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Archive for July, 2011

First to invent – it means first in the US not first anywhere

24 Jul

I recently came across an Internet post that unwittingly confirms an advantage of the current patent system to US inventors and highlights how “patent reform” will unilaterally give up that advantage without any benefit to the US.  That is, patent reform will downgrade the US system in this important matter.

 

 
 

Real life story of how FTF would cheat inventors

20 Jul

San Rafael, CA (July 19, 2011): CALIFORNIA INVENTOR SUES US GOV FOR $100M+ FOR USE OF INVENTION ON PTSD TREATMENT METHOD

Over 20 years ago, Dr. Ralph Lamson, a psychologist from San Rafael, CA was hiking in the Muir Woods when he experienced another episode of acrophobia (fear of heights) and mentioned to his friend that perhaps virtual reality simulations would be a way to help treat it. The friend said it sounded like “Virtual Therapy”. Some time later, Dr Lamson saw notice of a trade show where VR equipment was on display. Donning the head mounted display for a simulated elevator ride, Lamson once again experienced his fear of heights, but this time in virtual reality, and he found that the more he used it the less scared he became. As a psychologist, he had a “Eureka moment” and instantly knew this confirmed his earlier thoughts while hiking and in about a half-hour he used VR to treat himself right there at the trade show. Now, thinking he was on to something, he went to work in early 1993 to test the theory which he termed “Virtual Therapy” and found in his first large scale test that he was able to cure over 90% (38 out of 40) patients, most in one 90 minute session. Previously, a 60% cure rate in about 10 one hour face-to-face “prolonged exposure therapy” sessions was considered the optimum treatment. Lamson published an article and was in 1994 awarded a Cybertechnology Journal “application of the year” award, predicting it would have widespread application to many other phobias, stress disorders and mental conditions. He began getting phone calls, letters, and visitors from the military wanting to learn more about his invention for possible military applications, which he took to mean psy-ops of some sort. Fast forward ten years to 2004, when Dr. Rizzo at USC’s Institute of Creative Technologies (“USC-ICT”), who knew of Dr. Lamson’s pioneering work with virtual reality immersion therapy or VRIT, began adapting this treatment for PTSD, taking the video game “Full Spectrum Warrior”, and with Dept. of Defense funding developed “Virtual Iraq“, a program (see http://ict.usc.edu/projects/ptsd/) of virtual reality immersion therapy (VRIT) for the treatment of post-traumatic stress disorder (“PTSD”). In Virtual Iraq soldiers recreate traumatic experiences under controlled virtual reality conditions in order to help get over them. It works so well that Dr. Rizzo and others working under DOD funding, grants and contracts have received hundreds of millions of dollars in support of this program. In fact, Virtual Reality Immersion Therapy or VRIT has become the preferred treatment for PTSD and has the potential to save American taxpayers over a billion dollars as America tries to cure more than 300,000 PTSD sufferers. VRIT is quicker and more effective, so it lessens the chance of suicide or criminal behavior by sufferers of PTSD and other anxiety disorders. But, the reality is that this was invented by Dr. Lamson. Lamson says the Government stole his invention and that jobs have been lost in California and shipped out-of-state as a result, and he has hundreds of publications and videos to back up his story, including a patent (6,425,764) and book “Virtual Therapy” http://www.amazon.com/dp/B005BCOFXU published in 1997, two years before the US Army funded the creation of the USC program in 1999. http://en.wikipedia.org/wiki/Institute_for_Creative_Technologies . It is that patent and the invention it defines that is the basis of his lawsuit. After years of requesting compensation from the Government, Lamson has recently filed suit against Uncle Sam for more than $100 million for unauthorized use of his invention.

The Wikipedia article at http://en.wikipedia.org/wiki/Virtual_reality_therapy describes this technology and Dr. Lamson’s status as the pioneer in the field. Does theft of US jobs, say in southern California, concern you? Does theft of intellectual property interest you? Would you be concerned if it was the U.S. Government itself that was ‘taking’ intellectual property (inventions) and using these without permission of the inventor and without any payment whatsoever, let alone payment of ‘just compensation’ as required by the 5th Amendment of the US Constitution? Is there a relationship between the Congressional passage of patent reform and theft of patents from small businesses and independent inventors? Dr. Lamson knows the answer because it happened to him! His Government stole his invention, one which might have resulted in hundreds of San Francisco area jobs and sent those jobs to Belgium, Canada, Georgia, Florida, Maryland, Hawaii, Washington state, and to military bases and VA hospitals world-wide. And, he was not paid a dime!

