Ron Slusky: Five Prescriptions for Effective Analyzing an Invention and then Claiming It

Articles and Publications, Book Review, Claim Drafting Tips, Patent

PatentLawPic371I asked Ron Slusky to share some insight from his new book on patent prosecution and claim drafting. The book is titled Invention Analysis and Claiming: A Patent Lawyer’s Guide (American Bar Association 2007). [Currently $51 on Amazon] Information about the book, including extensive excerpts, can be found at www.claim-drafting.com. 

The following are Slusky’s “five prescriptions for effectively analyzing an invention and then claiming it.”

1. Identify the inventive concept by beginning from the problem that the inventor set out to solve and then asking how, broadly and functionally, the inventor solved that problem

The popular alternative approach of drafting a claim of some indeterminate breadth directed to the embodiment(s) and then whittling that claim down will surely result in a broader claim to the embodiment(s) than what one started with. But that approach may still miss the broad invention because if words defining the inventive concept are not present in the original claim—e.g., a new and non-obvious functional interrelationship—such words are unlikely to somehow magically appear during the broadening process.

2. Begin by drafting a problem-solution statement rather than a claim

As just noted, drafting claims should not be the primary vehicle for discovering the invention. The structural formalisms of claim drafting, while perhaps familiar and facilitating, can all too easily mislead us into thinking we have discovered the inventive forest when we have actually only identified some of its trees.

Begin, instead, by drafting a problem-solution statement and use that as the basis for drafting the patent application’s broadest claims A problem-solution statement is a single sentence stating as broadly as possible, but without reading on the prior art, a) the problem the invention solves, and b) the inventor’s solution to that problem. Here, for example, is a problem-solution statement for a seminal invention of rocket pioneer Robert Goddard:

The problem of enabling a rocket to carry a large amount of combustible material while keeping the weight of the rocket as low as possible is solved by successively feeding portions of the material to the combustion chamber from a separate casing containing the supply of combustible material.

This leads directly to the following claim appearing in Goddard’s U.S. patent 1,103,503 issued July 14, 1914:

A rocket apparatus having, in combination, a combustion chamber, a casing containing a supply of combustible material, and means for successively feeding portions of said material to said combustion chamber.

3. Dream Up Alternatives, Including Some Farfetched Ones

A powerful tool for analyzing an inventor’s embodiment to extract the inventive essence is to dream up some alternatives to the inventor’s embodiment(s), including some alternatives that are farfetched. These are embodiments that, while outlandish or “wacky,” would nonetheless solve the problem to at least some extent. The more farfetched the better. The point is not to claim, or even to disclose, these embodiments in the patent application. The point is that even a farfetched embodiment can solve the problem without involving some of the implementational details required by practical embodiments. Thus dreaming up farfetched embodiments is a way of isolating the essence of the invention from its illustrative implementational details. Thus, for example, envisioning that a touch-tone telephone might have miniature trained parrots to whistle the various tones might be the key to realizing that the idea of using tones to signal from a caller’s premises to the telephone network was not limited to the use of oscillators and physical push buttons, neither of which are used in, for example, web-based telephony systems like SkypeTM.

4. Endeavor to discover “What’s Really Going On”

One way of gaining insight into the breadth of an invention is to ask oneself What’s Really Going On? or—more completely—What’s Really Going On to Solve the Problem? The word "really" in this question emphasizes a search for the fundamental problem and the fundamental solution. What is going on really? The exhortation to discover What’s Really Going On? invites us to exercise our technological curiosity; to dig down and discover what the invention is accomplishing at its essence; to understand what is going on at the 50,000-foot level; to see the invention in terms of fundamental causes and ultimate effects, without all the stuff in between. Thus answering What’s Really Going On? means figuring out—and ultimately claiming—what it is that solves the problem in at least a rudimentary way—not what solves the problem in the most elegant, efficient or commercially attractive way. Indeed, competitors may sacrifice a measure of elegance, efficiency or even commercial attractiveness in their products if it means being able to get into the market or avoid paying a patent royalty. Or they may devise their own elegant, efficient or commercially attractive implementations. Try to identify what is common among all of the embodiments, including some “farfetched” embodiments that the inventor and attorney may be able to collaboratively dream up, as described above. Identifying that which is common to all of those embodiments provides a good start to answering the question “What’s Really Going On?”

