Because of the expense of patenting in the United States, it can be a challenge for a startup to determine whether or not to seek patent protection. Some argue it's waste of money because even if a patent is obtained a startup cannot afford to enforce patent rights. If enforcement makes economic sense and the startup IPOs, it can afford it, and if the startup is acquired, the acquiring company typically has more resources.
Some argue in favor of patenting as a way to increase investor interest. For example, here's support for that view: Farre-Mensa et al., What is a Patent Worth? Evidence from the U.S. Patent "Lottery". As stated in the abstract: "We provide evidence on the value of patents to startups by leveraging the random
assignment of applications to examiners with different propensities to grant patents. Using
unique data on all first-time applications filed at the U.S. Patent Office since 2001, we find
that startups that win the patent “lottery” by drawing lenient examiners have, on average,
55% higher employment growth and 80% higher sales growth five years later. Patent
winners also pursue more, and higher quality, follow-on innovation. Winning a first patent
boosts a startup’s subsequent growth and innovation by facilitating access to funding from
VCs, banks, and public investors."
Copyright © 2018 Robert Moll. All rights reserved.
Showing posts with label startups. Show all posts
Showing posts with label startups. Show all posts
Sunday, December 2, 2018
Wednesday, April 11, 2018
USPTO - Director of USPTO Andrei Iancu - Role of U.S. Patent Policy in Domestic Innovation and Potential Impacts on Investment
On April 11, 2018, Director of USPTO Andrei Iancu delivered an encouraging and insightful speech:
"Thank you Neil (Bradley) for that generous introduction. Thank you also to the U.S. Chamber of Commerce and its Global Innovation Policy Center for hosting this impressive gathering and inviting me to speak here today.
Dr. Eli Harari, an electrical engineer, always tinkered and invented things. He tells, for example, that he invented a new type of fishing rod, although he never fished. “Imagine how much more successful you’d be,” his wife said, “if you’d invent in a field you knew something about.” And so he did. Dr. Harari is credited with inventing the Electrically Erasable Programmable Read-Only Memory, also known as EEPROM, or “E-squared PROM.” This was in the 1970s, when Harari was working at a major corporation, where he was a star.
But a few years later, he wanted to be on his own, to invent, to perfect, to commercialize. In his late 30s, he was also married and had a child. So in the prime of his career, with a family at home, Harari left his comfortable life with major corporations. Seeding it in part with his own money, Harari started a company of his own. And he did not even draw a salary the first several months. He risked everything: his career, his finances, and his family.
That first company actually did not work out well, but a few years later, Harari risked it all again and co-founded a new company, which he ultimately called SanDisk. At SanDisk, Harari built upon his EEPROM technology, added critically important new inventions, and perfected flash memory data storage. And he obtained patents, including on how to turn memory chips into reliable systems. Harari’s flash technology came to be used almost universally in devices like digital cameras and cell phones. In 2016, Western Digital acquired SanDisk for $19 billion.
But think about it: Without patents, how could someone like Dr. Harari risk everything, put aside his secure career at an established company, and strike it on his own? As Dr. Harari told me: “The only asset you have is your idea. If you have no way to protect your idea, you are at the mercy of the next bad guy. The U.S. patent system is genius, really the bedrock foundation of capitalism.”
Harari’s sentiment was echoed by President Ronald Reagan, who said in 1982: “Throughout our Nation’s history, the patent system has played a critically important role in stimulating technological advances.” How true that is.
Yet today, our patent system is at a crossroads. For more than just a few years, our system has been pushed and pulled, poked and prodded. The cumulative result is a system in which the patent grant is less reliable today than it should be. This onslaught has come from all directions: There has been major reform legislation, and proposed legislation. There have been massive changes brought about by major court cases. And the USPTO itself has taken a variety of actions in an effort to implement these changes. Plus, importantly, the rhetoric surrounding the patent system has focused relentlessly on certain faults in, or abuses of, the system—instead of the incredible benefits the system brings to our nation.
We see the result of this years-long onslaught in your own study, the U.S. Chamber’s 6th Annual International IP Index. I don’t need to tell this audience that the American patent system, which in prior years was deservedly ranked as the number one system in the world, in 2017 fell to number 10. And this year it fell further, tied for number 12. But make no mistake: we are still an elite system, a mere ¼ point away from the systems ranked 2-11. And the United States remains the leader for overall IP rights.
Still, we are at an inflection point with respect to the patent system. As a nation, we cannot continue down the same path if we want to maintain our global economic leadership. And we will not continue down the same path. This administration has a mission to create sustained economic growth, and innovation and IP protection are key goals in support of that mission. So, how do we reverse the trend? The good news is that reclaiming our patent leadership status is within reach. For today, let me focus on two principal points: (1) Creating a new pro-innovation, pro-IP dialogue, and (2) Increasing the reliability of the patent grant. First, we must change the dialogue surrounding patents. Words have meaning. Words impact perception and drive public policy. And for too long, the words surrounding our patent system have been overly-focused on its faults. A successful system cannot be defined by its faults. Rather, a successful system must be defined by its goals, aspirations, and successes. Obviously, errors in the system should be corrected. And no abuse should be tolerated. Errors and abuse should be identified and swiftly eliminated. However, the focus for discussion, and the focus for IP policy, must be on the positive.
We must create a new narrative that defines the patent system by the brilliance of inventors, the excitement of invention, and the incredible benefits they bring to society. And it is these benefits that must drive our patent policies. At my swearing-in, I remarked that through the doors of the U.S. Patent and Trademark Office comes our future. And indeed it does, and it always did. We must celebrate that. From Thomas Edison to the Wright Brothers, from Stanley Cohen and Herbert Boyer to Steve Jobs, American inventors have fueled the imagination of our people for generations. We are a pioneering people, who overcome large obstacles in order to realize our dreams and create prosperity. Inventors help make dreams reality. And American invention changes the world. Indeed, with American patents, humans made light, began to fly, treated disease, and enabled instant communications across the globe from tiny devices in our pockets. And those patents also enabled these inventors to start companies and grow our economy. Our dialogue and policies need to be focused on these amazing achievements, and how we can encourage more of them. Take Walter Hawkins as another example: Hawkins, who in 1942 became the first African American scientist on staff at AT&T’s Bell Labs, developed the plastic coating that covers telephone wires, a more versatile, durable and eco-friendly alternative to the lead standard at the time. It was so durable, in fact, and so effective, that Hawkins’ invention enabled huge investments to bring affordable phone service across America, including rural areas, and to millions of people in the 20th Century. Inventor stories like Hawkins’ and Harari’s are those we need to tell. This is the American patent system. This is the dialogue we need to have. And this should be the focus of our patent policy. This is how we incentivize innovation and growth.
But, how exactly do we translate this into a better patent system? Here’s a start: when we write, interpret, and administer patent laws, we must consistently ask ourselves: Are we helping these inventors? Whether it’s an individual tinkering in her garage, or a team at a large corporation, or a laboratory on a university campus—we must ask ourselves: are we helping them? Are we incentivizing innovation? And that brings me to my second principal point for today: increasing the reliability of the patent grant. Because that is key to incentivizing innovation. Without reliable patents, inventors like Dr. Eli Harari are less likely to risk it all in order to bring their new concepts to the market. As I said at my Senate confirmation hearing: “When patent owners and the public have confidence in the patent grant, inventors are encouraged to invent, investments are made, companies grow, jobs are created, science and technology advance.”
This year’s Chamber report explains why our patent system has dropped to number 12: “innovators and creators face a challenging environment for protecting their IP under current U.S. law… U.S. patentability standards and patent opposition procedures continue to create uncertainty for rightsholders.” So your report identifies two principal reasons for the increased uncertainty (or lower reliability) of our patents: (1) Patentability Standards, or more specifically, patent subject matter eligibility pursuant to 35 USC Section 101; and (2) Opposition procedures, namely, the post-grant procedures, such as IPR, that were established by the America Invents Act.