How does this relate to current patent legislation? Well, even though he was first to invent Lamson was second to file. A Gov’t funded contractor filed first. With enactment 2011-09-16 of HR1249, the law will be “reformed” to where the first to invent will no longer get the patent as has been the case since the first US Patent law in 1790. Instead, Congress passed and the President signed legislation switching to a system where any inventor who is first to get to the Patent Office with an application gets the patent, not the true first inventor. This means that anyone (especially BIG Government or a BIG corporation) who learns about an invention that someone else discovered can pretend to “discover” it themselves,  have their eagerly awaiting patent attorneys rush to file and obtain a patent and use that patent to stop the even the true inventor. The independent inventor cannot afford the cost to move that quickly or to file on each possible wrinkle of his invention and will be out-of-luck. If the pretender is a BIG company (Microsoft, IBM, GE, etc.) or worse yet (but just as likely if not more likely) a foreign company, the jobs that the independent inventor would have had to create here, being too small to start overseas, to make his business grow will (hear the sucking sound) go overseas as that is where Big Business has its production now. And since the invention is, like Lamson’s, something better, it will displace existing American businesses and jobs. The economy will further erode as more jobs  disappear overseas, and once these new industries set up shop overseas the factories are there not here and the jobs will never return.

As Dr. Lamson points out, “If so-called ‘patent reform’ was law in 1997 when my patent was filed, I would have lost a lifetime of work with no recourse.” Congress wants to “streamline” the patent process by making it easier for government, corporations, and others to steal from inventors. “The Department of Defense (“DOD”), Office of Naval Research (“ONR”), Army, Air Force agencies and divisions, Defense Centers of Excellence, Naval Postgraduate School Monterrey, US Department of Veterans Administration, Department of Health and Human Services, multiple VA hospitals and TRICARE, as well as several Government contractors and grantees are all infringing my patent”, Dr. Lamson notes. “If patent reform was the law, I would just have to watch and cry. But that’s not what the Constitution says in the Fifth Amendment. It says

Amendment V

No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a grand jury, except in cases arising in the land or naval forces, or in the militia, when in actual service in time of war or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

“The theft of my invention by my Government without due process for public use without just compensation began years ago when officers from the Naval Postgraduate School, Monterrey visited me in San Rafael to pick my brain about my invention. They wanted to find out about this ‘remarkable new technology’ (Scott Pelley’s description of VRIT for PTSD on the CBS Evening New), my virtual reality psychotherapy discovery, the secrets of my VRIT treatments, and anything else they could steal concerning my VRIT. And I trusted my Government because they said I could and because they said it was really important for the military to know about it for ‘military reasons.’ That was sure a mistake. Don’t you make the mistake of trusting them on Patent Reform, either” says Lamson.

Dr. Lamson describes the theft of his invention. “The Navy began its own VRIT program almost immediately after learning how I did mine. Sure, the Navy now denies theft of my invention but evidence even in the public domain is overwhelming and demonstrates otherwise. For example they asked me to submit an SBIR (small business innovation & research) funding request but denied my request and instead wrote up their own funding request for their own program to do essentially what I had requested and described. They sent the manager of that program to attend my seminar to learn more from me. They then funded Georgia Tech and Emory University in Atlanta (Sam Nunn, head of the Senate Armed Services Committee was from Georgia).  Georgia Tech even tried to hire me to teach my secrets and, when I turned them down, hurried up to file their own patent application to beat me by a few months.” Meanwhile, Lamson was trying to perfect his invention, figure out the medical reasons why it worked so much better than other methods, and find funding to commercialize his invention. Lamson laments “I was really disappointed to learn that no legitimate venture capitalist was interested in my work. I felt that since I had originated the idea I knew best how to make it work so it could realize its maximum benefit. I was repeatedly told by venture capitalists that they were not going to invest their money because the Government was spending millions of dollars funding at least 5 competing programs after having stolen my invention.” So you see, had Big Business dominated James Madison (and the founders who created the US patent system) like it does our current Congress; had patent reform and it’s “first to file” system been the law at that time, Lamson would have been sunk, because he was second to file. “But, under our current patent system,” notes Lamson, “as has been the case for US inventors continuously for over 220 years since 1790, I was able to prove to the US Patent & Trademark Office  that I was actually the true and first inventor and I got the patent, thus effectively invalidating the prior-filed patent by the Government’s invention thieves.” David Pressman, Lamson’s San Francisco patent attorney did this by a sophisticated, but relatively inexpensive device that is familiar to most patent attorneys called a Rule 131 Affidavit, in which he submitted incontrovertible evidence proving Lamson’s earlier invention. Due to the arduous task of overcoming that prior filing it took five long years for Lamson to get his patent. Once he got the patent, he started looking for contingent fee lawyers to go after these invention pirates who were infringing his now issued patent. But, there was not yet enough money in it and the Government, with its limitless resources, would be the main Defendant. It took him seven years to locate an attorney willing to take on the Government.