5. Envision the “Opposing Team”—the potential infringer and his patent attorney

When analyzing an invention and drafting claims based on the analysis, do not focus solely on what the inventor has done. Focus, rather, on what some competitor may do that takes advantage of what the inventor has done while avoiding the claims. The Opposing Team will be poring over the claims after the patent issues, looking for limitations that their product does not meet, or for some way to redesign the product to that end. Thus as each word, phrase and structural element appears on the computer screen, the claim drafter should imagine himself to be the Opposing Team and try to think of a way around that limitation, just like the real-life Opposing Team will do. In short, the patent attorney endeavoring to further his client’s interests is aided in that task by taking on the mindset of a competitor’s attorney endeavoring to further his client’s interests.

Buy the Book at Amazon or from the ABA.

Certificate of Correction

Academic Studies, Articles and Publications, Certificate of Correction, Patent

According to PTO figures, the Office has issued around 25,000 certificates of correction on issued patents each year since 2001. On a per patent basis, about 15% of issued patents are associated with a certificate of correction.*

Generally, a certificate of correction can be used to correct a minor mistake such as a “clerical or typographical” error or other minor error. In Superior Fireplace, the court held that a certificate of correction that broadens the claim is only permissible when it is clear from the specification and prosecution history how to correct the error. Similarly, in Central Admixture Pharmacy the CAFC found that the correction from osmolarity to osmolality was void because the error “was not clearly evident to one of skill in the art and the result was to broaden the claims.” The relief for an improper certificate of correction is simply to cancel the certificate. 

Over the past several years, a number of automated and out-sourcing services have emerged to check against PTO printing errors and other typographical errors. What are the best services and best practices regarding corrections?

ScreenShot031 

  • * To account for the time delay in obtaining corrections, I looked at only patents numbered 6,000,000 – 7,000,000 for the per patent estimate.

A First Look at Who Files Provisional Patent Applications

Academic Studies, Accelerated Examination, Articles and Publications, Patent, Provisional Patent Application, Transnational

Patent.Law083As part of the 1995 patent law overhaul, the USPTO began allowing patent applicants to file provisional patent applications.  Over a decade later, these lower-cost provisional filings have taken hold.  According to PTO annual reports, over 132,000 provisional patent applications were filed in fiscal year 2007. In perspective, that number is over 30% of the number of the 439,000 non-provisional utility patents filed during the same period. This proportion has been slowly rising since 2002 when the provisional applications filing rate was about 27% of the non-provisional rate.[1] That year (2002), the PTO recorded just under 90,000 provisional applications and 332,000 non-provisional patent applications.

Interestingly, in my study of recently issued patents, only 21% reference a provisional application as a parent. (In the study, I look at approximately 15,000 utility patents issued in April and May 2008.) [2] 

Patent.Law085National Tool: Over half of the recently issued patents that listed an assignee indicated that the assignee was a foreign (non-U.S.) corporation or agency.[4]  Although foreign entities are not prohibited from filing provisional applications, the provisional tool was designed to benefit U.S. entities. Thus, it is not a surprise that only 5% of the patents assigned to international applicants were associated with a provisional application while 30% of the patents assigned to a U.S. applicant were associated with a provisional application.  Two countries – Israel and Canada – stood out as filing the highest proportion of provisional parent claims. Both of these countries are known for having patent attorneys with a high level of familiarity with U.S. laws.  Only 2% of the Japanese & Korean patents included provisional parent claims. [Updated June 03 with Corrected Figure]

The provisional application provides a potential extra year of patent eligibility at the end of the term.  Thus, it is also not surprising that new drug inventions – where a potential year at the end of the term is most valuable – have the highest rate of association with a provisional application.[5]  Likewise, patents on electrical and electronic applications had the lowest rate of provisional filing even after excluding the international applications.

The provisional filings appeared to have almost no impact on the pendency time of a patent application as measured by the number of days from filing the nonprovisional to issuance.  This makes sense as no examination takes place until the nonprovisional application is filed.

The following table also provides some interesting comparisons of patent strategy.[6]

Type of Technology< ?xml:namespace prefix ="" o />

Number of Utility Patents in the Sample

Number of Patents Referencing Provisional Parent

Assignee

Mechanical

24

1

4%

Ford

25

13

52%

GM

Drugs & Medical

7

4

57%

Wyeth

8

7

88%

Genentech

11

1

9%

Boston Scientific Scimed

21

10

48%

Medtronic

Computers & Communications

15

12

80%

InterDigital

23

7

30%

Oracle

31

11

35%

QUALCOMM

44

25

57%

Broadcom

114

16

14%

Microsoft

Chemical

6

6

100%

Bristol-Myers Squibb

9

4

44%

Procter Gamble

10

3

30%

3M Innovative Properties

14

9

64%

EI du Pont de Nemours

17

0

0%

General Electric[7]

17

16

94%

Genentech

 

[1] This information comes from PTO annual reports for FY 2006 and 2007.