Let me address each of these in turn. First, our current law surrounding patentable subject matter has created a more unpredictable patent landscape that is hurting innovation and, consequently, investment and job creation. Recent cases from the Supreme Court – Mayo, Myriad, and Alice – have inserted standards into our interpretation of the statute that are difficult to follow. Lower courts applying these cases are struggling to issue consistent results. Patent lawyers trying to advise their clients are, in turn, struggling to predict the outcome with respect to certain patents. And examiners at the USPTO must spend increased amounts of time addressing this challenging issue. The current standards are difficult for all: stakeholders, courts, examiners, practitioners, and investors alike. System-wide, a significant amount of time is being spent trying to figure out where the lines should be drawn, and what’s in and what’s out. And multiple people looking at the same patent claims often have trouble agreeing on, and predicting, the outcome.
Something must be done. To be sure, we must and will apply Supreme Court law faithfully. This does not mean, however, that more cannot be done to increase clarity and predictability. Of course, given our statutory mandate, there is only so much that the USPTO can do. But within that mandate, we will do everything we can. Currently, we’re actively looking for ways to simplify the eligibility determination for our examiners through forward-looking guidance. Through our administration of the patent laws, which we are charged to execute, the USPTO can lead, not just react to every new case the courts issue.
Second, your report also mentions our “patent opposition procedures” as a reason for the increased uncertainty of our patents. This refers primarily to our Inter Partes Review, or the IPR system. This was a creation of the America Invents Act, and since its introduction five and a half years ago, we have now conducted more than 8,000 such proceedings. It’s been a very popular proceeding. Opinions on this new system diverge widely. Yet each opinion is passionately held by its supporters. Pointing to the high invalidation rates in IPR proceedings, some hate the new system with vigor, arguing that it’s an unfair process that tilts too much in favor of the petitioner. Others love the system, and think it’s the best tool we have to correct errors, eliminate “bad patents,” and improve patent quality. Who is right? Well, both arguments have legitimate elements.
But I encourage people to reduce the hyperbole and look at the process with fresh eyes, in order to understand its true benefits and true challenges. This is what we are now doing at the USPTO. Indeed, it’s one of our highest priorities. We need to carefully balance rights-holder’s and rights challenger’s interests. On the one hand, for example, this proceeding can come years after issuance, when the patent owners and the public may both have relied on those rights and made investments accordingly. On the other hand, we do want to execute the statutory mandate and help maintain the quality of patent rights. And – assuming the Supreme Court does not declare it unconstitutional – we do want the IPR system to effectively address invalid claims, but at the same time, we don't want to throw out the baby with the bathwater. The filters need to be appropriately set. And so, among various other things, we are now examining: how and when we institute proceedings, the standards we employ during the proceedings, and how we conduct the overall proceedings.The goal, with whatever action we take, is to increase predictability of appropriately-scoped claims.
Finally on the predictability front, let me mention something that was not addressed directly in your report. If we want truly reliable rights, we must ensure that we issue appropriately-scoped patent claims from the get-go. In other words, we must also focus on the front end. And since our examiners are first in line, we must ensure that they have the tools they need for a thorough search and examination. Our examiners already do a fabulous job. And it is not easy, given the state of the law and all the information that needs to be processed and analyzed. To further improve the original examination, a next step would be to increase examiners’ ability to find the best prior art during examination. At times, there is a gap between the prior art found during initial examination and the prior art found during litigation. There are many reasons for this, but the main culprits are the ever-accelerating publication and accessibility explosions. These are issues that face every Patent Office around the world. Indeed, we are ahead of most others on this front. But if we could further narrow this gap in prior art between examination and litigation, then the accuracy of the patent grant – and therefore, its reliability – would increase. We are focusing on this as well, together with the other issues I’ve already mentioned.
Overall, addressing these various issues, especially as outlined in your report – from patentable subject matter to a carefully balanced post-grant process – we can return our patent system to a higher level of predictability and stability. Finding the right balance on these issues requires work, and a holistic, collaborative approach.
As Neil mentioned in his introduction, I come from the private sector. I’ve seen our patent system at work from all sides. And I have represented clients from various sectors, of different sizes, and in different postures. I understand that there are a variety of legitimate points of view. We must work together to achieve a careful balance that is most beneficial to the American economy as a whole. In the end, the hallmarks of a well-functioning patent system are the reliability and predictability of quality patents. This is critical for both patent holders and the public. And the benefits of a well-functioning patent system are indeed unmistakable. It enabled inventors like Eli Harari and Walter Hawkins, who exemplify the brilliance of American innovation, to make significant technological advances while also generating remarkable job creation and progress for our nation. Of his flash memory inventions, Dr. Harari told me, “We really changed the world.” And as to how his patents helped him start his company? He said, “With a patent at a minimum we were able to speak relatively freely under an NDA. And in a small start-up, you need partners who can help you accelerate your development and to invest in you.” “If you are not protected,” he said, “God help you!”
Let me leave you with this: During his first address to Congress in February of last year, President Trump noted that, on our 100th anniversary, in 1876, citizens from throughout the country came to Philadelphia to celebrate America’s centennial. At that celebration, the country’s inventors showed off their wonderful creations. Alexander Graham Bell presented his telephone for the first time. Remington revealed the first typewriter; and Thomas Edison showed an automatic telegraph and an electric pen. President Trump then asked all of us to imagine the wonders our country could know in America’s 250th year. He asked us to think about all the illnesses that could be cured, the distant worlds we could walk on, and the marvels we could achieve, if only we could set free the dreams of Americans. That’s how I think about intellectual property.
As I see it, no dream is too big if we unleash the power of innovation, and give our nation’s inventors the protections they need to succeed. That’s why it’s so important that we find the right balance in the IP system. This is something I’m very passionate about, and fully committed to, as I lead the U.S. Patent and Trademark Office. We have a remarkable patent system, born from our Constitution and steeped in our history. It is a crown jewel; a gold standard. We have a unique opportunity to ensure it meets its full Constitutional mandate to promote innovation and grow our economy. I look forward to working with all of you in support of that great endeavor. Thank you again for the invitation to participate in this important discussion."
I have only a few comments on Mr. Iancu's speech. His story about Dr. Harari is correct. I worked at WSGR on the SanDisk team that defeated Samsung in the ITC in 1996-1997. As I worked on that case, I came to respect both his brilliance and kindness and willingness to come from Israel, earn PhD in Physics from Princeton, work at Intel then leave all of that to start his own company. Dr. Harari really does believe in the US patent system. Check out how many SanDisk patents have issued and filing patents was the first order of business. You can ask Dr. Harari, but in my view that enforcement of SanDisk's patents was fundamental to its early success in the marketplace and many cell phones and digital cameras still use SanDisk patented technology today.
Because not many know about the SanDisk v. Samsung case, I should note SanDisk precipitated the patent dispute by having the audacity to ask the much larger Samsung to sign a patent license. Samsung would have none of that and filed a declaratory judgment action seeking to show the patents invalid in the district court. SanDisk aware of the expense of fighting it out in district court decided to file an ITC action to seek patent enforcement within 12-18 months. Fortunately, SanDisk won on both the patents which led Samsung and other large foreign competitors to sign patent licenses. Question whether with the unpredictable subject matter eligibility law, it would have had the same outcome.
Mr. Iancu mentions the negative view of patents being propagated in the press. For example, one myth I have heard is patents hinder innovation and startups. Keep in mind nearly everyone in the world acts in self interest -- and when a big tech companies (or related academic) tells you patents are harming the economy, or surprisingly that they harm innovation or startups ask yourself why is this academic/think tank or lobbyist telling me US patents are harming smaller competitors?
Thus, I appreciate Mr. Iancu's boldness cutting through the constant drum of misinformation and acknowledging we are at the cross roads with patents and startups need an improved reliable US patent system especially in terms of patent eligibility and IPR to succeed. I have seen patent success first hand, love this country and hate to see US patents harmed by misinformation.
Copyright © 2018 Robert Moll. All rights reserved.
"Thank you Neil (Bradley) for that generous introduction. Thank you also to the U.S. Chamber of Commerce and its Global Innovation Policy Center for hosting this impressive gathering and inviting me to speak here today.
Dr. Eli Harari, an electrical engineer, always tinkered and invented things. He tells, for example, that he invented a new type of fishing rod, although he never fished. “Imagine how much more successful you’d be,” his wife said, “if you’d invent in a field you knew something about.” And so he did. Dr. Harari is credited with inventing the Electrically Erasable Programmable Read-Only Memory, also known as EEPROM, or “E-squared PROM.” This was in the 1970s, when Harari was working at a major corporation, where he was a star.
