Wednesday, February 29, 2012

Intellectual Ventures and Patent Aggregators

Whatever one may think about Intellectual Venture's merit, it has never lacked press coverage. Because of this when it was taking off I told Peter Detkin, a co-founder, at a WSGR alumni get together, "you have become famous." Peter politely denied it, but I think it is true and what Peter has built with Nathan Myhrvold and others is a radical and significant change to the U.S. patent system. Despite all the press, however, it has been difficult to fully understand the method of operation and activities of Intellectual Ventures, which has rapidly accumulated 30,000 - 60,000 patents, making it the fifth largest patent portfolio of any US company.

Tom Ewing and Professor Robin Feldman answer many questions about Intellectual Ventures and patent (the authors say mass) aggregators such as Acacia Research and RPX in Stanford Technology Law Review's The Giants Among Us. I expect more coverage on patent aggregators, but this article is the best I have seen so far.

Also see Patrick Anderson's guest post on Patently-O: Intellectual Ventures Flexes Some Patent Muscle discussing how Intellectual Ventures is increasing its patent litigation effort today.

Copyright © 2012 Robert Moll. All rights reserved.

Tuesday, February 28, 2012

Yahoo! Threatens to Sue Facebook for Patent Infringement

Today, we have news coverage on Yahoo's threat to sue Facebook for infringement of 10-20 social networking patents unless Facebook pays for a license as Facebook approaches its IPO. This tactic to sue for patent infringement right before the IPO is a well known tactic for reaching settlement (who wants to risk a lower evaluation and/or amend the S-1 document to describe a major patent suit?). Here's links to articles giving the details below:

Yahoo Warns Facebook of a Potential Patent Fight - New York Times

Yahoo Picks Patent Fight with Facebook - CNET

Yahoo Stabs Facebook in the Back, Says Pay for Its Patents or Get Sued - TechCrunch

Why Yahoo! Should Seek at least $3 Billion from Facebook for Patent Violations - Forbes

Copyright © 2012 Robert Moll. All rights reserved.

Monday, February 27, 2012

Lobbying to Block ITC from Hearing Non-practicing Entities

When I worked at Wilson Sonsini Goodrich & Rosati in 1993 -1998, I met Barney Cassidy. Barney is a Harvard Law graduate and was a well respected, busy, and well liked attorney at WSGR. Where is he now? Barney Cassidy is General Counsel at Tessera Technologies, Inc., which develops, and patents next-generation electronic devices and related packaging. Tessera has become an important voice in Silicon Valley that believes the US patent system is valuable and under attack by special interests. In Follow the Money - Will the ITC Lose its Patent Jurisdiction? Barney discusses the ITC Working Group's lobbying effort to (1) keep the ITC from hearing non-practicing entities patent infringement cases, and (2) weaken the ITC's ability to block importation of infringing products. Who are members of the ITC Working Group? Apple, Avaya, Broadcom, Cisco, HP, Intel and Oracle. It's best to read Barney's article, but Barney's point is high tech companies have an interest to prevent NPEs (e.g., Universities, independent inventors, and companies who do not manufacture all they patent) from accessing the ITC. Yet preserving the NPE's right to seek ITC enforcement is in America's interest. I am not happy with all the patent infringement actions filed in the ITC, but agree all patent holders deserve the right to file a complaint in the ITC and have it considered on the merits. I know from personal experience that sometimes the companies patents are ahead of the market. Later the company makes what is described in the patent. Should we exclude that company before it begins manufacturing? As Barney asks would we block one of America's most prolific inventors Thomas Edison from filing in the ITC, because he was a non-practicing entity?

Copyright © 2012 Robert Moll. All rights reserved. 

iPhone Stripped Bare!

Geoff McCormick, director of UK design firm The Alloy, breaks open an iPhone to explain the hardware and the hundreds of patents contained in a smartphone in the following 5-minute video:

Patent Wars: Stripping the iPhone bare

I loved all the smartphones (even those a few years back look ancient) and blueprints strewn across Geoff's desk, but be prepared to hit mute (get a cup of coffee) after you click on my link to avoid a 2-minute commercial which must be "consumed" to see the video.  Also later when I ran video again it complained I didn't have the latest version of Flash. Didn't Steve Jobs lead Adobe to kill that off?

