From our “eBay is for crooks” dept.:
Confirming my oft-stated caution about relying on the legitimacy of eBay listings, an Atlanta court has sent an eBay seller to Federal pen for 7 years for selling stolen merchandise.
http://www.bizjournals.com/atlanta/news/2013/04/08/hill-gets-seven-years-for-ebay-fraud.html
In a major copyright decision, Wiley v Kirtsaeng, the Supreme Court has basically emasculated 17 USC 602 (a) which prohibits importation of foreign made copies of a work protected by US Copyright by holding tha the first sale doctrine of 17 USC 109(a)(3) applies and trumps 603(a) and reversing lower court decisions finding unauthorized parallel imports infringing.
http://www.supremecourt.gov/opinions/12pdf/11-697_d1o2.pdf
When petitioner Kirtsaeng moved from Thailand to the United States to study mathematics, he asked friends and family to buy foreign edition English-language textbooks in Thai book shops, where they sold at low prices, and to mail them to him in the United States. He then sold the books, reimbursed his family and friends, and kept the profit. Wiley filed suit, claiming that Kirtsaeng’s unauthorized importation and resale of its books was an infringement of Wiley’s §106(3). Held (6-3) The “first sale” doctrine applies to copies of a copyrighted work lawfully made abroad, so Kirtsaeng did not infringe by buying Wiley textbooks at low prices in Thailand, importing them into the US, and then reselling them in the US at higher prices substantially undercutting the US prices of Wiley. Libraries and universities lobbied hard for this result to save cost on textbooks. The entertainment industry and US artists and entertainers will lose millions of dollars due to this decision and foreign buyers will lose millions due to inability of US copyright owners to discriminate geographically on price by charging less in poor countires. China will profit as this makes US copyrighted products less competitive to Chinese counterfeits and look-alikes.
The Court falsely claims 17 USC 602(a)(1) retains significance because unsold foreign made product, officially licensed for only foreign distribution, would still infringe if shipped to the US. Of course even the most amateur foreign manufacturer will simply have the buyer take possession overseas so there is a sale prior to importing to the US. So 603(a)(1) is effectively destroyed and rendered toothless and superfluous. The result will be a double edged sword which hurts copyright owners but helps consumers, likely forcing US copyright owners to raise overseas prices (which raises foreign margins but makes US products less competitive) or lower US prices (to eliminate the incentive for such “parallel imports”). In fact, the majority concedes this:
“Wiley and the dissent claim that a nongeographical interpretation will make it difficult, perhaps impossible, for publishers (and other copyright holders) to divide foreign and domestic markets. We concede that is so.”
The dissent, and the lower courts, seem to me to have the better of the argument both on legal and policy grounds.
Bruce Burdick, Managing Attorney
The Burdick Law Firm, Alton IL & St. Louis, MO
2012 saw 3 patent awards reach a new milestone, exceeding $1,000,000,000.
The largest award last year, for $1.17 billion, was made in December by a jury in Pittsburgh federal court to Carnegie Mellon University, which sued claiming Marvell Technology Group Ltd. (MRVL) infringed integrated-circuit patents. Marvell has denied infringing despite the award and says it will appeal. Will it escape this huge verdict? Will it stand as the biggest patent award ever? Or, will it be reduced.
In the second largest award, Apple won in August when a jury in US District Court in San Jose, California, awarded $1.05 billion for alleged infringement of smartphone technology design patents by Samsung Electronics Co. of South Korea. Samsung also denied infringement and said it would appeal.
And in the third largest award, Monsanto Co. (MON) won a $1 billion verdict in August from a jury in US District Court for the Eastern District of Missouri here in St. Louis in a suit against DuPont Co. (DD) over a patent for genetically modified soybeans. DuPont motions to set aside or reduce the verdict are pending.