[2] These patents were downloaded on May 30. I excluded the few patents filed prior to the 1995 introduction of provisional patent applications.

[3] In a follow-on study, I will look at published patent applications claiming priority to provisional applications to get some sense of how often folks abandon provisional patent applications.

[4] 6823 were assigned to foreign entity while 6457 were assigned to a U.S. entity. Another 1922 had no listed assignee.

[5] My study included 677 patents having a primary U.S. Classification in a “drug” field and also assigned to a U.S. entity. Of those, 48% were associated with a provisional application.

[6] Note, my assignee ‘scrubber’ is not yet perfect. Thus, it is likely that some patents associated with listed assignees are not included in the table.

[7] Some companies, such as GE hold patents in several different categories – this table looks only at those patents in the particular identified category.

Theory of Dependent Claims: Survey Results

Academic Studies, Articles and Publications, Claim Drafting Tips, Patent, , , ,

Patent claims define the scope of an invention much like metes and bounds define real property boundaries or a statute delineates the difference between criminal and non-criminal activity.  Often, patent applicants submit a series of claims all directed toward the same invention. Various independent claims allow an applicant to focus on various aspects of the invention. These broad aspects may be directed to various nodes of a larger system or regions of a compound, processes for creating or using various elements, etc.  Dependent claims by definition add additional limitations. Thus, for instance disputed claim 1 and 2 from the recent Lovanex dispute reads as follows:

1. A heterogeneous intimate admixture of sulfated heparinic polysaccharides … consisting essentially of

from 9% to 20% of polysaccharide chains having a molecular weight less than 2,000 daltons
from 5% to 20% of polysaccharide chains having a molecular weight greater than 8,000 daltons, and
from 60-86% of polysaccharide chains having a molecular weight of between 2,000 and 8,000 daltons ….

2. The heterogeneous polysaccharide admixture as defined by claim 1, comprising less than 2% of dermatan sulfate.

Claim 2 is interpreted to include all the limitations of claim 1 with the additional limitation of “less than 2% of dermatan sulfate.” See 37 CFR 1.71(c).

Earlier this week, I polled Patently-O readers on why they file dependent claims and received just over 1000 responses. (Listed below).

Theory of Dependent Claims            
Why do you file dependent claims?             
  Percent of Responses  
Answer Options Strongly Agree Mostly Agree Neither Agree nor Disagree Mostly Disagree Strongly Disagree Rating Average
Dependent claims are backup in case the independent claim is rejected in prosecution. 59% 34% 4% 2% 0%        1.51
Dependent claims are backup in case the independent claim is found invalid in litigation. 59% 31% 6% 3% 1%        1.56
Claim Differentiation: The dependent claims expand or alter scope of other claims. 47% 37% 8% 6% 3%        1.82
Dependent claims focus on particular commercial embodiments to make infringement easier to explain to a jury. 29% 44% 21% 4% 2%        2.07
I primarily include dependent claims with nonobvious additional limitations.  19% 45% 25% 9% 1%        2.29
I was taught to draft dependent claims. 26% 34% 26% 8% 7%        2.35
USPTO fees: Patent office does not charge extra for first twenty-claims. 26% 34% 24% 9% 7%        2.36
Dependent structure better supports foreign filing. 7% 19% 58% 11% 3%        2.84
Dependent claims are easier to draft and manage than independent claims. 6% 23% 37% 23% 11%        3.08
Client demands a certain number of claims. 6% 16% 29% 25% 23%        3.42
Dependent claims help avoid restriction requirements. 2% 13% 39% 31% 15%        3.44
A longer application is more valuable. 2% 13% 29% 34% 22%        3.60
          answered question 1029
          skipped question 0

Responses were also allowed to add additional reasons in the comment section. I have compiled a few of those individual responses below.