Thanks to Alan Cooper for sending this article my way tonight! 

Copyright © 2012 Robert Moll. All rights reserved. 

Friday, February 24, 2012

Fired CEO Claims Benchmark Stole His Ideas

Here's a cautionary tale if you are seeking VC funding for your startup: Fatdoor Founder Sues Benchmark Capital, Saying It Stole His Idea for Nextdoor.
The startup (Fatdoor) had plans to be the "Facebook" of local neighborhoods, had filed many patents applications, had thousands of viewers, an experienced entrepreneur as the CEO, had allegedly impressed Benchmark only to see it then pass on funding ... and fund another startup (Nextdoor) six months later on the "same idea." Because Benchmark signed no NDA, and the CEO's applications were assigned to the startup and later sold to Google, the fired CEO was reduced to filing a trade secret, interference, and fraud lawsuit. I read the complaint and it sounds like this will be a difficult case. Because you won't find many VCs willing to sign NDAs, and assignment of your patents and applications to the startup, only raises the defense of assignor estoppel if you leave the place, contracts and patents cannot protect against investors from "taking your idea." For one, it will be difficult to define what is your idea. Surely, the companies have differences. So how does one protect self-interest? If you are going to spend the time and effort that this CEO allegedly put into the venture, you need to be well advised and have a corporate structure that allows you to retain management and voting control while satisfying the VCs interest.

Thanks to Suzie Lipton-Moll on this article! 

Copyright © 2012 Robert Moll. All rights reserved.

Wednesday, February 22, 2012

Apple v. Motorola - Patentability of User Software Interface in Europe

The US PTO and the EPO have some important differences when it comes to protecting software related inventions. Thus it is important to consider what European attorneys tell us is required to protect a software invention in Europe. 

Paul Cole of the UK firm Lucas & Co. wrote a blog post on Patently-O that has some insight into what the EPO requires to protect a user software interface using two well known features to iPhone users. With respect to the slide-to-unlock patent, the EPO Examining Division believed the invention satisfied a technical problem, but was still obvious over windows dragging and dropping. As Paul states, Apple argued an "objective technical problem was to provide a more efficient user-friendly procedure for unlocking a portable device and to provide a sensory feedback to the user regarding progress towards satisfaction of a user input condition that was required for unlocking to occur. As set out in the claim, the unlock image signalled to the user that the device was locked and simultaneously indicated a contact point that a user had to touch in order to unlock the device. The displayed path indicated to the user where and how the unlock image had to be moved and the current position of the image indicated progress already made towards the unlocked condition. The method was easier than in the prior art where a sequence of operations had to be memorised." With respect to the camera roll patent, the EPO considered it was patentable because the invention allowed a user to navigate within an image and switch between images with a minimum of inputs. Paul suggests choosing the EPO as the International Searching Authority and International Preliminary Examination Authority was also a factor. 

Paul contrasts these two successful patents with an Apple patent application that was refused by the EPO Appeal Board. In that case, the invention related to a transition between a maximized and minimized window, e.g., an icon of the window on a task bar. The EPO held the difference between the invention and the prior art resided in an aesthetic effect that couldn't contribute to the inventive step. It didn't help that specification stated a variety of techniques apparent to those of ordinary skill that could be used to implement the invention.   

Copyright © 2012 Robert Moll. All rights reserved.

Friday, February 17, 2012

Apple's Slide-to-Unlock Patent "Blocks" Motorola and Google's Application Depicts Future Lockscreen That "Slides Away"

The BBC article Patents: Apple wins over Motorola in 'slide-to-unlock' ruling describes Apple's victory in blocking two out of three embodiments in Germany. 

But is it short-lived? The Android Community article Google patent depicts future lockscreen features on Android. It basically "slides applications" to unlock zones on the display of the Android device. And that folks is design around life!