But a few years later, he wanted to be on his own, to invent, to perfect, to commercialize. In his late 30s, he was also married and had a child. So in the prime of his career, with a family at home, Harari left his comfortable life with major corporations. Seeding it in part with his own money, Harari started a company of his own. And he did not even draw a salary the first several months. He risked everything: his career, his finances, and his family.
That first company actually did not work out well, but a few years later, Harari risked it all again and co-founded a new company, which he ultimately called SanDisk. At SanDisk, Harari built upon his EEPROM technology, added critically important new inventions, and perfected flash memory data storage. And he obtained patents, including on how to turn memory chips into reliable systems. Harari’s flash technology came to be used almost universally in devices like digital cameras and cell phones. In 2016, Western Digital acquired SanDisk for $19 billion.
But think about it: Without patents, how could someone like Dr. Harari risk everything, put aside his secure career at an established company, and strike it on his own? As Dr. Harari told me: “The only asset you have is your idea. If you have no way to protect your idea, you are at the mercy of the next bad guy. The U.S. patent system is genius, really the bedrock foundation of capitalism.”
Harari’s sentiment was echoed by President Ronald Reagan, who said in 1982: “Throughout our Nation’s history, the patent system has played a critically important role in stimulating technological advances.” How true that is.
Yet today, our patent system is at a crossroads. For more than just a few years, our system has been pushed and pulled, poked and prodded. The cumulative result is a system in which the patent grant is less reliable today than it should be. This onslaught has come from all directions: There has been major reform legislation, and proposed legislation. There have been massive changes brought about by major court cases. And the USPTO itself has taken a variety of actions in an effort to implement these changes. Plus, importantly, the rhetoric surrounding the patent system has focused relentlessly on certain faults in, or abuses of, the system—instead of the incredible benefits the system brings to our nation.
We see the result of this years-long onslaught in your own study, the U.S. Chamber’s 6th Annual International IP Index. I don’t need to tell this audience that the American patent system, which in prior years was deservedly ranked as the number one system in the world, in 2017 fell to number 10. And this year it fell further, tied for number 12. But make no mistake: we are still an elite system, a mere ¼ point away from the systems ranked 2-11. And the United States remains the leader for overall IP rights.
Still, we are at an inflection point with respect to the patent system. As a nation, we cannot continue down the same path if we want to maintain our global economic leadership. And we will not continue down the same path. This administration has a mission to create sustained economic growth, and innovation and IP protection are key goals in support of that mission. So, how do we reverse the trend? The good news is that reclaiming our patent leadership status is within reach. For today, let me focus on two principal points: (1) Creating a new pro-innovation, pro-IP dialogue, and (2) Increasing the reliability of the patent grant. First, we must change the dialogue surrounding patents. Words have meaning. Words impact perception and drive public policy. And for too long, the words surrounding our patent system have been overly-focused on its faults. A successful system cannot be defined by its faults. Rather, a successful system must be defined by its goals, aspirations, and successes. Obviously, errors in the system should be corrected. And no abuse should be tolerated. Errors and abuse should be identified and swiftly eliminated. However, the focus for discussion, and the focus for IP policy, must be on the positive.
We must create a new narrative that defines the patent system by the brilliance of inventors, the excitement of invention, and the incredible benefits they bring to society. And it is these benefits that must drive our patent policies. At my swearing-in, I remarked that through the doors of the U.S. Patent and Trademark Office comes our future. And indeed it does, and it always did. We must celebrate that. From Thomas Edison to the Wright Brothers, from Stanley Cohen and Herbert Boyer to Steve Jobs, American inventors have fueled the imagination of our people for generations. We are a pioneering people, who overcome large obstacles in order to realize our dreams and create prosperity. Inventors help make dreams reality. And American invention changes the world. Indeed, with American patents, humans made light, began to fly, treated disease, and enabled instant communications across the globe from tiny devices in our pockets. And those patents also enabled these inventors to start companies and grow our economy. Our dialogue and policies need to be focused on these amazing achievements, and how we can encourage more of them. Take Walter Hawkins as another example: Hawkins, who in 1942 became the first African American scientist on staff at AT&T’s Bell Labs, developed the plastic coating that covers telephone wires, a more versatile, durable and eco-friendly alternative to the lead standard at the time. It was so durable, in fact, and so effective, that Hawkins’ invention enabled huge investments to bring affordable phone service across America, including rural areas, and to millions of people in the 20th Century. Inventor stories like Hawkins’ and Harari’s are those we need to tell. This is the American patent system. This is the dialogue we need to have. And this should be the focus of our patent policy. This is how we incentivize innovation and growth.
But, how exactly do we translate this into a better patent system? Here’s a start: when we write, interpret, and administer patent laws, we must consistently ask ourselves: Are we helping these inventors? Whether it’s an individual tinkering in her garage, or a team at a large corporation, or a laboratory on a university campus—we must ask ourselves: are we helping them? Are we incentivizing innovation? And that brings me to my second principal point for today: increasing the reliability of the patent grant. Because that is key to incentivizing innovation. Without reliable patents, inventors like Dr. Eli Harari are less likely to risk it all in order to bring their new concepts to the market. As I said at my Senate confirmation hearing: “When patent owners and the public have confidence in the patent grant, inventors are encouraged to invent, investments are made, companies grow, jobs are created, science and technology advance.”
This year’s Chamber report explains why our patent system has dropped to number 12: “innovators and creators face a challenging environment for protecting their IP under current U.S. law… U.S. patentability standards and patent opposition procedures continue to create uncertainty for rightsholders.” So your report identifies two principal reasons for the increased uncertainty (or lower reliability) of our patents: (1) Patentability Standards, or more specifically, patent subject matter eligibility pursuant to 35 USC Section 101; and (2) Opposition procedures, namely, the post-grant procedures, such as IPR, that were established by the America Invents Act.
Let me address each of these in turn. First, our current law surrounding patentable subject matter has created a more unpredictable patent landscape that is hurting innovation and, consequently, investment and job creation. Recent cases from the Supreme Court – Mayo, Myriad, and Alice – have inserted standards into our interpretation of the statute that are difficult to follow. Lower courts applying these cases are struggling to issue consistent results. Patent lawyers trying to advise their clients are, in turn, struggling to predict the outcome with respect to certain patents. And examiners at the USPTO must spend increased amounts of time addressing this challenging issue. The current standards are difficult for all: stakeholders, courts, examiners, practitioners, and investors alike. System-wide, a significant amount of time is being spent trying to figure out where the lines should be drawn, and what’s in and what’s out. And multiple people looking at the same patent claims often have trouble agreeing on, and predicting, the outcome.
Something must be done. To be sure, we must and will apply Supreme Court law faithfully. This does not mean, however, that more cannot be done to increase clarity and predictability. Of course, given our statutory mandate, there is only so much that the USPTO can do. But within that mandate, we will do everything we can. Currently, we’re actively looking for ways to simplify the eligibility determination for our examiners through forward-looking guidance. Through our administration of the patent laws, which we are charged to execute, the USPTO can lead, not just react to every new case the courts issue.
Second, your report also mentions our “patent opposition procedures” as a reason for the increased uncertainty of our patents. This refers primarily to our Inter Partes Review, or the IPR system. This was a creation of the America Invents Act, and since its introduction five and a half years ago, we have now conducted more than 8,000 such proceedings. It’s been a very popular proceeding. Opinions on this new system diverge widely. Yet each opinion is passionately held by its supporters. Pointing to the high invalidation rates in IPR proceedings, some hate the new system with vigor, arguing that it’s an unfair process that tilts too much in favor of the petitioner. Others love the system, and think it’s the best tool we have to correct errors, eliminate “bad patents,” and improve patent quality. Who is right? Well, both arguments have legitimate elements.
