Search Results for: "sas institute"

Patents and the Auto Industry Bailout

Design Patent, Patent

In 2005, the PTO held a ceremony to commemorate the issuance of design patent number 500,000. The design patent went out to DaimlerChrysler for the design of the Chrysler Crossfire. Then Commerce Chief Gutierrez and PTO Director Dudas were on hand to note the importance of design patent design patents.

The patent has taken an interesting path – as shown by the assignment records at the PTO. Of course, DaimlerChrysler is gone, and Chrysler now owns the patent. In addition, Chrysler has given-up three separate security interests in the design patent. The first and second priority are apparently held in trust by the Wilmington Trust Company. The third priority is held by the US Department of Treasury based on a January 2009 grant and is apparently related to the company’s receipt of bailout money. [Assignment Data]. D500,000 is not the only patent implicated here – the assignment documents show that the US Treasury holds a security interest in more than 2,400 of Chrysler’s patents or pending applications. [More Assignment Data]

ScreenShot018

One important practice issue is raised: Absent a specific agreement, to what extent must the applicant consult secured creditors during the prosecution of a pending patent application?

Brief post on the stimulus [updated]

Bits and Bytes, Patent

pic-9.jpgTo put $800 billion in perspective, I like to think in terms of households. In the US, there are around 115 million households with a little under three persons per household. Simple division gives us $7,000 per household. The median household income of Patently-O readers is at least two to three times greater than the national median of $50,000. The income-correlated cost will be at least proportional — pushing $20,000 for Patently-O households.

A weak economy has little demand for patent attorneys. Patent attorneys make less money, clients disappear, and law firms close. Although patents can be countercyclic, on average they are not – especially in a sustained downturn.

In the 1990’s, I taught high-school level math and physics as a Peace Corps volunteer in Ghana, West Africa. Many of my students were smarter and certainly harder working than their American counterparts. Yet, the Ghanaians have an expected per capita income of just under $1,000 per year. Those kids are a victim of circumstance. In the US, we reap the windfall of circumstance. Our individual income levels are within our control only to a certain extent.

The bottom line here is that this additional $20,000 cost is worth while … if it works. I guess that we’ll find out.

Chamber of Commerce Calls for Internal Changes at the PTO

Patent

The US Chamber of Commerce has released a set of recommendations for President Elect Obama in dealing with the USPTO. Some highlights below:

  • Comparing the past twenty years:

     

Year

Budget (Mil)

Patent Examiners

New Apps

Total Backlog

Pendency (Months)

1988

$144

1,540

148,000

268,000

20

1998

$567

2590

240,000

481,000

24

2008

$1,915

5,960

463,700

750,600

32

    

  • The PTO should use “fee and order of examination incentives” to encourage applicants to provide higher quality applications and information disclosures. Thus, instead of making a hard cut-off for RCE filings, the PTO should consider charging an “increasing fee for successive continuations or RCE filings.”
  • The PTO should allow oversight and transparency in its quality review process.
  • The Second-Pair-of-Eyes Review program “seems to be breeding a negative attitude among examiners and many applicants. The concept of quality review is essential, but the focus needs to change so that poor, unjustified decisions are not made in the alleged interest of quality.”
  • The next PTO director should have experience in patent prosecution and litigation.
  • Deferred Examination: “If the PTO cannot reduce its backlog through other means and the number of patent filings continues to increase, consideration should be given to allowing patent applicants to defer examination of their applications for perhaps up to three years.”
  • Key contributors to the report include Dana Colarulli (Legislative lead for the IPO); Q Todd Dickinson (former PTO director); Nicholas Godici (former PTO commissioner of patents); Esther Kepplinger (former director of patent operations at the PTO); Mike Kirk (former deputy commissioner of patents); Stephen Kunin (former director of patent examination policy for the PTO); Gerald Mossinghoff (former PTO director); Charles Van Horn; and Herb Wamsley (IPO) .
  • Read the Report.

Patent Law School Exam: Essay No. 3

Patent

3. (15 POINTS) Under 35 U.S.C. § 112 patent claims may be invalidated as indefinite. The Federal Circuit has interpreted the law to invalidate patented claims only when those claims are “insolubly ambiguous.” The insolubly ambiguous standard is a high standard, and patent claims are quite unlikely to be found invalid under that standard. More recently, policymakers have considered lowering the standard, but only for pre-issuance patent applications undergoing patent prosecution. Is this proposal a good idea? Why?

