Archive for March, 2011

Simplification of Record-keeping under Patent Reform – a Deadly Myth

27 Mar

I can see more logic to lowering the standard of proof for a derivation case than on an invalidity case since there is no prior examination or adjudication such as there is in a patent examiner’s prior determination on lack of anticipation and lack of obviousness. However, there is a high standard on proof of derivation for a good reason, as there is to much incentive for a non-inventor to lie in order to get credit or royalties for an invention. To my mind, that works both ways, as the patentee has just as much incentive to lie to keep the patent to himself or herself. So, to me the only basis for C&C standard on derivation is that the issue is settled by issuance and it should take more than a “dubious preponderance” to upset an issued patent. That is because Examiner’s do not examine factual issues related to inventorship unless there is a priority dispute. MS v i4i relates to evidence of prior use and what standard of proof is required. There the prior use is sought to be used as 102b/103 prior art to prove invalidity despite the PTO’s prior decision of validity inherent in the allowance of the claims. However, the PTO does not consider the issue of derivation unless it is raised. Now, if Section 3 of either S23 or the House bill (the section on oaths, allowing signing by assignees without an inventor’s signature) is enacted, we have another new and strong argument for a lower standard on derivation, namely the likelihood that a company will omit an obstinate inventor in order not to have to negotiate compensation to the omitted inventor.

The cases show that a derivation proceeding has traditionally indeed been of limited use to an omitted inventor, in view of the common lack of corroboration, and the high standard of proof, so derivation proceedings are minimal deterrence against theft of invention under the S23, Steal American Inventions Act.

Lesson to be learned: Pre-filing journals will be crucial under patent deform to reclaim a stolen invention. Simplification of record keeping under S23 is a deadly myth.


Water Displacement – Formula 40

25 Mar

Today is the 36th anniversary of the trademark registration for “WD-40” The US Pat & TM Office celebrated by giving a glimpse of the history of how that famous name came to be. “In 1953, the small Rocket Chemical Company sought to develop a Water Displacement solvent to prevent rust in the aerospace industry. After the 40th attempt, the company squeaked by with a success.”

The company website reveals even more. This was a chemical developed for use on Convair rockets to displace water and prevent corrosion. First known as ‘Water Displacement – Formula 40’ or ‘WD-40′”, after rocket workers snuck cans home and found success using Water Displacement – Formula 40 to free up rusted fasteners and other parts, “WD-40” went commercial and hit store shelves in 1958. By 1969, it was so successful that Rocket Chemical changed its company name to the WD-40 Company, Inc. Today 4 out of 5 American homes have a can of WD-40.


Monetizing Patents

22 Mar

David Kappos, USPTO Director, when in charge of managing IBM patents, said, “Right now, what you’ve got is a marketplace where nobody knows what the asset is worth.” Perhaps, but IBM has made over ten billion dollars licensing its patents, so somebody knows the asset is worth an awful lot. Microsoft has been assessed over a billion dollars in patent damages in a single case, so it “monetized” a patentee (Lucent-Alcatel) in a huge way. An individual, Jersome Lemelson made over a billion dollars licensing bar code technology and set up the Lemelson Foundation. So, patents can be worth “real money.” Patents need to be valued to get a substantiated idea-to-profit conversion, a real return on real money spent on R&D. “Patent value” refers to the estimated market value of a patent. Monetization refers to getting money for that value. Since patents, and other intellectual property (“IP”) often account for more than half a technology company’s valuation, it is important to know what factors are important to how patents are valued, and how companies can monetize that value, i.e., get money from or for their patents. So, gleaned from my 40 years as a patent attorney attempting to create protections to protect creations and then extracting money from those protections, here are the factors I have found most relevant:


