Patent Marking and Infringement Damages

A common patent question is whether products should be marked with any relevant patent number. The simple answer is that marking provides “constructive notice” to infringers and may allow a patentee to collect greater damages in an infringement suit.

According to the marking statute:

In the event of failure so to mark, no damages shall be recovered by the patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter, in which event damages may be recovered only for infringement occurring after such notice.

35 U.S.C. 287(a). As an added bonus, patent marking plates are becoming popular collectables.

Electronic Filing Software

LegalStar is offering its electronic patent filing software free until Labor Day 2004 (normally $50 per filing). I have not used their software yet, but am planning to try soon. The USPTO also offers EFS software here.

There are two reasons why I am convinced that electronic filing will be standard operating procedure for the majority of new filings within the next 18 months. First, it is likely that electronically filed applications will be given a hefty discount on filing fees. Second, attorneys will appreciate the peace of mind that comes with the immediate confirmation of filing.

It is difficult to predict whether practitioners will end up using USPTO’s filing software or that of a company like LegalStar. Any software company will need a compelling argument to show that its software is better than the USPTO’s free version. In the long run, electronic filing software will likely be tied to prosecution docketing programs and sold as a bundle.

Read the USPTO’s memo on the legal framework for electronic filing.

Nonobviousness

IPCentral has an ongoing discussion of the nonobviousness requirement of patentability. They quote one of my favorite law school professors (John Duffy).

[T]he Supreme Court … has not heard a case involving the nonobviousness doctrine in more than a quarter century. I recently gave a presentation at a patent reform conference in which I gave reasons why this drought may end very soon. Many people are not satisfied with the state of the law concerning nonobviousness.

Specifically, many are arguing that nonobviousness is taken much too lightly by the Federal Circuit.

BlackBerry Lawsuit

ntp_v. RIM
The CAFC is expected to hear oral arguments today in the patent infringement case against RIM, the maker of the BlackBerry. The district court issued an injunction against RIM and awarded over $50 million in damages to NTP. The injunction was stayed awaiting the results of the appeal.

NTP’s patents are directed toward an “electronic mail system with RF communications to mobile processors.” (e.g., U.S. Patent No. 5,436,960).

NYTimes Article (Free Subscription)

rim_blackberry_design_patent
For what it’s worth, RIM’s patent drawings are much more interesting.

Walkman Inventor May Sue Apple

portable_radio
Washington Times is reporting that the inventor of the portable stereobelt (Andreas Pavel) may sue Apple over its iPod technology. Mr. Pavel holds several patents including US Patent No. 5,201,003. The ‘003 patentissued in 1992, but claims priority to a 1978 application.

Reportedly, Sony recently paid Mr. Pavel several million dollars after a long dispute and settlement negotiation over Walkman technology.

Link here and here. Thanks to macsurfer for the backlink.

Lack of Inter partes reexamination proceedings

Xenia Kobylarz at the daily journal has written a new article discussing the failure of the inter partes system.

The inter partes procedure has been attempted only 42 times, according to the patent office. And the office has written the procedure out of its new 21st Century Plan – its five-year strategic blueprint – in favor of yet another experimental administrative proceeding based on a process used in European nations and Japan.

A couple of public interest organizations (e.g., EFF and the Public Patent Foundation) are stepping in as guinea pigs for the system.

The outcome of Public Patent Foundation’s highly public request for reexamination may determine the future use of the procedure.

Patent Video

A few years ago, the the Federal Judicial Center (FJC) created a video providing an introduction to patent law for judges and juries. The video is available here (Windows Media, Quick Time), and provides a very good (although general) introduction to patents and the patent office. I would recommend that anyone coming to work in a patent firm should watch this video as part of new employee orientation.

A sample patent used in the video is available here.

The video is used by some judges as a replacement for the testimony of a “patent law expert.”

Patent Law Malpractice Insurance

I think that everyone in the field is or will soon be feeling the pain of malpractice insurance rate hikes. Diedre Greg in Seattle has the story: Patent lawyers are slammed by insurance rates

Amity Insurance has developed their list of the top ten most common causes of attorney malpractice. Although the order may be somewhat different for patent attorneys, all of these are real issues.

1. Missing Deadlines
2. Lawyer Stress and Substance Abuse
3. Conflicts of Interest
4. Ineffective Client Screening
5. Inadequate Research and Investigation
6. Poor Client Relations
7. Overzealous Efforts to Collect a Fee
8. Poor or Inadequate Documentation
9. Inappropriate Involvement in Client’s Business
10. Unwillingness to Believe You Might Be Sued

Link

Samuel Oddi (UAkron), has a working paper discussing the recent increase in malpractice claims and provides an analysis of the exposure of patent attorneys to malpractice claims.