Patently-O Bits and Bytes

Patent
  • Law School Hiring: This year has been dismal for law student hiring. There are many 2Ls and 3Ls who are hopeful patent attorneys, but do not have jobs lined up yet or even serious prospects. In past years, those students would have been already snapped up by the big players. Contact me (dcrouch@patentlyo.com) if you are interested in looking at some Mizzou law resumes.
  • Crocs: Helping keep the streets free of ugly shoes (as well as microscopic fungi), Sketchers has agreed to stop selling its molded footwear. Crocs had sued for design patent and trade dress infringement. Crocs, Inc. v. Skechers U.S.A., Inc., Case No: 1:08-cv-01450-RPM (D. Co 2008).
  • Wall Street Journal Patent News:
    • Medicis Pharmaceuticals (NYSE) climbed 2.26, or 20%, to 13.38, as the Scottsdale, Ariz., skin-products maker agreed to settle a yearlong patent dispute with Impax Laboratories over a generic version of Medicis’ acne drug Solodyn.
    • Falling 7.67, or 46%, to 8.95, Tessera Technologies, a San Jose, Calif., company specializing in semiconductor packaging, was handed a setback when an International Trade Commission judge said six big chip makers didn’t infringe its patents.
  • Future of the PTO: On December 11, 2008 in DC, Chris Katopis will moderate an historic panel of former PTO Leaders: Dickinson, Lehman, Mossinghoff, and Godici. Free Live or via Telephone. Details, RSVP, and call-in info from TLiszka@comptia.org.
  • Santa Clara Computer and High Technology Law Journal’s 25th Annual Symposium: January 30, 2009 in San Jose. I will be presenting some ideas on attorney ethics and inequitable conduct. Other topics include developments in non-practicing entity patent litigation and litigation before the ITC.

In re Swanson: CAFC Allows Reexamination Based on Reference Previously Considered by PTO and Courts

Patent, Patent Cases 2008, Reexamination, , ,

In re Swanson (Fed. Cir. 2008)

Back in 1984, the patent examiner rejected Swanson’s claim based on U.S. Patent No. 4,094,647 (“Deutsch”). The claims were then amended and the patent allowed. Later, in an infringement action involving the patent, the Federal Circuit affirmed a judgment that “Deutsch did not anticipate the asserted claims.” Abbott v. Syntron, 334 F.3d 1343 (Fed. Cir. 2003). Surmodics is the patent owner, and the patent is licensed to Abbott.

After losing at the CAFC, Syntron filed for ex parte reexamination of the patent – asserting again that the claims were anticipated by Deutsch. As per usual, the PTO agreed to reexamine the patent – based on a “substantial new question of patentability.” 35 USC §303. On appeal, Swanson argues that the Deutsch reference was considered in both the initial examination and the litigation – and thus cannot serve as the “new” basis for reexamination.

Third-party filed reexaminations provide a check on PTO power, but the SNQ requirement is designed to protect patentees from harassment.

This ‘substantial new question’ requirement would protect patentees from having to respond to, or participate in unjustified reexaminations. Further, it would act to bar reconsideration of any argument already decided by the Office, whether during the original examination or an earlier reexamination. House Report 96-1307, 96th Cong., 2d Sess. (1980).

In its 1997 Portola Packaging case, the CAFC gave teeth to the SNQ requirement – finding that a new question could not be presented by “prior art previously considered by the PTO in relation to the same or broader claims.” Reacting to that decision, in 2002 Congress amended Section 303 and to ensure that a new question may be raised by prior art that was previously considered by the examiner:

35 USC §303 “The existence of a substantial new question of patentability is not precluded by the fact that a patent or printed publication was previously cited by or to the Office or considered by the Office.”

Pointedly, the House Report accompanying the 2002 legislation found that “the Federal Circuit incorrectly interpreted Congress’ original intent.” According to the House Report, “the appropriate test to determine whether a ‘substantial new question of patentability’ exists should not merely look at the number of references or whether they were previously considered or cited but their combination in the appropriate context of a new light as it bears on the question of the validity of the patent.”

SNQ = Reference Never Considered by the PTO for the Particular Purpose: Based on the statutory change, the appellate panel found that a substantial new question is simply one that has never been considered by the PTO. Here, the record shows that the original examiner relied upon Deutsch only as a secondary reference in an obviousness rejection of a broader claim.

“In light of the extremely limited purpose for which the examiner considered Deutsch in the initial examination, the Board is correct that the issue of whether Deutsch anticipates the method disclosed in claims 22, 23, and 25 was a substantial new question of patentability, never before addressed by the PTO”

SNQ Relation to Court Proceedings: In court, the parties had battled out the exact anticipation argument presented in the reexamination. On appeal, the CAFC panel found that “the determination of a substantial new question is unaffected by these court decisions.” According to the court this makes sense because “the two forums [Courts and the PTO] take different approaches in determining validity and on the same evidence could quite correctly come to different conclusions” based on the burden of proof. Quoting Ethicon (Fed. Cir. 1988).

Affirmed

Notes:

  • Judges Gajarsa (Author), Lourie, & Bryson.
  • This opinion gives further strength to ex parte reexamination requests.
  • The CAFC has consistently required that a patent’s presumption of validity be negated by “clear and convincing evidence.” Here, the court made a minor slip by calling the standard ‘statutory.’

“In civil litigation, a challenger who attacks the validity of patent claims must overcome the presumption of validity with clear and convincing evidence that the patent is invalid. 35 U.S.C. § 282. If this statutory burden is not met, “[c]ourts do not find patents ‘valid,’ only that the patent challenger did not carry the ‘burden of establishing invalidity in the particular case before the court.'” Ethicon, 849 F.2d at n.3 (internal citations omitted) (emphasis in original).”

Thanks to Paul Morgan for noting this issue.

