RSS
 

Archive for the ‘patent reform’ Category

The PGR torpedo in patent reform needs to be disarmed.

11 Jul

Big Software won’t like this article.  http://ipwatchdog.com/2011/07/10/torpedoing-patent-rights/id=18022/ calling PGR (post grant review) a torpedo that needs to be disarmed (removed from patent reform legislation).

It exposes what Big Software is up to in this PGR portion of their effort to legislatively extract themselves from the huge patent liability they face as a result of their choice to suppress and conceal their software inventions rather than file patents.  They are getting hit with huge patent judgments now that others are getting patents after having independently invented the concealed and suppressed inventions. An anti-Google contingent of Big Software players (Apple, RIM, EMC, Ericsson, Sony, and Microsoft) outbid Google and bought Nortel’s patent portfolio for $4.5 billion to gain a portfolio of patents.  That shows the kind of money involved in Big Software’s attempt to regain a patent position and prevent others from getting competing patents.  Prior user rights provisions in this abominable patent reform bill is Big Software’s primary ploy to escape liability.  But, whining about “bad patents” (other people’s patents on items Big Software invented but concealed) is another Big Software ploy to try to justify endless challenges under three different procedures, including PGR.  Thanks to Judge Michel for exposing their game.

Why should we kill nearly all patents, destroy small inventors and cripple small business to give Big Software a bailout from their bad legal decision to conceal their inventions? It was their deliberate choice, and besides small businesses keep their jobs here while Big Software sends their jobs overseas.

I strongly agree that this PGR torpedo needs to be disarmed, in fact this whole patent reform bill except for the provision ending fee diversion, before it sinks America’s creative small businesses in their infancy and with them the American economy.

 

The benefits [NOT] of 2011 Patent Reform

08 Jul

The President needs some “accomplishments” right now to deflect the bad employment news.

So for talking points, the President and politicians will delete the bracketed material below to get their talking points:
1. This bill will create good jobs [in foreign countries with low cost labor by helping Big Business steal inventions from American inventors].
2. This bill will spur the economy [of China, India and all our foreign competitors].
3. This bill will reduce the backlog of [currently frozen hiring for unfilled job openings for Examiners who examine new] unexamined applications [but will generate an even bigger backlog of new applications that will increase pendency dramatically].
4. This bill will end fee diversion [temporarily by putting PTO revenue money in a pool which can be diverted later by the Appropriations committee to other programs such as “earmarks” for members of the Appropriations committee].
5. This bill will make the PTO more [subservient to Big Business rather than] independent [enough to help inventors].
6. This bill will allow the PTO to reduce fees to [fewer] small inventors [and significantly raise the cost to most].
7. This bill will allow inventions of importance [to large foreign companies, those Big Businesses or wealthy people with lot of money to pay additional high fees, which excludes small inventors] to be examined on a priority basis. [Small inventors would need to pay an additional $1000 to avoid getting their applications bumped by Big Businesses with big bucks to spend.]
8. This bill will reduce damages [Big] businesses have to pay for “bad patents” [‘bad patents” being defined as those not owned by Big Businesses, particularly those on inventions which Big Software suppressed or concealed as trade secrets protected by “click wrap” or “shrink wrap” secrecy agreements rather than file as patent applications and disclose to the public].
9. This bill will help banks avoid another financial crisis by limiting [the damages that inventors, particularly small ones, can obtain on important new inventions by calling them] questionable business method patents on banking practices [and then making them unpatentable so banks can steal them more easily, which in turn will make inventors keep such items secret like Big Software has been doing].
10. This bill will prevent taxpayers getting [information on new tax strategies by taking away any incentive for inventors to disclose such inventions to avoid getting] cheated out of [just compensation in accordance with the 5th Amendment, by taking such inventions without compensation by invalidating any patents inventors might obtain on] tax saving strategies which Senator Leahy thinks should not be patented [and won’t since then there will be no incentive to disclose.  Instead this bill eliminates that incentive, thereby forcing anyone inventing such an tax saving strategy to keep it secret to extract maximum value, and in so doing assure no one else can use it without paying some exorbitant fee for access to the trade secret].

11. This bill [includes a PGR torpedo that] will allow [about 3-9 years of] additional challenges to [all patents sought to be enforced by having 3 different forms of challenges with all their inherent delays which can be sequentially used by big business to drive up the cost of enforcing even the most valid patents so that Big Software can ]weed out bad patents [, “bad” meeting any patent to an invention which Big Software chose to conceal rather than patent]  and prevent them from being used by “patent trolls” [which are about the only means a small inventor has to enforce a patent in view of the enormous cost of patent litigation due to bad legislation like this] to extort [“extort” meeting legitimately try to enforce a patent to obtain damages in the form of] money from big companies.

 

By deleting the bracketed material, politicians can describe all the enormous benefits [to Big Business, foreign companies, wealthy individuals and non-inventors] of this bill and what it does to help [ assure the extinction of] American small inventors who create the vast majority of new jobs in America.

 

What is really behind patent reform (HR1249 & S23)?