Bruce Burdick, Lamson’s patent trial attorney, notes “Yes, you guessed it, Rule 131 will be abolished by the ‘America Invents Act’ so true inventors like Lamson can’t do that to BIG business or BIG government any more. But patent reform was NOT the law in 1997, so Dr. Lamson, the true inventor, got the patent in 2002 and after years of requesting the Government to pay just compensation, we filed suit in July 2011. That suit could not have occurred under first-to-file, but rather the Ga. Tech and Emory Univ. and Government invention thieves would have been deemed the “inventor” and he would have become the infringer. So you see, his story shows the folly of this new patent bill in very real terms in a very real situation.” Burdick also notes “By the way, Dr. Lamson’s Senators, Barbara Boxer and Diane Feinstein were both leading opponents of First to File, arguing to the bitter end in favor of Amendments http://www.govtrack.us/congress/vote.xpd?vote=s2011-31 seeking to delete it from S23, the corresponding Senate bill and Senator Boxer was one of only 5 voting against the entire bill. http://www.govtrack.us/congress/vote.xpd?vote=s2011-35 . His representative, Lynn Woolsey, also voted against patent reform. http://www.govtrack.us/congress/vote.xpd?vote=h2011-491. Dr Lamson is proud of their effort on behalf of inventors like him. We now hope the US Court of Claims sees the truth and awards him the compensation he is due for this invention that is improving the lives of so many thousands of sufferers of PTSD and other psychological disorders. In America, great inventors should not be treated like this, especially by their own Government, or they will just stop inventing. It is an outrage.”

“Lest you think the Government acts fairly with inventors,” Burdick notes, “Dr. Lamson tried filing an Administrative Complaint of Patent Infringement in accordance with DFARS 227.7004 with the ONR (Office of Naval Research, which serves as Intellectual Property Counsel for the Navy) but that was denied. Since the denial looked bogus, Dr Lamson checked further. By FOIA request, he has recently learned that the Navy has turned down all (yes ALL, every single one) of such complaints for at least the last 15 years. The Government issues these patents and then does not even honor them. It’s really infuriating to inventors like Dr/ Lamson. His own Government has left him with no other choice but to file suit against them, so June 10, 2011 we filed suit in the US Ct. of Fed. Claims (USCFC), so his story is a matter of public record, and he will get his day in Court.” His Complaint to DOD is posted online at http://www.burdlaw.com/references/20101020%20Administrative%20Claim%20-%20final.pdf and his court Complaint at http://burdlaw.com/references/PX20110610%20Complaint.pdf . If you read those Complaints you will see many of the same facts he has described above.

As Dr. Lamson notes in closing, “The US Government says it is stimulating the economy to create jobs. Just the opposite. The last remaining corner of hope for arresting a downward spiral is inventing to achieve a competitive edge for the economy and for personal livelihood. The military is not only waging war abroad but silently destroying the US economy from within. It is insidious. And now the best Congress money can buy is about to kill the patent system for inventors like me. I want to create a business, hire people and cure people and improve their lives. My Government is stopping me by stealing from me my life’s work. Wonder why America’s economy is in decline? Who’s watching? Who’s reporting? “

Dr Lamson can be reached by email at rvirtigo.lamson@gmail.com or phone at (415) 209-4269. His attorney, Bruce Burdick, can be reached by email at beb@burdlaw.com or phone at (618) 462-3450.

 

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.

 

Small Seattle area co. Eagle Harbor Holdings seeks to sink SYNC with patent suit.

05 Jul

http://www.techflash.com/seattle/2011/07/eagle-harbor-holdings-sues-ford.html

Small Bainbridge Island (Seattle-Tacoma area) company Eagle Harbor Holdings sues Ford for patent infringement of 7 patents. Founders Joe & Dan Preston also founded Airbiquity, a Seattle company whose technology is in GM’s ONSTAR. The company is encouraged, no doubt, by the success of i4i in its suit against Microsoft which kept a high burden of proof in invalidation defenses against such suits.