Todd Dickinson To Take AIPLA Helm

Bits and Bytes, Patent

The AIPLA recently announced that Q. Todd Dickinson will become the new Executive Director of the organization. Dickinson is widely considered the most popular PTO director in recent history. Dickinson is also an Obama supporter and would be a likely return-appointee as PTO director if the democratic contender is elected. After leaving the PTO, Dickinson took the job of chief IP counsel for GE after working as a partner at Howry LLP. Dickinson is also known for his ability to bring parties together for compromise solutions – that may bode well for patent reform issues that have begun to divide both the AIPLA and the IPO. Michael Kirk, who has successfully led the AIPLA for more than a decade, is retiring.

End of an Era; End of a Blog

Patent

Bill Patry has decided to stop his popular copyright law blog. He gives two reasons:

  1. Although the blog is his personal work, most folks who quote the blog draw some link to Google policy. (I’ll do it here: Patry is Google’s top copyright attorney).
  2. Copyright law is too depressing:

    “[W]e are well past the healthy dose stage and into the serious illness stage. Much like the U.S. economy, things are getting worse, not better. Copyright law has abandoned its reason for being: to encourage learning and the creation of new works. Instead, its principal functions now are to preserve existing failed business models, to suppress new business models and technologies, and to obtain, if possible, enormous windfall profits from activity that not only causes no harm, but which is beneficial to copyright owners. Like Humpty-Dumpty, the copyright law we used to know can never be put back together again: multilateral and trade agreements have ensured that, and quite deliberately.

    It is profoundly depressing, after 26 years full-time in a field I love, to be a constant voice of dissent. I have tried various ways to leaven this state of affairs with positive postings, much like television news shows that experiment with “happy features.” I have blogged about great articles others have written, or highlighted scholars who have not gotten the attention they deserve; I tried to find cases, even inconsequential ones, that I can fawn over. But after awhile, this wore thin, because the most important stories are too often ones that involve initiatives that are, in my opinion, seriously harmful to the public interest. I cannot continue to be so negative, so often. Being so negative, while deserved on the merits, gives a distorted perspective of my centrist views, and is emotionally a downer.

    So between the inability or refusal of some people to accept the blog for what it is — a personal blog — and my inability to continue to be Cassandra, I decided it was time to pull the plug.”

Repeal 35 USC 122(c) …..at least for Business Methods

Patent

By Mark Nowotarski and Tom Bakos

35 USC 122(c) needs to be repealed and replaced with a law that will allow a more efficient and effective examination process. The current legal requirement to prevent third parties from participating in the patent examination process is no longer in the best public interest. Peer to Patent has shown us that public participation works, but the next step is impossible until 122(c) is at least amended. An examination process that utilizes the expertise of the industries in which applications lie has now become essential in the very difficult to examine fields of software, pharmaceuticals, and business methods.

35 USC 122(c) was added to the American Inventors Protection Act of 1999 to protect the interests of applicants, particularly small entities, once their patent applications were published. The concern at the time was preventing major corporations from harassing independent inventors by inundating the patent office with submissions and commentary intended merely to delay and ultimately prevent otherwise well deserved patents from issuing.

Times, however, have changed.

The USPTO can’t keep up with demand in part because it lacks technical expertise in many fields. A growing public perception is that patents inhibit innovation. The Supreme Court is openly questioning the presumptive validity of business method patents and political forces are aligning themselves to legislatively restrict the scope of patent protection in some of the most promising areas of growth in our economy, such as the financial services sector.

Recent trials of the Peer to Patent program have shown that well regulated systems for third party submissions and commentary can be set up to effectively assist examiners and dramatically improve the efficiency and thoroughness of patent examination. The system demonstrated its ability to harness the efforts of third party reviewers, including those in the employ of large corporations, to not only uncover important prior art, but to provide useful commentary as well. And, it did this without the feared negative consequences of large corporations unfairly dominating the examination process. But Peer to Patent is of limited use as long as 35 USC 122(c) restricts it to applicants who volunteer to have their applications reviewed and stops the review once the application is in the hands of an examiner.

Our experience in working together on several business method cases is that the combined efforts of a practitioner (like Mark) and third party technical expert (like Tom) yields dramatically higher quality applications and faster prosecution. We see no reason why the same principles can’t be applied by the USPTO so that examiners, with the proper safeguards, can work with third party technical experts to get higher quality patents to issue in substantially less time.

Recent advances in the art of public participation in patent examination can be applied to assure that large corporations do not unfairly monopolize third party submissions thus rendering 35 USC 122(c) in its current form no longer necessary. Rather than requiring the Director to block third party submissions, the law should allow the Director to harness the efforts of outside experts in order that inventors can receive the timely and thorough patent examination they deserve.

  • 122(c) reads as follows: “PROTEST AND PRE-ISSUANCE OPPOSITION.- The Director shall establish appropriate procedures to ensure that no protest or other form of pre-issuance opposition to the grant of a patent on an application may be initiated after publication of the application without the express written consent of the applicant.”

[NOTE: Mark Nowotarski is the president of Markets, Patents & Alliances and is a registered patent agent specializing in business methods. His background is in mechanical engineering and he has 17 patents in this field. Tom Bakos FSA MAAA is an independent actuary specializing in helping clients patent their insurance innovations. He is an inventor on one issued and several pending business method patents. Mark and Tom are also coeditors of the Insurance IP Bulletin. The Insurance IP Bulletin is a bimonthly publication dedicated to helping the insurance industry use patents to promote innovation.]