02 Jul

Big Software certain beneficiaries of EARMRK provisions are leading the charge on patent reform, but why?  In my educated opinion based on 40 years of prior user rights debate, prior user infringement liability is the real issue that motivates Big Software. Microsoft, Apple, IBM, Google, Yahoo, etc. are trying to avoid the fallout from a bad legal strategy.  Big Software chose to cover its software with trade secrecy law and not file patent applications. That went bad for several reasons.  First, it encouraged open source alternatives such as Linux, Android, OpenOffice, etc. in defiance of Apple and MS’s proprietary codes. Second, and more to the point of this article, subject matter patentability of software which was in limbo became solid and the PTO started doing a better job examining software patent applications.  Big Software, having elected to conceal their software inventions in “proprietary code” and use “shrink wrap” and “click wrap” EULAs (end user license agreements) to claim trade secrecy for their software, to conceal and suppress it, and to prevent reverse engineering now finds itself on the wrong side of history.  Open source is gaining ground and becoming as reliable as MS proprietary codes.  More and more patents for software are held valid on subject matter grounds to the point where the most recent pronouncement by the CAFC is that if an invention has commercial applicability it is probably patentable subject matter, thus expanding subject matter patentability in view of the Supreme Court’s Bilski v Kappos decision saying the CAFC’s bright-line machine or transformation test was too limiting.  MS and Apple chose wrong.  Patents were the smart choice, not trade secrecy. Just how wrong is highlighted by the recent auction of Nortel patent rights for $4.5 billion dollars to a group led by Apple & MS. Big Software and Big Telcom (which, due to Apple’s phenomenal resurgence and Google’s push into Android OS smartphones,  increasingly are one and the same) have been hit with huge patent judgments on patents that they cannot invalidate because their prior inventions were suppressed and concealed and are thus not prior art.  Quite a price to pay to gain a patent portfolio when had MS chosen differently, it could have been in the cat-bird’s seat on patents instead of coughing up such a huge ransom.  So, MS and others have embarked on an enormously expensive program to acquire patents, change Supreme Court law to lower invalidation standards weaken patents, get Big Software people to run the Patent Office, and/or change the patent laws to avoid such judgments.  Basically MS has chosen wrong again, opting to try to price small companies out of the game so they can’t get such patents, can’t afford to assert them, can collect as much if they do, and have an increased chance of getting them invalidated.  The attempt to weaken the burden of proof to invalidate a patent was totally unsuccessful as the Supreme Court in the MS v i4i case went unanimously for i4i and retention of the “clear and convincing” standard.  The legislation attempts at “reform” (more like DEFORM) have been ongoing for nearly a decade and are approaching success due to a mostly gullible and patent-ignorant Congress. The attempt to buy up third party patents has been more successful.  After IV (Intellectual Ventures) bought up many patents at great expense, but perhaps for pennies on the dollar, a group led by MS just concluded a deal to buy Nortel’s patent portfolio (Nortel took the patenting route rather than the secrecy route and obtained a large portfolio of key telecommunication and software patents) for a jaw-dropping $4,500,000,000, outbidding Goggle’s “stalking horse” bid of $900M.  Reports are that MS did this because it is petrified of such patents ending up in the hands of Google and being used to advance its Android OS.  Intellectual Ventures, one of the largest assimilators of 3rd party patents, is run by a former MS executive, Nathan Myhrvold, who either operated in collaboration with MS or in view of the knowledge of the long term folly of MS’s trade secrecy choice of protection. So MS is buying a bunch of patents to make up lost ground. And IBM, MS and earmark beneficiaries (see for example this one, the Wilmer Hale law firm earmark provision – yes a law firm is bailed out for $214M on the backs of small inventors). For another bailout, Section 18, the Wall Street “kill Data Treasury royalties” EARMARK provision see Senator Cantwell’s remarks.

So, with that in mind, I return to the patent legislation front, where we see MS is trying to weaken patents and to slant the system in its favor.  They want to switch to first-to-file so that Big Software with their army of patent attorneys can get patents away from the real inventors who are less likely to file quickly.  MS is trying to get “prior user rights” adopted so that all these software inventions that they chose to keep as trade secrets can be used without liability by MS even though they would otherwise infringe patents.   That defeats the very purpose of 35 USC 102(a)  and 102(g) which have been interpreted to prevent suppressed and concealed knowledge (trade secrets) from being cited as prior art to prevent a patent issuing to a later inventor who is diligent and discloses.  This was defeated in the Senate when prior user rights were knocked out of S23.  However, in the House this was more successful as Big Software was able to keep in Section 5 which would give MS such prior rights.  Whether this will withstand House-Senate conference and stay in the bill is not certain at this point.  You can be sure MS is sparing no expense to try to keep prior user rights in the final legislation.  It is literally worth billions of dollars to MS to keep that provision, so spending millions to buy votes in Congress for prior user rights is worth the price.  And, independently of Big Software’s multi-billion dollar interest in it, prior user rights actually does have a lot of appeal and logic.  The patent law is set up as a trade of an invention disclosure to the public in return for exclusive rights as against the public for limited times.   However, for that portion of the public that already knew the invention the trade is not really fair since the disclosure tells a prior user nothing, so it is logical to say that as against such secret prior users the patent should not be worth much.  However, on the other side is the argument which has held sway for 220 years so far, that we want to reward the inventor who discloses not the one who hides the invention, as a hidden invention cannot be used nearly as well to develop improvements and thus does not benefit the public nearly so much as a disclosed invention so suppression and concealment should be discouraged and patent infringement liability is needed as a discouragement to such suppression.   MS has certainly felt the brunt recently of that discouragement, being hammered in patent damages for using things it says it had been secretly using for many years, and that is why MS sees it differently.

So, when evaluating the provisions of patent reform (S23 or HR1249) keep in mind what is really motivating the proponents.  While much of the talk is about speeding up the process, the big play is on distorting the system so that it favors Big Software and allows Big Software to minimize its liability for a bad legal strategy that has seriously backfired, the choice of trade secrets over patents for their software inventions.

 

The most innovative country according to WIPO? Switzerland. US 7th!

30 Jun

http://www.wipo.int/pressroom/en/articles/2011/article_0019.html

Before just accepting this report, please understand that WIPO is based in Switzerland, so their prejudices and local loyalties may have affected their conclusions.

Note that the US is not 1st, not 2nd, and not even 3rd.   US is 7th, behind (in order) Switzerland, Sweden, Singapore, China, Finland and Denmark.

So, according to this it is Scandanavian ingenuity that leads the world not US ingenuity.

So, if that is true what, and knowing they are the world’s most socialistic societies, what does that say about socialism and invention?  As a socialist, that gives me comfort in knowing the facts back up my gut feelings that strong central Government and weaker big business actually favors innovation and the inventor more than our current economic model.

Definitely food (and objective facts rather than political spin) for thought.

 

Stanford v Roche-patent assignment pragmatism.

25 Jun

I want to say a few words as regards the specific controversy in this Supreme Court case and the lesson to be learned for research entities. I have an upbeat take on this case. It appears to me after reading the case thoroughly that Chief Justice Roberts was convinced that the invention was primarily made while the inventor was at privately funded Cetus and because of the access to privately funded facilities and researchers at Cetus and not because he returned to Stanford and used federal funds to finish it up, and that neither the Government nor its subcontractor Stanford should end up with the rights. So, the assignment issue was seized upon and resolved in a way that left Cetus with the invention and Bayh-Dole was interpreted not to auto-assign inventions, as that led logically and necessarily to the desired and just result.

