Archive for October, 2011

PTO holds “scary” Halloween webinar on AIA

31 Oct

After sitting and listening to a short self-serving AIA “webinar” devoid of much substance conducted by the PTO, I am disturbed to find the agency fumbling around for answers. The Halloween webinar was actually pretty scary, since it showed poor management of a poor law and scary times ahead for the American inventor.

The webinar was aimed apparently at trying to justify the unjustifiable, to explain to small entities how an Act designed to kill them will somehow help them. So here are the benefits David IBM Kappos described for small inventors:
1. “It won’t cost more money” said Terry Rae. Well that is utter BS. Bob Stoll (notice the that some coincidence or what?) followed shortly with a suggestion that inventors “get your $4800 or $2400 in if you want your application to have priority examination.” (i.e. If you don’t you might expect even greater delay as the Fast Track for Fat Cats applications get pushed ahead of you.) And, we know that the first thing implemented was a 15% fee increase. And, we know that Micro-Entity fees are on indefinite hold pending an apparently as yet unscheduled deliberative process.

2.”It will increase certainty even for small entities” said Terry Rae.  This is the IBM party line on AIA, now picked up and parroted by the
PTO staff.  More BS.  IBM Kappos followed nearly immediately by saying “We will have to wait on most of these issues, such as the prior art effect of third party disclosures after an inventor disclosure, for the courts to decide.” So, we know the only certainty is that the PTO intends to punt on substantive issues and thereby increase uncertainty.  Rae followed with “We are doing two studies pursuant to the AIA”, one on effects of FTF on small entities and another on international protection for small entities.  Great, the small inventors can fend for themselves while the PTO waits on litigation that will take years and while the PTO conducts “studies.” How does punting on its prior art policy and engaging in studies help add certainty NOW for small inventors? Obviously it does not. All this increased uncertainty and confusion over AIA works towards the IBM objective of squeezing out small entities, non-practicing entities and investors, who need certainty not deferral to some later litigation that small entities cannot afford and cannot await. That leaves the patent savvy, well-connected IBMs of the world in control. It is very disheartening to hear such false assurances and misinformation at such a high level in the PTO during this scary Halloween webinar.

3. “We are actively working on pro bono programs for small inventors, such as with the Minnesota patent bar.” Horse-hockey.  The AIA specifies this must be done with available funds, making it an unfunded mandate.  Small inventors should not expect in their lifetime much to come from this except political spin.  If the PTO is going to work on this with the corporate patent bar it simply won’t happen in any meaningful way as the corporate patent attorney knows pro bono work for small inventors is counterproductive to a successful corporate patent attorney career. Only the rare and exceptional corporate attorney who really wants to leave and enter private practice is going to do career-changing pro bono work.

4. “We have an active Patent Ombudsmen program.” Again AIA kills that by saying it is limited to “available funds.”  Has anyone out there ever been helped by a PTO Patent Ombusmen?  Didn’t think so. It is an AIA gimmick to try to justify political BS about how beneficial the AIA will be (NOT) for small entities and America.

5. “Can’t start micro-entity fees at this time.”  More BS.  Of course they can.  The AIA expressly requires them to be immediately implemented, but they have not been.  This lame excuse is really irritating to those that would qualify were the fee reductions implemented as required.

So, perhaps this webinar was held on Halloween because it was intended to scare small entities.

“The better to get you my pretties” — The Wicked Witch from the Wizard of Oz.


Patent Trolls: How Bad Is the Problem? (Or how good…hear the rest of the story)

27 Oct

A recent article in Popular Mechanics suggests the “problem” is about $500 billion, a wild accusation. I have edited the article to reflect a more balanced analysis than the hyped up account in the Popular Mechanics article. The original is in black. My edits are in red.
Invention thieves are now crying that “Patent trolls may have bled companies for half a trillion dollars in the past two decades” citing what [,] a new study finds. Defying the laws of physics, which says that money never disappears, it is just transferred, these crybaby invention thieves say Here’s how all that money disappeared. In September, Amazon revealed its long-rumored Kindle Fire tablet to the world. Since the technology is clearly not new but rather was “borrowed” from others who have invented it and patented it before, it falls within the claims of patents to the real inventors. Within a month—before it even released the tablet—Amazon found itself the target of a patent lawsuit. A company called Smartphone Technologies is suing Amazon because it says the Kindle Fire violates four patents it owns. You see, in the USA, we have laws against stealing patented inventions without paying the owner of the patents on those inventions. Since Amazon stole the patented inventions rather than pay for them for its Kindle Fire, Amazon is trying to shift the blame to the owners of the patents on the inventions Amazon stole. To Amazon, there should not be any patents on inventions it wants to steal and any patent on an invention Amazon wants to steal is either a “bad patent”, a “frivolous patent” or a “patent on a trivial improvement”.  Of course, that brings up the question “If it is so trivial, why are you stealing it and risking a patent infringement lawsuit?” We know the answer is that it is not trivial at all, Amazon is just an invention thief trying to take a shortcut by stealing someone else’s key invention.