  1. How Thorough is the Strategy? When I worked at Winchester during the peak of the Cold War,  Winchester decided to expand from small caliber sporting ammunition to tank ammunition and military weapons. That took a hundreds of millions of dollars in R&D to develop the new tank ammunition and weapons. Patents and trade secrets were a key to locking up those creations to protect them from competition and to force the Government to compensate Winchester, so the products could be developed and sold to get the money back with a profit. Over a period of years, this resulted in about a 1000% profit, that is ten times the money spent on R&D and patents, and several spin-off companies. Thirty years later, one of those patented products is still Winchester’s biggest profit generator due to sole source Government contracts resulting from the patented technology. Winchester was unusual in this because its biggest asset was thought to be its world famous WINCHESTER trademark, and indeed I was able to set up a licensing program on that, as well, but that is another story. To gain and keep a competitive edge in the marketplace, a company needs to have a well-crafted patent strategy in place. An effective strategy encourages spending sufficient resources, both time and money to make it likely the company will always consider the patentability of ideas as the company continues the development of ideas into technologies so that what is developed can be protected and thus made exclusive. The diligence of the company in patenting its new technologies makes the company and its ideas worth more since investors get a reasonable expectation that the company will continue to protect its new technology and, with it, the investors value. Investors will also look at the deployment of the patented technology to meet the company’s business objectives to determine how practical the ideas being developed by the company are, sense ideas that are implemented are worth more than ideas that may never be practical or put into use. Investors will all so want to see continual improvements to the of company’s technology and continual patenting of such improvements so that investors know their value will continue to grow and expand profitably if a company has a good patent strategy, investors are willing to put more money into the company.
  2. How Good Is the Timing? Since a well-known crucial factor in tapping the potential of a patent is timing, investors will want to see that a company is good at addressing the current needs of the industry. This is called “timing”. A patent may encompass a useful, breakthrough, or disruptive technology, but if the sale is ill-timed, the utility of the patent will decrease over time. Many famous inventors received very little for their inventions because they were so far ahead of their time that it took virtually forever for their inventions to become adopted. Companies need to be watching their market and timing the release of their new products to market conditions. Steve Jobs has become known as the “master of the universe” at good timing for Apple with its introduction of iPod, iPhone, and iPad.
  3. Will The Patented Invention Sell? Thomas Edison said this best: “Anything that won’t sell, I don’t want to invent. Its sale is proof of utility, and utility is success.”
  4. Is It Useful? A patent’s worth is in the utility of the invention, as just noted above by Thomas Edison. The utility of the patented technology in addressing a market need is evaluated to determine the profitability that will accrue from use of the patented technology and the advantage of deploying the new patented technology. The more useful a patent is, the more likely that the patent will produce money. Samuel Lemelson’s patents on “machine vision” made him over $1 billion because they were successfully enforced against barcode users. Thomas Edison’s patents on light bulbs and electricity were the foundation for his formation of General Electric Company, one of the biggest and best recognize companies in the world.
  5. Is It Transformational? A patent is evaluated for its ability to replace existing technology, or, to start a new technological trend. There are currently more than 100 patent infringement lawsuits relating to smart phone technology because smart phones are transforming the world and replacing telephones and computers of all types to a substantial degree. Nowadays, almost every person has a smart phone.
  6. How Broad Is the Patent? A patent is valued based on the scope of a patent’s claims. The claims of the patent are what is really important. The detailed description and drawings of the patent merely support the claims. The claims define what is covered by the patent, not the description or drawings, although the description and drawings are frequently used to interpret the scope of the claims so that the claims are not totally inconsistent with the description. It is easily get a patent if the claims are written very narrowly, but narrow claims are not worth very much because they do not cover very much, that is, they are not “broad”. Many patents sharing a given technological space with narrow claims are less valuable than a patent with broad claims.
  7. How Big Is the Market? A key patent on a smart phone is going to be worth more than a patent on a toothpick. Valuation of a patent depends on the $ amount of the market as a whole for the patented technology.
  8. What Share of the Market Will the Patent Command? The iPhone was so successful because it captured a huge share of a huge market. Microsoft, Windows was so successful because it captured an even larger share of an even larger market. The projected market share that the patent can capture from the overall market, and the projection of the market share in $ over the life of the patent and on any subsequent improvement patents to extend the patent monopoly are very important to the value of the patent and how much money can be extracted from the patent during its lifetime.
  9. Will Anyone Buy the Patent? The quickest path to monetizing a patent or patent portfolio is to sell it to companies that are in the business of purchasing patents. Outright sale of a patent eliminates the financial outlays of starting a business or a company around a patented product. However, the monetary returns on patents may be low because the purchaser has to spend money to either enforce the patent or develop a market for the patented item. Also, most investors will insist on getting control of the patent yet many inventors hate to lose control by forfeiting ownership of the patent.
