Patently-O Bits and Bytes by Juvan Bonni

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70 thoughts on “Patently-O Bits and Bytes by Juvan Bonni

  1. 6

    link to ipo.org

    This is being skipped by people. But this is in agreement with what I’ve been saying and in agreement with the assessment that the value of a US patent has dropped by about 80-90 %.

    What I am seeing is worse than these numbers. I see that corporations had been playing a wait and see game as they thought that the patent system would be corrected. We are on a learning curve where the top people at corporations are started to say that patents are nearly worthless.

    The effects of the AIA and Alice have a lag due to the slow movement of corporations and because so many have seen the patent system go down only to be corrected.

    I suspect what is next is big corporations lowering salaries of tech workers and lowering the amount of research they do. The big corporations keep those research centers alive because of patents.

    Anyway—everything I said would happen is happening. The next step is going to be more of a decrease in patent filings from big corporations. Probably they will file about 40% of what they use to and drop the budgets to file the patents. I’d guess they will hire about 1/2 as many people to do research as they used to.

    All of this takes time to work through the system.

    I see this just getting worse and worse. There will be another learning curve with the trade secrets and researchers. The corporations are figuring out how to lock people into jobs with trade secrets and they are figuring out that it is cheaper to take from other people rather than pay 1,000’s of people to do research without patents.

    Big complex system that is slowly unraveling.

    1. 6.1

      Be interesting to see how the likes of people like Lemley try to spin what is happening. Money corrupts.

    2. 6.2

      We can thank the likes of people like R. Stern, M. Lemley, and –of course–the ultimate destroyer in the universe—Obama.

      1. 6.2.1

        Maybe the biggest thing to blame is corrupt system of raising money in politics. There will always be low life that will take the money.

        1. 6.2.1.1

          Sure – I think that both of us realize that the likes of “Citizens United” and the raising of the power of juristic entity voices was NOT a good thing, given as most all such large powerful juristic entities fall into the “established entity” category and thus would prefer to compete on non-innovation grounds.

          Very much like inviting the fox to be the warden over the hen house…

    3. 6.3

      Just incredible too the denial by the anti-patent judicial activists (and I think too the monopolists) that there is a connection between hiring of researchers and patents.

      I’ve sat and talked to executive vice presidents of large corporations who start research facilities to get patents. It won’t take long before they figure out that there is no need to innovate when you can take.

      Jimmy Carter figured all this out. He realized that corporations needed a fire under their a$$ and that patents would force them to innovate.

      1. 6.3.1

        As to “forced to innovate,” you alight upon one of the biggest fallacies of the anti-patent folk as to “patents are bad when they block innovation.”

        I have called this “blocking” the stick portion of the traditional “carrot AND stick” approach.

        What the anti-s (including the Court and Fire-hosed-trained lower courts) always seem to forget is that being blocked is a good thing. Being blocked invigorates the creative juices and promotes the ingenuity to find new [and often disruptive] ways to compete. I often find that it is the unimaginative and rather dull folk that see blocking as a “bad thing” and simply under estimate man’s ingenuity when faced with being blocked.

    4. 6.4

      What I am seeing is worse than these numbers.

      Mileage may vary.

      Our firm has seen a slight softening (probably about 5%), but also has seen increased rigor and determination in fighting during prosecution.

      The “gloom and doom” is an easy trap to fall into, as the danger of that prognosis is indeed very real, even if such has not been realized and even as more and more people are waking up to the detriments of a weakened innovation protection system.

      At the same time, the Efficient Infringers would love nothing more than people to quit the fight and become resigned that “patents are worthless.”

      Large established firms may well be more than able to play the “patents are worthless” game precisely because they would rather compete on non-innovation terms. It’s not as if they do not (or cannot) innovate per se, it is just that such may well NOT be their only or preferred competition strategy. Being established very much tends away from innovation — especially disruptive innovation.

      Further, cash-rich (established) entities may also be able to “buy low” any intellectual property assets of others especially when such assets have been depreciated by the economic/politically-influenced ongoing that DO weaken the value of those assets.