So, unless all 3 Defendants prevail, 2013 may see the largest damages payments for patent infringement in US history.
http://www.reuters.com/article/2013/02/15/us-obama-patent-idUSBRE91E03320130215
President Obama seems to be catering to big business again, duped into attacking patent aggregators as impediments to progress. There is an underappreciated flip side, and that is that the patent reforms so far enacted at the behest of Obama’s team actually aggravate the problem by making patent enforcement even more expensive so that such aggregators are effectively the only option for many small businesses seeking to obtain redress for blatant infringement by big business. The software industry certainly has a legitimate beef due to the rapid pace of new inventions and the inability of the USPTO to keep pace, which leads to long pendencies and issuance of highly questionable patents that often serve more to slow down progress and reward marginal advances. We have for more than two decades here been advocating that the US move to a patent registration system with an opposition period and with PTO adjudication of validity and infringement issues so that this situation can be eliminated, patents issue rapidly, oppositions come quickly and disputes are decided quickly and more reliably by the most qualified experts (patent examiners). Once the validity and infringement issues are resolved, the remainder of the patent infringement issues generally follow and settlement comes quickly. If the patent is held invalid or not infringed, the accused infringer goes on about its business without further interruption or delay. If the patent is held valid and infringed, the accused infringer either stops or negotiates a license to or purchase of the patent on the one hand or sets about to design around the patent to create a non-infringing alternative. Such design around activities unquestionably promote the progress of the useful arts, as those designing around patents naturally want to create something not just different, but something better so that they can turn the tables, advertize advantages of their new design, and get the patent on that new workaround that stops the patentee from making, using or selling the improved workaround.
We encourage further patent reform, but reform that builds on the reforms by recognizing the need for speed in patent issuance and the need for speed in patent conflict resolution so that certainty can be brought more quickly in order to allow businesses and individuals to invest with more confidence in American ingenuity and to devote resources currently spent litigating patents on R&D instead. I like us patent lawyers getting rich, but I would prefer inventors getting rich instead.
David “IBM” Kappos was put in as Director of the PTO through the efforts of Sen. Patrick “IBM” Leahy, admittedly for the purpose of assisting IBM and other big business interests and special interests in pushing the earmark riddled Anti-Inventor Act of 2011 through Congress. Having IBM Kappos running the PTO made more certain the Big Business provisions of the AIA would be implemented, such as the Fast Tract For Fat Cats program. Now that First To File, increased fees, multiple expensive challenges, and the like are nearly implemented, IBM has done that dirty deed to individual inventors and is now apparently leaving before the fallout begins.
http://www.ipwatchdog.com/
IBM’s legacy as PTO Director is a bunch of big business provisions that seem destined to kill small inventorship in America. Case in point, IBM still has not implemented the watered-down, highly limited Micro-Entity fees that were used to “sell” the AIA, and it seems clear whether they will not be implemented before he leaves. Instead, IBM has stalled them for over a year now. Meanwhile IBM rushed through the Fast Track For Fat Cats, a 15% fee increase, a new Detroit branch office (coincidentally in the district of a swing vote on the bill), new challenge procedures to better attack small inventor patents, and various provisions to help special Wall Street bankers and a specific law firm in Boston.
Sad thing is, the next Director may not be much better for small inventors than IBM Kappos. The anti-patent lobby and the big business patent lobby will he hard at work trying to get another patent-killing big business Director and trying to push for IBM to be put on the Fed. Circuit. At least putting a patent attorney, even a big business lobbyist, would seem to be better for small inventors than another non-paten
The PTO has chosen the Director’s Forum, a moderated PR blog by David “IBM” Kappos to state that in PGR (post grant review) the PTAB (Patent Trial and Appeal Board) will review subject matter patentability, a court-defined (See the Bilski and Prometheus cases) prerequisite for issuance of a valid patent as a “condition for patentability” along with other statutorily defined conditions (see 35 USC 102, 103, 112). Presumably that will only occur when the petitioner for PGR raises the issue. The legal justification given by Kappos was somewhat shaky, although we expect correct, grounds. See http://www.uspto.gov/blog/director/entry/ptab_and_patentability_challenges . This was expressly issued to quell the commentators on Patently-O (see http://www.patentlyo.com/patent/2012/08/can-a-third-party-challenge-section-101-subject-matter-eligibility-in-the-usptos-new-post-grant-review-procedure.html) that suggested the PTO had no authority to review subject matter patentability in PGR under the AIA (America Invents Act, or as we more fittingly call it, the “Anti Inventor Act of 2011″).
We agree with IBM Kappos on this one, as it seems clear to us that the Supreme Court has in analyzing subject matter patentability under 35 USC 101 judicially added another condition of patentability, in effect another paragraph to 35 USC 102, that reads “h) or, the invention is an abstract idea, a law of nature, a mathematical formula, an intangible business method devoid of structure, or some other subject matter that has been determined by the Supreme Court to not be proper subject matter for a patent.”
What is Google Patents up to??