  • Drafting Process: A few responses commented on the iterative process of drafting a patent. For some, drafting the dependent claims helps refocus and redefine potentially problematic terms from the independent claims. For many, the dependent claims also serve as a guide for fully drafting the specification.
  • Prosecution Process: Some responses proposed that the dependent claims are helpful during prosecution for several reasons. First, there is a perception amongst patent practitioners that examiners read and consider the claim-set before looking at the actual specification. For that reason, the claims should be considered as a way to teach the examiner about the features and purpose of the invention.  For some, obvious limitations in a dependent claim are useful in that regard to show the examiner an intended use (practical embodiment) of the invention.  For those who see patent prosecution as a negotiation, a series of narrowing dependent claims speed up the the process — the applicant and examiner need only agree upon how narrow the claims need be.  Some propose at least some dependent claims being “super narrow” to serve as a “foot in the door” to increase the likelihood that there is at least some patentable subject matter.  Once you have agreed that a patent will issue, it may be easier to debate the scope of the eventual claims. On a practical note, the existence of dependent claims means that an applicant can get to a post-final rejection allowance without filing a request for continued examination. These practical concerns are important considering that the vast majority of patent applicants amend their claims during prosecution.
  • Claim Differentiation: Most practitioners agreed that the claim differentiation benefit of dependent claims is important. The doctrine encourages courts to consider that each claimed element covers something different than the others. Pushing that line, a typical reasoning is that two or more dependent claims providing alternative implementations of a term from an independent claim will help ensure that the independent claim element is not limited to a single embodiment. Some folks quibbled with my statements regarding dependent claims “expanding scope” of other claims and instead used a more PC version of “aiding construction.”  It is important to realize that the originally filed dependent claims also form part of the specification and can thus help overcome enablement and written description hurdles.
  • Appeasing Clients: Many inventors see their invention narrowly — as their particular embodiment. Dependent claims provide an easy way to satisfy the inventor’s desire to claim their invention without limiting legal rights. On this “politics” side — dependent claims also give reason to add joint inventors, which may be good for office politics. “An invention may only warrant one independent claim embodiment, but many clients like to see many claims. They believe the more claims they have the stronger the patent and that they are getting value for there money.So you add them, e.g., a blue widget, a red widget. It is like chicken soup for a cold, it can’t hurt.”
  • Ease of Analysis: “Filing dependent claims rather than only independent claims makes it much easier for several parties (attorneys prosecuting the application, examiners and the BPAI examining the patent, attorneys analyzing the issued patent, courts analyzing the issued patent) to more readily evaluate the differences and similarities of claims.”  Others noted that it is also useful as a way for potential licensees to know that the proposed product is literally and explicitly covered. For some patent owners, this “ease of analysis” is actually a negative. (Try to read NTP’s $600,000,000 claims). A long claim-set makes it more likely that a potential defendant will easily cave rather than pursue an expensive invalidity / noninfringement study.
  • Capture “minor inventions”: Dependent claims allow an applicant “to capture improvements to the invention that are not important enough to justify a separate application, but that one would want to avoid having a competitor step in and patent something similar.”
  • Tradition: There is nothing wrong with tradition and custom. It helps ensure that we’re all on the same page.  For many the 3/17 rule of independent/dependent claims serves as a default rule that can be adapted for unique circumstances.
  • International: Internationally, patents use fewer independent claims than in the US. One European attorney made the following comment: “Multiple independent claims in the US style cause major headaches and costs in Europe, so one good independent, with well gradated dependents, is the best solution for me.”
  • I will attach the full comments once reformatted.

Counting Design Patents

Academic Studies, Articles and Publications, Design Patent, Patent

ScreenShot003

In 2007, Samsung Electronics received over 550 design patents — the most ever issued to a single company in one year.  Sony holds the most design patents, and is followed closely by Nike. The following table shows the company awarded the most design patents each year:

ScreenShot004Louis Zarfas is the primary examiner associated with the most issued design patents. Mr. Zarfas has allowed over 16,000 design patents since his first (as a primary) in 1978. Over 1,000 of those design patents relate to shoe designs claimed by companies such as Nike, Reebok, AVIA, Asics, LA Gear, Rockport, Sketchers, Wolverine, Keds, Louis Vuitton, Timberland, Berluti, and Kangaroos.

Recently issued design patents (issued 2000–2007) were, on average, pending for 16.2 months. Companies with at least 100 design patents during that period had about one month less pendency than those with fewer patents. Nike has prosecution down to a science — and averages less than 9 months pendency (filing to issuance). Toward the other end of the pendency chart, Apple averages over 21 months.

During the 2000–2007 period, approximately 75% of examinations were handled by primary examiners without any assistance from an assistant examiner. As with utility patents, the pendency for cases without an assistant is significantly less than for those with an assistant. Here, the difference is about two months.

 * These numbers are based on a recently compiled dataset of 300,000+ design patents issued since 1976 on file with DDC.

Does Size Matter? Counting Words in Patent Specifications

Academic Studies, Articles and Publications, Patent

The following chart does not tell us whether the size of the patent document makes any difference. It only tells us that the average patent has grown considerably over the past twenty years.

ScreenShot002

To create the chart, I obtained a sample of 10,000 patents issued between January 1977 and December 2007 and counted the number of words in the description of the claimed invention. This excludes claims, title, abstract, references, and other identifying information.  To amplify the results, I added two trend-lines. The first trend-line runs from 1977 to 1987 and has essentially no slope — indicating that description size remained steady over those years. The second trend-line runs from 1987 – 2007 and has a clearly positive trend-line indicating that the number of words is increasing over time.