While I too hope this decision does not result in more Draconian assignment agreements by Universities, I expect that for a short time it will, as Universities will surely try to use the loss of invention rights by Stanford to justify an immediate assignment clause like Cetus used rather than a duty to assign clause like Stanford used, as that supposedly made all the difference in the case. However, there are 2 things that work against that. First, that is myopic and fails to recognize that the Court might well have found some other basis to let Cetus end up with the invention rights even if Stanford had an immediate assignment clause. Second, University professors are quite smart and talk to one another and will really balk at such clauses, as well they should. What is likely then, under that scenario is that Universities will react by trying to insist on immediate unconditional assignment of inventions when made but have to offset that to retain research staff and establish an impartial royalty setting board to better and more fairly compensate University inventors and, if they fail to do so, will risk losing their researchers to other Universities that have such boards working fairly.

On the other side of the coin, even if federal funded entities take that approach, privately funded research centers like Cetus are surely going to insist on current assignment like Cetus used, and should also insist that any federally funded entity sign sub-assignments, releases from assignment obligation, or waivers of assignment, joint venturing, or some other sure and certain way of gaining the invention rights that will prevent the invention from being a “subject invention” under Bayh-Dole and thus overcome any prior immediate assignment clauses or Bayh-Dole rights of retention.

This will then cause a review of invention agreements by both federally funded entities and privately funded entities. In a situation like Cetus-Stanford, if both sides do their agreements properly, the end result should be that the privately funded research center (like Cetus) insists on it obtaining the invention rights and that the federally funded employee not have access until such rights are clearly with the privately funded research center. Where, as was the case at Cetus, the privately funded research center does not need to provide access, it should have the upper hand in such negotiations. Also, such rights are more important to privately funded research entities because they do not have federal funds to rely upon to sustain themselves, while federally funded entities do. So, I would expect that the end result of any turmoil will be that through negotiations, the result arrived at should generally end up being the same as that arrived at by the Supreme Court. So the lesson to be learned on Assignments is be fair and don’t try to be too greedy or the Court will find a way to deny you.

One final note, and that is that this case may end up more famous for another aspect, and that is its holding that inventors own assignable property rights to their inventions at the moment of invention, as that (when considered in view of the takings clause of the 5th Amendment) will be and has been seized upon in support of arguments against constitutionality of first to file provisions of the America Invents Act which unilaterally deprive a true and original inventor of such ownership without compensation. The Court has shown a pragmatic, results-oriented approach in this case, and might well do the same when that other issue inevitably arrives at its hallowed halls. How that will be resolved is uncertain and subject of heated speculative debate, and if the Court again chooses a results-oriented approach could easily go either way depending on the Court’s perception of how first to file is perceived at the time and how it is working or not working to provide the stimulation of American ingenuity and creation of American jobs promised by its proponents, and from that what result the Court perceives to be pragmatically desirable.

 

Objective analysis of HR 1249 America Invents Act patent reform (S23 modified)

23 Jun

HR 1249 is cleared to go to the floor, with the sell-out (“compromise”) of fee-diversion whereby fees are diverted to a “pool” for possible appropriations to other programs.  Is there anyone who thinks that pool will not be tapped for earmarks or other appropriations.  Since when has Congress ever left a pool of Federal money untapped?  No, Congress lives hand to mouth and then robs any such pool and even writes hot checks if that is not enough, which it never seems to be.  In short “fee retention” has been unwisely sacrificed in order to get unwise conversion to job-killing First to File through so big business and foreigners can kill small American inventors.  Now that it is headed to the house floor for probable passage, let’s tally up the good and the bad, the pro-small business/small inventor/start-up and the pro-big business aspects of the bill.  It is pretty ugly, but here it is:[with editorial comments]

America Invents Act – (Sec. 3) Amends federal patent law to define the “effective filing date” of a claimed invention as the actual filing date of the patent or the application for patent containing a claim to the invention (thus replacing the current “first inventor to use” system with a “first inventor to file” system), except as specified. Requires the effective filing date for a claimed invention in an application for reissue or reissued patent to be determined by deeming the claim to the invention to have been contained in the patent for which reissue was sought. [Favors the bigs, so Bigs & Foreigners 1, Small Guys 0]

Establishes a one-year grace period (a prior art exception) for inventors to file an application after certain disclosures of the claimed invention by the inventor or another who obtained the subject matter from the inventor. Revises provisions concerning novelty and nonobvious subject matter (commonly referred to as conditions for patentability). [Favors the bigs, so Bigs & Foreigners 2, Small Guys 0]

Repeals provisions relating to inventions made abroad and statutory invention registration. [Favors the bigs, so Bigs & Foreigners 3, Small Guys 0]

Permits a civil action by a patent owner against another patent owner claiming to have the same invention and who has an earlier effective filing date if the invention claimed by the earlier patent owner was derived from the inventor claimed in the patent owned by the person seeking relief. Requires such an action to be filed before the end of a specified one-year period. [This is the resurrection of Section 5 of the 1790 Act, but only if the true and original inventor has filed within one year of the big business invention thief.  Since applications are not published until a year & a half, this needs to be 2.5 years, not 1 if it is to really give a year, so it is completely ineffective to accomplish the objective, and favors big business.  Favors the bigs, so Bigs & Foreigners 4, Small Guys 0]

Sets forth derived patent provisions. Replaces: (1) interference proceedings with derivation proceedings, and (2) the Board of Patent Appeals and Interferences with the Patent Trial and Appeal Board (the Board). [Derivation proceedings will be very costly, so only bigs can afford them. Favors the bigs, so Bigs & Foreigners 5, Small Guys 0]

Requires reports from: (1) the Small Business Administration (SBA) on the effects of eliminating the use of dates of invention in the patent application process, particularly on small businesses; and (2) the U.S. Patent and Trademark Office (USPTO) on the operation of prior user rights in selected countries in the industrialized world. [Neutral, it is only a report not any legislation.  Congress is free to and, if the current bill is any indication, simply ignore anything favors the small guy. Strongly favors the bigs, so Bigs & Foreigners 6, Small Guys 0]