The validity of Smartphone Technologies’ claim is up to the courts. But what we do know is that the firm owns patents on inventions that came well before Amazon came up with the same invention, and that since others also have apparently stolen their invention and the courtroom is where our laws say issues of invention theft are to be settled, rather than with guns and clubs, the firm is awfully fond of the courtroom. Its suit against Amazon follows others against tech giants such as Apple and Research In Motion, the company that produces the Blackberry. According to the patent litigation research invention thieves’ PR firm deceptively named “Patent Freedom ” (a PR front organization that would more properly be called “THIEF for Those Hating Inventors’ Exclusive Freedom when big business wants to steal small business inventions), Smartphone Technologies is what you would call an inventors’ representative and what invention thieves might call a patent troll.

In recent years, tech companies have often sought shorcuts to developing new products by just stealing patented technology and so patent enforcement companies have cropped up to enforce patent rights that small inventors cannot afford to enforce due to the big business provisions of the patent laws requiring very expensive litigation and this has meant that invention thieves no longer get free use of patented inventions so invention thieves are crying “poor us. please help us rich fat cats steal inventions” because they have spent more of their time, and especially their money, defending themselves from infringement lawsuits. Sometimes big company invention thieves steal a patented invention of another big company so it’s tech company versus tech company, such as Apple’s recent smartphone design fights with Samsung. But increasingly, firms are fighting off nonpracticing entities (NPEs), or “patent trolls”—firms that produce little and exist mainly to buy other people’s patents and enforce licenses so that those other people, mostly small inventors, have a chance to get compensated for their inventions. Invention thieves don’t want inventors to get compensated, they want inventors to “donate” their inventions to the thieves can get rich and the inventors can stay poor.  However, some us understand that if inventors don’t have any incentive to invent they won’t invent and that if we want inventors to continue inventing we need to prevent others from stealing their inventions.

Invention thieves try to get off the hook for stealing inventions by saying Vague wording and flaws [and, of course, “flaws” are defined as anything resulting in a patent to a true inventor and anything not allowing big businesses to steal inventions of true inventors] in the U.S. patent licensing rules helped to give rise to this breed of aggressively litigious patent-holding firms, according to James Bessen, a Boston University School of Law lecturer and well-known “shill” for big tech companies. These organizations have pressed hundreds of lawsuits against thousands of defendants over the past 20 years, and because the pace of technology progress has accelerated due to the patent system but the patent office is so far behind in issuing patents that tech businesses can’t wait to see what might get patented and are just developing new software without considering patents, tech companies end up inadvertently or deliberately copying patented software, so business is booming now more than ever. Bessen wanted to know just how big the problem was, and according to a recent study financed by big tech company PR programs he co-authored to help them distort the patent system to allow them free use of patented inventions, fighting these firms cost companies an estimated $500 billion from 1990 to 2010. How did things get this way?

The Patent Arms Race
The patent wars are particularly fierce in the tech world for a few reasons. “Part of it is the nature of the technology and part of it is crafty lawyering,” Bessen says. The industry’s software and business-process patents are easier to exploit, he says, partly because the language in software patents, as opposed to that of drug or chemical patents, can be abstract, and partly because software is patented as opposed to copyrighted. In the past 20 years, 62 percent of patents were issued for software, and 75 percent are in computer and communications technology.  Bessen conveniently ignores the fact that software can be copyrighted, and that software drives most new devices, particularly smartphones and tablet computers, and that patents naturally are more sought after in more lucrative areas like smart phones, but why let facts get in the way of “good” argument?