  10. Will Anyone License the Patent? By licensing the patent, the patent holder retains ownership of the patent and earns a royalty of about 5-20% on future sales of the product over the life of the patent. A license can be either exclusive, sole or non-exclusive. An exclusive license will command the most money, but the patentee is excluded from competing in the market itself. A “sole” license will command less money but allows the patentee and licensee, but no one else, to practice the invention. A non-exclusive license commands even less money but allows the patentee to license as many companies as the market will allow. A good licensing agent or patent attorney should be able to help the patentee determine which of these options is most likely to produce maximum return. IBM’s revenues from the licensing of its patents are in excess of $1 billion, annually. Most of the software giants like Microsoft, Sun Microsystems, etc., obtain a significant part of their revenue from licensing of their software patents.
  11. Can You Borrow Against The Patent? Another way of extracting money from a patent is to borrow money from financial institutions using the patent as collateral.
  12. Can You Sell The Patent With A Grant Back? Yet another way of monetizing patents is a hybrid where the patent holder sells the patent(s) to a purchaser, with a royalty-free non-exclusive license back to the patent holder plus a percent of the royalty that the purchaser earns on the licensing of the patent(s). You will need a patent attorney experienced in patent licensing to do this because it is rather complex, but it is particularly advantageous for getting money out of currently unused patents while still reserving the option to use them in the future if your company’s business changes.
  13. Is the Patent a Blockbuster? A “crown-jewel” patent protecting a significant, first of its kind technology may be used to dominate an industry and block competitors and create an exclusive market-niche for the company. Even a solitary crown-jewel patent may sometimes form the basis for a start-up or spin-off companies, and you may be able to get money from investors who are eager to join that new start-up.
  14. Is the Patent Part of a Minefield of Patents? A minefield of many patents can sometimes be used to make it so dangerous and troublesome for a competitor to enter the relevant industry that the collection or “minefield” of patents has great value, just due to the number of patents. Donald Weder of Highland,, Illinois, has 1359 patents on flowerpots, floral paper, floral grass, and floral supplies. This amazing volume of patents and one small industry has allowed his Weder Family Trust, which owns these patents, to license virtually the entire floral industry and made him a very rich man. Most of these patents, by them selves, our fairly narrow, but collectively they make it virtually impossible for somebody to enter the field without tripping up upon one of his thousands of patent claims, so it is much easier for a floral company to just take a license from him as a sort of “insurance” policy. Kia Silverbrook of Australia has over 3600 patents relating to his “MEMJET” super-fast ink-jet-array printing technology. The company in its right mind will enter the inkjet-array industry without getting a license from his Silverbrook Technologies.
  15. Does the Patent “Fence In” a Competitor? One fairly effective patent strategy is to get a large number of patents on improvements to a competitor’s core technology to “fence in” that competitor by patenting all conceivable improvements over the core technology so they cannot expand their business without infringing one of your patents. This allows you to make them give you something to license one or more of your patents in order to expand their business or improve their products to stay competitive. Another reason for doing this is to obtain a license from the other company to that core technology in return for a license to your improvement technology. This is called a “cross-licensing”. Cross-licensing is prevalent amongst companies with overlapping core technologies. Sony and Samsung Electronics have entered into a 5 years cross-licensing agreement covering over 24,000 patents in an effort to reduce cost and potential friction.
  16. Does the Government Require the Patented Technology? The panel law provides that the government cannot infringe a patent, however, the Fifth Amendment to the US Constitution provides that the Government cannot take a person’s property without just compensation. This is enacted into law (35 USC 1498) requiring the Government to pay a reasonable royalty for use of a patented invention. Value can be extracted from the Government in various forms in lieu of this “reasonable royalty”. For example, the Government may issue a sole source contract to the patentee for production of the patented item, which guarantees the company a profit. The Government may also require any contractor to pay a royalty to the patentee as part of a Government contract. So, a company should not overlook the possibility of obtaining a patent early because the item will be used exclusively by or for the Federal Government.
  17. Is There an Infringer? Another method for monetizing patents is proactively finding products that infringe the patent and thereafter offering to license the patented technology to the infringer, or seeking treble damages for willful infringement if the infringer refuses to stop. Infringement damages in the billion dollar range are not uncommon. Recently Microsoft settled an infringement action by Alcatel for $1.5 billion for infringement of Alcatel’s patented MP3 technology and RIM (Blackberry phones) paid over $600 million for use of patented e-mail “push” technology. There are several companies (commonly called “patent trolls”) whose sole business is enforcing patents against prominent infringers. It may be possible to either “partner” with one of these companies or sell your patented position to them if there is active infringement.

