Archive for the ‘Uncategorized’ Category

The Death of the US Patent System – an Obituary and Proposed Resurrection

01 Aug

First we had the world’s best patent system and American ingenuity was the envy of the world.

Next, we let the best Congress money can buy steal patent fees to cripple the PTO, and made the patent laws so complex they became a rich man’s sport designed to protect only big business from new startups and innovators.

However, some inventors still used the patent system to advantage so the best Congress money can buy, to better protect big business and stifle small inventors, passed the Anti-Inventor-Act of 2011 (misnamed the AIA or America Invents Act) designed to prevent and kill patents, which should more properly be called the America Stops Inventing Act or ASIA since that is who it benefits. [see the 1st and 4th post at where "I warned about this"]

Since patent assertion was now made a rich man’s sport, small and medium sized inventors turned to Patent Assertion Entities that have the financial clout to pursue patent litigation by aggregating enough patents to make it worthwhile. Big companies (especially importers that do no inventing and want to sell on price alone) that want to be able to ignore patents and just steal inventions like people steal copyrighted material on the Internet – have been targeted by these PAEs and don’t like it. Some of the PAEs are, in fact, bullies that intimidate with suits designed to extract settlements. It takes a bully to fight a bully sometimes. Of course, Amazon or eBay or Walmart don’t think of themselves as “bullies”, but any inventor who has tried to stop them knows otherwise.

Not surprising! When Congress screws up the patent system, which Congress really does not understand anyway, this sort of mess is inevitable. Now, the best Congress money can buy, is being asked by the patent infringers to stop all the “low quality claims”, “frivolous litigation”, “abusive litigation”, “questionable business method patents” or whatever other terminology marginalizes real inventors and in essence just means “we are stealing your inventions and we don’t want to pay”. The White House is duped into following this, as when it comes to Congress and the White House “money sails and justice fails”. After all, it takes money to buy negative TV campaign ads to get re-elected and that is the real priority. So we see the Asian goods emporiums like Amazon, Dell, eBay, Google, Kroger, Eddie Bauer, J. Crew, Macy’s, Safeway, Wal-Mart. Note there is not an inventive company among them! They are patent thieves who get new ideas by just copying what real inventors create. Again, they don’t do research except to see what sells and what ads work best, so they need to steal patented inventions and they don’t want to pay those who do invent, as paying inventors reduces infringer’s profits.

What is the solution to this mess? We had it back in 1793-1836. A patent registration system that quickly issues patents without the examination. However, as was realized by 1836 someone needs to guard against issuance of patents on “inventions” that do not warrant a patent. That is why the PTO was established, to do it impartially. If we had only added a patent office that conducts examination, determines validity/invalidity, and determines infringement/non-infringement so that we had some tribunal that knew what it’s looking at and what it’s doing. The average patent examiner could do the examination in a day and determine validity or invalidity in a day and the infringement analysis in probably an hour.  We could have a fair, objective and reliable answer in less than a week and everyone could move on with certainty and small inventors and big inventors alike could be confident they would get fair treatment.

Of course, we would need to guard against politicians corrupting the PTO. It is very disappointing when IBM’s patent strategist is appointed as the Director of the PTO and then immediately sets about lobbying for and then implementing the Anti-Inventor Act of 2011. It makes small inventors wonder if there is any way to keep big business from stacking the deck against them. For now, the answering is a clear NO, there is NO such way.


Former GC of NMPA appointed GC of US Copyright Office

30 Jul

The music publishing industry is now even more strongly represented at the US Copyright Office, as the former NMPA (National Music Publishers’ Association) General Counsel [and former HFA GC] is now the Assoc. Registrar and General Counsel of the Copyright Office.


Congress diverts patent fees despite AIA promise not to divert.

30 Jul

Hate to say “We told you so.” Congress is stealing the higher PTO fee revenues for other programs and the PTO is putting its “improvement” programs on hold due to the resultant lack of funding. Same old same old. Congressional lies and corruption.

In our opposition to the AIA we predicted Congress would see the USPTO as a revenue stream to be spent and would divert fees despite the promises of Senator Patrick “IBM” Leahy and former PTO Director David “IBM” Kappos to the contrary. You remember, IBM Kappos assuring the AIA was needed so the PTO could keep its revenues and would be properly funded and could cut down its backlog and that Section 22 of the AIA made sure that would occur. I predicted the PTO revenue fund would be raided and that the promises to the contrary were lies. Surprise, they lied and just as we predicted, the increased fees are being diverted. The PTO has announced that it will stop hiring, stop the branch offices and the backlog will not decrease, but that the higher fees will remain in place.