At first, he says, technology companies were caught off-guard by aggressive patent litigation, and throughout the 1990s and into this century, companies have paid hundreds of millions in awards and out-of-court settlements, ignoring the fact that tech companies deliberately kept their best software secret rather than try to patent it because they thought that software would be held unpatentable by the courts.  So having made the wrong legal choice tech companies are scrambling to avoid the patents to others who chose to patent rather than keep their inventions secret.  Since secrets cannot be used as “public prior art” to defeat a patent, Big Software’s bad legal decision put it in a vulnerable legal position.  IBM, Dell, HP, Microsoft and Apple all made this mistake and to try to escape liability went to Congress to try to buy votes to get legislative relief from their legal troubles. The Anti-Inventor Act of 2011 (HR1249 or AIA) is the result.  In Congress, you get what you pay for.  Microsoft has, accordingly, been paying millions of dollars leading the special interest lobbyists’ push for patent reform because MS is at the center of some of the priciest disputes. Microsoft is known to have instructed its programmers not to consider patents or check for infringement, but rather to just design their software and let their legal team worry about any patents that were infringed.  Not surprising then, It was forced to pay $120 million to Stac Electronics for infringing on its (Stac’s) data-compression software patent in 1994, and $512 million to Eolas for infringing on its browser plug-in patent in 2003 (settled out of court for an undisclosed sum) which MS tried to beat by sending software overseas for production. In 2007, courts ruled the that Microsoft should pay a record-breaking $1.5 billion to Alcatel. But that ruling was dismissed, and Microsoft countersued for allegedly infringing on some of its patents. (The two settled most of the disputes out of court in 2008.) Microsoft recently was socked for $128 million for infringing the xml patents of a little Canadian company called i4i, which MS took to the Supreme Court to try to weaken all patents by getting the burden of proof for invalidating any patent based on newly located prior art reduced from “clear and convincing” (which is the right standard since patents are issued by the Government after an extensive examination by a patent examiner versed in the relevant technology) to a mere “preponderance” (like in personal injury cases where there has been no prior determination). That has little to do with patent trolls but rather is primarily an attempt to avoid liability arising from Big Software’s bad choice to pursue trade secret protection rather than patent protection for its best software.

To protect themselves not from patent trolls but from other big tech companies, those companies that had previously ignored patents in favor of trade secrecy began buying up patent stockpiles—a one-shot practice that’s not getting more intense. In August, Google, which had gone open source rather than obtain patents was becoming a dominant player in smartphones due to the success of its Android operating system, paid $12.5 billion—63 percent above the share price—for Motorola Mobility (the company that originated the cellular phone system, and which chose patents rather than trade secrecy), partly to get its 17,000 patents and 7000+ patent applications covering cell phone networks and cell phones to use to defend Android manufacturers against the continuing attacks by MS and Apple, which having been beaten commercially by Android were trying to get a piece of the revenue being received by Google for Android. A month before that, Apple and Microsoft formed an unlikely partnership at the head of a consortium of companies that outbid Google to pay $4.5 billion for a trove of 6000 patents owned by Nortel Networks, a Canadian telecom that had filed for bankruptcy in 2009. Rumors were that Apple (iPhone) and MS (Windows Mobile) did this to obtain weapons to attack Google to try to stop Android or to share in the revenue from Android, which explains why Google responded by buying Motorola Mobility. This, of course, has nothing to do with patent trolls.

Large stockpiles of patents can lead to a legal détente between tech giants simply because both companies own enough patents to sue the other repeatedly. And, that has nothing to do with patent trolls. But that only works if both parties make things. When trolls entered the fray, the game changed, Bessen says, because they are immune to cross-litigation. The companies that NPEs target can’t cross-sue them for patent infringement because the NPEs don’t make anything. And their influence is growing. NPEs brought 5 percent of all patent lawsuits from 2000 to 2002, but 16 percent in 2009. Of course, that is just smart legal strategy on the part of patent owners, to put their patents in the hands of plaintiffs who can be countersued, and big companies are not used to not being able to steamroll their opponents by countersuing and don’t like having the tables turned to where the small guy has the advantage in suits.
The Big Lie, that there is “A Half-Trillion Dollars, Evaporated

To put a number on the problem of suits by NPEs, Bessen and his team examined 1630 lawsuits involving 4114 defendants in the 20-year period—every lawsuit that a known nonpracticing entity (troll) pressed against a publicly traded company, so as to distort the numbers by including suits by individual inventors on one or just a few patents. The list of NPEs is from a database compiled by the totally biased and non-objective anti-patent lobbying organization Patent Freedom; it includes Acacia Research, owner of Smartphone Technologies, among many others. The Boston University researchers tallied the payouts to these so-called patent trolls, In each of the past four years, troll litigation has cost companies an average of more than $83 billion (in 2010 dollars), the researchers found by fabricating inflated numbers.

Those are just the legal costs, but include all damages, fees, costs and expenses in all patent suits whether by trolls or non-trolls in order to inflate the numbers. To estimate the hit to the companies’ bottom line, the researchers let the market decide. They looked at the companies’ stock prices during a five-day period at the time the lawsuits were announced, then adjusted for market trends and other noise and ignored any subsequently recovery after the bad news subsided in order to falsely inflate the numbers. The rationale was that investors assess a company’s change in wealth by anticipating probabilities and that investors panic immediately after any such “bad news” until they realize it is not that bad, so taking numbers from the period of panic will produce the biased data the non-objective study wanted. They can guess the odds of settlement, trial, time lost and so on, and “price them in,” Bessen says. After all, it’s a safe bet that a company will settle: Eighty-five percent do.