Lesson to be Learned: The value of the patent should not be overlooked, even if it is not actively being used. Although a patent is often classified as an “intangible” asset, with prudent choices of action, it may be possible to turn that.” Intangible asset unquote into real, tangible money. In fact, patents are like a deeds to real estate. If the “real estate” is valuable, it can often be converted into money, sometimes BIG money.


Is the tide turning against FTF and patent reform (America Invents Act – S23)?

18 Mar

I think the tide is turning, but not enough.   For a current list of supporters and opponents of the S23 version of “reform”, see (you may be surprised to know that Apple and Dell oppose S23).  As Ron Riley at the Professional Inventors Alliance ( says, however, that is no reason to give up the fight when the fight is right.  Or, as I would note, might doesn’t make right, it may just be mighty wrong. That seems to me to be true for S23. I think there is a decent possibility that FTF can be yanked out of the House version if there is enough of an outcry.  To me the untapped key is Victoria Espinel (–she has a non-profit org background like Obama does and is trusted by Obama, and she can put the screws to Microsoft as she is the point-of-the-spear on fighting Chinese piracy of MS software) and OMB at the White House.  If Victoria Espinel comes out against FTF, so will Obama, Microsoft will have to back off, the White House will follow, Democrats will follow the White House, and we will defeat it.  If not, between Democratic Policy Committee support and misinformation, White House “talking points” misinformation, Pat Leahy putting out misinformation talking points, pro-business Republicans supporting big business and putting out false “talking points”, and big software companies lobbying with their misinformation at all costs, we have no chance.  As I see it, if you get the White House to oppose FTF, you break the coalition against us.  Fail and patent reform is going to win.

Assuming FTF and PGR and IPR etc. all win, as I think most likely, I still see hope for the small inventor through education toward prompt filing, including use of great software (see below about the great and free to aid in filing provisionals more quickly so that small inventors get to where they file faster than big business.  If we do that, we turn a loss into a victory and turn the tables on those that are pushing through this pro-big business distortion of the patent system.  So, even if we lose this battle, and I think odds are strong we will lose, we can help the small inventor live to fight another day.

As to improving the situation, for sure automating software for PGRs, IPRs etc. would be a big equalizer, if you could do that.  Just think, thanks to S23, you would need to file 20 times as many applications to cover your variants because that is what S23 will make you do to cover yourself under FTF.   The real problem, however, remains that pushing “litigation” into prosecution sends prosecution costs through the roof for small inventors.   When I became a patent lawyer (1974) a patent filing cost $35 with no maintenance fees and you ended up with something much stronger that you seldom had to litigate and that was respected when you did.  Now the filing fees for a small entity run at least $425 ($110 for provisionals) and maintenance fees about $2500, an increase of about 8400%.  This horrible reform will doubtless raise it to $10,000 or more per patent because about 10 extra provisionals and 3 additional regular applications are going to be needed for every patent previously needed so the inventor can cover variants.   See Steve Perlman’s explanation of why this is nutty, and you will see why it convinced Barbara Boxer to vote NO and Diane Feinstein to move to strike FTF.

Inventors already use CAD programs, patent draftsmen use CAD programs (even the LPOs in India do that).  Others use simpler approaches.  For me, I find using TeamPatent and PaperPort is much preferable as it is simple, reliable and does exactly what is needed without additional complexities.  I have no need to use a battleship when a rowboat works better.  If you have not tried TeamPatent ( you are missing a great free service that makes error-checked patent drafting by novices possible.  David Pressman (patent attorney and author of “Patent It Yourself”) and I have been working with Rocky Kahn, founder of Team Patent for several years to help him refine the online service he developed, and continues to develop, under his NSF grant.  It is already prime-time ready and getting better.  The more use it gets the better it gets.  Something like that could also be an equalizer.

Wouldn’t it be ironic if use of software by small inventors turned S23 around so small inventors can easily file first and FTF bites the big software companies in their collective butts?