But I encourage people to reduce the hyperbole and look at the process with fresh eyes, in order to understand its true benefits and true challenges. This is what we are now doing at the USPTO. Indeed, it’s one of our highest priorities. We need to carefully balance rights-holder’s and rights challenger’s interests. On the one hand, for example, this proceeding can come years after issuance, when the patent owners and the public may both have relied on those rights and made investments accordingly. On the other hand, we do want to execute the statutory mandate and help maintain the quality of patent rights. And – assuming the Supreme Court does not declare it unconstitutional – we do want the IPR system to effectively address invalid claims, but at the same time, we don't want to throw out the baby with the bathwater. The filters need to be appropriately set. And so, among various other things, we are now examining: how and when we institute proceedings, the standards we employ during the proceedings, and how we conduct the overall proceedings.The goal, with whatever action we take, is to increase predictability of appropriately-scoped claims.
Finally on the predictability front, let me mention something that was not addressed directly in your report. If we want truly reliable rights, we must ensure that we issue appropriately-scoped patent claims from the get-go. In other words, we must also focus on the front end. And since our examiners are first in line, we must ensure that they have the tools they need for a thorough search and examination. Our examiners already do a fabulous job. And it is not easy, given the state of the law and all the information that needs to be processed and analyzed. To further improve the original examination, a next step would be to increase examiners’ ability to find the best prior art during examination. At times, there is a gap between the prior art found during initial examination and the prior art found during litigation. There are many reasons for this, but the main culprits are the ever-accelerating publication and accessibility explosions. These are issues that face every Patent Office around the world. Indeed, we are ahead of most others on this front. But if we could further narrow this gap in prior art between examination and litigation, then the accuracy of the patent grant – and therefore, its reliability – would increase. We are focusing on this as well, together with the other issues I’ve already mentioned.
Overall, addressing these various issues, especially as outlined in your report – from patentable subject matter to a carefully balanced post-grant process – we can return our patent system to a higher level of predictability and stability. Finding the right balance on these issues requires work, and a holistic, collaborative approach.
As Neil mentioned in his introduction, I come from the private sector. I’ve seen our patent system at work from all sides. And I have represented clients from various sectors, of different sizes, and in different postures. I understand that there are a variety of legitimate points of view. We must work together to achieve a careful balance that is most beneficial to the American economy as a whole. In the end, the hallmarks of a well-functioning patent system are the reliability and predictability of quality patents. This is critical for both patent holders and the public. And the benefits of a well-functioning patent system are indeed unmistakable. It enabled inventors like Eli Harari and Walter Hawkins, who exemplify the brilliance of American innovation, to make significant technological advances while also generating remarkable job creation and progress for our nation. Of his flash memory inventions, Dr. Harari told me, “We really changed the world.” And as to how his patents helped him start his company? He said, “With a patent at a minimum we were able to speak relatively freely under an NDA. And in a small start-up, you need partners who can help you accelerate your development and to invest in you.” “If you are not protected,” he said, “God help you!”
Let me leave you with this: During his first address to Congress in February of last year, President Trump noted that, on our 100th anniversary, in 1876, citizens from throughout the country came to Philadelphia to celebrate America’s centennial. At that celebration, the country’s inventors showed off their wonderful creations. Alexander Graham Bell presented his telephone for the first time. Remington revealed the first typewriter; and Thomas Edison showed an automatic telegraph and an electric pen. President Trump then asked all of us to imagine the wonders our country could know in America’s 250th year. He asked us to think about all the illnesses that could be cured, the distant worlds we could walk on, and the marvels we could achieve, if only we could set free the dreams of Americans. That’s how I think about intellectual property.
As I see it, no dream is too big if we unleash the power of innovation, and give our nation’s inventors the protections they need to succeed. That’s why it’s so important that we find the right balance in the IP system. This is something I’m very passionate about, and fully committed to, as I lead the U.S. Patent and Trademark Office. We have a remarkable patent system, born from our Constitution and steeped in our history. It is a crown jewel; a gold standard. We have a unique opportunity to ensure it meets its full Constitutional mandate to promote innovation and grow our economy. I look forward to working with all of you in support of that great endeavor. Thank you again for the invitation to participate in this important discussion."
I have only a few comments on Mr. Iancu's speech. His story about Dr. Harari is correct. I worked at WSGR on the SanDisk team that defeated Samsung in the ITC in 1996-1997. As I worked on that case, I came to respect both his brilliance and kindness and willingness to come from Israel, earn PhD in Physics from Princeton, work at Intel then leave all of that to start his own company. Dr. Harari really does believe in the US patent system. Check out how many SanDisk patents have issued and filing patents was the first order of business. You can ask Dr. Harari, but in my view that enforcement of SanDisk's patents was fundamental to its early success in the marketplace and many cell phones and digital cameras still use SanDisk patented technology today.
Because not many know about the SanDisk v. Samsung case, I should note SanDisk precipitated the patent dispute by having the audacity to ask the much larger Samsung to sign a patent license. Samsung would have none of that and filed a declaratory judgment action seeking to show the patents invalid in the district court. SanDisk aware of the expense of fighting it out in district court decided to file an ITC action to seek patent enforcement within 12-18 months. Fortunately, SanDisk won on both the patents which led Samsung and other large foreign competitors to sign patent licenses. Question whether with the unpredictable subject matter eligibility law, it would have had the same outcome.
Mr. Iancu mentions the negative view of patents being propagated in the press. For example, one myth I have heard is patents hinder innovation and startups. Keep in mind nearly everyone in the world acts in self interest -- and when a big tech companies (or related academic) tells you patents are harming the economy, or surprisingly that they harm innovation or startups ask yourself why is this academic/think tank or lobbyist telling me US patents are harming smaller competitors?
Thus, I appreciate Mr. Iancu's boldness cutting through the constant drum of misinformation and acknowledging we are at the cross roads with patents and startups need an improved reliable US patent system especially in terms of patent eligibility and IPR to succeed. I have seen patent success first hand, love this country and hate to see US patents harmed by misinformation.
Copyright © 2018 Robert Moll. All rights reserved.
Tuesday, February 13, 2018
USPTO & Berkeley Center for Law & Technology - Start-Up Nation Comes to Silicon Valley: Comparing the U.S. and Israel Patent Systems and Start-up Cultures
Today, the USPTO and Berkeley Center for Law & Technology announced registration is still open for "Start-Up Nation Comes to Silicon Valley: Comparing the U.S. and Israel Patent Systems and Start-up Cultures."
Here are the details:
"Friday, February 16, 2018
12 noon - 1:15 PM
Silicon Valley U.S. Patent & Trademark Office
26 South 4th Street
San Jose, CA 95112
Join leaders from across the innovation ecosystem in a comparative U.S. - Israel discussion on promoting start-up activity and fostering economic growth. Panelists will highlight trends in entrepreneurial activity taking place in both countries and will share their experiences with patent practices and address questions of patent subject eligibility and patentability across emerging technologies.
This event is free and open to the public. Space is limited.
Register here by February 15, 2018
Speakers:
• Moderator: Peter Menell, Koret Professor of Law and Co-Founder/Director, Berkeley Center for Law & Technology, Berkeley Law
• Asa Kling, former Director of the Israel Patent Office and Commissioner of Patents, Trademarks, and Designs (2011 - 2017) and Gilbert Distinguished Visiting Fellow of the Berkeley Institute of Jewish Law and Israel Studies at Berkeley Law
• John Cabeca, Regional Director, Silicon Valley U.S. Patent and Trademark Office
• Dan Lang, Vice President, Intellectual Property and Deputy General Counsel, Cisco Systems
• Yasmin Lukatz, Executive Director, ICON -Israel Collaboration Network"
Copyright © 2018 Robert Moll. All rights reserved.
Here are the details:
"Friday, February 16, 2018
12 noon - 1:15 PM
Silicon Valley U.S. Patent & Trademark Office
26 South 4th Street
San Jose, CA 95112
Join leaders from across the innovation ecosystem in a comparative U.S. - Israel discussion on promoting start-up activity and fostering economic growth. Panelists will highlight trends in entrepreneurial activity taking place in both countries and will share their experiences with patent practices and address questions of patent subject eligibility and patentability across emerging technologies.
This event is free and open to the public. Space is limited.
