free markets only occasionally exist despite attempts to assure their inherent “freedom.” In a free market all participants have equal access to accurate information. For example, the SEC seeks to achieve a “free” market of securities by mandating both the degree and timeliness of disclosure by traded companies fo that all investors are on an equal footing. And, yet, we still see insider trading abuses despite our government’s best intentions. Markets may need to be “free,” but that does not assure they are free.

    In the world of patents this “unfreeness” of markets is manifested by unmeritorious patents, i.e., patents that would not have issued but for ambiguity in description and lack of full access to all relevant prior art. These two factors – ambiguity and lack of full access – are not consistent across all patentable subject matter. Some subject matter, e.g., mechanical devices or chemical compounds, lends itself to relatively accurate description in words and drawings. Others, especially those that are concerned with abstract ides, such as software and business methods, are more apt to be ambiguous and thus, more difficult to be accurately and fully discerned by the public. Similarly, one would expect relevant prior art in subject matter areas that have long been covered by patent, such as the mechanical or chemical arts, to be more readily identified and applied in the examination process than prior art in subject matter areas that are relatively new to patent coverage and which are not as easily searched. Consequently, painting all patents with the broad brush of validity fails to accurately represent the state of the inconsistent marketplace of patentable subject matter.

    In a perfect world, only meritorious patents would issue, and the marketplace for those patents would truly be free – free in the full information conveyed to potential buyers and licensors, free in the certainty of the boundaries of patent protection, and free of unnecessary and unproductive litigation. At present we are far from such a free market for patents when it comes to some areas of technology.

  144. Even having litigated against some of these trolls, I still think Mr. Aharonian is correct. The WSJ article wholly ignores the innovation behind a patent and is a great example of the increasing anti-patent sentiment we are facing these days.

  145. “the crap being issued by the PTO”

    Therein lies the real problem.

    Just because a company manages to blow a piece of crap past the PTO and get a patent issued does not suddenly put them on the side of the angels when they try to extract hundreds of millions of dollars from a successful company simply because their particular piece of crap covers some minor feature of a valuable product.

    Mr. Aharonian’s defense is the same as that of a criminal lawyer who argues that his client should be acquitted of burglary because the homeowner left his front door unlocked.

  146. Greg raises some interestng points.

    Economically, there should be nothing wrong with somebody being able to buy and sell property.

    Also, if somebody complains about an overly-broad patent being asserted, don’t complain about the patent holder. Complain to the USPTO for issuing the patent. There is, however, a difference between allowing bad claims and rejecting good claims on bad art. Regardless, finding the best prior art in the #1 key to examination.

    However, I have to take issue with the comparison between pharma and “Cisco (and most of Silicon Valley)” with regard to identifying patents in their field. In many instances, it is exponential more difficult for a tech company to monitor issue patents in their field. Not only is the field broader, any given product can employ hundreds (if not more) of different technologies from the hardware to the software.

  147. One way that trolls are germinated is big companies’ refusal to deal with individual inventors and other small entities. The not-invented-here syndrome that causes big companies to refuse to sign NDA’s from individuals requires the individuals to work independently, get their patents and hope for the best. If the best turns out to be selling to a patent lawyer-dominated outfit and who will litigate on a contingency, so be it.

    What the big companies want is for others to stay away from innovating in their markets altogether and allow them to exploit the market power that comes from their size. Guess who is stifling competition?

  148. As a longtime sufferer from restless-legs-syndrome, I agree with Greg “that there is absolutely nothing wrong with companies raising funds to help enforce patents where the original inventor does not have the financial resources to do so.” However, that doesn’t mean that Cisco hasn’t been sued with baseless infringement claims. Note that a baseless lawsuit doesn’t necessarily mean that the subject patent is invalid, although some almost certainly are. I’ve also seen a number of cases where the claims have been stretched WAY beyond reason. I’m not sure that the prior art database Greg proposes will help there. But I also think that judges already have the tools to deal with the problem – they just appear to be reluctant to use them.

  149. When I examined in the 70′s, I was of the opinion that the suits that ran the PTO were the less competent that could not transition into the law firm world. But my perception was that there was no corruption at that level and the examiners were protected from congressional interference. (Of course, in the 70′s the allowance rate was quite high and patents did not survive litigation, especially in the 8th Circuit.)

    Mr. Aharonian now expands his attack to add corruption to the insitutional incompetence at the management level. Most of you guys post anonymously. If corruption now exists, please educate me with some examples.

    BTW, I tend to agree with Aharonian’s views of the efficacy of patent tr-lls.

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