Bruce Burdick
BURDICK LAW FIRM, 3656 Western Ave., Alton, IL 62002 618-462-3450 Fax 618-208-1712

On Fri, Mar 18, 2011 at 1:49 PM, Rich Elk <> wrote:

Hi Bruce,

Thanks for a very insightful explanation of the invention industry.  Do you think the new law is inevitably going to be passed in this form, or do you think the momentum is changing now with all the added objections from public sources?

If it is likely to become law, then from your experience, do you see any possibility of improving the situation by providing automation to the inventor to get through the extra reviews with much less impact than the currently entertained plans to implement that law?

You may remember that I am in the business of inventing software that makes people’s jobs easier –automated productivity improvement software.  So it seems there should be ways to make the inventor’s added burdens less laborious in case the law does go through.  And I’m sure even if it doesn’t, the inventor would be better off with software that “understands” the PTO regulations for prosecution, maintenance, reexamination, and so forth.  Presently, my products are more for litigation support, but prosecution support is provided by some other software vendors.

Do you see any market growing for the inventor to use such patent CAD software products?  Is the law, and its likely changes, going to be amenable to inventing automation products that help make the whole process streamlined?




Rich Cooper

Rich AT EnglishLogicKernel DOT com

9 4 9 \ 5 2 5 – 5 7 1 2





From: [] On Behalf Of Bruce Burdick
Sent: Friday, March 18, 2011 11:03 AM
To: PIAUSA Discussion Group
Subject: Re: [PIADiscuss-L] Patent Docs: Post-grant Review Provisions of S.23

I have been a patent prosecutor and litigator for 40 years and this article on PGR and IPR etc. seems convoluted to even me.  The required length of the article to review the new pro-big business IPR of secton 5 of S23 is telling enough.  The big software companies want to make the system complex and expensive to squeeze the small guy out and seriously advantage big business so they can more easily steal inventions.

What is going on here is simple.  Big software companies want to move litigation into the PTO so that it is cheaper for them to challenge patents, so the forum is one where the standard is “preponderance” not “clear and convincing”, and so a challenge drives the cost of an application through the roof and small inventors get priced out of the game.  So, the ITA (S23 – the Invention Theft Act) adds several expensive reviews and contests to patent prosecution to force the small guys to defend “litigation” during prosecution.  Patent prosecution should be patent prosecution not patent litigation. This addition of litigation to prosecution is grossly unfair, which is the intent, to small inventors and distorts the process (again, that is the aim) even more heavily in favor of big software companies and with them, all other serial infringers.

I have been pushing for more than a decade for a “regression” (which I feel would actually be a great move forward) of the patent system to 1790 when we had a simple registration system, so the patent was issued very very fast and, the inventor got his reward promptly and the challenges came later.  Back then the inventor got exclusive rights right away and had his patent while all these attacks were going on.  That leveled the field, because then the infringer has a huge disincentive to litigate and a huge incentive to work a deal and avoid litigation.  Simply put, the infringer in that system puts its very livelihood at stake when challenging – lose and the big business must shut down production of the infringing item, win and the field opens up for competitors of the big business.   Also, since 90% of patents never see a courtroom, 90% would not need to be thoroughly examined and the PTO could save 90% of the time it wastes examining non-commercial patent applications.  That would be great because they are just not important enough to challenge or otherwise spend such a valuable resource on.  On those, the inventor would get the recognition sought and get an exclusive position right away and there would be a huge incentive for “under the radar” inventors, which is where most small inventors live and work.  The “talking points” have the key emphasis of reducing the backlog, so a registration system fits right into the expressed objectives of the proponents of patent reform.  A registration system would be true reform and a true “overhaul” and would immensely favor the small inventor.  Why is it not being pushed by PIA?  To be sure, big business will say a registration system adds uncertainty to patents, because they issue before a thorough exam is made.  However, it really adds certainty, certainty for the applicant small inventor, who gets his patent with more certainty and more speed and with more likelihood of it being worth something other than the opportunity to spend a fortune to defend against big company challenges that S23 would give as a “reward” to small inventorsA.

Bruce Burdick
BURDICK LAW FIRM, 3656 Western Ave., Alton, IL 62002 618-462-3450 Fax 618-208-1712

On Fri, Mar 18, 2011 at 9:40 AM, <> wrote:

I scanned this.  Since I’m not a ‘practitioner’ the nuances of some of this stuff get awfully confusing.

