Thursday, October 31, 2013

House Bill to Provide Permanent Funding for USPTO

The Federal government demonstrated during sequestration that the America Invents Act (AIA) didn't eliminate fee diversion. In response, Representatives Conyers, Watt, Issa, and Collins introduced a House bill (H.R. 3349) to provide permanent funding for the USPTO on October 28, 2013. The bills calls for a revolving fund into which the USPTO would deposit its fee revenues to be used solely for its reasonable expenses. The USPTO would also no longer be subject to the annual appropriations process. Many applicants would agree with AIPLA Executive Director Q. Todd Dickinson's statement that "the time has come for Congress to provide the USPTO with the ability to do the work its customers pay for by ending the possibility of fee diversion, once and for all." But will Congress vote against another source of funding?

Copyright © 2013 Robert Moll. All rights reserved.

Wednesday, October 30, 2013

Joe Mullin - Lawmakers blast patent trolls, but split on parts of a key bill

In Lawmakers blast patent trolls, but split on parts of a key bill, Joe Mullin tells us "Rep. Brent Farenthold (R-TX) was incredulous that Whataburger, the Texas-based chain of hamburger joints, had been targeted by a patent suit. 'They make hamburgers!' sputtered Farenthold. 'They don't play in the intellectual property game ... You know there's a problem when I can't get Wi-Fi and the prices at my grocery store are going up, because they're tagged by frivolous lawsuits." Sounds like Rep. Farenthold is voting yes on the bill, and I would too if I didn't have Wi-Fi and rising grocery prices due to frivolous patent cases.

Copyright © 2013 Robert Moll. All rights reserved.

USPTO - Changes to Implement the Patent Law Treaty

On October 21, 2013, the USPTO published Changes to Implement the Patent Law Treaty which will implement some revisions to the rules of practice before the USPTO that may help some recover patent rights in some situations so are worth reading. Here is the summary that the USPTO provided:

"The Patent Law Treaties Implementation Act of 2012 (PLTIA) amends the patent laws to implement the provisions of the Hague Agreement Concerning International Registration of Industrial Designs (Hague Agreement) in title I, and the Patent Law Treaty (PLT) in title II. The PLT harmonizes and streamlines formal procedures pertaining to the filing and processing of patent applications. This final rule revises the rules of practice for consistency with the changes in the PLT and title II of the PLTIA. The United States Patent and Trademark Office (Office) is implementing the Hague Agreement and title I of the PLTIA in a separate rulemaking.

The notable changes in the PLT and title II of the PLTIA pertain to: The filing date requirements for a patent application; the restoration of patent rights via the revival of abandoned applications and acceptance of delayed maintenance fee payments; and the restoration of the right of priority to a foreign application or the benefit of a provisional application in a subsequent application filed within two months of the expiration of the twelve-month period (six-month period for design applications) for filing such a subsequent application.

This final rule also revises the patent term adjustment provisions to provide for a reduction of any patent term adjustment if an application is not in condition for examination within eight months of its filing date or date of commencement of national stage in an international application, and contains miscellaneous changes pertaining to the supplemental examination, inventor’s oath or declaration, and first inventor to file provisions of the Leahy-Smith America Invents Act (AIA)."

Copyright © 2013 Robert Moll. All rights reserved.

Tuesday, October 29, 2013

Professor Robin Feldman - Patent Demands & Startup Companies - A Comment

Professor Robin Feldman published an interesting article Patent Demands & Startup Companies: The View from the Venture Capital Community on October 28, 2013.

Some of Professor Feldman's findings, based on responses from Members of the National Venture Capital Association and CEOs of the VCs member companies, are as follows:
  • About 70% of VCs and 30% of startups report having received a patent demand.  
  • 80% of VCs think patent demands have increased over the last five years.
  • 70% of VC believe patent demands most impact the IT sector, 30% life sciences, and 10% clean tech.
  • VC report 60% of patent demands came from patent assertion entities whose core activity is licensing or litigating patents.
  • 60% of VCs estimate defense costs exceed $100,000, with some reporting costs in the millions.
  • 75% of VC and 60% of CEOs report patent demands had a highly or moderately significant impact on startups, since they distracted management, expended resources, or altered business plans.
  • 70% of VCs don't think patent demands are positive. Every VC said a patent demand against a prospect could influence an investment decision, and 50 percent said it would be a major deterrent.
Professor Feldman concludes "the economic and human toll of patent demands on startup companies is substantial." Yes, but in a selective way as 2/3 startups have never received a patent demand. I also wonder how many of the patent demands that the 30% received led to litigation, since I have seen many patent demand letters that didn't result in a lawsuit, because the patent is invalid or not infringed or the patent owner is not willing to risk losing the patent or incur the cost of litigation. The patent is reviewed and analyzed and a reply sent to the patent owner, if appropriate, why the company doesn't need a license, and the matter is quietly dropped. So if my experience as a patent attorney over the last two decades is representative, the finding that 1/3 of startups get a patent demand does not support 1/3 of startups are sued.