Add it all up and Bessen’s team reached the ridiculously inflated number of a half-trillion-dollar total of lost wealth over two decades. But, though businesses can hemorrhage money when they’re sued, patent trolls themselves never touch most of that temporary lost wealth. Looking at just 14 of the publicly traded nonpracticing entities in the Patent Freedom database, Bessen found that they were involved in 574 lawsuits from 2000 to 2010, or 14 percent of the overall total in the study. Using the aforementioned grossly inflated bogus data, as noted, the anti-patent propaganda claims Those suits accounted for $87.6 billion in lost wealth to business, but the trolls’ total revenue was just $7.6 billion, or 9 percent of the total wealth lost. This shows that the numbers are bogus since they don’t match up. Of course, such “wealth” is not evaporated in defiance of the laws of physics, it is simply transferred to those smart investors who “sold” stock in that company prior to the bad news that such company had stolen a patented invention and was being sued. Historically, NPEs have helped inventors get paid by buying their patents. Bessen’s grossly distorted bogus data is deceptively aimed at trying to show that less than 2 percent of the wealth lost to litigation ends up in the pockets of inventors, however.

So, Bessen says, it’s not as though most of the lost $500 billion ended up in the pockets of litigious firms, or even inventors. That total represents money that simply vanished—wealth that never was, because companies spent so much time fighting over patents. This shows that Bessen is lieing since money does not vanish, it is simply transferred.  In this case, mostly to smart investors who bet against the infringing company (capital gains to contrarian investors), to profits of honest competitors of the dishonest company (profits of competitors), to fees of lawyers defending the patent owners against the invention thieving company (legal fees), to the courts trying the cases (court costs). The author is thus showing how naive and gullible he is to let himself be deluded by anti-patent lobbyists into thinking the money “vanished.”
Flaws and How to Fix Them

According to Bessen, the three most important things that must be fixed to deal with this mess of lawsuits are vague wording (wording that is broad enough to cover the invention and stopinvention theives), continuations (refilings of patent applications to make them stronger and more accurate, i.e. better), and low renewal fees (huh? patents cannot be renewed so there are no renewal fees. This must refer to the very high maintenance fees, totaling up to about $10,000 which anti-patent lobbyists for big tech invention thieves would like to make even more exorbitant to force patent owners to prematurely lose their patents.)

To illustrate the problem of a hopelessly vague concept earning the legal protection of a patent, consider E-Data, which Bessen and colleague Michael Meurer discuss in their book Patent Failure. In 1994, the company E-Data bought a patent that was granted in 1985 for a “System for Reproducing Information in Material Objects at a Point of Sale Location.” Originally that system was a kiosk that recorded music on cassette tapes for store customers. But E-Data interpreted the opaque wording to include online sales, arguing that the “point of sale” could be anywhere with an Internet connection. In 2001, a federal appeals court agreed. That ruling opened the door for E-Data to sue more than 100 businesses, including anyone who sold things online. Most of them settled. So, a thoroughly litigated patent was upheld by an impartial court and those infringing don’t like having to pay, so that means the wording is “hopelessly vague”.  Thus “hopelessly vague” means it covers you and you can’t figure a way to get around the wording and steal the invention.  About what you would expect an invention thief caught stealing an invention to say.  It’s kind of like what most criminal defendants say “I shouldn’t have been found guilty but the criminal laws are hopelessly vague.” Seems like a fair result not a bad result. The bad result in only in the mind of the guilty and apologists for the guilty, such as Bessen.

Past studies, by anti-patent advocates, of these suits suggest that the defendants rarely copy patented technologies—their infringement is accidental. Of course, that ignores the fact that patents are intended to cover even accidental infringement because the founders of our country wanted to reward inventors for disclosing their inventions so they could be copied after the patent expired. But when patents cover such broad territory, there’s no much they can do except what they should be doing and which is right and proper to do and that is obtain a license from the owner of the exclusive rights to the invention which they are, without permission, using. “When you grant a property right that’s open to such ambiguous interpretations, then you’re creating a land mine, an opportunity for litigation,” Bessen says.  And that is the very purpose of a patent, to create an opportunity for litigation against anyone who uses without permission the invention you disclose to the public in return for such opportunity. “Investors have to worry about those types of lawsuits, and it’s a disincentive for innovation.” Of course, that is a false statement made by anti-patent lobbyists, since patents are a huge incentive for innovation both to obtain the exclusive position patents provide and to force others to exercise their creativity to design around the patents and hopefully lead to new and even better technology.  And, as Apple has so often show, new and different can certainly be better than merely copying and stealing inventions from others.