—– wrote: —–

From: stv <>
Sent by:
Date: 03/18/2011 10:23AM
Subject: [PIADiscuss-L] Patent Docs: Post-grant Review Provisions of S. 23

posted… _______________________________________________
PIADiscuss-L mailing list


Outsourcing American Jobs

16 Mar

Here is a collection of links I received from a discussion list I monitor.
Microsoft and IBM want to steal inventions more easily so they can send the resultant jobs they concurrently steal offshore? And, the Senate voted 95-5 in favor of it – no wonder America is declining in world status.
# IBM Lays Off 1000’s in US While Offshoring 1000’s of Jobs, MARCH 2, 2010;

# Microsoft to outsource legal work to CPA Global, February 18th, 2010;

# Ballmer Says Tax Would Move Microsoft Jobs Offshore (Update3), By Ryan J. Donmoyer, June 3, 2009, Blooomberg News;

# Union says Microsoft work going offshore, Thursday, July 29, 2004, By TODD BISHOP, SEATTLE POST-INTELLIGENCER REPORTER;

# Why the next phase of offshoring may interest you, By Howard Baldwin, Microsoft Corp.;

# Welch: GE Ex-CEO Blasts Outsourcing Opponents, 05-11-04, by Greg Levine,;

# Offshoring: Spreading The Gospel, Outsourcing’s inner circle has deep roots in GE and McKinsey. Here’s how they caught the fever, MARCH 6, 2006;

# Intel, HP chiefs praise offshore outsourcing, 22 Oct 2003, by Yvonne Guzman, News Editor,;

# “Exporting America.” U.S. companies either sending American jobs overseas, or choosing to employ cheap overseas labor, instead of American workers, Lou Dobbs,


S23-Boom Times for Invention Promotion firms and invention assistance scams, Bust times for small inventors

15 Mar

Well, it is even more full employment for us patent attorneys than just more litigation. We are going to get paid to write five times as many patent applications (most of the extra ones wasteful) if our Japanese counterparts who work under a FTF system are any indication. Even so, I am one patent attorney that thinks this act is an abomination. I hate seeing small inventors get cheated. Most small inventors will just slop together some inadequate provisionals thinking they are somehow protected by that and end up watching their inventions get stolen by big business. After all, that is the real purpose of this act, to allow America’s big businesses to more easily steal inventions.

Invention Submission Corporation (InventHelp) will also love this, as they are big winners from S23. When it becomes law, invention promoters will be able to justify telling inventors they have to rush really fast to use their useless invention promotion services and file cheap sloppy applications using their bevy of low-ethical standard (conflicted) patent attorneys.

It will be boom times for the inventor “helping” scammers and bust times for the increased number of small inventors that will use them.

Bruce Burdick
BURDICK LAW FIRM, 3656 Western Ave., Alton, IL 62002 618-462-3450 Fax 618-208-1712

On Tue, Mar 15, 2011 at 7:47 PM, wrote:

The Civil Justice Caucus should be targeted because “America Invents Act” is in fact “America Lawyer Full-Employment Act.”

“America Invents Act of 2011will simply generate more expensive litigation by adding more, not less legal challenges to American patents and intellectual property; benefiting large corporations which infringe and hurting small innovators and small businesses.

Here are the Chief’s of Staff emails for:

“Robert Goodlatte (R-VA 6th District)” ,
“Dan Boren (D-OK 2nd District)” ,
“Nick Rahall II (D-WV 3rd District)” ,

Congressional Civil Justice Caucus Academy website at George Mason University;

—– wrote: —–

From: “ News Distribution List” Sent by:
Date: 03/15/2011 11:41AM
Subject: [PIANews-L] W.Va. congressman joins Civil Justice Caucus-The Civil Justice Caucus is the brainchild of Congressman Bob Goodlatte [LegalNewsLine]

W.Va. congressman joins Civil Justice Caucus
WASHINGTON (Legal Newsline) – U.S. Rep. Nick Rahall has joined the bipartisan Congressional Civil Justice Caucus.

The Civil Justice Caucus is the brainchild of Congressman Bob Goodlatte, a Republican representative from neighboring Virginia, and his colleague and co-chairman Dan Boren (D-Oklahoma). The Caucus will serve as a forum for discussing medical malpractice reform, venue reform, patent reform, federal pleading standards and other legal reform issues that affect the efficiency of our civil justice system and the vitality of our state and national economies.