CAFC Rejects Patent on Invention to Overcome the Second Law of Thermodynamics

Patent,

In re Speas (Fed. Cir. 2008)

In a short non-precedential opinion, the CAFC affirmed the PTO’s rejection of Speas patent application as both non-enabled and lacking utility. The application claims:

“all devices and systems which operate in such a manner as to violate the second law of thermodynamics as it is currently understood.”

The CAFC briefly described operation of an embodiment:

‘According to the specification, the invention raises a ferrofluid out of a reservoir by a magnetic column into a mass. The ferrofluid then escapes a “gradually decreasing magnetic field which holds it up against gravitational force” and is drawn away via tubular element by a capillary force aided by Brownian motion. At the end of the tubular element, drops of this ferrofluid accumulate and drop back into the reservoir below, spinning a wheel along their downward paths. Thus, the movement of the ferrofluid imparts mechanical energy upon the wheel. Speas claims that because this ferrofluid is moved and adds energy to the paddle wheel “without input into the system other than ambient thermal energy,” it is proof that the second law of thermodynamics is not inviolate – an object of the invention.’

Notes:

  • Although this type of case is fun to read, it also provides an interesting lesson — that the patent office has tools to reject inadequate patent applications on their merits without resorting to broad exclusions of particular subject matter. 
  • Speas is the inventor of several issued patents covering more practical applications such as an internal combustion engine and an adjustable bicycle drive mechanism. His home of record is in the town of Haiku on the island of Maui.

Tafas v. Dudas: PTO’s Proposed Limitations on Continuations and Claims are Invalid

Patent

In a twenty-six page opinion, District Court Judge Cacheris has granted GSK’s and Tafas’s Motions for Summary Judgment — finding the PTO’s proposed limitations to the number of continuation applications and claims per patent to be improper extensions of PTO authority:

“Because the USPTO’s rulemaking authority under 35 U.S.C. § 2(b)(2) does not extend to substantive rules, and because the Final Rules are substantive in nature, the Court finds that the Final Rules are void as ‘otherwise not in accordance with law’ and ‘in excess of statutory jurisdiction [and] authority.’ 5 U.S.C. § 706(2).”

The documents:

==== Discussion ====

PTO Has No Substantive Rulemaking Authority:  35 U.S.C. § 2 provides various specific powers to the PTO. However, Section 2 does not provide the PTO with any “general substantive rulemaking power.” According to the Court, “Section 2(b)(2)’s authority is limited to rules governing the ‘conduct of proceedings’ before the Office, the USPTO does not have the authority to issue substantive rules, and it does not have the authority to make substantive declarations interpreting the Patent Act.”

Substantive Rulemaking is Broadly Defined: The district court defines a “substantive rule” as any rule that “affect[s] individual rights and obligations” (Quoting Chrysler Corp. v. Brown, 441 U.S. 281 (1979))

PTO’s Proposed Rules are Substantive: Applying the broad definition of substantive, the court then easily found that the proposed rules are “substantive rules that change existing law and alter the rights of applicants such as GSK and Tafas under the Patent Act.”

“The 2+1 Rule and the 5/25 Rule, which limit continuing applications, RCEs, and claims, and the ESD requirement, which shifts the examination burden onto applicants, constitute a drastic departure from the terms of the Patent Act as they are presently understood. By so departing, the Final Rules effect changes in GSK’s and Tafas’s existing rights and obligations.”

Limits on Continuations are Substantive: In particular, the court found that the continuation rule is runs contrary to the law because it imposes a “hard limit” that “deprives applicants of their valuable rights under 35 U.S.C. § 120 to an unlimited number of continuation and continuation-in-part applications as a matter of right.” Likewise, the limitations on RCE filings is a “clear departure from the plan language” of 35 U.S.C. § 132 (the PTO “shall … “at the request of the applicant …”).

Limits on Claims are Substantive: For over eighty years, the courts (CCPA) have blocked the PTO from placing any “mechanical limits” on the number of claims. Although the PTO may object to duplicate claims, the court found that the law prevents any strict limit on the number of claims.  The Court saw the ESD requirement substantive because it shifts the burden of examination from the PTO to the Applicant:

[T]he ESD requirement changes existing law and alters the rights of applicants under the current statutory scheme by shifting the examination burden away from the USPTO and onto applicants. . . . [T]he Federal Circuit has stated that applicants have “no duty to conduct a prior art search” and “no duty to disclose art of which an applicant could have been aware. . . . It is only after the USPTO makes a demonstration of unpatentability that the burden shifts to the applicant to rebut that showing. . . .  Thus, by requiring applicants like GSK and Tafas to perform prior art searches and by shifting the examination burden away from the USPTO, the ESD requirement manifestly changes existing law and alters applicants’ rights under Sections 102, 103, and 131.”

Holding: “Because the USPTO’s rulemaking authority under 35 U.S.C. § 2(b)(2) does not extend to substantive rules, and because the Final Rules are substantive in nature, the Court finds that the Final Rules are void as “otherwise not in accordance with law” and “in excess of statutory jurisdiction [and] authority.” 5 U.S.C. § 706(2).

From the order:  “Defendants Jon W. Dudas and the United States Patent and Trademark Office and their agents, servants, and employees are permanently enjoined from implementing the Final Rules”

Notes:

  • The court made no attempt to carve-out portions of the rules that may be legal.
  • Although numerous other issues were raised by the parties and amici, the Court decided only on the substantive ground.
  • Weak points in the decision: TBD.