      1. 6.4.1

        Our firm is up in revenue anon, but revenue from large clients is down.

        You have to think this through. It is complicated what is happening. The large clients don’t think patents are worthless, but they think they are worth far less and are being used differently.

        1. 6.4.1.1

          I agree with you – just saying that mileage may vary.

          Interesting to note that you are experiencing increased revenue from smaller entities. Is that due to more of such entities, or more spending from the same number of such entities?

          Our firm’s make-up and contribution from small entities has been fairly consistent on both factors, albeit, that’s just not a huge focus for us.

          1. 6.4.1.1.1

            We have more small/medium clients now. The big clients have definitely lowered their budgets.

            The take away from the article and the coverage on the blogs should be that the anti-patent forces are very strong. The system is unraveling and there is plenty of evidence of it. Yet still denial from people like Lemley.

            1. 6.4.1.1.1.1

              ” The system is unraveling ”

              When are you going to retire bruh?

              1. 6.4.1.1.1.1.1

                I figure you, anon, MM, and me can buy a ranch and raise rabbits.

    5. 6.5

      We are on a learning curve where the top people at corporations are start[ing] to say that patents are nearly worthless.

      The effects of the AIA and Alice have a lag due to the slow movement of corporations and because so many have seen the patent system go down only to be corrected… All of this takes time to work through the system.

      Exactly correct. When the proponents of Mayo/Alice gormlessly contend that Mayo/Alice are not so bad, because there are still just as many new diagnostics and still just as much new software coming on the market now as there was pre-Mayo/Alice, then miss the R&D lag time factor. New products entering the market now were being developed in the pre-Mayo/Alice era. Meanwhile, it took awhile for the relevance of Mayo/Alice to come to the attention of those responsible for R&D investment decisions.

      In other words, the untoward consequences of Mayo/Alice on consumer welfare require ~10 years to unfold and become apparent. It is scarcely surprising that they are not being felt too badly yet. Give it another five years, however, and Mayo/Alice would really start to bite.

      Fortunately, the Congress evidently realizes that there is a problem on the horizon, and are moving to preempt it. The folks who present themselves as insouciently confident about Mayo/Alice will be mercifully spared the pain of learning the hard way how wrong they were.

      1. 6.5.1

        I agree Greg. It is the same with a lot of software/EE/mechanical inventions as well. There are a lot of big corporations that are saying, gee without patents what is the point of paying 1000 researchers?

  2. 5

    Totally off-topic, but this is “Bits & Bytes,” so who cares: a friend reminded me of this today, so I went back and re-read it. I am pleased at how well it holds up in view of subsequent developments. Even the parts on which I waffled at the time actually hold up really well (far better than the detractors’ putative counterpoints).

    1. 5.1

      far better than the detractors’ putative counterpoints)

      Your statement does NOT hold for the “detractor” at that link.

  3. 4

    link to ipo.org

    Qualcomm 2,300 -18.6%
    Microsoft 2,385 -9.1%

    Lots of the top tech companies have dramatically fewer patent grants in 2018 compared with 2017. This is in agreement with my experience that the top companies are beginning to cut their patent budgets and see patents as becoming almost junk paper.

    I expect this trend to continue and would bet that in the next recession that patent filings drop 40%.

    1. 4.1

      I know. I know. I am sure your Lemley can slice and dice the numbers to make them look good to the casual reader.

    2. 4.2

      Great news. They can use the money they save to pay their employees to write better instructions. Or maybe give them better benefits.

      Oh but wait! It will mean less work for the worst patent attorneys who ever lived. Boo hoo hoo!

      1. 4.2.1

        Great news

        Your cognitive dissonance is noted.

  4. 3

    From Prof. Cotter: “A simple set of recommendations follows, namely that courts generally should (1) grant injunctions when the probability of holdup is low, and (2) deny them when the probability of holdup is great and the expected harm from valuation error low to moderate.”

    Sorry, but this strikes me as a meaningless ivory tower kind of a statement.