Patent Litigation Trends: Survey Results

Articles and Publications, Patent

PatentLawPic124Fulbright & Jaworski recently released some results from its survey of 300 GC’s (and AGC’s) at large US & UK companies. Results:

  • Very large companies (>$1B) are much more likley to be hit with charges of patent infringement than are smaller companies (<$100m).  Unlike smaller companies, the very large companies also claim that the quantity of charges are on the rise. A small percentage (~3%) of companies with a revenue greater than $100m have defended against more than 50 claims in the past three years.
  • For most defendants, the major concern is not the potential for an injunction, but rather the cost of litigating.
  • The very large companies are also more likely to be on the plaintiff side asserting their own patents. The report claims a close correlation between company size and likelihood of enforcing its patent claims through litigation.

The report is free after you provide your contact info: Link. I can also e-mail a copy to you.

 

Why Design Patents Need Not Satisfy 35 U.S.C. § 101?

Articles and Publications, Design Patent, Patent

PatentLawPic11935 U.S.C. § 171 is a unifying provision – briefly stating that “except as otherwise provided,” the entire Patent Act applies equally to both utility patents and design patents.  Thus, design patents must fit within the requirements of §§120 and 112.[1] On the other hand, § 122 expressly exempts design patents from the publication requirements.

The enigma is § 101 and its definition of utility. Section 101 includes no explicit exception for designs. But, even a novice observer would question how a non-functional ornamental design can at the same time be “useful?”

The Supreme Court appears to have answered this query in Footnote 5 of its 2001 opinion in J.E.M. Ag Supply v. Pioneer Hi-Bred.[2] In that case, the Court held once again that the patentable subject matters scope of 35 U.S.C. § 101 is “extremely broad” and that the scope for utility patents certainly includes plants despite the existence of § 161 “plant patents.” 

In Footnote 5, the Court briefly compares § 101 utility patents with § 161 plant patents and § 171 design patents. “Patents issued under § 161 are referred to as ‘plant patents,’ which are distinguished from § 101 utility patents and § 171 design patents.”[3] 

The implication from the Court’s comparison is that design patents are not subject to the requirements of § 101 (despite the lack of any statutory exceptions). Thus, a patented design must be “new, original[, ] ornamental [and] an article of manufacture.” However, the design need not be useful.

[1] In re Daniels, 144 F.3d 1452 (Fed. Cir. 1998).

[2] J.E.M. Ag Supply v. Pioneer Hi-Bred Int’l., 534 U.S. 124 (2001)

[3] Id. at fn. 5.

 

Sidenote: The Apple iPod design patent (US D549,237 filed Aug 24 2005) appears to be identical to the company’s trademark design application (Serial No. 78925932 filed July 2006). A continuation patent has also issued which also claims the screen shape. (US D542,808) Interestingly, in the trademark case (response to a rejection), Apple admitted that the “rectangular video screen design is functional.”

Overall, has your company made money from the patent system?

Academic Studies, Articles and Publications, Business Developments, Patent

On August 7–8, 2007, I conducted a simple survey through Patently-O. [See Survey].  Readers were asked whether the patent system, taken as a whole, had been positive (made money) or negative (lost money) for their company.  The results below show the responses of 131 corporate employees who are all highly involved with their company patents.

The results here follow a predictable pattern: On average, pharmaceutical companies see patents as a profit center while software companies see patents as an overall loser.  (At 95%CI, Software & EE results each differ significantly from Pharm results).

PatentLawPic010

Notes:

  • Next time: Is this an important question?
  • The Survey [LINK]
  • Bessen & Meurer: Negative Return on the Patent System
  • On the process:
    • The above graph merges responses from small corporations with those from large corporations. It also excludes individuals at law firms, government entities, and educational institutions. 
    • Individuals responded to the question: “Overall, has your company made money from the patent system?”  There were three potential responses: “Clearly positive (made money”, “Unsure whether positive or negative”, and “Clearly negative (lost money).” For the graph above, these responses were converted to a simple numerical scale: 1, 0, and -1, respectively. The y-axis above ranges from -1 to 1.