Computer Implemented Means-Plus-Function Element Must be Supported by Specific Algorithm in Specification

Indefinite, Means Plus Function, Patent

ScreenShot014Aristocrat Technologies Australia (ATA) v. International Gaming Technology (IGT) (2007-1419) (Fed. Cir. 2008)

ATA and IGT have two parallel cases pending before the CAFC. This appeal focuses on whether ATA’s asserted claims are invalid as indefinite. (U.S. Pat. No. 6,093,102). The other pending case questions whether the PTO properly revived ATA’s unintentionally abandoned national stage application. (U.S. Pat. Nos. 7,056,215 and 7,108,603) [See Patently-O discussion of revival case].

This case focuses on a patent covering an electronic slot machine patent that allows players to pre-select which combination of symbol locations will be used to determine a winner.

Claims Indefinite: The district court held the claims invalid as indefinite under 35 U.S.C. § 112 ¶ 2. Its opinion focused on the claimed means-plus-function element “game control means” — finding the term indefinite because the specification did not provide “structure” to perform the claimed functions.  The specification did include the statement that the control means could be a microprocessor-based gaming machine with “appropriate programming.” However, the lower court focused on the absence of any “specific algorithm” or “step-by-step process for performing the claimed functions.”

On appeal, the CAFC affirmed, holding that computer implemented means-plus-function claims must include “more than simply a general purpose computer or microprocessor.”  The purpose of the requirement, according to Judge Bryson’s opinion, is to avoid overbroad “pure functional” claims.  Because of the ubiquity of general purpose computers, a bare microprocessor cannot be considered a sufficiently specific structural disclosure:

For a patentee to claim a means for performing a particular function and then to disclose only a general purpose computer as the structure designed to perform that function amounts to pure functional claiming.

Within PHOSITA’s Ability: The algorithm missing from ATA’s disclosure is almost certainly within the ability of an ordinary game programmer.  In fact, I believe that it would only take me (a law professor) only a few hours to create a rough algorithm showing how the ATA software program could operate.  Judge Bryson shot-down that argument: Structure for a means-plus-function element must be provided in the specification regardless of whether the structure is already well known in the art.

What is Required: “Source code” is not required to be disclosed, nor is a “highly detailed description of the algorithm.”  However, a computer oriented application using means-plus-function claims must “at least disclose the algorithm that transforms the general purpose microprocessor to a “special purpose computer programmed to perform the disclosed algorithm.” (Quoting WMS Gaming)

Notes:

Intramurals: The European Patent Divide

Patent

European IP Attorney Severin de Wit writes one of the best patent focused blogs on the European continent: IPEG. With his permission, I am reposting his article on European Patent No. 0455 750 B1 owned by the US company Document Security Systems, Inc. (DSS).

PatentLawPic253You are a European institution, the European Central Bank (ECB), and you seek the invalidation of what has been granted as a valid right by another European institution, the European Patent Office (EPO). The last weeks we got a taste of how The Great Patent Divide, the most un-European experience in patent law, has turned into Europe’s Patent Demise.

Threatened by a patent infringement claim of a US company, Document Security Systems, Inc. (DSS) the ECB seeks invalidation in several European countries. The UK patents court (in first instance) invalidates the patent, EP 0455 750 B1 for a ‘Method of making a nonreplicable document’ on March 26, 2007. A day later the German Federal Patent Court (“BundesPatentGericht”) disagrees with the UK court and finds the patent valid. By judgment of March 12, 2008 the District Court in The Hague, Netherlands, upheld the patent as valid and follows Germany. Just a few weeks earlier, on 9th January 2008, the French court (“Tribunal de Grande Instance de Paris”) agreed with the UK court in first instance and distances itself from the German court and found the patent invalid.

On March 19, 2008, the UK Appeal Court affirmed the invalidity findings of its first instance colleagues. Patent dead, in the UK and France (so far, appeal in France still pending).

You still with me?

What a disgrace. What a sorry state European patent law is in. We know that Europe is lacking a European view on validity (and infringement for that matter), but how can this be explained? The view, generally held, is that UK courts are (very) critical on what comes out of the European Patent Office. [According to the UK,] Patent 0455750 should not have been granted. France, not yet known as “patent-unfriendly” has chosen the side of the UK in this case. Is this a scary sign of what is there to come? Maybe (just) an incident and no forbode of what is next (France as the next patent basher)? One begins to wonder, are the Germans more fond of what comes out of their (“own”) EPO, located in Munich? Is Holland more inclined to accept what comes out of Munich as well? Or is this all “coincidence”? We think not. We have seen this divide before (on stents: Angiotech’s patent for Taxus stent revoked by UK Court of Appeal, (partially) upheld by the Dutch District Court, but then it was only for Germany & Holland versus the UK. Is France now joining the chorus of “we-know-it-all-better-than-the-EPO” ?