Register here by February 15, 2018
Speakers:
• Moderator: Peter Menell, Koret Professor of Law and Co-Founder/Director, Berkeley Center for Law & Technology, Berkeley Law
• Asa Kling, former Director of the Israel Patent Office and Commissioner of Patents, Trademarks, and Designs (2011 - 2017) and Gilbert Distinguished Visiting Fellow of the Berkeley Institute of Jewish Law and Israel Studies at Berkeley Law
• John Cabeca, Regional Director, Silicon Valley U.S. Patent and Trademark Office
• Dan Lang, Vice President, Intellectual Property and Deputy General Counsel, Cisco Systems
• Yasmin Lukatz, Executive Director, ICON -Israel Collaboration Network"
Copyright © 2018 Robert Moll. All rights reserved.
Tuesday, November 14, 2017
Forbes - USC Sees The Future With New Course Offering - Intellectual Property
In USC Sees The Future With New Course Offering, Marshall Phelps reports that University of Southern California is offering an intellectual property course for undergraduates through the Marshall Business School.
Here's an excerpt from the article: "... intellectual property is the new watchword for almost any career of the future. The only problem is, most of our higher education institutions haven't gotten the memo yet, and that’s a real bummer for young people.
Here’s why: Intellectual property (IP) now accounts for a whopping 38.2% of total U.S. GDP and 30% of total national employment. Yet despite IP's enormous role in the U.S. economy, almost no American universities offer any undergraduate courses on the basic workings of patents, copyrights, trademarks and trade secrets in U.S. social and economic life."
This “IP education gap” poses a real threat to U.S. leadership of the 21st century knowledge economy. To understand why, just imagine how U.S. leadership of the industrial economy of one hundred years ago would have been hamstrung had there been no Wharton School or Forbes or Harvard Business Review to teach industrial management and the organization of mass production enterprises to 20th century business leaders. Similar stakes exist today.
That’s why it’s such good news that the University of Southern California (USC) has stepped forward with a first-of-its-kind course for general undergraduates on the basics of IP. This new program, launched by the Greif Center for Entrepreneurial Studies within USC’s Marshall School of Business, will train tomorrow’s leaders in the skills they need to navigate our IP-driven economy. If successful, it will be rolled out to some 40 other colleges and universities nationwide.
Pioneered by USC President C. L. Max Nikias and billionaire medical inventor Dr. Gary Michelson, USC's new undergrad course — named “The Entrepreneur’s Guide to Intellectual Property” — launched this fall semester. Taught by Kirkland & Ellis partner Luke Dauchot, this innovative new course has already attracted a who’s who of IP luminaries as guest speakers.
These include former Patent Office director David Kappos, long-time Google head of patents and current Facebook IP chief Allen Lo, Dolby’s General Counsel Andy Sherman, Chinese smartphone maker Xiaomi’s chief of IP strategy Paul Lin, and a dozen of the senior-most IP leaders of Apple, Nike, Teva Pharmaceuticals, Dollar Shave, and other high-flying IP-intensive companies."
Good job President Nikias and Dr. Michelson!
Note the author Marshall Phelps led the very profitable IBM and Microsoft patent licensing programs.
Copyright © 2017 Robert Moll. All rights reserved.
Here's an excerpt from the article: "... intellectual property is the new watchword for almost any career of the future. The only problem is, most of our higher education institutions haven't gotten the memo yet, and that’s a real bummer for young people.
Here’s why: Intellectual property (IP) now accounts for a whopping 38.2% of total U.S. GDP and 30% of total national employment. Yet despite IP's enormous role in the U.S. economy, almost no American universities offer any undergraduate courses on the basic workings of patents, copyrights, trademarks and trade secrets in U.S. social and economic life."
This “IP education gap” poses a real threat to U.S. leadership of the 21st century knowledge economy. To understand why, just imagine how U.S. leadership of the industrial economy of one hundred years ago would have been hamstrung had there been no Wharton School or Forbes or Harvard Business Review to teach industrial management and the organization of mass production enterprises to 20th century business leaders. Similar stakes exist today.
That’s why it’s such good news that the University of Southern California (USC) has stepped forward with a first-of-its-kind course for general undergraduates on the basics of IP. This new program, launched by the Greif Center for Entrepreneurial Studies within USC’s Marshall School of Business, will train tomorrow’s leaders in the skills they need to navigate our IP-driven economy. If successful, it will be rolled out to some 40 other colleges and universities nationwide.
Pioneered by USC President C. L. Max Nikias and billionaire medical inventor Dr. Gary Michelson, USC's new undergrad course — named “The Entrepreneur’s Guide to Intellectual Property” — launched this fall semester. Taught by Kirkland & Ellis partner Luke Dauchot, this innovative new course has already attracted a who’s who of IP luminaries as guest speakers.
These include former Patent Office director David Kappos, long-time Google head of patents and current Facebook IP chief Allen Lo, Dolby’s General Counsel Andy Sherman, Chinese smartphone maker Xiaomi’s chief of IP strategy Paul Lin, and a dozen of the senior-most IP leaders of Apple, Nike, Teva Pharmaceuticals, Dollar Shave, and other high-flying IP-intensive companies."
Good job President Nikias and Dr. Michelson!
Note the author Marshall Phelps led the very profitable IBM and Microsoft patent licensing programs.
Copyright © 2017 Robert Moll. All rights reserved.
Friday, November 3, 2017
Northwest University Kellogg School of Management - Waiting to Protect Intellectual Property Could Doom Your Startup
Northwest Kellogg School of Management's publishes a free online magazine that has a section on entrepreneurship with well written articles on innovation and intellectual property (IP) that is worth checking out. For example, here's an article that may help startups seeking to protect their IP: Waiting to Protect Intellectual Property Could Doom Your Startup. In this article, Mark McCareins, Northwestern's clinical professor of business law argues a startup really needs to spend time and money to protect its IP and interviews four patent attorneys' for tips on protecting IP.
Copyright © 2017 Robert Moll. All rights reserved.
Copyright © 2017 Robert Moll. All rights reserved.
Saturday, April 16, 2016
Professor Mark Lemley - Rethinking Assignor Estoppel - A Comment
In Rethinking Assignor Estoppel, Professor Mark Lemley argues assignor estoppel interferes with invalidating bad patents and employee mobility. I don't completely agree with Professor Lemley, but think this article is definitely worth reading.
Assignor estoppel bars an inventor who has assigned a patent from challenging its validity in a patent infringement suit. It is an issue an employee may face after filing a patent application(s) at a company and leaving for a competitor. The article argues that assignor estoppel should be granted less often in patent infringement cases.
As stated in the abstract, assignor estoppel may not make complete sense: "The Supreme Court and the Federal Circuit have repeatedly emphasized the public interest in testing the validity of patents, weeding out patents that should not have been issued. But there is one important group of people the law systematically prevents from challenging bad patents. Curiously, it is the very group patent law is supposed to support: inventors themselves. The century-old doctrine of assignor estoppel precludes inventors who file patent applications from later challenging the validity or enforceability of the patents they receive. The stated rationale for assignor estoppel is that it would be unfair to allow the inventor to benefit from obtaining a patent and later change her tune and attack the patent when it benefits her to do so. The Supreme Court has traditionally disfavored the doctrine, reading it narrowly. But the Federal Circuit has expanded the doctrine in a variety of dimensions, and applied it even when the benefit to the inventor is illusory. Further, the doctrine misunderstands the role of inventor-employees in the modern world.
More important, the expansive modern form of assignor estoppel interferes substantially with employee mobility. Inventors as a class are put under burdens that we apply to no other employee. If they start a company, or even go to work for an existing company in the same field, they will not be able to defend a patent suit from their old employer. The result is a sort of partial noncompete clause, one imposed without even the fiction of agreement and one that binds anyone the inventor comes in contact with after leaving the job. Abundant evidence suggests that noncompetes in general retard innovation and economic growth, and several states prohibit them outright, while all others limit them. But assignor estoppel is a federal law doctrine that overrides those state choices.
It is time to rethink the doctrine of assignor estoppel. I describe the doctrine, its rationale, and how it has expanded dramatically in the past 25 years. I argue that the doctrine is out of touch with the realities of both modern inventing and modern patent law, and that it interferes with both the invalidation of bad patents and the goal of employee mobility. Should the Supreme Court take up the doctrine, it is unlikely to survive in its current form. Rather, it should – and will – return to its much more limited roots."