Directs the Comptroller General (GAO) to submit a report on the consequences of litigation by non-practicing entities, or by patent assertion entities, related to patent claims under specified federal patent laws and regulations. [Again, simply a report, but since it is GAO, it will arguably be relatively impartial.  Thus a neutral provision, so still Bigs & Foreigners 6, Small Guys 0]

Expresses the sense of Congress that converting from a “first inventor to use” to a “first inventor to file” patent registration system will: (1) provide inventors with greater certainty regarding the scope of protection, and (2) promote international uniformity by harmonizing the U.S. patent registration system with systems commonly used in other countries with whom the United States conducts trade. [Tries to use “sense of Congress”, an oxymoron, to combat strong language from Supreme Court suggesting possible unconstitutionality. Falsely implies that downgrading to the inferior systems of other countries is good for the US due to “uniformity” and “harmonization”. Will we next have adoption of Sharia law for “uniformity and harmonization” with Islamic countries. Strongly favors the bigs, so Bigs & Foreigners 7, Small Guys 0]

(Sec. 4) Modifies requirements regarding the oath or declaration required of an inventor.

Allows a person to whom an inventor has assigned (or is under an obligation to assign) an invention to make an application for patent.

[There you go, big business can avoid even negotiating with the true and original inventor and file on its own behalf for a patent instead of the true and original inventor – or false and not original lying dog inventor. This promises to be the death of University patent rights and the death of employee patent rights. Very strongly favors the bigs, so much so that we give two points to bigs. Bigs & Foreigners 9, Small Guys 0]

(Sec. 5) Modifies the earlier inventor to file defense to infringement by: (1) eliminating provisions that limited the defense to business methods, (2) applying the defense to commercial uses of the subject matter of a patent in the United States, (3) removing an existing definition of the applicable effective filing date, (4) specifying that the subject matter must be reduced to a practice and commercially used at least one year before the effective filing date, and (5) prohibiting such a defense for certain derived patents or disclosed inventions excepted from prior art when the commercialization date is less than a year before such disclosure. [Expands prior user rights to all patents. This is a Big Software provision seeking to correct a bad legal strategy that backfired.  Big Software chose trade secrecy over patents to protect their software and now wants to avoid liability for infringement of patents to other later inventors who did not suppress and conceal those inventions, particularly small businesses and Universities.  Very strongly favors the bigs, and so much so that we give the bigs two more points. Bigs & Foreigners 13, Small Guys 0]

(Sec. 6) Allows a person who is not the patent owner to request to cancel as unpatentable one or more claims of patent by filing a petition with the U.S. Patent and Trademark Office (USPTO) to institute: (1) post-grant review on any ground that could be raised under specified provisions relating to invalidity of the patent or any claim, and (2) inter partes review (replaces inter partes reexamination procedures) on specified novelty and nonobvious subject matter grounds based on prior art consisting of patents and printed publications. [Favors the bigs, who can afford to defend these proceedings and not the small guys who cannot afford these proceedings, so Bigs & Foreigners 14, Small Guys 0]

Limits the filing of petitions for post-grant review to the one-year period beginning after the grant of patent or issuance of a reissue patent. Requires any petition for inter partes review to be filed after the later of: (1) one year after the grant or reissue, or (2) the date of termination of a post-grant review. [Favors the bigs, as these are sophisticated limits that small guys not familiar with the patent system cannot be expected to understand, but which the patent attorneys on staff at the Bigs will know in use to crush small guys. Bigs & Foreigners 15, Small Guys 0]

Directs the USPTO to make public data available on the length of time between the institution of, and issuance of a final written decision for, each post-grant and inter partes review. [Favors the bigs, as this is only a report not any requirement for action, so Bigs & Foreigners 16, Small Guys 0]

Prohibits the USPTO Director (defined as the Under Secretary of Commerce for Intellectual Property and USPTO Director) from authorizing: (1) inter partes review unless the petition shows a reasonable likelihood that the petitioner would prevail with respect to at least one of the challenged claims; or (2) post-grant review unless information in the petition, if not rebutted, would demonstrate that it is more likely than not that at least one of the challenged claims is unpatentable, or unless such petition raises a novel or unsettled legal question important to other patents or applications. [Makes the proceedings complicated in order to favor the bigs, so Bigs & Foreigners 17, Small Guys 0]

Disallows: (1) post-grant review and inter partes review if the petitioner (or real party in interest, or privy) has filed a related civil action before filing the petition, and (2) inter partes review if the petition is filed more than one year after the petitioner is served with a complaint alleging infringement. Prohibits the petitioner from asserting claims in certain proceedings before the USPTO and International Trade Commission (ITC) and in specified civil actions if such claims were raised or reasonably could have been raised in the respective reviews that result in a final Board decision. [Another sophisticated and complex provision, which as such, favors the bigs, since the small guys cannot be expected to know if this while the Biggs will use it, so Bigs & Foreigners 18, Small Guys 0]

Allows any person, at any time, to cite to the USPTO: (1) prior art bearing on the patentability of a claim, and (2) statements of the patent owner filed in a proceeding before a federal court or the USPTO in which the patent owner took a position on the scope of any claim of a particular patent. Requires, on written request of the person citing prior art or written statements, that that person’s identity be kept confidential.