Thanks to Alan Cooper for the BBC article; yes, I am running to keep up with him!

Copyright © 2012 Robert Moll. All rights reserved.

Wednesday, February 15, 2012

DOJ Closes Investigations of Google's Acquisition of Motorola Mobility and Apple, Microsoft and RIM's Acquisitions of the Nortel Patents

On February 13, 2012, the Department of Justice's Antitrust Division issued a statement that it is closing the investigations of Google's acquisition of Motorola Mobility, Apple's acquisition of patents held by CPTN (formerly owned by Novell), and Apple, Microsoft, RIM and other's acquisition of the Nortel patents. DOJ believes each acquisition is unlikely to substantially lessen competition given Apple and Microsoft's clear commitment to license its standard essential patents (SEP) on fair, reasonable, and non-discriminatory (FRAND) terms and not seek an injunction on the SEPs. In contrast, the DOJ appears to criticize Google's unwillingness to make a clear commitment on future use of its patents. The DOJ also stated a willingness to jump into the fray to stop any anticompetitive use of SEP rights. Hopefully, the DOJ's statement and analysis will bring some order in the mobile computing patent war. I think this is welcome news for consumers (Click here for the DOJ's statement)

Copyright © 2012 Robert Moll. All rights reserved.

Wednesday, February 8, 2012

Third Party Preissuance Submissions of Prior Art

The PTO recently proposed rules to implement preissuance submission by third parties, 35 USC 122(e) of the America Invents Act (AIA). Preissuance submission permits the public to submit relevant prior art against any US patent application pending on September 16, 2012.  

Professor Crouch comments new 35 USC 122(e) "opens the door to Peer-to-Patent style submissions for all published applications." But what is Peer-to-Patent? It was a PTO pilot that ran from 2007-2009 and 2010-2011 that permitted peers to submit prior art to examiner. It never received widespread adoption and is reported to have only affected a few hundred applications. Perhaps it was too much to expect applicants would want to submit their application to examination by "peers" in exchange for expedited examination. Preissuance submission has the potential to affect many applications since volunteering to participate is not a requirement.

Preissuance Submission by Third Parties - 35 USC 122(e):

(1) IN GENERAL.—Any third party may submit for consideration and inclusion in the record of a patent application, any patent, published patent application, or other printed publication of potential relevance to the examination of the application, if such submission is made in writing before the earlier of—
(A) the date a notice of allowance under section 151 is given or mailed in the application for patent; or
(B) the later of—
(i) 6 months after the date on which the application for patent is first published under section 122 by the Office, or
(ii) the date of the first rejection under section 132 of any claim by the examiner during the examination of the application for patent.
(2) OTHER REQUIREMENTS.—Any submission under paragraph (1) shall—
(A) set forth a concise description of the asserted relevance of each submitted document;
(B) be accompanied by such fee as the Director may prescribe; and
(C) include a statement by the person making such submission affirming that the submission was made in compliance with this section.
Here are several features and pitfalls to 35 USC 122(e) preissuance submissions:

1.  Proposed PTO fees for preissuance submission are inexpensive ($180 for up to ten references) or nothing if a first submission of up to 3 references.

2.  The PTO does not require the patent application owner be served and will not identify the third party making the preissuance submission to encourage submissions.

3. On the other hand, preissuance submissions may alert the applicant getting broad claims and filing continuations is warranted because somebody infringes the application claims.

4.  You must file a preissuance submission before the PTO mails a notice of allowance. If, however, the PTO hasn't allowed an application, you can file a preissuance submission up to 6 months after the PTO first publishes the application or up to the first Office action rejecting a claim, whichever is later. However, one cannot safely rely on filing before those later events, since the PTO has no duty to inform before mailing a notice of allowance or an Office action rejecting any claim.

5.  Once a preissuance submission meets all requirement, it will be treated in terms of procedure much like an information disclosure statement (IDS). However, unlike an IDS, an examiner will have the benefit of a description of the asserted relevance of each document. If nothing else, this should make it easier to write up an Office action rejecting the claims. 