New Patent Law Scholarship

Articles and Publications, Patent
  • MortarboardPatent Reform: Matthew Sag and Kurt Rohde, Patent Reform and Differential Impact. Sag (DePaul) and Rohde (MBHB) want to get patent reform rolling — they suggest that we throw-out the chaff because it slowing down the process. Their differential impact approach helps us focus on reforms that will stop the abuse of “bad patents.” 
  • Software Patents: Robert Merges (Berkeley), Patents, Entry and Growth in the Software Industry. A decade ago, everyone predicted that software patents would turn the industry on its head.  Professor Merges finds that software patenting has not been earth shattering.  Big companies have adapted and “new firm entry remains robust.”
  • Federal Circuit: Professors Nard (CWRU) and Duffy (GWU) suggest that we rethink the CAFC experiment and the virtues of uniformity in their new article, Rethinking Patent Law’s Uniformity Principle. CAFC jurisprudence is becoming a bit stale and would benefit greatly from at least one other sister-court deciding patent appeals.
  • Takings: Adam Mossoff (Michigan State) is quickly becoming known for his studies on the history of patent jurisprudence. In the wake of Zoltek, where the CAFC refused to protect patent rights under the takings clause of the Fifth Amendment, Mossoff took the court to task — especially for its continuation of the untrue myth that “patents were never secured as constitutional private property in the nineteenth century.”  In his new article, Mossoff concludes that “[i]t is time to set the historical record straight, and to recognize that nineteenth-century courts applied the Takings Clause to patents, securing these intangible property rights as constitutional private property.”
  • Google Scholar: For those of you who do not know about it, Google Scholar is getting pretty good and should now be on your agenda for most prior art searches. http://scholar.google.com.

 

Scherer on Compulsory Licensing

Articles and Publications, Patent

In 1977, noted economist F.M. Scherer wrote a monograph entitled “The Economic Effects of Compulsory Patent Licensing.”  At that time, there was pending legislation on compulsory licensing of nuclear technology.  In some ways, Scherer’s analysis thirty years ago can serve as the starting-point for determining whether to issue an injunction in our post-eBay environment. Specifically, Scherer argues that compulsory licensing should not be favored when any of the following are true:

  1. The patent holder’s share of the product market averaged less than 20% over the preceding five years; or
  2. The patent holder’s total sales of related products during the past five years as well as the reasonably anticipated sales over the next five years are less than ten-times the patentee’s R&D budget; or
  3. The patent holder exercised extraordinary creative initiative or extraordinary technical and financial risks in its innovative effort.

Scherer was concerned that injunctive relief was most important for small and especially micro-sized firms whose barriers to entry and lack of non-patent competitive advantages increased their relative valuation of patent importance.

A patent success story

Articles and Publications, Patent

Simvastatin StructureToday I am truly proud of the patent system.  The block-buster drug Zocor (simvastatin) has transitioned off-patent and into the world of generics.  Unlike other areas of IP law, patents really are valid only for “limited Times” and when those years have passed the property right evaporates — leaving the inventions “free as the air to common use.” (In the words of Justice Brandeis).

There is no question that patent rights played a major role in providing incentive to Merck to develop and test Zocor and to push it through the difficult FDA approval process.  The incentive worked, Merck recouped its investment, and now generic versions will be sold at an unbelievably low price that is very near its production costs.

Scholarship: Patent Thickets See a New Light

Articles and Publications, Patent,

Patent law professor Douglas Lichtman (and my good friend) has an interesting new short article (8 pages of text) about problems of “patent thickets.” 

Theorists have discussed patent thickets as an example of problematic over-ownership — A.K.A. the tragic “anti-commons.”  When a particular area of technology is blanketed by multiple patents owned by multiple parties, everyone blocks everyone else, and nothing gets done.

After all, the conventional literature on the tragedy of the anti-commons asserts that resources will be inefficiently under-used in the face of too many overlapping patent rights.

Lichtman turns this theory on its head and asserts that in actuality, a very thick thicket might result in less litigation.  His idea is in a case of multiple overlapping patents, each patent represents only a small piece of the pie.  And few patentees would be willing to go through litigation simply to recover such a small slice.

More patents means less money per patent holder. Less money, in turn, means less of an incentive for a firm to strategically delay in the hopes of being a patent holdout, and less of an incentive for an accidental patent holdout to actually bring suit.

A couple of weeks ago, I would have rejected Lichtman’s argument out of hand.  Under the old rule, every patent holder had a right to force large settlements based on its hold-up threat through injunction.  Now, post eBay, his ideas begin to make more sense. . .

Conflicts of Interest in Patent Prosecution

Articles and Publications, Patent

HricikProfessor David Hricik is a leading Intellectual Property Ethicist.  He recently posted some questions about your thoughts on patent prosecution conflicts.  Do these situations create conflicts of interest:

First example:  In prosecuting application for Client A, lawyer receives an office action rejecting claims over a prior art reference that is owned by Client B. Is there a conflict? [your comments].

Second Example: Is it per se unethical for a lawyer to provide a non-infringement or invalidity opinion about another client’s patent? [your comments].

Professor Hricik is also a speaking at our upcoming conference on blog law.

Hat tip to Steve Nipper.