[A real shot in the gut to small business, independent inventors and Universities, allowing virtually unlimited numbers of ANONYMOUS challenges both before and after allowance of the patent. Big business can afford this, but it’s no surprise that small guys cannot. Big business will love this provision and it will be the death of patent enforcement by underfunded small inventors and Universities. This is a killer to the small guys, worth another two points for the Bigs. Bigs & Foreigners 20, Small Guys 0]

(Sec. 7) Sets forth the Board’s required composition and duties. Allows appeals to the U.S. Court of Appeals for the Federal Circuit (CAFC) from specified Board decisions, including examinations, reexaminations, post-grant and inter partes reviews, and derivation proceedings. [If you are a big business, you want the proceedings to be appealable so that they can go on endlessly at great expense while delaying any award of patent damages and thus bury the small guy in expenses with no income, so Bigs & Foreigners 21, Small Guys 0]

(Sec.8) Allows any third party to submit any publication of potential relevance to a patent application (commonly referred to as preissuance submissions). [Guess who’s going to be submitting such stuff! Not the small guy. Favors the bigs, so Bigs & Foreigners 22, Small Guys 0]

(Sec.9) Changes appeals of USPTO decisions from USDC-DC to USDC-ED-VA.  [Neutral in effect.  This is logical since the USPTO is actually located in Alexandria, VA rather than in DC and the USDC-VA-E has recognized expertise in patents, is generally pro-patent and has a fast docket.  Appeals are likely to get resolved quicker.  However, this added burden on the USDC-VA-E may slow down the handling of patent infringement cases due to the added number of appeals from USPTO decisions. Still Biggs & Foreigners 22, Small Guys 0]

(Sec. 10) Authorizes the Director, for a six-year period and subject to conditions, to set or adjust by rule any fee established, authorized, or charged by the USPTO under specified federal patent and trademark laws. Requires the Director to notify Congress of (and publish in the Federal Register) certain proposed fee changes. [Let’s see, the director of the patent and trademark office is the former patent manager for IBM, so guess who these these he will have authority to independently set will be slanted towards. While he naturally claims he will be neutral, MS, and IBM naturally favor this. If they favor this, you know, it favors the bigs, so Bigs & Foreigners 23, Small Guys 0]

Reduces certain fees to qualified small entities (including fees for prioritized examination of utility and plant applications) and any micro entity. [While, a provision that actually favors the very small inexperienced patent filer, the Bigs were able to water this down with limits that make it generally inapplicable to small business. Still, small business scores its first point, so Bigs & Foreigners 23, Small Guys 1]

Defines the term “micro entity” as a certifying applicant who: (1) qualifies as a small entity as defined in regulations issued by the Director; (2) has not been named as an inventor on more than four previously filed patent applications, as specified; and (3) has gross income below a designated level without having transferred ownership interest in the application to an entity with gross income exceeding such limit. Authorizes the Director to impose income, annual filing, and other micro entity qualification limits under provisions related to public institutions of higher education. [As I told you, these are the strict limitations by which big business makes the micro-entity fees seldom applicable to anyone dealing with patents with any frequency. Favors the bigs, so Bigs & Foreigners 24, Small Guys 1]

Establishes a $400 fee for original patent applications filed non-electronically. [In 1790 this fee was $4 so it is now 10,000% higher, in 1970 it was still under $40 , and  since making patents expensive favors big business and hurts the poor small guy, big fees are made statutory in this big business bill. Favors the bigs, so Bigs & Foreigners 25, Small Guys 1]

(Sec. 11) Sets forth fees for filing, excess claims, examination, issue, disclaimer, appeal, revival, extension, maintenance, patent search, small entity, national fees (for certain international applications), and other specified fees. [Oh yes, big business likes a multitude of these and so does the patent office. The more expensive we can make patents, the better for big business. That’s why it’s in this big business bill. Bigs & Foreigners 26, Small Guys 1]

(Sec. 12) Establishes supplemental examinations to consider, reconsider, and correct information. Requires the Director to order reexamination if a substantial new question of patentability is raised by at least one item of information in the request. [As long as were slanting this toward big business, why not have yet another expensive procedure for small inventors to navigate and which big business will be able to use to steamroll the small guy by driving up expenses? Bigs & Foreigners 27, Small Guys 1]

(Sec. 13) Decreases the percentage of certain invention-related royalties and income that must be paid to the federal government and correspondingly increases the percentage that must be given to small business firms when a nonprofit organization has a funding agreement with the government for the operation of a government-owned, contractor-operated facility. (An existing provision defines the term “funding agreement” as a contract, grant, or cooperative agreement entered into between a federal agency and any contractor for the performance of experimental, developmental, or research work funded in whole or in part by the federal government.) [Favors the bigs who are the only ones that ever operate a GOCO plant, but adds a insignificant token teaser for small business so they can disingenuously say it favors small business. Bigs & Foreigners 28, Small Guys 1]

(Sec. 14) Deems any strategy for reducing, avoiding, or deferring tax liability insufficient to differentiate a claimed invention from the prior art when evaluating specified conditions of patentability. [This is just a stupid provision by a patent ignorant senator. If the patent system is desirable to encourage new inventions, why would we want to discourage such inventions just because they relate to tax strategies? Both big business and small business should be opposing this provision, as what stupid special interest will be protected next by excluding that interest from patent protection? Also, while perhaps not unconstitutional, as article 1, section 8, clause 8 of the Constitution is a permissive provision, carving out such special interests provisions greatly supports foreign governments in carving out whatever special interest they may have, such as software or pharmaceuticals that America might want to protect. What a folly!  Bigs & Foreigners 28, Small Guys 1, Idiots 1]

(Sec. 15) Prohibits using a failure to disclose the best mode as a basis on which any claim of a patent may be canceled or held invalid or otherwise unenforceable. [Favors the bigs, particularly foreigners, who do not have best mode requirements in their native country. Also favors big business so that they can get patent and yet hide the good stuff so that nobody can effectively compete. In fact, this is so pro-big business that it also deserves two points. Bigs & Foreigners 30, Small Guys 1, Idiots 1]

(Sec. 16) Allows virtual markings (markings that direct the public to a freely-accessible Internet address where a patented article is associated with its patent number) to provide public notice that an article is patented. Requires the Director, within three years, to report to Congress on the ability of the public to obtain information from such virtual marking and related legal issues. [In order to avoid liability for mis-marking and the current multitude of qui-tam suits, big business wants to just refer people to a probably non-informative website that can be easily maintained where all of their patent numbers will be listed, probably without any description of what they relate to, in lieu of patent notices.  So what will the reference look like? Probably something like “May be protected by one or more US patents. See www.hidden patentreferences.com.” And, what will the webpage look like? Space probably something like “Our products may be covered by one or more of the following patents 1,234,567; 1,234,568, 1,234,569, etc. and others pending a yet to be issued, including published patent applications number xx-xxx,xxx; xx-xxx,xxy; xx-xxx,xxz, etc. and others yet to be published.”  That will conveniently force everyone to review every one of the claims of every one of the patents to know if anything is actually covered. For someone like IBM, that would mean merely searching 73,014 patents with a total of about 2 million claims to find out if one of them covers the product. Unless this spells out was specificity on the web notice for each patent number what products are claimed to be covered, so that they can actually be searched in a reasonable time, patent marking will become totally useless when applied to big business. On the other hand, small business listings,which will have only a very few patents, this will make a website available where big business can go quickly and check out patents. So while sounding great, this is a deceptive provision that so strongly favors the bigs, that we have to give them two points. Bigs & Foreigners 30, Small Guys 1, Idiots 1]