Unfortunately, our predictions have been proven accurate. Congress is using “Sequestration” to steal money from those paying increased patent fees who agreed to support increased fees in return for Congressional promises to use the money exclusively for the PTO.

No surprise really that Congress welches on a promise to patent applicants or that Congress steals $148,000,000 of PTO revenues for other programs, just sad that no one listened when we were saying the loophole that might allow that needed to be closed so Congress could not welch on its “promise.” After all, this is the best Congress money can buy. And, if there is not enough money to buy them, they steal some.

Here is what I said back in Sept. 2011 about Sec. 22 of the AIA:

“Sec. 22. Patent and Trademark Office funding.  Establishes the USPTO Public Enterprise Fund (replaces the Appropriation Account) as a revolving fund available to the Director without fiscal year limitation. Requires all fees paid to the Director and all appropriations for defraying the costs of USPTO activities to be credited to the Fund. Requires fees charged or established by the Director to be collected by the Director and available to carry out USPTO activities until expended. Directs fees from specified sources to be deposited in the Fund, recorded as offsetting receipts, and available to cover appropriate expenses. [This is the fund that would be set up as a means to capture all PTO revenue and expenses and make a ready fund available for easy diversion by congressional money grabbers eager to fund earmarks in totally unrelated areas by making inventors pay for them. This is an idiotic provision that will obviously run up patent fees and hurt American inventors of all sizes. So, we have to give another point to the idiots. This actually hurts everone, so Bigs & Foreigners +38, Small Guys-22, Idiots -16] Requires the Director to submit an annual report to Congress including: (1) the USPTO’s operating plan, expenses, and staff levels; (2) long term modernization plans and related progress updates; and (3) the results of an annual independent audit of the USPTO’s financial statements required by this section. Requires the Director to annually: (1) notify Congress of its spending plan, and (2) submit to the President a business-type budget as prescribed by regulation for the federal budget. [This annual report is obviously designed to make the PTO budget subject to annual appropriation so that PTO fees can be diverted to earmarks. That hurts everyone. Bigs & Foreigners+37, Small Guys-23, Idiots-17]”

See my full review of the AIA at the time it was passed, here:

This is one time when it hurts to be proven right. It is times like this when we see that the AIA really was what we called it from the start, the “ANTI-Inventor Act” rather than the “America Invents Act.”


SAP v Versata – Major PTAB decision adverse to business method patent claims

03 Jul

In it’s first major inter partes reexam decision on business method patent claims, the PTAB has a blockbuster. Remember the name SAP v Versata, as it will be perhaps the hottest topic this year in patent law unless and until the Federal Circuit and/or Suprem Court reviews and revises this monumental decision. It will change the way patent applications are drafted and prosecuted. A patent prosecution attorney who is not up to speed on this decision has a serious malpractice risk. The PTAB announced its presence by determining that the appropriate claim construction standard for post-grant review is the Broadest Reasonable Interpretation (BRI) as opposed to the standard of claim construction used in US District Court proceedings (Phillips v. AWH) and then held all of Versata’s claims unpatentable as directed to unpatentable subject matter. It’s a major turnaround of the case and victory for SAP, but sure to be appealed to the Federal Circuit. The PTAB has sure made its new presence known in a big way with this decision effectively gutting a $345 million infringement finding by declaring the claims invalid as too abstract.

This was one of 3 proceedings, as there are also pending a Federal Circuit case and an USDC-VA-E case.

Versata won a significant decision at the USDC-VA-ED of $345 million for infringement, and the Federal Circuit had affirmed on May 1, 2013. See nice report in easy to read language at

Bruce E Burdick, The Burdick Law Firm, Alton, IL


New TBMP issued

28 Jun

On Thursday, June 27, 2013, the TTAB issued the June 2013 update of the TBMP. The update is posted on the USPTO website. It incorporates current Board practice and precedential decisions that issued between March 3, 2012 and March 1, 2013, as well as the changes, where appropriate, to the USPTO’s Code of Professional Conduct which became effective May 3, 2013.

TTAB Manual June 27, 2013


Pirate Bay Founder Goes to Jail

23 Jun

Justice moves slowly but surely. After a long run as a major copyright infringement enabler, Gottfrid Svartholm Warg was extradited to Sweden last year from Cambodia to begin a one-year jail sentence after being convicted in 2009 of internet piracy


7 years in Federal Prison for eBay seller

10 Apr

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.


Kirtsaeng v Wiley. SCOTUS (6-3) holds the “first sale” doctrine applies to copies of a copyrighted work lawfully made abroad.

22 Mar

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.

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


Patent Awards Reach Billion Dollar Mark

19 Mar

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.


Obama makes anti-patent troll remarks

21 Feb

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.