“It is important that we continue to explore ways to improve and strengthen our civil justice system for working families and small businesses,” Rahall, D-W.Va., said. “I hope the Caucus generates some new ideas that can foster compromise and unity in the Congress.

“Civil justice reform is a long-running concern that comes up session after session of Congress. Caucuses often times enable Members to get beyond the glare of the television cameras and heated floor debates and can smooth the road for innovative ideas and bipartisan cooperation.

“This year, the U.S. House of Representatives is expected to consider patent reform and medical malpractice legislation. I hope the Caucus will help to inform and shape those debates and yield some good policy initiatives.”

To view the entire article, visit the West Virginia Record .

Filed Under: Hot Topics

PIANews-L mailing list


Illinois enacts Internet sales tax – Amazon and Wal-Market jockey for affiliates

11 Mar

Effective immediately, Illinois joins the ranks of states that tax Internet sales of any business that has a physical presence in Illinois. Amazon announces it will cut its affiliation with all current affiliates with a physical presence in Illinois. In a counterattack, Wal-Mart announces it welcomes all former Amazon affiliates to Who wins this depends on whether additional states adopt this type of tax. As states are having hard financial times, it seems to me that Wal-Mart has the better play here, as any Amazon affiliate dropped by Amazon will find this a wonderful opportunity to establish a relationship with Wal-Mart and to perhaps move from just online to online plus store retail in the biggest retailer in the world. More states are likely to adopt this tax, which IL says will generate around $160MM in new revenue.

DETAILS per (reproducing a breaking news report from :

Gov. Pat Quinn signed legislation Thursday to require online merchants with a physical presence in Illinois to collect and remit sales tax.

The controversial law, called the Main Street Fairness Act, means online retailers — including giant Inc. and Inc. — must collect sales taxes on purchases made by Illinois residents as long as the retailer has a physical presence in the state. The law is effective immediately.

The move is expected to have little effect on consumers’ online shopping habits, but deals a blow to small businesses that count the giant retailers as a major source of ad revenue.

Amazon and said they would avoid collecting sales tax by stopping their affiliation with Web site companies in Illinois that direct traffic to Amazon and Ovestock. Under the new law, online retailers are deemed to have a presence in Illinois if they have a contract with an affiliate based in here.

“Illinois’ main street businesses are critical to ensuring our long-term economic stability, which is why they must be able to compete with every company doing business online in Illinois,” said Quinn. “This law will put Illinois-based businesses on a level playing field, protect and create jobs and help us continue to grow in the global marketplace.”

Amazon and Overstock, along with other out-of-state online merchants, have ties to thousands of deal and coupon sites. These so-called affiliate marketing sites typically send potential customers to Amazon and Overstock in exchange for a cut of sales.

Illinois is among a handful of states that have instituted similar laws to extract sales taxes from online merchants and boost depleted state coffers. The Illinois Department of Revenue estimates it misses out on $153 million to $170 million in uncollected sales taxes each year from online purchases. The uncollected taxes of goods sold online and through catalogs totaled $8.6 billion in 2010 nationwide, according to a Wall Street Journal report citing the National Conference of State Legislatures.

The U.S. Supreme Court ruled in 1992 that companies without a physical presence in a state aren’t required to collect state sales taxes. sent a letter to its marketing affiliates in Illinois immediately after the bill was signed into law, notifying the businesses that it will sever ties with them as of May 1 unless the law is repealed or the affiliates move to another state where no such law exists.

“We think that states that do this are making a mistake,” said Jonathan E. Johnson, president of Salt Lake City-based Overstock. “We think this kind of law doesn’t really hurt Overstock that much. The affiliate business can be borderless. If a web shopper is looking for a coupon, they don’t care if they get it from an Illinois-based affiliate or an Indiana-based affiliate.”

Scott Kluth, founder and CEO of Chicago-based, called the new law “deeply disappointing” and said his company is “actively exploring” moving to Indiana.

“It’s a shame we have to consider leaving out longtime home in Illinois, but we will do what is best for our business,” said Kluth.

Rival retailers saddled with brick-and-mortar stores, for their part, cheered the new law.