I found an interesting anomaly with Google Patents while working with 6,425,764 for a prior post . Google Patents lists (see http://goo.gl/Tjnbd) as “citations” on the patent “Overview”, 19 patent references, among them being two Hodges & Rothbaum patents that were cited under 35 USC 102e (effective as of their filing date to show invention prior to the applicant’s filing date which is presumed to be the date of invention unless shown to be earlier) and then removed following the applicant’s submission of a Rule 131 Affidavit proving the applicant’s date of invention was before those patents were filed . I know this from the file history. This is confirmed by looking at the front page of the patent itself (see http://goo.gl/TpQkH) only lists 5 patents as “cited references” That is, Google lists 14 non-citations as citations including two that were specifically held NOT to be prior art during prosecution of the patent – very wrong and misleading of Google Patents. Wonder why they do that!
New tool available from Google Patents that not only helps locate prior art but also helps locate infringements.
Google has added to each patent overview in Google Patents (see for example 6,425,764 at http://goo.gl/f31nh) , a blue button labeled “Prior Art Finder”, which appears to be a search tool that searches Google Scholar, Google Patents, Google Web, Google Books and Google People databases to try to find references that use the words of the patent claims in the patent. By default this gives the top 10 references from all those sources. Very cool, right? It arguably does for free in seconds what an invalidity searcher would charge thousands of dollars to do in a few weeks. The Geeks who have noticed it so far have touted it as a new way to fight patent trolls by cheaply locating patent killing prior art. And, it will surely do that in some situations. Patent defense attorneys will certainly welcome this new tool, as they and their engineers can pour over this stuff and quickly locate significant prior art to use in invalidity arguments and/or invalidity opinions. Even though I do more plaintiff work, I also welcome it as it allows me to play devil’s advocate and locate those things I might expect my opponent to assert in arguments for invalidity. I also welcome it on an objective level as being an objective “truth finder”. This tool is arguably neutral as to whether what it finds in invalidating art, as it just apparently searches for things in a given time period that seem to be similar based on the words of the patent claims in question.
As a plaintiff’s attorney in infringement cases, I notice a neat and perhaps unintended capability of this “Prior Art Finder”. As the saying goes, “what infringes if later, anticipates if earlier”. The Prior Art Finder has user adjustable search fields for the beginning and ending date of the search it makes. Again referring to 6,425,764 (Lamson VRIT patent) when we click on the Prior Art Finder button we get the following screen http://goo.gl/eO4fO in which you will see on the left the heading “Custom Date Range” which can be adjusted. For example with 6,425,764 I know the priority date is the provisional filing date of 06/09/1997 rather than the non-provisional date 12/12/1997 listed. Apparently the Google programmers realized this sort of situation and made the date range fully adjustable. However, here’s the really neat twist for patent enforcers – if you make the starting date the issue date of the patent and leave the ending date blank or today, you get an infringement search since now the “Prior Art Finder” becomes a subsequent art finder. So in my example, doing that produces http://goo.gl/rn4qt a list of possible infringements. Note it can also be customized by clicking on one of the boxes at the top of the page, say Patents, to just list patents or to Scholar to just list scholarly articles, etc. As the attorney for 6,425,764, that is a great tool I will certainly use to advantage.
L2BL (lesson to be learned) What anticipates if earlier infringes if later.
From our “Muddled Thinking?” Department comes this recent post on guest post on Patently-O, which we will repeat and then dissect with commentary.
Dr. Sheppard is an Assistant Professor of Law at the University of Nebraska Lincoln College of Law. Prior to joining the University of Nebraska, Dr. Sheppard was Chief Counsel on Patents and Trademarks and Courts and Competition policy for the United States House of Representatives Commmittee on the Judiciary. – Jason
By A. Christal Sheppard
Just over a week ago, Dennis Crouch stated on Patently-O that “[i]t is simply ridiculous that after 40 years of debate, we still do not have an answer to the simple question of whether (or when) software is patentable.” The confusion on what is and what is not patentable is not a new debate but has come to a head in the last few years with the Supreme Court taking on certiorari multiple cases on the matter of patentable subject matter and the Court of Appeals for the Federal Circuit, arguably, disregarding Supreme Court precedent.
We all understand the problem[1], but what is the solution? The question of what should be patentable is fundamentally a public policy decision. This public policy decision is one that the framers of the Constitution contemplated and specifically tasked one specific entity with balancing the equities. The Constitution states “The Congress shall have Power…[t]o promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” Congress not the Courts was tasked to determine what should be eligible for the “embarrassment of a patent.” However, the Courts, led by the Court of Appeals for the Federal Circuit, not the Congress, have driven the expansion of Patentable Subject Matter to “anything under the sun made by man.”