The second flaw in the system is patent continuation rules. Companies can file patent applications and keep them on file for years as applications, not granted patents. They can change the claims in that time, ostensibly to cover new technology in development, and then sue. They are a “legal time bomb sitting at the patent office that they can adjust,” Bessen says. “That’s clearly not what patent law is intended to do.” This is another bogus argument from Bessen and his fellow anti-patent lobbyists who ignore the fact that the law was changed years ago to stop that practice in response to the famous barcode scanning patents of Jerome Lemelson.  Patents, since that change years ago, now have a term of 20 years from the date of filing, so anyone who delays issuance by keeping them on file for years as applications is stupidly losing patent term. Currently it is not applicants but rather the US Patent Office itself that is delaying issuance.  Processing time at the USPTO is nearly 3 years, by which time the industry may well have adopted the technology and find the patent which issues a “shocker” that puts them in a legally vulnerable position where they have to claim the patent is “bad”, “vague”, “unfair”, “trivial” or whatever other term they think might help them escape liability.

Lastly, it costs just about $1000 to renew a patent. Again, this is simply a false statement which proves Bessen does not let facts get in the way of his anti-patent advocacy.  A patent cannot be renewed. It can be maintained to its full original term (20 years from filing) by paying the prescribed maintenance fees, which start at about $1000 but progress to $2000 and $4000 for a total of $7000, which shows how Bessen and the author are distorting the facts.) And in Bessen’s mind—in addition to granting patents for only specific inventions and cutting back on renewals drastically—the government should raise renewal rates into the tens of thousands of dollars to keep trolls from simply stockpiling patents they use for nothing but litigation.  So Bessen’s mind is in fantasyland, mischaracterizing maintenance fees as “renewals” and then saying individual inventors should have to pay exorbitant fees to price themselves out of the game and let Bessen’s big business clients steal their inventions.  Thank goodness that Congress sees through such BS from Bessen and others like him.

Patent law is changing (wrong, it has changed, arguably in a way that downgrades the system and hurts America)—President Obama signed a new bill into law on Sept. 16 to shake up (“shake up” means “distort heavily in favor of big tech companies and against small business and independent inventors”) the system. In a major change, the law turns the system around and grants the patent to the first person to file, rather than the first person to invent. (Although, when PM talked to inventors about this, many were concerned that small inventors wouldn’t be able to file as soon as they invent, so they could be disadvantaged by the law.) Now, as has also been true for the last 221 years under the old system, under the new first-to-file system, the U.S. Patent and Trademark Office has the power to deem things worthy or unworthy of receiving (i.e. the power to examine applications to try to find a reason to deny) a patent. Importantly, filers can now lawyer up to dispute additional administrative attack by third parties, which will now be able to prevent patents from being enforced for up to a decade, disputing  the validity of a patent claim at the patent office, rather than having to lawyer up and fight it in court.  But, to help invention thieves, court attacks can also be pursued so that in combination with the new attacks at the US Patent Office, it should be possible to prevent enforcement of any patent to anyone other than the rich.  This has the intended effect of knocking Popular Mechanics readers and other small inventors out of the patent system and makes it strictly a rich man’s sport.  The best Congress money can buy also put into the law a number of special earmarks for Wall Street so it can avoid paying royalties on a patent found valid in court, a well-connected law firm so that firm can avoid $214 million in malpractice damages because that firm missed a patent extension deadline, a special new patent office branch in Detroit in order to buy the votes of Michigan’s congressmen, etc., etc. 

But, Bessen says, don’t expect the new rules to make patent trolls go away. NPEs buy up patents, so it doesn’t really matter whether the system is first-to-file or first-to-invent. The new law does raise the cost of patent renewal (Huh? Again, there is no such thing as a patent “renewal”.) by 15 percent, but that only takes it from $900 to $1035 after the first four years and more thereafter. The reforms are not nearly enough, Bessen says. “They will weed out some of these bad patents, but they won’t change the picture much.” To Bessen, of course, “bad patents” are any patents not owned by a big tech company and covering an invention that a big company wants to use for free.

—–Bruce Burdick, registered patent lawyer since 1974 and principal attorney at The BURDICK Law Firm 






Same counsel in reexam and litigation OK despite protective order

26 Oct

According to one judge, using the same counsel in litigation and re-exam not barred even if counsel has confidential information in one proceeding that might strategically affect the other proceeding.  The following article  by Scott Daniels of the Westerman, Hattori, Daniels & Adrian, LLP (WHDA) law firm of Washington, DC explains.