Recent Patent Law Job Postings on Patently-O

Patent

 

Patent Troll Tracker & Cisco’s New Blog Policy

Patent

WorldisflatMost major companies are still trying to get their heads wrapped around the flat world concepts that Thomas Friedman presented in his 2005 bestseller. The reputational power of the internet is now driving many corporate balance sheets.  The business issue: ensuring that the reputation is going right way.  Certainly, this management may be a bit like herding cats: In less than five minutes, anyone with an internet connection and skills with a mouse can become an anonymous online publisher to the world without spending a dime.  The impact of cheap worldwide distribution is multiplied by a seeming societal shift away from a desire for privacy, away from strong employee loyalty, and away from a respect for intellectual property in favor of free speech and free software.

Cisco Systems found itself in the midst of a potential reputation firestorm when the popular anonymous blogger known as the Patent Troll Tracker (PTT) revealed himself as a Cisco IP Director Rick Frenkel.  The PTT blog focused on patent enforcement companies — so called patent trolls — that have sued major technology companies such as Cisco, Microsoft, Sprint, and others.  Frenkel and Cisco have been accused of defaming two Texas plaintiffs attorneys and have also been accused of a stealth anti-patent lobbying campaign. (Cisco is a major part of the “Coalition for Patent Fairness” — an organization lobbying for weaker patent rights).

One way that Cisco can emerge as a publicity winner is to promote and encourage employee publication and free speech.  Cisco appears to be taking this road. I discussed the Frenkel case with a Cisco spokesperson today who indicated that Cisco is defending against the lawsuit; that Cisco is “committed to supporting [its] employees and their right to online expression”; and that Frenkel will certainly be allowed to continue blogging while a Cisco employee.

The internet’s ease of anonymity is in tension with the prevailing blog notion of transparency.  The problem with anonymous corporate blogs is the potential for customer backlash when they discover the true content provider.  The other major problem with anonymous publication is the tendency of anonymous authors to become reckless authors. (See, e.g., anonymous Patently-O comments). Cisco’s new employee publishing policy takes these issues into consideration. The policy: No anonymous blogging or comments on issues associated with your Cisco job.

“If you comment on any aspect of the company’s business or any policy issue the company is involved in where you have responsibility for Cisco’s engagement, you must clearly identify yourself as a Cisco employee in your postings or blog site(s) and include a disclaimer that the views are your own and not those of Cisco. In addition, Cisco employees should not circulate postings that they know are written by other employees without informing the recipient that the source was within Cisco.”

I disagree with many of Cisco’s patent reform suggestions, but I admire the way the company is handling this issue.

Notes:

Patently-O Bits and Bytes No. 21

Patent
  • ScreenShot041Disclose Disclose Disclose: APJ Richard Lebovitz argues (on his own) that scientific researchers should be required to disclose potential patent rights prior to publication of related research as part of the conflict-of-interest review. [6 Nw. J. of Tech. & Intell. Prop. 36].  In his study of Science and Nature articles, Lebovitz found that “almost one-third” of the research articles were associated with one or more patent filings.
  • Compulsory Licenses: Thailand plans to continue its plan of paying low compulsory license rates for patents covering important cancer drugs. In response, Novartis has proposed to offer Gleevec for free, but only to Thai patients that qualify as poor. [Noonan]
  • More Like Property: A major point of the Bessen & Meurer book is that the patent system can be improved by making patents work more like property. Should we work toward a system where patent rights are more predictably valid; where patent scope is more easily discernable; and where fragmented ownership of overlapping patent rights does not block further development?
  • Patent Reform: IPO reports that the “massive” Patent Reform Act of 2007 will likely receive senate floor attention in April or May.  According to the organization: “Patrick Leahy (D-Vermont) appears intent on moving the bill ahead even though it is unclear whether enough Senators will support it to break holds placed on it by some Senators.  Claims made every day by lobbyists that Leahy has or does not have the 60 votes required to cut off debate and pass an amended bill are speculation, because the amendments are not known.  Pronouncements that the bill is dead this year are premature.”

Do Patents Stimulate R&D Investment and Promote Growth?

Academic Studies, Patent,

James Bessen and Michael J. Meurer have authored a new book presenting a careful empirical analysis of whether patent rights encourage innovation. Their conclusion: for the most part, today’s patent system does not achieve its stated goal. I asked them to provide Patently-O readers with a cut from their analysis. The following post is the first in a series of four by the authors. The book is titled: Patent Failure and published by Princeton [Web Link]. The analysis done in this book put Bessen and Meurer at the forefront of leaders in economic analysis of patent laws. I suspect that their results will become the talking points of the next round of patent reform discussions. A live symposium will be held at UGA Law School on March 29 focusing on the book and its results. [LINK]

==========

by James Bessen and Michael J. Meurer

As background material, this post reviews the sizable body of empirical research analyzing the impact of patents on R&D investment and economic growth. Three future posts will present new empirical research featured in our book Patent Failure. The theme across all four posts is that patents often fail to perform effectively as property rights. [DDC: To work well as property, the right should be predictably valid; have discernible boundaries; and not have an overly fragmented ownership scheme.]

Economists cherish property rights that provide strong incentives for investment and trade, and that thereby contribute to economic growth. Potentially, patent rights could accomplish these three goals, and surely they sometimes do. Apparently though, it is hard to set up and maintain a patent system that works as property.