In the past few weeks, Sears Holdings Corp., Best Buy Co., Barnes & Noble and Wal-Mart Stores Inc., among others, launched the effort to poach disgruntled Amazon affiliates in states the online retailer has threatened to leave.

As the biggest online retail company, Amazon’s ability to avoid collecting and remitting state sales tax has been the envy of brick-and-mortar retailers. Retail margins are so slim, typically less than 5 percent, that not charging sales tax amounts to a price advantage.

Wal-Mart said the new law “will help create a level playing field between online-only retailers and brick-and-mortar retailers.”


Patent Reform Will Spark Small Inventors?????

10 Mar

What it may actually do is reward fast liars rather than real inventors.  What it may actually do is spark is widespread theft of inventions by big business, patents to those who file on other peoples’ inventions, and the demise of the small inventor in America.

If any liar sees a neat invention by someone else, the liar soon will be able to race to the patent office and steal it away from the real inventor.  All that is required is to get to the patent office first, file a patent application and lie about independent conception. Yes, the Senate will now reward fast liars rather than cautious inventors.

Patent reform may actually spark a race to the bottom, where theft of inventions from small inventors is rampant.

Patent deform will also cause small inventors to file several times as many patent applications.  The PTO will be deluged by them, but will see a big increase in revenues from filing fees.



Let the Misinformation begin on patent

09 Mar

So, Orrin Hatch voted for Patent Reform 2011 because “the new system” allows a patent application for $100 instead of an interference for $50,000. It is pathetic that Senators are so misinformed. Provisional patent applications (which cost more like $1500-$5000, as the $100 is only the filing fee) have been in effect for years, and have nothing to do with this legislation.  Interferences will continue under the legislation under a different name “derivation proceedings”, and their number will dramatically increase, since it will be one of the few ways for the real inventor to get back a stolen invention. It shows what a good job big business has done with lobbying misinformation and what a poor job small inventor lobbyists have done getting the truth out.

See the newspaper article below:


Patent-reform bill wins on 95-5 vote

The nation’s 1950s patent system, which has forced innovators and inventors to wait years and outlast challenges and lawsuits before getting recognition for their products, would be overhauled under a measure passed Tuesday by the Senate


The legislation, which was approved 95-5, transforms a patent system now operating under a law passed in 1952, at a time when the high-tech revolution was still in the future and international competition was still negligible. It now moves to the House.

President Obama

said he looked forward to signing into law “the most significant patent reform in over half a century” to increase economic growth and create jobs.

The bill’s most substantial change would be to switch the United States to a “first-inventor-to-file” system for patent applications used by all other industrialized countries, rather than the current “first-to-invent” system. Supporters say the first-to-file system would put American innovators on the same page as their overseas competitors, making the process simpler, more certain and less expensive.

Sen. Orrin G. Hatch

, Utah Republican, said disputes over who invented a product can cost $500,000 in legal fees. The new system lets an inventor pay $100 for a provisional application to protect his invention. To meet the concerns of independent inventors and small businesses that first-to-file would aid corporations with the resources to file quickly and often, the bill gives a one-year grace period to protect academics and inventors who disclose their inventions before filing.


office director David Kappos

said first-to-file was “a win for all American innovators, of all sizes and all industries.”


Patent Reform Passes 95-5 in Senate

09 Mar

To find out how each Senator voted, see

The House counterpart should move this Month to the Judiciary Committee in the House of Representatives.

In our opinion, the Senate measure includes the following Good Features:  USPTO sets its own fees without fee-diversion, and apparently damages limitations were removed from the bill prior to passage so big business will not be able to steal inventions as cheaply as they hoped.

In our opinion, the Senate measure includes the following Bad Features:  A change [arguably unconstitutional] to a First-to-file system (like the rest of the non-American world) rather than the current pro-American First-to-Invent so big business can more easily steal inventions, increased third-party submissions (with explanations) during ex parte patent prosecution to help raise cost to knock out small inventors so big business can more easily steal inventions, a  new (German style) “first-window” post-grant patent opposition system with broader jurisdiction (but a shorter timeframe) than reexaminations to help big business knock out small inventors and more easily steal inventions, and a provision that eliminates certain tax strategy patents so everyone can more easily steal those inventions.

Later today,  March 10, 2011, Dennis Crouch will testify before the Judiciary Committee as members consider how to draft corresponding legislation. See his blog post on Patent Reform 2011 at