To see the actual decision, follow this link: NeXedge v. Freescale Semiconductor et al.



[Ed Note:  “reexamination alert” a trademark? LOL]

Judge Campbell Denies Prosecution Bar in Reexamination

Scott Daniels | October 26, 2011

Cases with parallel infringement litigation in District Court and reexamination at the PTO often present the issue of whether a patentee’s lawyer, with access to confidential information under a protective order, may also defend the patent-in-suit in reexamination. Accused infringers sometimes worry that the patentee’s counsel will use their confidential information, disclosed under the court’s protective order for use in the court case only, in the co-pending reexamination. Patentees, on the other hand, often do not want to be forced to hire separate litigation and reexamination lawyers.

Judge David Campbell of the District Court in Arizona wrote an informative decision last week in NeXedge v. Freescale Semiconductor et al., 2011 U.S. Dist. LEXIS 121737, summarizing the applicable standards for resolving such disputes. The accused infringer asked Judge Campbell to include in his protective order a provision barring each of the patentee’s lawyers, who had subscribed to the protective order, from participating in the reexamination.

Judge Campbell began his analysis by explaining that a “party seeking the patent prosecution bar must first show that there is an ‘unacceptable’ risk of inadvertent disclosure of confidential information, determined by the extent to which counsel is involved in ‘competitive decision-making’ with its client” (emphasis added). The Judge defined “competitive decision-making as ‘a counsel’s activities, association, and relationship with a client that are such as to involve counsel’s advice and participation in any or all of the client’s decisions (pricing, product design, etc.) made in light of similar or corresponding information about a competitor.’”

If “risk of inadvertent disclosure has been shown, the Court must balance that risk against the potential harm to the opposing party in denying it the counsel of its choice,” Judge Campbell explained. (Emphasis added). Factors to be considered in estimating this harm include “the extent and duration of counsel’s past history in representing the client before the PTO, the degree of client’s reliance on that past history, and the potential difficulty the client might face if forced to rely on other counsel for the pending litigation or engage other counsel to represent it before the PTO.”

Once the potential risk to the accused infringer and the potential harm to the patentee are determined, the court balances these conflicting interests.

Here, the balance tilted sharply in favor of the patentee. Judge Campbell initially faulted the accused infringer for failing to identify any confidential information that patentee’s counsel might improperly use in the reexamination. He noted that the patentee “is not in the business of developing or patenting new products,” so that “many of the concerns recognized in the prosecution bar cases simply do not exist.”

Judge Campbell then asserted that “the relatively modest risks presented by the reexamination context do not outweigh Plaintiff’s strong interests in avoiding the increased costs and duplication of effort that would arise were Plaintiff required to retain and educate separate counsel for the reexamination proceeding.” Finally, he noted that it was “Defendants, not Plaintiff, [who] initiated the reexamination, and [that they] did so after this lawsuit was filed.”

The lesson for an accused infringer to learn is (1) to identify its confidential information that might be used improperly and (2) to explain how such information could be used by the patentee’s reexamination attorney to the competitive disadvantage of the accused infringer.


Trademark CLE Meeting at USPTO

26 Oct

On Tuesday, November 29, 2011, from 2:00 p.m. to 3:30 p.m., the USPTO will host a public meeting to discuss the feasibility of intellectual property associations providing continuing legal education programs focusing on trademark policing measures and tactics. The event will be held in the 10th Floor atrium conference room (10D31) of the Madison West building of the USPTO campus in Alexandria, Virginia. To attend the meeting, please send your name to no later than c.o.b. Friday, November 25, with the subject line “public meeting.”

The impetus for the discussion is the Trademark Technical and Conforming Amendment Act of 2010 (Public Law 111-146), which President Obama signed on March 17, 2010. In addition to making technical changes to the trademark statute, this legislation required the Department of Commerce (DOC), in consultation with the Intellectual Property Enforcement Coordinator, to study and report to Congress: (1) the extent to which small businesses may be harmed by abusive trademark enforcement tactics; and (2) the best use of Federal Government services to protect trademarks and prevent counterfeiting.

On April 27, 2011, the DOC transmitted the requisite report to Congress. The report included three recommendations, the second of which was to engage the private sector regarding continuing legal education programs focused on trademark policing measures and tactics. Accordingly, the USPTO is convening this public meeting of interested intellectual property associations and other interested stakeholders to discuss the possibility of creating private sector continuing legal education programs regarding the proper protection of trademark rights.