 

ICANN approves new top level domains & awareness campaign

05 Jul

http://www.icann.org/

On 20 June 2011, ICANN’s Board approved a program that will add to familiar top-level domains such as .com, .org, and .net, the possibility of having almost any word in any language as a top-level domain. This massive expansion of the number of possible domain names calls for an equally significant communications campaign to raise global awareness about the program. The rest of 2011 is a communications period dedicated to raising awareness around the world about the opportunity and risks associated with applying for a new gTLD. The Application period opens 2012-01-12 and will run for 90 days (until 2012-04-12), and the evaluation fee is set at $185,000, with approximately a one-year approval cycle.  This is sure to raise a number of trademark battles and be an expensive new vanity asset for organizations, particularly multi-national corporations.

IP attorneys need to be advising their corporate clients about this, so steps can be taken to protect corporate tradenames and trademarks.

For information, see the ICANN new gTLD FAQ sheet

For those interested in possibly applying there is an Applicant’s Guidebook.

ICANN has issued a request for proposals (RFP). The objective of the RFP is to retain an advertising agency to help ICANN develop, implement and measure the success of a global advertising and awareness campaign for new generic top-level domains (new gTLDs), stating:.

“Please review the attached RFP for an overview of the program, our vision and proposal requirements. Send any questions about the RFP to michele.jourdan@icann.org by 11 July 2011. Responses to inquiries will be posted to a community wiki by 13 July 2011. All responses are due by 8:00a Pacific time, Monday, 18 July.

RFP – New gTLD Global Awareness Campaign
http://www.icann.org/en/topics/new-gtlds/rfp-new-gtld-global-awareness-campaign-05jul11-en.pdf [PDF, 633 KB]”

 

 

Twitter loses long-shot venue challenge

03 Jul

Techdirt.com article 2011/07/23

Twitter Tries To Move Patent Trial By Saying All Twitter Users Agree To Settle Legal Disputes On Twitter’s Home Turf

from the nice-try,-but-no dept

It’s no secret that patent holders suing for infringement prefer certain venues. And, many tech companies based in the Bay Area like to try to get those cases moved to a local court instead. There’s been some efforts to move cases to better locations, but thanks to some tricky games, lawyers can frequently keep the cases where they were filed.

Apparently Twitter thought that it might try some tricky lawyers’ games of its own to get one case transferred. The company tried arguing that because the patent holder, Dinesh Agarwal, who was suing them was also a Twitter user, it meant he’d agreed to Twitter’s terms of service… which state that all lawsuits against the company must be brought in San Francisco. That’s pretty clearly a tortured reading of the Terms of Service, because this lawsuit had nothing, whatsoever, to do with Agarwal’s use of the service… and the judge didn’t buy it, allowing the case to continue in Virginia, where it was filed. As the judge noted, agreeing to this “would potentially foster satellite litigation in every patent case involving a social networking market participant,” basically guaranteeing that such lawsuits could only be brought where social networking companies wanted them to be brought.

Burdlaw comment: This suit was pursuant to patent laws not Twitter service to Agarwal. First, the plaintiff was VS Technologies, which did not have a Twitter account and was not created until after Agarwal got a Twitter account, so the Judge found that VS Technologies could not have agreed to the TOS. Hard to dispute that. Second, the suit was not about Twitter’s service to Agarwal, but rather Twitter’s adoption of items covered by the VS Technologies patent. Third, if TOS trumped patent law choice of forum, a patentee suing multiple social networks would generate satellite lawsuits in each network’s TOS forum choice, rather than in one multi-defendant case in one jurisdiction before one judge, and judicial efficiency favors one case rather than an unlimited number when the issue is essentially the same. Hard to dispute that logic. Fourth, in this case the balance of convenience appeared to be either equal or favoring non-transfer. That balance is for the Court to determine, not Twitter. Fifth, Agarwal’s undisputed testimony was his Twitter account was only obtained in order to gather evidence for the suit, not to use the service. Sixth, the USDC-VA-E has a faster docket (it is one of the famous rocket docket jurisdictions for patent cases), and that was a minor factor favoring non-transfer to USDC-CA-N. Not mentioned was the real reason, which the Judge well knows, that the USDC-VA-E is much more pro-plaintiff than the USDC-CA-N so the plaintiff wants it to stay at the USDC-VA-E and Twitter, the defendant, wants it the hell out of there and into a more anti-patent forum like the USDC-CA-N. If Twitter were the patent owner and VS Technologies the defendant, Twitter would be arguing the other way, namely to keep the case there. All in all, this was a real legal stretch by Twitter, indicating desperation. Expect Twitter to try to settle this one.


 

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.