    District judges, who have the most in-depth understanding of the facts of cases, should grant or deny injunctions based on the equities and the exercise of their discretion.

    If we are going to do away with the presumption of an entitlement to an injunction, as the Court did in eBay, then we should also do away with other bright line tests, such as the “rule” that a non-practicing entity is not entitled to an injunction. Anything else is just an improper thumb on the scales of justice.

    1. 3.1

      “based on the equities and the exercise of their discretion.”

      I agree, but I also think they should consult with the Muses and the Furies if possible before coming to any firm conclusion. In a perfect world anyway.

    2. 3.2

      “Derp derp you can’t diminish my patent rights derp! No derp fair derp!”

      Man, what a bunch of entitled whiners.

      1. 3.2.1

        Ah yes, the Malcolm blight of his mindless ad hominem “Derp Dance” – what you call “entitled whiners” are supposedly the clients that you serve. So yet again, we see your cognitive dissonance on display.

  5. 2

    Click on the Chaswal Link to reveal a piece written in the year 2010. Why publish it now?

    1. 2.1

      In addition to the paper pre-dating IPR proceedings, it appears the “IPR” in the title and keywords should be “IP.”

      1. 2.1.1

        I wonder what readers take to be the meaning of IPR. Perhaps it depends whether one is within the USA or elsewhere (such as India).

        For me, IPR means “Intellectual (or, formerly, Industrial) Property Right”. A right in intellectual property law that one can assert. Always has done, over my entire career span.

        But I am aware that for some young people it also suggests “inter-Partes Review”.

        How old the commentator S. Morse is, I can only guess.

        1. 2.1.1.1

          I think you’re right about the paper referring to Intellectual Property Rights. I was being provincial (not young) when I assumed somebody must be referring to USPTO IPRs. Moreover, those proceedings are considered by some to be a type of alternative dispute resolution.

          1. 2.1.1.1.1

            If you had ventured so far as to even click on the link and read the provided Abstract, you would not have made your lazy assumption.

            I was going to say that THAT is not being “provincial,” but a quick google gives the following definition that fits (emphasis added):

            of or concerning the regions outside the capital city of a country, especially when regarded as unsophisticated or narrow-minded.

            You have that unsophisticated and narrow-minded thing down pretty good.

            1. 2.1.1.1.1.1

              “IPR” according to Wikipedia, the free online encyclopedia that anyone can edit.[*]

              IPR may refer to:

              Law
              Intellectual property rights
              Inter partes review, US procedure for challenging patents

              [*] “Anyone with Internet access can write and make changes to Wikipedia articles, except in limited cases where editing is restricted to prevent disruption or vandalism. Users can contribute anonymously, under a pseudonym, or, if they choose to, with their real identity.”

              1. 2.1.1.1.1.1.1

                I love the fact that you are still bu tt-sore about the smack down I gave you with the wiki use for the Nobel prize reference (that I challenged you to come up with a reference — any reference — for your “countervailing” position, which you refused to do, then I provided a direct source citation that directly affirmed my use of the wiki.

                But hey, YOUR own lazy and ig n0r ant posts under a shifting historical pseudonym name (that gets the views of the chosen name wrong) is WAAAY better then the wiki, eh?

                1. Yes, Blue anon, you proved beyond a reasonable doubt that you can cut and paste from sources other than Wikipedia. i.e., “a direct source citation that directly affirmed my use of the wiki.”

                  A direct source citation!! Endzone dance!!!

                2. Keep on doubling down as the “black and white” show you to be an @$$ that just cannot handle being corrected (which is rather odd, given how much correcting needs to be done with your posts).

              2. 2.1.1.1.1.1.2

                As for the inane:

                IPR may refer to:…

                Sure — no one is saying that in some other context easily discerned by the non-lazy that THAT may be the case.

                But here – with the most minimal of effort and (actual) reading, NO ONE would make that mistake.

                And somehow, you are still the “awesome,” my friend.

                (you really should learn to stop when you are so far behind and not double down on the st u p1d)

                1. Exactly what?

                  You do know that I did not indicate content with form, eh, my shifting-historical-name friend.