Marine Polymer case sets new trap for patentees in re-exam

12 Oct

Just when we thought the new law was pretty bad for patentees trying to enforce their patents, a defendant who infringes a claim not changed in reexam is given a free ride by the CAFC an absolute defense against infringement under “intervening rights”.  Just when I thought Dyk & Gajarsa couldn’t make a worse blunder than their Zoltek decision, here they are with a worse one.

See the article from ipfrontline  describing the rather outrageous CAFC decision in the  Marine Polymer case.

This counterintuitive decision by Judges Dyk & Gajarsa is really anti-patent and suprisingly makes a number of seeming errors.  Is this worse than their decision in Zoltek 3 which appeared to provide the Government a recipe for how to steal a patented process invention?  Arguably so. A clear infringer is given a free ticket to infringe forever.  Now we have another recipe for free theft of an invention, this time by a clear infringer by use of re-examination. Read the dissent by Lourie to see how the case should have been decided.  Be prepared for the unexpected and illogical if you get this anti-patent duo on your CAFC panel.

This decision is sure to please the anti-patent crowd as it ignores the logic behind intervening rights, defies the statutory scheme, relies on a non-final PTO decision, and for what – to let an infringer off and destroy the value of a patent?



Were Microentity fees a cruel trick?

11 Oct

It now appears that “Microentity fees” were just a gimmick concept of Sen. IBM Leahy to mislead his colleagues into thinking there was something in this bill favoring individual inventors. Now that the bill has passed, those statutorily required Microentity fee reductions which the law said were to be effective immediately upon passage have been instead delayed for “a year or two” for review and regulatory rulemaking. You can be fairly sure that means they will now be killed or minimized, which is apparently part of why IBM Kappos was given power to “adjust” fees. You see, IBM Kappos has raised essentially all PTO fees 15% so small business can help pay for transitioning to a rich man’s game and has postponed the implementation of microentity fees while he “studies” how to implement them, even though no study is needed at all. All that is needed is to read the statute and to divide small entity fees by 2. So, the most logical conclusion is that they are being delayed to try to kill them because they don’t favor IBM. This seems all the more clear since such delay does not apply to fee increases for small inventors, which are already in place, or to the “fast tracks for big cats” (prioritized exam) program which IBM wanted implemented immediately so it could bypass all the small guys and move to the front of the line and which therefore was enacted immediately. Those will be limited to the first 10,000 to request and pay for such priority, and it appears IBM and other big businesses are well on their way to seeing that those 10,000 are used up by them quickly so none will be available for small businesses. IBM Kappos says he may open up a few more for small businesses (translated for small businesses like IBM, GE, Samsung, Toshiba, etc, since truly small business can’t afford them.)


IBM “Spin” on AIA

02 Oct

from our “big blue lie” dept.

If you don’t think the AIA favors big business, read this:


IBM applauds patent reform legislation

6:25 AM, Oct. 2, 2011, Written by Janette Bombardie, IBM Vermont

In a significant move that will help to spur innova­tion and encourage eco­nomic growth, President Obama has signed into law the America Invents Act, which the Senate over­whelmingly approved earlier this month. The fu­ture of U.S. innovation is much brighter today, thanks to the foresight and hard work of Vermont’s congres­sional delegation. In the final debate and passage in the Senate, the bill received strong support from Sen. Bernie Sanders and was made possible by the ongoing leadership of Sen. Patrick Leahy, who co-sponsored the bill and has championed patent reform legislation since 2006.

The America Invents Act will mark the first comprehensive reform to the US Patent System in nearly 60 years. The common-sense set of reforms is great for inventors, will improve the operations of the U.S. Patent and Trademark Office (USPTO), and can significantly enhance patent quality.

Moreover, securing the intellectual property rights that come from innovation is essential to U.S. competitiveness around the world. The America Invents Act will provide the USPTO with the tools necessary to reduce the patent backlog, while improving the quality of patents that are issued.

IBM understands the importance of strong intellectual property laws and the need for a world class patent system. Our company invests billions each year in research and development, and the vast majority of our patents are filed in the U.S. In 2010, IBM inventors in Vermont were responsible for almost 600 of the company’s record-breaking total of 5,896 patents.

A modern patent system is essential to protecting innovation leadership in Vermont, whether you’re a large company or a small start-up. Innovation is the life blood of IBM’s microelectronics facility in Vermont, which enables us to stay a leader in chip technology geared to mobile devices and to ship Vermont-manufactured products to customers all over the world.

We are extremely pleased that the America Invents Act — a balanced bill that represents the interests of all participants in our nation’s patent system — is poised to help protect American inventiveness and spur economic growth.