Revises provisions addressing false marking actions to: (1) prohibit anyone other than the United States from suing for the applicable penalty, and (2) allow only a person who has suffered a competitive injury to file a civil action for recovery of damages adequate to compensate for the injury. (Current law allows any person to sue for a penalty of $500 for every such offense, in which event one-half is awarded to the person and one-half to the United States.) [Big business wants to put an end to these “qui-tam marking suits”, so that big business can fraudulently leave patent markings without any reasonable exposure to liability for misleading the public, and present a read any reasonable recovery for the damages caused by false patent marking. Bigs & Foreigners 31, Small Guys 1, Idiots 1]

Exempts from false marking liability activity engaged in: (1) during the three-year period beginning after the patent expires, or (2) after that three-year period if the word “expired” is placed before the patent identification on either the article or its virtual marking. [Big business wants another nail in the coffin of patent marking suits, by allowing themselves three years of deliberate faults marking. Big business should know when it’s patents are expiring and schedule the adjustment of their markings appropriately in view of such expirations to avoid misleading the public. This provision would actually allow the idiotic self-contradictory marking “covered by expired patent number x,xxx,xxx; x,xxx,xxy; and x,xxx,xxz”   Nothing is covered by an expired patent, so this is a deliberately faults and misleading statement. Of course big business wants this to avoid liability for such false and misleading statements, but is the public really better served by such a fraud? since there are two escape provisions for big business in this item, we give two more points to big business. Bigs & Foreigners 33, Small Guys 1, Idiots 1]

(Sec. 17) Bars using an accused infringer’s failure to obtain the advice of counsel to prove that any infringement was willful or induced. [Reports are that Microsoft is instructing its engineers to simply not look for conflicting patents, it is understandable why they and other big businesses who do likewise, would want to avoid liability for deliberately ignoring patents. Even though that is willful, this statute would make such willful activity legally not willful. When slanting a bill so heavily toward big business, why let semantics get in the way? Ugggh…Bigs & Foreigners 34, Small Guys 1, Idiots 1]

(Sec. 18) Requires the Director to establish, with specified standards and procedures, a ten-year transitional post-grant review proceeding for reviewing the validity of covered business-method patents (claiming a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except technological inventions). [Sense big business is getting hammered for stealing business method inventions after failing to get the Supreme Court to invalidate all business method patents, they now want to kill them with post-grant review. Enacting this big business provision will single out small business patents on business methods for invalidation by introducing yet another expensive and complex proceeding for small businesses to wade through in order to enforce their patents, even after having to wade through all the other onerous provisions that this bill would add. What big business is really trying to do here is move patent litigation into a long, expensive, and less administrative series of proceedings so that small business can never really get around to enforcing these patents. [not satisfied with merely knocking out future business method patents, big business has added this provision to call into question every previous business method patent and required that they be re-examined. So if you are a small business, you can look forward to thousands of dollars of additional expense. If you have several business method patents, make that many thousands of dollars. Not a problem for big business with multimillion dollar patent enforcement budgets, but a huge problem for the small guys. Bigs & Foreigners 35, Small Guys 1, Idiots 1]

(Sec. 19) Amends the federal judicial code to deny state courts jurisdiction over legal actions relating to patents, plant variety protection, or copyrights. Grants the CAFC exclusive jurisdiction of appeals relating to patents or plant variety protection. Adds procedural provisions regarding joinder of accused infringers in patent cases. [sense small business might have equal footing in a small state court, big business obviously wants to keep any disputes out of such courts and put them into more expensive national courts where big business has a huge advantage. Bigs & Foreigners 36, Small Guys 1, Idiots 1]

Provides for the removal to a U.S. district court of legal actions involving patents, plant variety protection, or copyrights, and for the remand of unrelated matters. [While we are killing the small guy on utility patents, why not also add plant patents and copyrightsspace and “unrelated matters.”? This bill just gets more and more slanted the further you read. Bigs & Foreigners 37, Small Guys 1, Idiots 1]

Requires the CAFC to transfer any appeal concerning designs and unfair competition to the court of appeals for the regional circuit embracing the district from which the appeal has been taken. [Since the CAFC is known to be favorably disposed to enforcement of designs and unfair competition claims, big business would like to move those out of the CAFC into more favorable local forums, such as those downtown courts next to their big business skyscrapers. Bigs & Foreigners 38, Small Guys 1, Idiots 1]

(Sec. 21) Permits the USPTO to pay subsistence and travel-related expenses of persons attending certain USPTO-conducted intellectual property programs who are not federal employees. Authorizes the Director to fix a basic pay rate below a certain level for administrative patent and trademark judges appointed under specified provisions. [Although a minor provision, this provision would allow payment of speaker fees and higher pay for administrative patent and trademark judges. This is one of the few good provisions of the bill and seems to be fairly neutral. Still Bigs & Foreigners 38, Small Guys 1, Idiots 1]

(Sec. 22) 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. Bigs & Foreigners 38, Small Guys 1, Idiots 2]

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 again so that PTO fees can be diverted to earmarks. Chalk another one up to the idiots. Bigs & Foreigners 38, Small Guys 1, Idiots 3]

(Sec. 23) Requires the Director, within a three-year period using specified criteria, to establish at least three U.S. satellite offices for the USPTO and submit a related report to Congress. [The first such office has been designated for Detroit, Michigan. This is a good provision that should make the PTO more accessible to those not located in the weird world of Washington, DC and environs. It should help big business and small business alike, so is considered neutral. No points. Still Bigs & Foreigners 38, Small Guys 1, Idiots 3]