The article is well researched and written, but I am not sure it supports major patent reform is urgently needed to protect startups from patent demands. Like any potential lawsuit (e.g., contract dispute, founder or shareholder suit, product liability, domain name, or employment suit) patent demands are not a positive development, but something to manage so they don't have "a highly or moderately significant impact," "distract management," "expend resources," or "alter business plans."

Many VCs want patents filed to protect their startups inventions, but readily vote to sell them to the highest bidder (i.e., a patent monetizer) if the startup fails. Maybe we should determine how many patent demands are based on patents purchased from VC backed startups that failed in case we are unsure of VC's role in this problem.

Copyright © 2013 Robert Moll. All rights reserved.

USPTO Fee Schedule - Current and Revised Patent Fees on January 1, 2014

The USPTO sets and adjusts patent fees as authorized by the American Invents Act (AIA). The fees are set and adjusted to be sufficient to pay for operations, reduce backlog, improve patent quality, and upgrade IT infrastructure. See Final Rules Notice Federal Register Setting and Adjusting Patent Fees. Surprisingly, many categories of patent fees decrease on January 1, 2014:

USPTO fee schedule through December 31, 2013

USPTO fee schedule effective January 1, 2014.

Copyright © 2013 Robert Moll. All rights reserved.

Tuesday, October 22, 2013

Patent Trolls or Patent Monetizer - Goodlatte's Innovation Act of 2013

The news media has barraged the public with the evil of patent trolls: they harm our business and create nothing of value. Yes, patent litigation abuse needs to be curbed, but how?

Goodlatte's Innovation Act of 2013 proposes to change things. The Act limits legal estoppel to issues actually raised in post-grant proceedings and increases transparency on patent ownership, which should help, but also proposes to radically change decades of US patent law by introducing fee shifting perhaps in many if not all cases. This is more than "modernizing" 35 USC 285 folks this is giving up the American rule. We have this rule to encourage small entities to be able to protect their rights against large interests. If passed, large company defendants will have an incentive to overspend on legal fees, resulting in a win (how could they not win if they spent an order of magnitude more?), then hand the losing patent owner a very large legal bill. We are talking millions in legal fees. This will soon deter a small entity from enforcing a patent against any large company that decides infringement makes sense. The Act also heightens an infringement complaint to essentially require the patent owner submit a claim chart showing infringement with the complaint, and do it all before any discovery! Is this how we want it to work, establish infringement without discovery? Such a provision should be carefully considered by the patent community, because it only benefits large companies.

Beside carefully considering the impact of the laws, we need to drop the pejorative labels. Many acknowledge we shouldn't use the term "patent troll." Instead, we should refer to "patent assertion entities," but months later it is back to calling non-practicing patent owners patent trolls in the press, which preconditions the debate. Consider if you were accused of bullying others. Let's assume we don't know yet if you are. What if we each time we cross paths I ask, "So Mr. Bully, what have you been doing today?"

Congress appears to be introducing patent reform based on PR, media, and lobbyists. Many arguments raised against "patent trolls" might be raised against any patent licensing. Is it evil for someone to seek to obtain income from patent licensing and/or litigating rather than provide a service or make a  product? IBM, Microsoft, Texas Instruments, HP, Intel, and SanDisk have all licensed patents beyond what is in their products, but that is left out of the media barrage, because these companies make valuable products and services (even if not related to a patent) and therefore are not "patent trolls."

We must delve into the facts to understand how to reduce patent litigation abuse. The FTC recently launched an investigation into patent monetizer. Some academics have done a great job of investigating into the facts. In The AIA 500 Expanded: Effects of Patent Monetization Entities, Professor Robin Feldman investigated almost 13,000 cases and 30,000 patents in lawsuits filed in 2007-2008 and 2011-2012 and draws interesting conclusions about how patent monetizers are reacting to changes of the patent law in the America Invents Act (AIA). This fact investigation with reasonable conclusions is a step in the right direction and should continue. Some of the findings of Professor Feldman's article:
  • In 2012, patent monetizers filed 58.7% of all patent lawsuits filed in the USA. In contrast, patent monetizers filed only 24.6% of US patent lawsuits.
  • The recently issued US patents are most frequently litigated, which might mean people are applying for patents with the plan to file lawsuits.
  • Current mechanisms to notify the public when a patent is asserted in lawsuit did not operate 2/3 of the time. 
  • Month-by-month data show a massive spike in monetizer activity the month prior to the joinder provisions of America Invents Act became effective then the lawsuits began to rise again in the last part of 2012. I thinks she gets it right in noting, "The data demonstrate that the increase in activity by monetizers in recent years is not an artifact of the changes in the America Invents Act, but represents a true rise in the level of litigation activity."
I am not saying let's give any patent monetizer a free pass, but let's stop labeling them patent trolls and let the FTC investigation take its course. It should help identify conduct that needs to be stopped before we rush to change laws. Otherwise, Congress' efforts to change the law may bar legitimate patent enforcement and licensing activity. 