6.  A preissuance submission may backfire. If the claims are not canceled or narrowed based on the preissuance submission, the third party may face a strengthened patent that is infringed, plus have lost practical benefit of the prior art. Further, any amendments that do occur to the claims to avoid the preissuance submission will not raise intervening rights such as those obtainable in reexamination or reissue. 

7.  Two reasons the preissuance submission may backfire. After submission, the third party has no right to participate further. Only the examiner and applicant get to exchange information on what it all means. If this happens in an interview, don't expect the interview summary to fully describe what was discussed. Second, examiners suffer from information overload, which tends to result in complex filings not being fully addressed. See Kuhn, Yale Journal of Law and Technology, Information Overload at the U.S. Patent and Trademark Office: Reframing the Duty of Disclosure in Patent Law as a Search and Filter Problem. Yet a presumption is raised the preissuance submission was duly considered.

8.  Although the third party is not estopped from raising the prior art in an ex parte reexamination, inter partes review, post-grant review, or in a district court, the third party will have a more challenging situation to use the references of the preissuance submission.

9.  I expect third parties to be therefore reluctant to submit the best prior art in a preissuance submission when stakes are high. Instead, they will save the prior art to support a request for ex parte reexamination, inter parties review, post-grant review, or a district court. 

10. An examiner will be required to inform of a submission when it issues an Office action, but applicant will be required to monitor applications to know at other times. 

Preissuance submissions may help to derail doubtful patents, but are best limited to when other post-grant procedures (e.g., ex parte reexamination) are too expensive and other relevant prior art can be kept out of the preissuance submission just in case.   

Copyright © 2012 Robert Moll. All rights reserved.

Saturday, February 4, 2012

USPTO Satellite Office in Silicon Valley?

The America Invents Act (AIA) requires the PTO open three or more satellite offices by September 16, 2014. The first satellite office will be in Detroit. What about Silicon Valley?

In the past, Santa Clara county residents have filed and received more issued US patents than residents in 42 states of the United States. The AIA states a satellite office should "better connect patent filers and innovators with the Office." What region could better connect patent filers and innovators with the Office? 

Because of the sheer number of patent filings here, opening a satellite office would increase access to examiners and reduce the backlog. Although phone interviews work well, face-to-face interview are a more efficient way to exchange information. If the backlog impacts lots of patent filings here, especially software related patent filings, let's tackle it head on, not nip around the edges. As UC Berkeley Computer Science Professor David Patterson notes a key hardware design principle is to make the common case fast. Increasing the ability of companies to freely exchange of information with examiners will also improve the quality of patent examination.

One gainsayer told me recently, yes it would be nice, but it isn't going to happen -- the cost of living in the Bay Area is prohibitive. He may be right, but again imagine if the PTO came here.

For more about efforts to bring the PTO to Silicon Valley, see San Jose Mercury News Editorial: Silicon Valley deserves a regional patent office

Copyright © 2012 Robert Moll. All rights reserved.

Thursday, February 2, 2012

Two Different Views - Why Investors Are Focused on Patents

Well here's two articles giving disparate views of patent deals today:

In Patent-Palooza: Why Investors Are Suddenly Focused on IP, Paul Ryan, President and CEO of Acacia Research, argues corporations need for profit is driving the recent patent deals. Patent rich companies are simply selling their under-leveraged patents to non-practicing entities such as Acacia Research that assert them against other companies.

In Crushed innovation: When patent lawyers switch to NPEs, Ruth Suehle, writer in Brand Communications + Design at Red Hat, decries patent litigators, John Desmarais and Matt Powers, switching from corporate patent defense to represent non-practicing entities against corporations. Ruth asks, "Could the sordidness of a business based on bringing patent lawsuits be outweighed by large amounts of cash?" It's not clear to me, why they are engaged in a sordid business. Is going to court to enforce patent rights and seek damages for infringement a sordid business per se or does it simply cross the open source "party line?" 

Thanks to Alan Cooper for Ruth's article. 

Copyright © 2012 Robert Moll. All rights reserved.