(Sec. 24) Designates the satellite office to be located in Detroit, Michigan, as the “Elijah J. McCoy United States Patent and Trademark Office.” [So the Detroit office becomes an earmark. Assuming that Elijah J. McCoy is a deserving fellow, this would seem to be neutral. Still Bigs & Foreigners 38, Small Guys 1, Idiots 3]

(Sec. 25) Requires the Director to establish a Patent Ombudsman Program using available resources. [Although the Ombudsman has thus far proven more just a token than anything of substantial benefit to small inventors, this is presumably more favorable to small inventors than big business, so we finally get another point for the small guy. Bigs & Foreigners 38, Small Guys 2, Idiots 3]

(Sec. 26) Authorizes the USPTO to establish regulations providing, at the request of the applicant, prioritized examination of applications for products, processes, or technologies important to the economy or national competitiveness without recovering the aggregate extra cost of providing such prioritization. [Gets to will be getting these priority designations? It’s unlikely the small guy will even know they exist, let alone want to pay the extra price that will be exorbitantly set for such a request. This heavily favors big business in order to allow them to jump the priority of their applications over those of the small guys. Now big business is back on its roll. Bigs & Foreigners 39, Small Guys 2, Idiots 3]

(Sec. 28) Requires the Director, within four years, to submit a report to Congress assessing federal patent policies, the implementation of this Act, competitiveness of U.S. markets, and access to capital for investment by small businesses. [Well, this only requires a report which can be, and with competent big business lobbying will be, ignored. Noticed that the report is to be provided by the Director. Again, we point out the fact that the Director of the PTO is the former Director of the IBM patent program. Perhaps the Leopard can really change its spots, but there is at least a reasonable doubt that such will occur. In fact, the report could be damaging to small business is slanted to favor big business, as we think the much more lightly outcome will be. So, we have to call this neutral and give no points. Still Bigs & Foreigners 39, Small Guys 2, Idiots 3]

(Sec. 29) Directs the Director to support intellectual property law associations in establishing pro bono programs to assist financially under-resourced independent inventors and small businesses. [This is a token gesture without much substance. Intellectual property law associations, which really means the AIPLA, the IP section of the ABA, and the IP sections of the various state bar associations, are predominantly populated by corporate patent attorneys who represent big business. Corporate patent attorneys are notoriously reticent to do pro bono work since it does not serve to advance their corporate careers to spend time helping small inventors. The author of these comments was a corporate patent attorney for 20 years in a Patent Department of 13 patent attorneys, and not only did none of us do any pro bono work, we were all told specifically not to volunteer, because it might take away from our corporate duties and that would be bad for our careers. Still, this has to be said to be more favorable to small businessmen big business because it now would put a Congressional mandate to help independent inventors and small businesses who are financially under-resourced. So, the small guys now are considered equal to idiots. Bigs & Foreigners 39, Small Guys 3, Idiots 3]

So there you have it, this bill scores out to be so heavily slanted towards big business as to really be unconscionable. Do you favor big business like Microsoft and IBM this heavily? If not, you need to recognize that Microsoft and IBM are contacting their representatives and their lobbyists and have oodles of money available to throw at this legislation.  If you want to have any effect, now is the time to be urgently and loudly contacting your representative in Congress before this horribly slanted big business bill is passed and becomes a new job-killing law and begins stifling small business in America, making the rich richer and the poor poorer, and destroying the economic recovery by killing the jobs that are created by small businesses. And, by all reports, small businesses are currently and historically creating all the new jobs.  You may link to this article in any such effort as http://www.burdlaw.com/blog/?p=217

Sincerely,

 

Bruce E. Burdick

Managing Attorney

Owner & Founder, The Burdick Law Firm, Alton, Illinois (near St. Louis, MO)

Registered Patent Attorney since 1974, IP counsel to small inventors and small business for the last 17 years (1994-present)

Formerly Chief Trademark Counsel for Olin Corporation (WINCHESTER® arms & ammunition and Olin HTH® pool chemicals) for 20 years (1974-1994)

President & Founder, The Great Midwest Inventors Club

Member, The Inventors Association of St. Louis

Past Secretary and Past Acting President, Illinois Innovators & Inventors Association

Licensed, US Court of Federal Claims & US Court of Appeals for the Federal Circuit

Member of the State Bars of Texas, Illinois & Missouri

Publisher of the www.burdlaw.com intellectual property portal and burdlaw IP blog

 

 

1790 Patent Act – A First to Invent Registration System with Conditional First to File Patents

20 Jun

The Act of 1790 was a registration system with only a CONDITIONAL first to file award of patent.  The patent registered could be invalidated under Section 5 of that act by showing that the patentee was not the true inventor. Then, the true inventor could file and obtain the patent under Section 1 of the act. In other words, it actually was a first-to-invent system.

It is incredibly disingenuous to use that to argue for an UNCONDITIONAL first-to-file system such as in S23 or HR1249 where the patent can never be invalidated if the first to file is shown not to be the first in fact.

I am in favor of a conditional first to file, a registration system similar to that of the 1790 act, and that type of registration system would appear to be consistent with the inchoate right of ownership of inventors stated in Stanford v Roche and the 5th Amendment.  In fact, I have been urging such an act for several years, one I call PLEAS (Patent Litigation Expense Avoidance System)

 

Patent Office Fee Setting Authority – Probably Better For Small Inventors

19 Jun

I see a number of well-intentioned inventor advocates and fiscal conservatives who have come out in opposition to “independent” Patent Office fee setting authority. Be careful lest you get that for which you ask. While job-killing First to File is widely opposed by small inventors with good reason, PTO fee-setting authority is likely better for small inventors.