Yes, assignor estoppel may give an overly generous shield against a challenge to patent validity. and why bar a challenge to patent validity when an inventor's awareness of the prior art is many times incomplete when signing the inventor declaration? However, the argument that assignor estoppel substantially interferes with employee mobility seems like a real stretch.
Copyright © 2016 Robert Moll. All rights reserved.
Assignor estoppel bars an inventor who has assigned a patent from challenging its validity in a patent infringement suit. It is an issue an employee may face after filing a patent application(s) at a company and leaving for a competitor. The article argues that assignor estoppel should be granted less often in patent infringement cases.
As stated in the abstract, assignor estoppel may not make complete sense: "The Supreme Court and the Federal Circuit have repeatedly emphasized the public interest in testing the validity of patents, weeding out patents that should not have been issued. But there is one important group of people the law systematically prevents from challenging bad patents. Curiously, it is the very group patent law is supposed to support: inventors themselves. The century-old doctrine of assignor estoppel precludes inventors who file patent applications from later challenging the validity or enforceability of the patents they receive. The stated rationale for assignor estoppel is that it would be unfair to allow the inventor to benefit from obtaining a patent and later change her tune and attack the patent when it benefits her to do so. The Supreme Court has traditionally disfavored the doctrine, reading it narrowly. But the Federal Circuit has expanded the doctrine in a variety of dimensions, and applied it even when the benefit to the inventor is illusory. Further, the doctrine misunderstands the role of inventor-employees in the modern world.
More important, the expansive modern form of assignor estoppel interferes substantially with employee mobility. Inventors as a class are put under burdens that we apply to no other employee. If they start a company, or even go to work for an existing company in the same field, they will not be able to defend a patent suit from their old employer. The result is a sort of partial noncompete clause, one imposed without even the fiction of agreement and one that binds anyone the inventor comes in contact with after leaving the job. Abundant evidence suggests that noncompetes in general retard innovation and economic growth, and several states prohibit them outright, while all others limit them. But assignor estoppel is a federal law doctrine that overrides those state choices.
It is time to rethink the doctrine of assignor estoppel. I describe the doctrine, its rationale, and how it has expanded dramatically in the past 25 years. I argue that the doctrine is out of touch with the realities of both modern inventing and modern patent law, and that it interferes with both the invalidation of bad patents and the goal of employee mobility. Should the Supreme Court take up the doctrine, it is unlikely to survive in its current form. Rather, it should – and will – return to its much more limited roots."
Yes, assignor estoppel may give an overly generous shield against a challenge to patent validity. and why bar a challenge to patent validity when an inventor's awareness of the prior art is many times incomplete when signing the inventor declaration? However, the argument that assignor estoppel substantially interferes with employee mobility seems like a real stretch.
Copyright © 2016 Robert Moll. All rights reserved.
Wednesday, February 3, 2016
Harvard and NYU Business School - The Bright Side of Patents
In The Bright Side of Patents, Joan Farre-Mensa of Harvard Business School and Deepak Hegde and Alexander Ljungqvist of NYU's School of Business investigate and conclude patents help startups. I would add this is my experience working with startups over two decades. I have seen startups mainly fail for lack of sales, but if you are a technology leader and have even moderate commercial success the world is ready to copy you. We have seen it too many times. Patents can help a startup acquire a sustainable competitive advantage. So if trade secret is not an option, you should definitely think about it.
From the Abstract: "Motivated by concerns that the patent system is hindering innovation, particularly for small inventors, this study investigates the bright side of patents. We examine whether patents help startups grow and succeed using detailed micro data on all patent applications filed by startups at the U.S. Patent and Trademark Office (USPTO) since 2001 and approved or rejected before 2014. We leverage the fact that patent applications are assigned quasi-randomly to USPTO examiners and instrument for the probability that an application is approved with individual examiners’ historical approval rates. We find that patent approvals help startups create jobs, grow their sales, innovate, and reward their investors. Exogenous delays in the patent examination process significantly reduce firm growth, job creation, and innovation, even when a firm’s patent application is eventually approved. Our results suggest that patents act as a catalyst that sets startups on a growth path by facilitating their access to capital. Proposals for patent reform should consider these benefits of patents alongside their potential costs."
Copyright © 2016 Robert Moll. All rights reserved.
From the Abstract: "Motivated by concerns that the patent system is hindering innovation, particularly for small inventors, this study investigates the bright side of patents. We examine whether patents help startups grow and succeed using detailed micro data on all patent applications filed by startups at the U.S. Patent and Trademark Office (USPTO) since 2001 and approved or rejected before 2014. We leverage the fact that patent applications are assigned quasi-randomly to USPTO examiners and instrument for the probability that an application is approved with individual examiners’ historical approval rates. We find that patent approvals help startups create jobs, grow their sales, innovate, and reward their investors. Exogenous delays in the patent examination process significantly reduce firm growth, job creation, and innovation, even when a firm’s patent application is eventually approved. Our results suggest that patents act as a catalyst that sets startups on a growth path by facilitating their access to capital. Proposals for patent reform should consider these benefits of patents alongside their potential costs."
Copyright © 2016 Robert Moll. All rights reserved.
Tuesday, February 2, 2016
Stanford Technology Law Review - Patents and Small Participants in the Smartphone Industry
Patenting in the smartphone industry? Better check out the Stanford Technology Law Review article Patents and Small Participants in the Smartphone Industry.
From the abstract: "This Article seeks to show how patent rights affect the ability of small participants to enter, compete, and exit smartphone markets. The study collected and used comprehensive empirical data on patent grants, venture funding, mergers and acquisitions, initial public offerings, patent litigation, and marketing research data. This Article shows empirically that small participants succeed in the market when they have a low and specific critical mass of patents and that this success exceeds the general norms in the startup world. Surprisingly, the analysis demonstrates that the level of financing and market success do not increase with larger patent portfolios. Lastly, despite the controversies over patent trolls, this Article demonstrates that patent litigation, whether from operating companies or NPEs, does not appear to be a significant concern for small players and does not appear to pose barriers to entry. The Article concludes by arguing that patent rights are providing incentives for innovation among small industry players and that contrary to some expectations, patent rights support competitiveness in the smartphone industry for small market players."
Copyright © 2016 Robert Moll. All rights reserved.
From the abstract: "This Article seeks to show how patent rights affect the ability of small participants to enter, compete, and exit smartphone markets. The study collected and used comprehensive empirical data on patent grants, venture funding, mergers and acquisitions, initial public offerings, patent litigation, and marketing research data. This Article shows empirically that small participants succeed in the market when they have a low and specific critical mass of patents and that this success exceeds the general norms in the startup world. Surprisingly, the analysis demonstrates that the level of financing and market success do not increase with larger patent portfolios. Lastly, despite the controversies over patent trolls, this Article demonstrates that patent litigation, whether from operating companies or NPEs, does not appear to be a significant concern for small players and does not appear to pose barriers to entry. The Article concludes by arguing that patent rights are providing incentives for innovation among small industry players and that contrary to some expectations, patent rights support competitiveness in the smartphone industry for small market players."
Copyright © 2016 Robert Moll. All rights reserved.
Wednesday, July 22, 2015
Amazon Web Services Agreement's Intellectual Property Non-Assert Clause
Reading a cloud service provider contract is no fun. It is typically written in hyper-technical legalese, tiny font, and long convoluted sentences. And this style helps cloud service providers structure customer relationships to their advantage in surprising ways. How many of us are willing to slug through the fine print? Maybe this is the point since the service provider can remind a customer to not forget "our agreement" when a dispute arises leading to the customer read the "agreement" for the first time too late.
Amazon Web Services is a popular service for software startups, but the customer agreement appears to have some IP issues. In Beware the IP non-assert clause in AWS cloud service agreement, warns ex-Microsoft patent chief, Joff Wild flags a problematic non-assert clause in the standard Amazon Web Services (AWS) customer agreement. It states "during and after the Term, you will not assert, nor will you authorize, assist, or encourage any third party to assert, against us or any of our affiliates, customers, vendors, business partners, or licensors, any patent infringement or other intellectual property infringement claim regarding any Service Offerings you have used" (Section 8.5). Aren't many of us customers of Amazon? If so are we shielded from patent infringement for any AWS service used?