Case law dictates that the intent of Congress was 1) that patentable subject matter is a requirement separate from that of the other requirements of the patent laws and 2) that Congress intended for anything under the sun made by man to be potentially patentable with the exception of laws of nature, natural phenomena and abstract ideas. Thus, the Courts have, by a stepwise expansion of patentable subject matter to software and business methods, created a situation whereby the high tech industry has been legally encouraged to tie itself into a Gordian knot. A knot that, without overruling prior precedent, or creative interpretation of precedent, the Courts cannot resolve.
This blog post is to propose that the United States Congress immediately take an active role in the creation of the parameters for patentable subject matter.[2] Congress is the only entity that has the ability and the resources to resolve this conflict in a reasonable and responsible manner. It is also the entity charged by the Constitution with doing so.
I’m not unaware that using the terms “reasonable” and “responsible” in the same sentence with the United States Congress during an election year will globally elicit sound effects from chortles to foul language questioning my mental facilities. However, below are a few points that are worth considering regarding who is best positioned to advance a solution to what most of the intellectual property community would consider a mess.
There are a multitude of very good reasons why calling on Congress is not a perfect solution. But with Myriad and the patentability of gene sequences and genetic testing on the horizon, does the intellectual property community want the Courts or Congress to decide this public policy issue? Businesses need certainty and only Congress can now provide that stabilizing influence without destabilizing entire industries. Whether Congress will or not, ought not prevent the assertion that they should.
Food for thought…
[1] The Supreme Court decisions have done nothing to clarify what is and what is not patentable. At this juncture, not only is the Federal Circuit in rebellion against the Supreme Court; an influential judge from another circuit dismissed an entire high-tech case with prejudice and promptly penned an article entitled “Why There Are Too Many Patents in America”; the International Trade Commission is under siege from an explosion of technology cases and recently sought comment from the public as to whether certain patents should have limited remedies; the Administration (United States Patent and Trademark Office and the Department of Justice) have differing opinions regarding the patentability of genes and genetic tests; thermonuclear patent warfare between high tech companies is overloading our courts; market based solutions are spawning Fortune 500 companies as the new patent troll; and a patent valuation bubble reminiscent of the real estate market before the crash is driven ever forward as companies amass patents as a shield of paper armor not as an instrument of innovation.
[2] One thing is certain, there will not be unanimous agreement on what should be patentable subject matter; however, someone should decide and should decide now. Moreover, that decision should not negatively affect those who have relied upon the law as the Court defined and expanded it over the last 40 years only to now sound the horns of retreat.
[3] I am not here advocating for any particular resolution, I am merely pointing out a fact.
[4] Prior user rights for business method patents in the 1999 American Inventors Protection Act; Human organisms, tax patents and creating a business method patent post-grant opposition procedure in the 2011 America Invents Act. The Congress did not address the latter three as patentable subject matter issues, but in carving them out the Congress is showing that there are additional areas that they have determined should not be entitled to patents where the Courts have determined otherwise.
[5] Of course patents are subject to case-by-case challenges but the Supreme Court seems to be signaling that whole categories of patents, while still technically eligible, would not meet the Courts inventiveness test as a practical matter.
[6] Congress can also provide some finality on the issue of whether patentable subject matter is a separate requirement from 102, 103 and 112.
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COMMENTARY
“The confusion over what is patentable and what is not.” is an artificial confusion, created as a straw man by those seeking to alter 200 years of constitutional law by making “discoveries” mean not “discoveries” but “discoveries in areas other than those where rewarding inventors is inconvenient to the rich and powerful people paying lobbyists to confuse us into denying rewards to inventors.”
“We all understand the problem”? First she says “we do not have an answer” and then “we all understand”. Typical Washington doublespeak.
She is wrong to say that Congress, not the Courts, is tasked to interpret the Constitution and laws. For 200 years since Marbury v Madison, the Supreme Court has been the ultimate interpreter of what the Constitution and laws mean. Congress is the elected legislative body which passes laws based on public policy considerations, or more truthfully based on financial election campaign contribution considerations. The Courts are there to keep Government, including the best Congress money can buy, in check by preventing public policy (i.e. campaign contribution) considerations from over-riding the Constitution and enacting fat cat legislation. The Courts are there to try to protect the people from oppression by their Government.