The first thing to keep in mind is that any such authority is subject to Congressional mandates on fees, so it can never be totally independent and will always be subject to restraint of law if the PTO starts abusing one class of inventors in favor of another. Do you really want the best Congress Microsoft can buy to determine patent fees, the same Congress that is ignorantly extolling the “job-creating virtues” of job-killing First-to-File, the “end of bad patents” that will “inevitably result” from endless multiple re-exams that will really only mean the end of small business patents, the end of the “outrageous patent damage awards” by limiting patent damages so that small high tech can never attack big high tech, the “job-creating” virtues of elimination of patent injunctions that prevent infringement by cheap foreign-sourced goods, and on and on, to be setting patent fees? That would be the same Congress that for decades has been diverting patent fees and using them as a source of revenue for other programs? And do you think a Congress of patent ignorant politicians will do a better job than the largely non-partisan patent savvy professionals at the PTO, professionals who know what procedures actually cost and who know that small inventors need to be encouraged and know that big fees hurt small inventors?  Who proposed reducing fees for electronically filed applications? Ans: Not Congress, but the PTO.  Who proposed micro-entity fees? Not Congress, but rather the PTO.  Who proposed and is piloting “2 yr provisionals”? Not Congress, but the PTO.  Get the picture?

With this in mind some inventors and patent owners, both small and large, including me, think that PTO fee setting authority is a better idea. Many think it would be an improvement over the present system where patent fees are set by politicians who seldom understand the patent process.

The alarmist propaganda from Paul Ryan and cohorts just demagogues the issue by falsely saying Congress would lose control of patent fees. Of course, some would say “Not true, but even if it were, so what, that would probably be a good thing.”

-Bruce Burdick

 

Prof. Kieff essays on FTF – It adds too much uncertainty and favors big business

18 Jun

http://www.hoover.org/publications/defining-ideas/article/81446
http://www.hoover.org/publications/defining-ideas/article/81626
http://www.hoover.org/publications/defining-ideas/article/81961
http://www.hoover.org/publications/defining-ideas/article/82096

In these concise essays, Prof. F Scott Kieff of GWU, a well-known patent law professor and expert and former patent litigator explain his opposition to current version of patent reform.

 

Brave New World of FTF – Is It Really What We Want

13 Jun

Here is a nice set of hypotheticals (which are not really so hypothetical if FTF passes)  that I found in a blog comment questioning Gene Quinn’s conversion to ardent supporter of FTF that makes FTF look fundamentally unfair, which it is, and which I edited to be more in accord with current practices such as e-filing:

Let’s assume (for argument sake) first-to-file is Constitutional.

But let’s consider the underlying policy issues in the following hypothetical:

Three inventors: A, B and C:

1) Inventor A is first to conceive. She lives on the Wrong Coast (say California) and she believes in the laid back approach where you think things out deeply rather than acting in haste and where you keep meticulous notes and logs. So after having been first to conceive of the basic concept, she works on it, makes fantastically detailed notes and drawings, builds a prototype to be sure it works and seeing that it works decently but could be better, works on it some more until she comes up with a much much better mode of carrying out the invention (let’s call that the best mode). Then she spends time carefully researching which patent law firm to entrust with writing up the best mode in an enabling manner. It all takes time, and even though the firm quickly writes the application in perfect form including the best mode and a superbly enabling teaching of how and why the invention works and e-files it, she is last to reach the Patent Office.

2) Inventor B is second to conceive. He lives in the Heartland (say rural North Dakota), knows nothing of Inventor A, and he believes the race should belong to the swiftest. He too comes up with the basic idea but stops there, having heard of FTF and wanting to get something on file, and puts off working it up further so he can get it filed. He tries to find a patent attorney who will understand the invention, but alas the search is a long and arduous one because there aren’t too many patent attorneys or agents in rural North Dakota who can understand the invention and write up a decent application for it. To add to his troubles, just as he finally finds a good patent attorney in Fargo, he falls ill, loses his job due to the illness, and thus is on hard financial times and is unable to complete the patent writing process for another month or two. Even then, in view of these financial troubles, Inventor B can only afford a used outdated copy (before e-filing) of “Patent It Yourself” but follows instructions in the book and self-prepares a decent Provisional, takes it to the Post Office on his next trip into town, and Express Mails the application to the PTO.  Despite his troubles, Inventor B comes in second in the race to the Office steps.

3) Inventor C is third to conceive. He’s Chinese and is staying near the Right Coast (say in Alexandria, VA). He too believes the race should belong to the swiftest, and knows how FTF works overseas. He has his “network” and hears from a friend who heard from a friend who heard from source in China about some guy (Inventor A) who ordered parts for a secret prototype of “a neat idea.”  Nothing in writing and no one will ever know, so he does some surreptitious “investigating” through  “trusted confidential sources” and gets enough information to put 2 and 2 together, learn the prototype worked, and come up with the basic idea, but stops there because he knows he needs to file fast in case that other guy files a patent and besides, he doesn’t really understand it well enough to work it up further and neither do his “sources”, and for sure not anywhere nearly enough to get the best mode. Lucky for him though, his brother-in-law is a fancy lawyer at a top notch Alexandria, VA patent firm and thinks it is a great idea and agrees to do the patent write up for this last to invent dishonest Forrest Gump guy for free and right away the same day. The law office is practically next door to the USPTO, but the brother-in-law knows there is an even faster route and has a clerk e-file the application immediately before the hard copy is even printed, before the ink could dry fresh off the high-speed inkjet printer. The filing fees are electronically charged to the firm deposit account and the inventor’s oath will be gotten later. The sharp patent attorney brother-in-law knows all the tricks to get his client’s “paperwork” in first; before inventors A and B have a fair chance to get theirs in. But hey, that’s their problem.

So basically, in this story, it’s almost biblical, “he who is last shall be first.”  The invention thief C who was last to the idea but luckily had access to the fastest, cheapest resources, wins the race to the Patent Office. Word gets out on the street of what a lucky lucky guy C was and how unfortunate it was for A and B that they didn’t have “the right stuff” for winning the race.  C and his sources see a new source of riches in ripping off American inventors.  Even if C gets caught on his derivation, which is highly unlikely, his brother-in-law will make the proceeding so expensive A and B will probably drop out.  But if not, A gets punished for being diligent and making a good invention better.

The question, however, is whether this a kind of public policy we want to foster?

Do we want to discourage A from working up a best mode?

Do we want to punish B because he got sick or didn’t have the cash or easy access to the right kind of patent attorney?

Is this the Brave New America we want to live in?