THE WAR IS OVER: NTP and RIM Settle.

Articles and Publications, Patent

PatentlyOImage009After years of high-profile legal battles, NTP and Research-in-Motion (RIM) have reportedly settled their patent dispute over RIM’s BlackBerry system. According to the press release:

RIM has paid NTP $612.5 million in full and final settlement of all claims against RIM, as well as for a perpetual, fully-paid up license going forward. This amount includes money already escrowed by RIM to date.

The settlement, widely expected for the past year, will likely bring to a close the wild ride at NASDAQ. (RIMM).

An appropriate reader comment:

Actually, I’m rather sorry to see this settlement. All the media hype and nonsense, plus the fears of politicians of losing their service, seemed to be greatly contributing to patent reform momentum and to the Supreme Court taking more patent cases.

But at least the belated but initially effective RIM reexaminations of the patents in suit served to publicly demonstrate reexamination effectiveness in lowering settlement expectations. And without all the lawsuit publicity the reportedly cited obscure prior art Norwegian university publications would probably never have surfaced.

On the Reexaminations: A settlement could include a provision that NTP must return RIM’s money if the patents were eventually invalidated. However, considering NTP’s stance thus far, such a provision would be exceedingly unlikely. Consequently, I expect that the continuing reexamination of NTP’s patents at the PTO will become more of a curiosity than a business concern. The only way that NTP can stop the reexamination process would be to capitulate to the PTO and thus abandon the patents.

 

Does the Wall Street Journal Understand Patent Law?

Articles and Publications, Patent

Last year I had a refreshing course in the positive power of patenting. We had sued a handful of companies for infringement.  They were clear copy-cats, and the cases quickly settled.  Several months later, our client sent an e-mail showing the competitors’ new product lines.  They had gone back to the drawing-board and created what was arguably a design that was even better.  Consumers are the beneficiaries with better products and even more competition.  America has always been a place of innovation — and in this case it was our patent system that forced the free-loaders to take some initiative. 

I had two companies approach me this week about patent work. They are both small businesses who want to go global.  They believe that they have great innovations, but the only way that they will have get a fair shake in the world of investors and business development is if they begin the process of securing their IP rights. 

As you may know, I am up-beat about our patent system.  Despite the bad press, there are genuine success stories that continue to drive the uniquely American innovative spirit.  Lets bring about legislative and PTO reforms to fix the problems — and I believe that there are problems — but the system is far from broken.  A complete overhaul makes interesting press, but it is not the right solution.

With all this on my mind, I was saddened by today’s Wall Street Journal’s editorial that “blame[s] the lawyers.”  Here are highlights from the paper:

  • Patents now operate to deter research and penalize innovation.
  • Patent cases are dubious if they involve patent-holders who never commercialized their inventions.
  • A third party has no standing to challenge a patent unless he is accused of infringing it.
  • The rise in filed patent applications “has less to do with genuine innovation than it does with innovative lawyers filing a patent on anything that moves.”
  • “Blame the lawyers.”

Several online articles have already been written about the editorial.  Matt Buchanan takes real issue with the over-arching blame game being played by the WSJ.  The Patent Baristas make several interesting points, including a note comparing the number of patents obtained by major corporations with those obtained by the so-called patent trolls.  This morning, an upset Patently-O reader e-mailed me about the editorial with the following comments:

Shouldn’t the writer have consulted you to get a better balanced  and more educated viewpoint?

Of course, I am apparently not so high on the speed-dial of the WSJ editors, but Stephen Nipper found an interesting response:

“It is much easier to suggest solutions when you don’t know too much about the problem.” – Malcolm Forbes.

Even the staunchly concervative IPO noted its problems with the editorial:

[T]he Journal asserted, “the percentage of [patent] approvals has climbed; approvals were close to 90% in 2000, up from 69% in 1984 . . . .” Contrast the recent speech by USPTO Director Jon Dudas at the AIPLA meeting in Palm Springs, California, in which he said approvals are now less than 60%.

Patently-O Scholars

Articles and Publications, Patent,

AcademicEggHeadThere are a couple of interesting new patent papers:

Linguistics and Claim Construction by Kristen Osenga (available here).  

Professor Osenga explores linguistic theory for truths that can be applied to claim construction.  She writes about five particular “notions” that could be used to make claim construction more consistent:

1) every reader, including a judge, possesses a mental lexicon with a common sense (or conventional) understanding of word meaning which is a point from which to start when interpreting claims;

2) there is an appropriate place for dictionary usage, which is to inform the judge’s common sense understanding about a word where he has none;

3) patent claims have their own grammar which must inform the syntactical and contextual analysis, but may also skew the reader’s common understanding that was obtained either from a mental lexicon or from a dictionary;

4) regardless of the common sense understanding, the PHOSITA must be returned to the analysis and changes made to the law to effectuate the return of the PHOSITA; and

5) extensive resort to the specification and prosecution history to divine the patentee’s intent is inappropriate.