“Case law dictates that the intent of Congress was” – now there is an interesting about face, “case law” means Court decision. First she says Congress decides then relies of Court decisions to try to make her point. There is indeed confusion there, and it is in her muddled logic. With changing positions so often, she must be a Romney supporter like Jenna Jameson.
“Currently we have a Court created expansion of the definition of what is eligible for patent.” BS, we have a Congressional and Court created contraction of what is eligible. The Constitution says patents may be awarded for, without any limitation whatsoever, “discoveries”, whereas the Court has contracted that to exclude abstract ideas, laws of nature, and natural phenomena, which are discovered as having been created by God not man. Some of the most important discoveries are law of nature such as the Theory of Relatively, or natural phenomena such as The Higgs Boson (“the God particle”)..
“section 103 – nonobviousness – was added to the statute by Congress in 1952 to inject a stabilizing effect that the Courts and general practice had not been able to accomplish over decades.” That’s an interesting lie. She rewrites history to her liking. Nonobviousness was definded by the Supreme Court in Graham v John Deere and Giles Rich wrote it into the 1952 Patent Act to merely adopt the Graham v. Deere standard. Congress did not stabilize the law by injecting the “non-obviousness” standard, the Supreme Court did. Credibility goes out the window when you are caught rewriting history to try to push your political agenda.
“Only Congress can be prospective in its resolution.” More altered universe. The Courts are routinely prospective in their holdings. The non-obviousness standard in Graham v Deere, which she just miscredited to Congress, is one example. The bright-line machine or transformation test (that the CAFC attempted to impose and the Supreme Court muddled up by instead using a vague and nebulous commercial viability standard) was clearly prospective in intent. The purpose of having CAFC jurisdiction over patent cases was to encourage this prospective unification of court decisions to lend certainty to patent law. It is Congress and the Supreme Court that are mucking it up with uncertainty, as we never know what monied lobbyists will get Congress to do next, and we never know for sure what the non-patent lawyers of the Supreme Court will do to muddle patent law.
“Should the law of patentability need to expand for unknown advancements, Congress can do that in a way that is much less disingenuous than the Courts. The framers of the Constitution contemplated this in their directive to Congress.” Wishful thinking does not substitute for fact. Since when did Congress become anything other than disingenuous? Congress’s 9% approval rating shows how Americans feel about that. The framers set the Courts, not Congress, as the final authority on the Constitution and all the wishful thinking of how it would be nice if Congress was less disingenuous than the Supreme Court does not change the fact that it is the best Congress money can buy and no amount of money seems to be able to buy a Supreme Court justice, as Justice Roberts recently showed in his Obamacare decision. Congress is not working to do anything that is less disingenuous than the Courts, and that is just the way it is and why we have the Courts and not Congress as the final authority on the Constitution. What a crock that “Congress is less disingenuous” statement is!
“does the intellectual property community want the Courts or Congress to decide this public policy issue?” That presupposes the conclusion that Congress should handle Constitutional patent law issues. Easy for me. I think it’s a matter of constitutional law, not public policy, and I choose the Courts. Look at the AIA if you think Congress is competent to reform patent law. Congress is competent to do what big campaign contributors tell it to do unless the public outrage gets so severe that big campaign contributors can’t overcome the outrage.
” I am not here advocating for any particular resolution, I am merely pointing out a fact.” LOL. Get out the water hose your pants are on fire.
http://www.article-3.com/shield-against-patent-trolls-98209
An article recently published extolling the virtues of a proposed Saving High-Tech Innovators from Egregious Legal Disputes (SHIELD) Act. The Act seeks to protect high tech businesses against suits by patent enforcement companies (patent trolls or PECs) by adopting a one-sided “loser pays the costs of the winner, but only if loser is the patent owner” policy. The author of the article says “As they stand today, our current patent laws do little-to-nothing to protect businesses from egregious lawsuits. A new bill proposed this week might actually make a dent in the saga of tech patent wars.”
So, the party asserting a patent would pay costs of the alleged infringer if the infringer proves the patent invalid, but the infringer does not pay costs of the patent owner if the invalidity defense is frivolous.
So, the proposal would make a patent infringement trial inherently unfair. It needs an amendment to make it simply “loser pays”.
Bruce Burdick
The Burdick Law Firm, Alton, IL