As noted by Joff Wild, the non-assert clause appears to be way too broad. And now we will see how it is interpreted by a court, because Amazon seeks to dismiss a patent infringement suit based on the AWS customer agreement. For details see Todd Bishop of GeekWire's article Amazon fights patent suit using little-noticed clause in standard AWS customer agreement.
Copyright © 2015 Robert Moll. All rights reserved.
Amazon Web Services is a popular service for software startups, but the customer agreement appears to have some IP issues. In Beware the IP non-assert clause in AWS cloud service agreement, warns ex-Microsoft patent chief, Joff Wild flags a problematic non-assert clause in the standard Amazon Web Services (AWS) customer agreement. It states "during and after the Term, you will not assert, nor will you authorize, assist, or encourage any third party to assert, against us or any of our affiliates, customers, vendors, business partners, or licensors, any patent infringement or other intellectual property infringement claim regarding any Service Offerings you have used" (Section 8.5). Aren't many of us customers of Amazon? If so are we shielded from patent infringement for any AWS service used?
As noted by Joff Wild, the non-assert clause appears to be way too broad. And now we will see how it is interpreted by a court, because Amazon seeks to dismiss a patent infringement suit based on the AWS customer agreement. For details see Todd Bishop of GeekWire's article Amazon fights patent suit using little-noticed clause in standard AWS customer agreement.
Copyright © 2015 Robert Moll. All rights reserved.
Wednesday, April 29, 2015
WSJ - Data Storage Startup Infinidat Raises $150 Million at $1.2 Billion Valuation
Tonight, I suggest reading the Wall Street Journal article Data Storage Startup Infinidat Raises $150 Million at $1.2 Billion Valuation. So an Israeli makes a major contribution to EMC, leaves and sells a startup to IBM in 2008, and forms yet another data storage company with 200 employees and 100 software patents? That's an argument to respect your elders!
Copyright © 2015 Robert Moll. All rights reserved.
Copyright © 2015 Robert Moll. All rights reserved.
Sunday, March 8, 2015
Los Altos Town Crier - Robert Showen - Los Altos Scientist and Inventor of the Year 2014
I suggested reading Los Altos scientist named inventor of the year 2014 for a story on how US patents can play a role in a tech startup.
The Silicon Valley Intellectual Property Lawyers Association named Robert Showen for his inventions for ShotSpotter Inc. (now SST Inc.), a gunfire alert and analysis company, which has set up a vast network of microphones that detect gunfire, record the audio, map the location and send alerts to local patrol officers. It had a humble beginning with a computer on the grand piano connected to the rest of the prototype set up in rooms of his house, but is now a system implemented in 90 cities across the United States to reduce gun violence.
"'It was sort of a shot out of the blue,' Showen said of the honor. 'I hadn’t expected it.'"
Copyright © 2015 Robert Moll. All rights reserved.
The Silicon Valley Intellectual Property Lawyers Association named Robert Showen for his inventions for ShotSpotter Inc. (now SST Inc.), a gunfire alert and analysis company, which has set up a vast network of microphones that detect gunfire, record the audio, map the location and send alerts to local patrol officers. It had a humble beginning with a computer on the grand piano connected to the rest of the prototype set up in rooms of his house, but is now a system implemented in 90 cities across the United States to reduce gun violence.
"'It was sort of a shot out of the blue,' Showen said of the honor. 'I hadn’t expected it.'"
Copyright © 2015 Robert Moll. All rights reserved.
Tuesday, February 24, 2015
USPTO - Deputy Director Michelle Lee - Initiatives in 2015
Deputy Director Michelle Lee recently visited the Brookings Institution to talk about the USPTO's plans for 2015. For details see the USPTO video and Patent Quality Initiative.
Deputy Director Lee stated: "I've seen firsthand from the business side the importance that patents play, the exclusionary right they give, the protections they give innovators, businesspeople, and startups at the very early stages. If you're entering a market that is highly competitive, you need to have the assurance that you will have protection as you go up against some very steep and oftentimes well-funded competition. So for the USPTO to issue those patents promptly and accurately is critically important so that people invest in these developments."
This is absolutely right! Startups need great patents to penetrate markets. I would add that proposals to reform US patent law to defeat "patent trolls" should be viewed with the skepticism reserved for any other self-serving corporate lobbying. Why do large companies want to weaken US patents? To reduce patent license costs. You just say no to many efforts to license a patent, then knock down the audacious few who seek to enforce patent rights in court with favorable laws passed by Congress.
Copyright © 2015 Robert Moll. All rights reserved.
Deputy Director Lee stated: "I've seen firsthand from the business side the importance that patents play, the exclusionary right they give, the protections they give innovators, businesspeople, and startups at the very early stages. If you're entering a market that is highly competitive, you need to have the assurance that you will have protection as you go up against some very steep and oftentimes well-funded competition. So for the USPTO to issue those patents promptly and accurately is critically important so that people invest in these developments."
This is absolutely right! Startups need great patents to penetrate markets. I would add that proposals to reform US patent law to defeat "patent trolls" should be viewed with the skepticism reserved for any other self-serving corporate lobbying. Why do large companies want to weaken US patents? To reduce patent license costs. You just say no to many efforts to license a patent, then knock down the audacious few who seek to enforce patent rights in court with favorable laws passed by Congress.
Copyright © 2015 Robert Moll. All rights reserved.
Tuesday, February 10, 2015
Gizmodo - A Bizarre Statistical Fact About Patents and Theft in SF
Today, I suggest reading the Gizmodo article: A Bizarre Statistical Fact About Patents and Theft in San Francisco. Among other things, the article argues that the huge increase in patent filings in SF is somehow related to crime in SF. The companion book for this article? How to Lie with Statistics.
Copyright © 2015 Robert Moll. All rights reserved.
Copyright © 2015 Robert Moll. All rights reserved.
Saturday, March 22, 2014
Professor Sichelman - The Vonage Triology: A Case Study in "Patent Bullying"
University of San Diego Law Professor Ted Sichelman published an interesting article The Vonage Trilogy: A Case Study in "Patent Bullying" on February 18, 2014.
Professor Sichelman tells us "patent bullies are large, established operating companies that threaten or institute costly patent infringement actions of dubious merit against smaller companies, usually in order to suppress competition or garner licensing fees."
Professor Sichelman states "patent bullies have scarcely been discussed in the academic literature or popular press, especially in recent years."
Professor Sichelman examines Sprint, Verizon and AT&T patent infringement suits against Vonage, a startup providing Internet telephone services. Yes, whatever happened to Vonage? The article says the patent infringement suits sank Vonage. How many startups are hampered not by patent trolls but by the incumbents' patents? We should figure this out, because incumbents patent portfolios may not just capture innovation, but generate a patent thicket for startups seeking to enter the marketplace. Congress should take a look at patent bullying -- is Vonage an isolated instance or an all too frequent occurrence?
Copyright © 2014 Robert Moll. All rights reserved.
Monday, January 20, 2014
USA Today - The Other Reason Google bought Nest: Patents
Today, Alistair Barr of USA Today wrote an interesting article The other reason Google bought Nest: patents. It notes bringing Tony Fadell and his group of talented x-Apple developers is not all that made Nest so valuable. I agree with Mr. Barr's article, and would add Nest's foresight to build a significant patent portfolio to protect its innovative technology is what many startups should be doing. Don't listen to anyone who tells you don't file on your inventions because you don't have money to enforce your patent rights in court. This assumes your company will not be bought by another company which does have financial resources to monetize the patents, that contingency fee representation does not exist, and/or that the patent(s) cannot be licensed and/or sold to a company able to best leverage the value in the patent.
Thanks to Alan Snyder for sending this article my way!
Copyright © 2014 Robert Moll. All rights reserved.
Thanks to Alan Snyder for sending this article my way!
Copyright © 2014 Robert Moll. All rights reserved.
Saturday, January 4, 2014
Paul Graham - Are Software Patents Evil?
In the article Are Software Patents Evil, Paul Graham does a nice job explaining the role of patents in startups. It is based on his presentation to Google in 2006, which may be long ago, but I think describes patents better than many things I have read in recent years. It also has weight because Mr. Graham is not a lawyer, but a software programmer, a writer, an artist, and a startup advisor. See details in Paul Graham wiki. He is not trying to make us like patents so we will file more, he is trying to grapple with a difficult problem software companies face today.