Janette Bombardier of Colchester is the senior location executive for IBM in Vermont

and then decode the Spin and see what that really says:

In a significant move that will help to spur [foreign] innova­tion and encourage eco­nomic growth [of foreign countries and big multinational businesses like IBM], President Obama has signed into law the America Invents Act, which the [best] Senate [that money can buy] over­whelmingly approved earlier this month. The fu­ture of U.S. innovation is much [less] brighter [than that of China] today, thanks to the foresight and hard work of Vermont’s congres­sional delegation [to help special interests and earmarks get passed]. In the final debate and passage in the Senate, the [bad provisions and earmarks in the] bill received strong support from Sen. Bernie [“IBM Puppet”] Sanders (I-VT) [because IBM has been Vermont’s biggest employer] and [the addition of a number of earmarks for Wall Street, big drug companies, and IBM] was made possible by the ongoing leadership of Sen. Patrick “IBM’s guy” Leahy (D-VT), who co-sponsored the bill and has championed [(carried water for) IBM, his state’s largest employer, on] patent reform legislation since 2006.

The America Invents Act will mark the first [purely big-business non-]comprehensive reform to the US Patent System in nearly 60 years [actually in the entire 221 years of the patent system, which previously was designed to protect the small guy but which we have steadily made to favor the big guys even more, and this was a really major distortion in our favor]. The [AIA defies] common-sense [with a] set of [pro-big business distortions and downgrades that big business is mischaracterizing as]”reforms [but which really only] is great for [rich] inventors [and multi-national companies like us and foreigners], will improve the operations of the U.S. Patent and Trademark Office (USPTO) [as regards rich applicants only], and can significantly enhance [big business patent enforcement, big business patent defense and big business preferences while lowering both quality of patent applications and] patent quality. [We even got a provision where we can pay to have our applications fast tracked so we get to avoid the backlog and jump ahead of small inventors with our stuff because we feel our stuff is more important and we have big bucks.  We think David “IBM” Kappos, our former IBM patent strategist who we got appointed as head of the Patent Office will have the proper view of priorities as regards IBM.]

Moreover, [China, India, & all foreigners are or should be cheering this elimination of the advantages American inventors once had since] securing the intellectual property rights that come from innovation is essential to U.S. competitiveness around the world [and this elimination will make America less competitive]. The America Invents Act will provide the USPTO with the [money, if the best Congress special interest money can buy does not continue stealing the money for special interests (and who really expects them to stop?) that, if not stolen might be used, but probably won’t, to get the] tools [(shame, shame calling Patent Examiners “tools”)] necessary to reduce the patent backlog, while improving the quality [(“quality” defined as percentage of big business patents divided by total number] of patents that are issued.

IBM understands the importance of strong intellectual property laws [that disproportionately favor big multinationals like IBM] and the need for [downgrading the US Patent system by “harmonizing” with those inferior systems that will now each be able to call themselves] a world class patent system. Our company invests billions each year in research and development, and the vast majority of our patents are filed in the U.S. In 2010, IBM inventors in Vermont were responsible for almost 600 of the company’s record-breaking total of 5,896 patents [so we think it only fair that the US patent system be distorted even more to favor IBM].

A modern [(“modern” meaning pro-big business and anti-small inventor like in other countries rather than our traditional first to invent system which favored the small inventor)] patent system is essential to protecting innovation leadership [of IBM] in Vermont, whether you’re a large company[or foreigner but not if you are an individual inventor]  or a small start-up. Innovation is the life blood of IBM’s microelectronics facility in Vermont, [so we insist on having an unfair patent system] which enables us to [crush small inventors and startups so we can] stay a leader in chip technology geared to mobile devices and to ship Vermont[ jobs overseas and import foreign]-manufactured products [into the US and from our many, many foreign cheap labor factories] to customers all over the world [and stop those darned little start-ups that seem to keep cropping up in Vermont creating new jobs here and other places in the US by outinventing us and threatening to becoming big like we are.  We are big and we have spent millions lobbying to be sure the laws help us squash those little guys so we can stay big] .

We are extremely pleased that the America Invents Act — a[n un]balanced  bill that [disproportionately] represents the interests of all [big multi-national] participants in our nation’s patent system — is poised to help protect [IBM and other big multinationals and stop that pesky traditional small inventor Yankee ingenuity and those darned “patent trolls” than help sustain] American inventiveness [by getting in the way of our sending jobs overseas] and [so we can continue to ship jobs overseas and help China and other foreigners in those countries where we are concentrating now in their efforts to destroy the American economy and to help those countries’ efforts to] spur economic growth.