In other insurance news, Universal Security has sued its insurer (the Hartford) for failing to cover patent litigation costs. (Article).

Sharing & Stealing

Professor Jessica Lichtman’s working paper and music sharing proposal is titled “Sharing and Stealing.”

My specific proposal is inspired by an impulse to see whether an architecture like the one that has permitted the Internet to flourish as an information space can define a thriving music space. The U.S. recording industry’s recent enforcement campaign seems to seek to move us in a very different direction.

This paper is a fun read.

Edward Felton, Martin Schwimmer, and others have already noted Professor Mark Lemley’s new paper that disparages the justification for ex-post IP incentives.

At the very least, Lemley misses the necessary ex-post first-publication incentives. Any coherent IP system gives an incentive to both create (ex-ante) and show your creation to the public (ex-post).

Measuring Secrecy: A Cost of the Patent System Revealed

The patent system is often juxtaposed with a system of trade secrets. A major difference between the two systems is that patented technology is disclosed to the public while trade secrets may remain hidden forever.

It turns out that in many cases, the patent system also promotes secrecy and witholding of information. This is especially true in scientific fields where the publication of research is postponed to await patent filing dates.

In his most recent paper, Dr. Jeremy Grushcow uses statistical analysis of data retrieved from online abstract databases and from the USPTO to demonstrate that secrecy in academic institutions is on the rise.

This paper confirms that granting patent rights to scientists and their institutions succeeds in generating increased industry participation in publicly funded research and increased patenting and commercialization activity. However, the paper also shows that scientists who seek patents are more secretive, withholding publication or presentation of their data so as not to jeopardize patentability. Notably, this paper also observes that even those university scientists not seeking patents became more secretive in response to the 1980 changes. This unanticipated increase in secrecy increases the risk of wasteful duplication caused by the patent system.

Grushcow offers several potential solutions to restore a “norm of data sharing.”

[I]ncreasing the rewards for early data sharing while providing an experimental disclosure exception to reduce the risk that early data sharing will jeopardize patentability.

Another aspect of secrecy that Grushkow did not explore is the period between filing and publication. Shortening the 18-month publication delay would allow for public knowledge at an earlier time in many cases.

Journal of Legal Studies, vol. 33 (January 2004)

Blocking patents

The headline: Patent royalties threaten new mobile service

Patent royalties are posing threats to a new digital mobile broadcasting service in Korea before it is even launched. Digital mobile broadcasting, or DMB, is a service that enables users to view television through cellular phones by means of satellite transmission.

TU Media Corp. announced yesterday that Toshiba Corp., the Japanese company that holds the core technology for satellite mobile broadcasting, is demanding royalties for terminals sold in Korea. TU said Toshiba requested royalties of 2 percent per terminal for all gadgets that will use the satellite broadcasting service, reports JoonGang Daily.Commentary: The facts here don’t appear to show a great “threat” or that the patent owner plans to block all use of DMB — Toshiba just wants a piece of the action.

Patent Litigation Jobs

It looks like the job market for patent attorneys is still good. Need a job offer?

Update: A friend of mine has been a patent agent for several years in Chicago and also has a MolBio PhD. For family reasons, he is moving back to Northern California (Tiburon). He would like to continue doing patent work but does not want to commute to silicon valley. Please e-mail me patent@gmail.com with any leads or to request his info.

Personal Liability for Corporate Patent Infringement

Currently, the Federal Circuit requires a “piercing of the corporate veil” for individual liability of corporate officers in a patent infringement suit. In a new manuscript, Lynda Oswald (Michigan) argues that the current standard is wrong and overly broad.

In adopting this piercing standard, the Federal Circuit has inadvertently and radically expanded the scope of individual officer liability and has exposed corporate officers to a form of strict liability for their corporation’s infringing activities. I propose instead a standard that parallels the “personal participation” standard of traditional corporate doctrine, which would ensure that culpable corporate actors are held liable in appropriate circumstances, but would avoid wholesale imposition of personal liability upon officers for the patent infringement of their corporations.

IDEA: The Journal of Law and Technology, Vol. 44

Patent law: Further Justification

Patent law is traditionally justified as an innovation incentive. In a new working paper, Jochen Bigus (Hamburg University) argues that patent law also serves a second goal:

Namely, mitigating conflicts of interest in the venture financing process, thereby making innovations more likely.

Essentially Professor Bigus argues that the clear milestones provided by patent law allow for a better relationship between investor and innovator.

Starting an in-house IP department

Those struggling with starting an in-house IP department should look here.

The absolute first thing you should get is your own customer number from the PTO. Immediately request it, listing only your reg. no. and listing the company address as the correspondence address! Changes can later be made depending on how you decide to handle things.

Harry has further advice if you want to push around the outside counsel.