Copyright © 2013 Robert Moll. All rights reserved.

Thursday, October 17, 2013

USPTO Confirms Validity All Claims of Steve Jobs Patent in Reexamination

Today, FOSS reports U.S. Patent Office confirmed all 20 claims of the Steve Jobs patent: bad for Samsung, Google.

U.S. Patent No. 7,479,949 to Steve Jobs et al. addresses the "need for touch-screen-display electronic devices with more transparent and intuitive user interfaces for translating imprecise user gestures into precise, intended commands that are easy to use, configure, and/or adapt ... in mobile computing devices."

Not only are all claims confirmed as patentable, the ex parte reexamination certificate states "no amendments have been made to the patent." Thus, an infringer cannot argue they obtained intervening rights. Of course, this allows damages up to six years before filing the patent infringement action. Further, this patent does not appear to be a standard essential patent (SEP) in any sense of the word and de facto SEPs has not caught on. So Apple may not only get damages, it may seek injunctions. Sure people are getting smarter about designing around, but tinkering with the UI risks annoying users into switching to an iPhone. I guess losing every aspect of an ex parte reexamination although rare has some not so fun implications. It may not bar validity challenges in court, but it may convince some courts that a validity challenge on similar literature should fail.

Copyright © 2013 Robert Moll. All rights reserved.

Samsung Agrees To Not Seek Injunctions In Enforcing Standard Essential Patents (SEPs) In Mobile Communications for Five Years in Europe

ZDNet reports that Samsung waves white flag on patent wars. Perhaps a bit of hyperbole, but still a significant change in Samsung's strategy in enforcing standard essential patents (SEPs) in the mobile computing patent wars in Europe. Thanks to Suzie Lipton-Moll for passing on this article today.

Copyright © 2013 Robert Moll. All rights reserved.

Wednesday, October 9, 2013

Samsung Can't Import Some Smartphones and Tablets - President Obama Won't Veto ITC Ban

On October 8, Bloomberg reports Samsung Loses Bid for Obama Veto of Apple-Won Import Ban. The administration vetoed Samsung's ITC ban, and now the reverse? Is the Obama's administration siding with an American company over a Korean one? It is not completely unreasonable to wonder after reading this article, because it is not that clear.

Even if the Obama administration was right to veto Samsung's ITC ban but not Apple's, it should explain how the different facts drove the different results.

Mr. Edward Black, president of the Computer & Communications Industry Association, which counts Samsung and Google as members, claims the veto of the Apple import ban was based on political pressure and favoritism, which sounds plausible, but was not supported by evidence discussed in the article.

For more details Apple's patent infringement case against Samsung is "In the Matter of Electronic Digital Media Devices, 337-796, and Samsung’s case is In the Matter of Electronic Devices, Including Wireless Communication Devices, Portable Music and Data Processing Devices, and Tablet Computers, 337-794, both US ITC.

Copyright © 2013 Robert Moll. All rights reserved.

Friday, October 4, 2013

Professor Robin Feldman - Prolific Patent Scholar

If you follow this blog, you know I like to read and post late at night. One of my "late night discoveries" after I started blogging was Professor Robin Feldman. I had met her husband Boris Feldman, a partner WSGR, as an associate in 1993 -1998. Boris had all of our respect (despite the toys in the office) because of his brilliance in fending off opportunistic SEC claims. A typical result for Boris? Case dismissed. No discovery, just dismissed. Someone mentioning his wife was a law professor at UC Hastings, but that's all I remembered ... I was too busy.

So when I stumbled across The Giants Among Us on the rise of patent aggregators and saw one of the authors was a UC Hastings law professor Robin Feldman ... I thought wait is this Boris' wife? As I read Giants, I was stunned. It was a tour de force and gave many fresh details regarding Intellectual Ventures, a firm that has been shrouded in secrecy. The fact research was excellent. It followed she had graduated second in her class at Stanford Law school.

Tonight, when I saw UC Hastings law school had an article Robin Feldman: Shaping Patent Policy Through Scholarship noting her influential law review articles in recent years, I was not surprised. I appreciate her scholarship and hope it continues well into the future. She strikes me as someone who is relentlessly investigating and reporting on the challenges of US patent law, something we need before Congress passes "helpful" bills for the sake of the US economy. Thus, reading her articles is much a better starting point to understanding today's challenges than the agenda set forth by corporate lobbyists.

Copyright © 2013 Robert Moll. All rights reserved.