                  But then again, you were probably just being lazy (or ig n0r ant — or both), and did not read (or understand) that.

                  As typical.

                2. Exactly. When you can’t say anything on content, turn to form. Such as bold type. You are not the slow cousin?

                3. Maybe YOU should focus on the content from others that is already there instead of YOU only sniping on form (as the black and white clearly indicates).

                  Who knows, we might see you actually contribute to a legal conversation. (not that I will be holding my breath for that event – )

                4. “Maybe YOU should focus on the content from others . . . . Who knows, we might see you actually contribute to a legal conversation.”

                  You, Blue anon? You say that? Mwhhaaa, ha, haaa, haaaa!! Wait, I can’t breathe !!! I can’t breathe !!!

                5. As a refresher, you espouse that the patentee in the Global IP Holdings case should not have filed a “re-issue” but instead should rely on the Doctrine of Equivalents. Further, you allege the fact that patentee’s statements “lead to” “evidence that the person of ordinary skill — not just a skillful potential infringer — would have recognized the interchangability of elements at the time of the infringement.’”

                  Is your alleged fact relevant to the Doctrine of Equivalents? If so, how?

                  Do not answer. Run away from the “content” and the “legal conversation.” Now reply with insults, only.

                6. Do not answer. Run away from the “content” and the “legal conversation.” Now reply with insults, only.

                7. And don’t neglect the race card. Your “black and white” thing. And don’t forget to mention this “Malcolm” character in every/every other post. Remember, insults. No content or “legal conversation.” Insults! Focus.

                8. It took you four days to come up with that dust-kicking…?

                  And you want to switch topics to the typo of re-issue versus reissue to boot?

                  And you want to try to insert “race” as to YOUR meme of black and white (which I merely used against you) — which had nothing to do with those adjectives in the race sense?

                  Wow, you are desperate.

          2. 2.1.1.1.2

            Nice to hear from you Samuel. As we are conversing pleasantly, I would like to take you up on your choice of word “provincial”. I suspect that is not quite right. You surely do not see yourself as an unsophisticated man of the countryside, and nor do I see you as that. More like the very opposite, a sophisticated resident of a city at the centre of an empire, no? Rather, I suspect that you are conceding that you see the patent world through the lens of a US patent attorney. Of course, that is inevitable, just as I cannot help but see it through the lens of a patent attorney in Europe. Talking to each other in a civilised way enriches us both, I fancy, helps us both to see more legal angles, and thereby benefits all of our respective clients.

            1. 2.1.1.1.2.1

              Wow, the over-politeness is cloying.

              It really is not about my shifting-historical-pseudonym-friend being “of the city” nor of him seeing the world through the lens of being a US attorney.

              Much better to be direct and use wild words to assault the unthinking.

        2. 2.1.1.2

          Well Max, (acknowledging that the acronym doesn’t match the words), I’ve come to believe that what “IPR” actually stands for is:

          No. Patent. For. You.

          1. 2.1.1.2.1

            Here in Europe, we have had IPR since 1978. The fee is peanuts, the cost trivial. If successful, the result is revocation of the patent, at a stroke, in up to 38 countries. We call it “opposition”.

            You would think it would be quite popular. In certain art fields it is, reasonably (about 5% of patents granted by the EPO).

            The stats suggest that about 1 in 3 patents survive unscathed, a further third in amended form and a third get revoked. Nobody says the EPO gets it systemically wrong.

            How to explain the difference in success rate, between USPTO and EPO. Why should the USPTO cultivate a reputation as a body with a “No patent for you” mission. Perhaps the USPTO has been granting a load of bad patents and, given the chance, is busy correcting its mistakes?

            1. 2.1.1.2.1.1

              That’s the Efficient Infringer mantra there, MaxDrei.

              1. 2.1.1.2.1.1.1

                If I understand it right, the “efficient infringer” hypothesis is that it is more efficient to infringe than to design around or seek a licence. As far as I know, it is unknown in Europe.