The rise of new market economies and strengthening of property rights around the globe in the last two decades provides economists with “natural experiments” that help us evaluate whether and how much property rights contribute to investment and growth. The empirical results are impressive. Countries that expanded the role of markets and strengthened property rights have prospered from these choices. Economic historians find the same results hold going back to the Industrial Revolution.

Comparable studies of patent systems are discouraging. The evidence certainly is consistent with the notion that patents encourage American pharmaceutical R&D. But otherwise, it is hard to find evidence suggesting patents are a major factor spurring R&D investment, that patents contribute to economic growth, or even that the patent system is a source of great wealth to important inventors and innovators (outside of a few industries like pharmaceuticals).

(more…)

Troll Tracker, Defamation, and Splitting the Bar

Patent,

Rick Frenkel – who until recently was known only as the Patent Troll Tracker – has now been sued for defamation by two Eastern District of Texas lawyers: Johnny Ward, Jr. and Eric Albritton.  Frenkel recently revealed himself as an IP Director at Cisco Systems. Cisco is also a named defendant in the lawsuit. Ward has represented many plaintiffs in E.D. Texas patent cases and is the son of Federal Judge John Ward of the Eastern District of Texas.

The whole case seemingly stems from a Patently-O posting on October 16, 2007. That post, titled “Patent Office Has Stopped Examining Patents with 25+ Claims,” included a short blurb about a seeming “preemptive strike” by the patent holder ESN:

From Patently-O: In another preemptive strike, on October 15th, ESN sued Cisco for infringing Patent No. 7,283,519.  Unfortunately, the patent did not issue until the 16th of October. [Link] 

ScreenShot039Of course, a patentee has no standing to sue until after the patent issues, even if you know that the patent will issue the next day. The Patently-O post included a link to ESN’s complaint that had an October 15 electronic time-stamp and a civil cover sheet dated October 15.  Ward and Albritton were involved in this case, apparently serving as local counsel for the McAndrews firm.

ScreenShot040By October 18, the PACER filing information still reflected that the case had been originally filed on the 15th, but the PACER complaint filing date now indicated October 16. (See thumbnail screenshots.)  This date became potentially important because, in the meantime, Cisco had filed a declaratory judgment action against ESN in Connecticut.  (First-to-file with standing usually wins venue.)

On October 18, the Troll Tracker posted what are seemingly his most pointed comments about the case:

“I got a couple of anonymous emails this morning, pointing out that the docket in ESN v. Cisco . . . had been altered. One email suggested that ESN’s local counsel called the EDTX court clerk and convinced him/her to change the docket to reflect an October 16 filing date, rather than the October 15 filing date. I checked, and sure enough, that’s exactly what happened – the docket was altered to reflect an October 16 filing date and the complaint was altered to change the filing date stamp from October 15 to October 16. Only the EDTX Court Clerk could have made such changes. . . . This is yet another example of the abusive nature of litigating patent cases in the Banana Republic of East Texas.”

In a different post, PTT mentioned that Ward and Albritton represented ESN and that they might not “play well” in a Connecticut court.

Moot Point?: Since then, ESN v. Cisco has been dismissed by agreement of the parties, and the original filing dates have become meaningless and moot. However, Ward and Albritton remembered Frenkel’s comments. Within three days of Frenkel’s “outing” a defamation lawsuit had been filed in Texas state court. At this point, none of the parties are discussing either case in public except that Cisco “continue[s] to have high regard for the judiciary of the Eastern District of Texas and confidence in the integrity of its judges.” 

Seeing an opportunity, the Howrey firm has now declared that it “absolutely won’t represent trolls.”  Is the patent bar in the midst of a split? [Joe Mullin has the Howrey Advert]

Documents:

  • File Attachment: Defamation Complaint filed by WARD (383 KB)
  • File Attachment: Defamation Complaint filed by ALBRITTON (452 KB)
  • Original ESN v. CISCO complaint 

    • Notes:

    • Although I have not always agreed with Frenkel’s opinions, he has been a great addition to the public debate over patents and patent reforms. His analysis has always been fresh. On several occasions, I double-checked the factual basis of his reports, and each time found them spot-on.  I do hope that he’ll be back with more caustic analysis. I’ve been sitting on this story for a while now. Although not a named party, my name appears in the filings. Craig Anderson (DailyJournal) apparently broke the story in a hardcopy version.

    • This case may serve as a caution to Patently-O “anonymous” commentors. A defamed individual may have ways to figure out your identity.

    • ESN has explained that it actually filed the complaint at 12:01 am on October 16.

    • A couple of days after posting the comment above, PTT deleted the above quoted material and replaced it with the following: “You can’t change history, and it’s outrageous that the Eastern District of Texas may have, wittingly or unwittingly, helped a non-practicing entity to try to manufacture subject matter jurisdiction. Even if this was a “mistake,” which I can’t see how it could be, given that someone emailed me a printout of the docket from Monday showing the case, the proper course of action should be a motion to correct the docket. (n.b.: don’t be surprised if the docket changes back once the higher-ups in the Court get wind of this, making this post completely irrelevant). EDIT: You can’t change history, but you can change a blog entry based on information emailed to you from a helpful reader.” [Mullin]

    • Reporter, Joe Mullin has more background — According to his report, Ward filed the complaint in November and had been in the process of unmasking the troll.  