I suggest reading the article, but for now here's a passage you don't hear often from the software community:
"Patents are a hard problem. I've had to advise most of the startups we've funded about them, and despite years of experience I'm still not always sure I'm giving the right advice.
One thing I do feel pretty certain of is that if you're against software patents, you're against patents in general. Gradually our machines consist more and more of software. Things that used to be done with levers and cams and gears are now done with loops and trees and closures. There's nothing special about physical embodiments of control systems that should make them patentable, and the software equivalent not.
Unfortunately, patent law is inconsistent on this point. Patent law in most countries says that algorithms aren't patentable. This rule is left over from a time when "algorithm" meant something like the Sieve of Eratosthenes. In 1800, people could not see as readily as we can that a great many patents on mechanical objects were really patents on the algorithms they embodied.
Patent lawyers still have to pretend that's what they're doing when they patent algorithms. You must not use the word "algorithm" in the title of a patent application, just as you must not use the word "essays" in the title of a book. If you want to patent an algorithm, you have to frame it as a computer system executing that algorithm. Then it's mechanical; phew. The default euphemism for algorithm is "system and method." Try a patent search for that phrase and see how many results you get.
Since software patents are no different from hardware patents, people who say "software patents are evil" are saying simply "patents are evil." So why do so many people complain about software patents specifically?
I think the problem is more with the patent office than the concept of software patents. Whenever software meets government, bad things happen, because software changes fast and government changes slow. The patent office has been overwhelmed by both the volume and the novelty of applications for software patents, and as a result they've made a lot of mistakes."
Few can describe how patents relate to startups. It takes time to master a domain, but also I think people don't have access to enough experiences. Perhaps his role at the YCombinator investment firm interfacing with literally thousands of software companies generates the data to get it right. See Randall Stross' The Launch Pad Inside YCombinator for details. That's why recent criticisms of his comments about lack of woman in computer science is off-base. He is not discriminating against women, but giving his candid impression based on data on a problem many would like fixed.
Copyright © 2014 Robert Moll. All rights reserved.
I suggest reading the article, but for now here's a passage you don't hear often from the software community:
"Patents are a hard problem. I've had to advise most of the startups we've funded about them, and despite years of experience I'm still not always sure I'm giving the right advice.
One thing I do feel pretty certain of is that if you're against software patents, you're against patents in general. Gradually our machines consist more and more of software. Things that used to be done with levers and cams and gears are now done with loops and trees and closures. There's nothing special about physical embodiments of control systems that should make them patentable, and the software equivalent not.
Unfortunately, patent law is inconsistent on this point. Patent law in most countries says that algorithms aren't patentable. This rule is left over from a time when "algorithm" meant something like the Sieve of Eratosthenes. In 1800, people could not see as readily as we can that a great many patents on mechanical objects were really patents on the algorithms they embodied.
Patent lawyers still have to pretend that's what they're doing when they patent algorithms. You must not use the word "algorithm" in the title of a patent application, just as you must not use the word "essays" in the title of a book. If you want to patent an algorithm, you have to frame it as a computer system executing that algorithm. Then it's mechanical; phew. The default euphemism for algorithm is "system and method." Try a patent search for that phrase and see how many results you get.
Since software patents are no different from hardware patents, people who say "software patents are evil" are saying simply "patents are evil." So why do so many people complain about software patents specifically?
I think the problem is more with the patent office than the concept of software patents. Whenever software meets government, bad things happen, because software changes fast and government changes slow. The patent office has been overwhelmed by both the volume and the novelty of applications for software patents, and as a result they've made a lot of mistakes."
Few can describe how patents relate to startups. It takes time to master a domain, but also I think people don't have access to enough experiences. Perhaps his role at the YCombinator investment firm interfacing with literally thousands of software companies generates the data to get it right. See Randall Stross' The Launch Pad Inside YCombinator for details. That's why recent criticisms of his comments about lack of woman in computer science is off-base. He is not discriminating against women, but giving his candid impression based on data on a problem many would like fixed.
Copyright © 2014 Robert Moll. All rights reserved.
Saturday, December 14, 2013
Nest Faces Incumbent Dirty Tricks, Patent Lawsuits & More
In Nest Labs CEO advice: Startup? More like lawyer up, Tony Fadell says startups challenging the incumbents need to prepare not just for competition but dirty tricks:
"They will throw everything under the sun at you, and a lot of it is not cool. In addition to patent lawsuits, they'll trash your products on review sites. Nest Labs has been able to track some one-star reviews back to the facilities of its competitors, and he values having a lawyer who can fight the patent suits."
Yes, but what's an even dirtier trick? Maybe the Goodlatte Innovation Act (HR 3309) that purports to stop patent trolls, but will no doubt intimidate some small companies into not enforcing legitimate patent rights to avoid the risk of paying incumbent's legal bills. Nothing like the threat of shifting your legal bill to send a startup on its way!
How will Goodlatte shift incumbent legal fees to small companies? It proposes mandatory attorney fee shifting in every single case when a court concludes the loser's conduct or claim was not reasonably justified. Each time a defendant wins, the patent owner will face a motion for attorney fees. This is a huge change from 35 USC 285 that requires each party bear its expenses, including attorney fees except in exceptional cases.
Congress appears to be rushing the Goodlatte's bill to passage before smaller entities can oppose it and/or before the Supreme Court can decide two cases on the award of attorney fees in patent cases: Highmark Inc. v. Allcare Management Systems, Inc. and Octane Fitness v. Icon Health and Fitness. It might be smart to hear how the Supreme Court would guide this topic instead of rushing forward to change 35 USC 285.
Copyright © 2013 Robert Moll. All rights reserved.
"They will throw everything under the sun at you, and a lot of it is not cool. In addition to patent lawsuits, they'll trash your products on review sites. Nest Labs has been able to track some one-star reviews back to the facilities of its competitors, and he values having a lawyer who can fight the patent suits."
Yes, but what's an even dirtier trick? Maybe the Goodlatte Innovation Act (HR 3309) that purports to stop patent trolls, but will no doubt intimidate some small companies into not enforcing legitimate patent rights to avoid the risk of paying incumbent's legal bills. Nothing like the threat of shifting your legal bill to send a startup on its way!
How will Goodlatte shift incumbent legal fees to small companies? It proposes mandatory attorney fee shifting in every single case when a court concludes the loser's conduct or claim was not reasonably justified. Each time a defendant wins, the patent owner will face a motion for attorney fees. This is a huge change from 35 USC 285 that requires each party bear its expenses, including attorney fees except in exceptional cases.
Congress appears to be rushing the Goodlatte's bill to passage before smaller entities can oppose it and/or before the Supreme Court can decide two cases on the award of attorney fees in patent cases: Highmark Inc. v. Allcare Management Systems, Inc. and Octane Fitness v. Icon Health and Fitness. It might be smart to hear how the Supreme Court would guide this topic instead of rushing forward to change 35 USC 285.
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:
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.
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.
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.
Friday, September 6, 2013
Professor Colleen Chien - What To Do If You Get A Patent Troll Demand
Santa Clara University associate professor Colleen Chien has an interesting article What To Do If You Get A Patent Troll Demand in TechCrunch based on a detailed report Patent Assertion and Startup Innovation that examines 134 VCs and 173 startups' experiences with patent assertion from NPEs or patent trolls. Note the sample size was based on a total of 6,636 addressees not counting opt-outs and bounced emails and not specific to any industry. See the report for methodology and details.
Copyright © 2013 Robert Moll. All rights reserved.
Copyright © 2013 Robert Moll. All rights reserved.
Sunday, June 3, 2012
Zetta Research - Maximizing the Value of Patents from Failed Startups
Like a number of others, Zetta Research, LLC in San Mateo, CA buys patents from failed startups, but instead of just hoarding the patents, it works with the inventors of the startups to get the patent applications granted as patents and file any desired continuations that will maximize the overall value of patent portfolio to a big tech company.
For details see the Wall Street Journal article: Zetta Research Finds Friendlier Approach to Patent Business
Copyright © 2012 Robert Moll. All rights reserved.
For details see the Wall Street Journal article: Zetta Research Finds Friendlier Approach to Patent Business
Copyright © 2012 Robert Moll. All rights reserved.
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