                That might be because jurisdictions in Europe have developed a raft of measures to further the interests of justice in a civil dispute between a patent owner and a party which might or might not be within the ambit of a claim that might or might not be invalid.

                1. As far as I know, it is unknown in Europe.

                  Your qualifier is rather big distinction from reality.

                2. “Efficient infringement” is universal. It’s also known as “evaluating facts and making a business decision based on those facts.”

            2. 2.1.1.2.1.2

              Why should the USPTO cultivate a reputation as a body with a “No patent for you” mission.

              A few thoughts:

              1) I think that it is worth remembering that the PTAB does not cancel patents. It cancels claims. Once the PTO grants a patent, the PTO never cancels the patent without the patentee’s consent. The most that the PTO can do without the patentee’s consent is to cancel some claims.

              2) If the PTAB has a acquired a reputation of “no patent for you,” that has less to do with anything that the PTAB does and much more to do with a steady drumbeat of self-interested misinformation. The plain, prosaic fact is that the PTAB does not cancel claims with any greater frequency than do the U.S. district courts. Nor are the PTAB’s cancellations reversed on appeal more frequently than the U.S. district courts’. In fact, the EPO oppositions board, the PTAB, and the U.S. district courts all cancel challenged claims at about the same rate. Anything that you hear to the contrary is just (as they say) “fake news.”

              1. 2.1.1.2.1.2.1

                Both of these statements by Greg are false (leastwise in an effective manner, as a cancelation of all claims IS effectively a cancelation of the patent – pedantic semantic ISMs…)

                Not sure why Greg even feels the “need” to “set the record straight.”

                1. Re: “Not sure why Greg even feels the “need” to “set the record straight.” ”
                  You must be kidding, given the massive amount of miss-information regularly asserted in so many blog comments, and routine “shoot the messenger” attacks instead of factual rebuttals.

                2. His “facts” do not take into context the differences in the mechanism and mistates actuality.

                  So, no, I am not kidding.

                3. … the massive amount of miss-information regularly asserted…

                  Is “miss-information” a set of factoids about unmarried young women? :-)

                  For example, my daughter’s favorite color is turquoise. Is that “miss-information”? I suppose that if one reported inaccurate facts about an unmarried young woman, that would be mis-miss-information.

              2. 2.1.1.2.1.2.2

                “…about the same rate….”

                Hey, Greg, that’s a comfort. Thanks for that assessment (from pharma in house, I take it).

                Of course, it does help, that the “rules of the game” in pharma are pretty much settled and pretty much harmonised, at least in comparison with the CII space.

                1. The numbers that I linked are not pharma specific. Those numbers are based on all oppositions filed in the EPO, all IPR petitions filed in the USPTO, and all affirmative defenses of invalidity asserted in the U.S. district courts.

                  The rate of invalidity for pharma claims is lower in both the PTAB and U.S. district courts than the overall invalidity average. I have no data to hand regarding how pharma claims fare compared to all claims in Europe, although my Bayesian prior would be that pharma does better in EP just as in the US.

            3. 2.1.1.2.1.3

              Max, we also have an opposition system here under the AIA – PGR. The main reason it is rarely used [far less than even European oppositions], is that it is also only usable for a few months after the patent grant, which is long before most patents are sued on, and few oppositions or IPRs are filed against patents that have not been sued on.

              1. 2.1.1.2.1.3.1

                That may be so, Paul, but opposition at the EPO can be filed only in the 9 months immediately after grant. Front-loaded. No extension possible.

                Nevertheless, it is mostly used long before there is any serious prospect of being sued for infringement. You can think of it as another manifestation of “clearing the way” or even of “getting your retaliation in first”. I suspect some Opponents use it to put pressure on the owner of a US patent, squeeze them into making errors. After all, with 38 countries in play, and 600 million consumers, the issued EPO patent is worth defending, no?

  6. 1

    The Molteni piece left me in mind of this. It was as if the author was concentrating so intensely on the work of showing off her command of all the latest cant and jargon (“trolls,” “fiefdoms,” “reform,” etc.) that she forgot the point that she might have had in mind to convey.

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