Patent Metrics: The Mismeasure of Innovation in the Biotech Patent Debate by David Adelman and Kathryn DeAngelis (available here).

Adelman and DeAngelis have written what they claim to be “the first comprehensive empirical study of biotechnology patents.”  Their conclusions — there is little evidence that the rise in biotechnology patenting is adversely affecting innovation. The pair also provides a general criticism of “the current enthusiasm for empirical” at the expense of exploring “the obvious complexity of innovative processes.”

EBay v. MercExchange: Stay of Injunction Pending Appeal

Articles and Publications, Patent

A friend of mine who is also a senior patent counsel at a major technology corporation passed along his thoughts on the eBay appeal in an anonymous article entitled eBay v. MercExchange: Are YOUR Interests Represented?. 

The article, published here on Patently-O, raises a particular issue—that of stays pending appeal.  The article argues, inter alia, that the relatively short CAFC docket (~1 year) coupled with the high reversal rate indicate that injunctions should generally be stayed pending appeal.

This approach takes the high middle ground — allowing for injunctions on a regular basis, but not forcing settlement based on district court holdings that would potentially be vacated on appeal.

Notes:

  • Cite the article as: Note, eBay v. MercExchange: Are YOUR Interests Represented?, Patently-O, January 31, 2006 at https://patentlyo.com.
  • The article can be linked directly at: https://patentlyo.com/patent/eBay_20Article.pdf
  • Comments on the article should be directed to me.

First-to-Invent vs The Constitution [Updated]

Articles and Publications, Patent,

According to Dave Simon, The First-to-File Provisions of the Patent Reform Act of 2005 Violate the Constitution’s Intellectual Property Clause.

The Patent Reform Act of 2005 proposes provisions that would change the granting of patents from the so-called first-to-invent system to a first-to-file system. The Intellectual Property Clause limits Congress to granting patents only to “Inventors”. A system enacted by Congress for granting patents to anyone other than a good faith inventor operates outside of the constraints enumerated in the Clause, and therefore is facially impermissible. The first-to-file provisions of the Act are violative of Article I, Section 8, Clause 8 of the United States Constitution.

Dave’s paper is premised on the assertion that an invention is only made once, and later independent inventions should not actually be considered inventions.  Dave is not the first to make this argument — his paper, however, is easily accessible online. Download Dave’s paper.  Ed Suominen, patent attorney in Scotsdale made the same argument back in 2001 in a paper published by the JPTOS. Download Ed’s Paper.  

Of course, it is highly unlikely that any court would agree that a first-to-file system is unconstitutional. Ed agrees — “Eldred proved that Congress can pretty much do whatever it wants about IP as far as this Supreme Court is concerned.”  Professor Mark Lemley gave his remarks in an e-mail:

I have to disagree with the claim that first-inventor-to-file is unconstitutional. Dave Simon’s reasoning is based on the idea that “inventor” means whoever thought of it first, not simply a person who thinks of it independently. But if that were true, (1) current US patent law would be unconstitutional in the circumstances in which it discounts invention in non-WTO member countries, and the system would have been unconstitutional throughout its history when it was limited to inventive activity in the US; and (2) copyright law would be unconstitutional because it treats any independent creator as an author. Both results seem unlikely to me.

If you are against a switch to first-to-file, I would not hang my hat on the constitutionality argument.

Practical Tips For Prosecuting Trans-Border Inventions

Articles and Publications, Patent

A new paper in the AIPLA Quarterly Journal provides a number of practical tips for dealing with inventions or infringing acts that naturally cross international borders.  The authors (Mark Lemley, David O’Brien, Ryan Kent, Ashok Ramani & Robert Van Nest) call these “divided infringement claims” and focus on the recent Federal Circuit decisions in Research-In-Motion v. NTP, Eolas v. Microsoft, AT&T v. Microsoft, and Pellegrini v. Analog Devices.

Prosecution Strategies:

  1. Attempt to draft unitary claims — i.e., claims that are not susceptible to international distribution.
  2. Claim devices and systems, not just methods — in RIM, the CAFC taught that system claims are much stronger on an international level.
  3. Draft claims that would infringed under the importation or domestic sale provisions of 271(g).
  4. Keep continuations alive.
  5. File foreign.

The paper also delves into a number of ex post litigation strategies such as filing suit at the ITC and advocating for a claim construction that avoids international division. 

Great work!