    • Joe Mullin Reports on the Case

    • Legal Blog Watch

    • Legal Pad reports on the Case

    • Forbes has a quite flippant view

    • Zura Reports

    • Mark Randazza

    • Robert Ambrogi

    Board of Patent Appeals and Interferences (BPAI)

    BPAI, Patent, , ,

    Eight Reasons: I am undergoing a project to better understand the role of the Board of Patent Appeals and Interferences (BPAI).  There are several reasons why BPAI is now receiving more limelight than ever. Here are eight such reasons: (1) every proposed patent reform bill includes an expanded role for a patent administrative court, such as the BPAI; (2) as various technology centers make patents more difficult to obtain, more cases are appealed to the administrative court; (3) under the proposed rule changes to limit continuation applications, more cases will likely be appealed; (4) as the value of patent rights continue to grow, important cases will continue to be challenged; (5) the publication of patent applications means that BPAI decisions can now also be immediately published; (6) the current large batch of examiners without much experience requires a serious check on potential abuses of naiveté; (7) under Judge Fleming, the BPAI has begun to open up to more public input and scrutiny; and (8) BPAI decisions are now available via Google search and Westlaw search.

    BPAI is a Busy Court: It is important to recognize that the BPAI is deciding 3,500 cases every year. Thousands more are ‘settled’ prior to a BPAI decision either because the patent examiner withdrew a rejection (and likely re-opened prosecution) or the patent applicant filed a continuing application or abandoned the case. The BPAI usually sits in three-member panels, although there are occasionally ‘stacked’ panels for important cases such as Lundgren or Bilski.  In my one-year sample, over seventy different Administrative Patent Judges (APJs) authored opinions. 

    As part of my initial study, this week, I created a database of information on recent BPAI decisions and coded them by issues discussed.  My database is derived from decisions available on Westlaw. Consequently, it is missing some decisions. In particular, Westlaw decisions do not include appeals associated with unpublished patent applications.

    The table below looks at board decisions for each technology center. The relative numbers are interesting — showing a low affirmance rate for rejection of business method cases (TC 3600) and a high affirmance rate for chemistry cases (TC 1700). The BPAI offers its own calculation of these numbers based on all of its decisions that are roughly parallel. [LINK] ScreenShot037
    (Note, the table does not add-up to 100% because I excluded decisions to remand and deny rehearing).

    Independence of the BPAI: One serious question about the competence of an internal patent appeal board is whether that body can act independently from the examining corps. Most of the BPAI judges are former examiners and they all work for the PTO Director. Although not conclusive, the above numbers give me some cause for hope that the BPAI does act independently. Over the past several years, many of the art units of TC 3600 has been notoriously difficult on applicants (especially e-commerce and business method groups). The BPAI’s low affirmance of rejections from that technology center may indicate that the Board has taken an independent stand against overzealous rejection practice.  There are many other explanations, including some selection bias or difference in quality of attorneys. In addition, there is a skew of judges — i.e., Judges with a technical background related to a particular technology center are more likely to judge cases from that technology center. The BPAI rightfully does this to ensure that every case has at least one administrative patent judge (APJ) who is prepared to understand the technology at issue.

    Issues on Appeal: Far and away the most decided issue is that of nonobviousness. Almost 80% of decisions involved a discussion of nonobviousness and 30 U.S.C. 103(a).  Unfortunately for patent applicants, nonobviousness decisions were also the most difficult for applicants to win. In my study, decisions involving Section 103(a) were affirmed 63% of the time; decisions involving anticipation under Section 102 were affirmed 55% of the time; and decisions involving Section 112 were affirmed 52% of the time. As more issues are added to an appeal, the chance of affirmance goes down, and the chance of a split (reverse-in-part) decision goes up.

    As might be expected, split decisions tend to be longer than others: 4500 words for split decision vs. 3500 words other decisions.  If a short decision arrives at your desk, you may assume it is a remand.

    Notes:

    Tafas v. Dudas: Challenging PTO Rules Potential Feburary 8th Decision

    Patent

    The challenge against the USPTO’s implementation of its new continuation and claim rules continues into its seventh month. On Friday, February 8, Judge Cacheris is hosting oral arguments on the competing motions for summary judgment.  Previously in this case, Judge Cacheris indicated his holding from the bench — this case may be no different.  

    As I have mentioned before, at best, this case is a likely partial-winner for Tafas. The patentee’s two best arguments are (1) the illegality of strictly limiting the number of continuations and (2) retroactivity problems.  Two additional arguments are also potential winners: (3) that the ESD requirements are vague (not just costly) and (4) that the PTO followed improper procedures in implementing the rules.

    Even if the rule challengers win, the PTO would still be able to implement portions of the new rule that limit the number of claims in newly filed applications.  However, the court could potentially require that notice-and-comment process be entirely redone — thus changing the timing.

    • Docket & Briefs on Justia
    • Polestar Amicus is particularly interesting [as discussed by PatentHawk]
    • PLI’s Quinn will be blogging from the event.
    • Regarding Paragraph two above, I also predicted the Patriot’s to win. . .
    • One argument against the possibility of ‘splitting’ the rules is that no party has asked for that rule — both sides are going all or nothing.
    • It is also interesting to consider why none of the plaintiffs or amici have been able to pursuade the Senate to include limits on PTO power in the proposed Patent Reform Act of 2007.