Joshua Sisco updates on the progress of the U.S. Patent and Trademark Office in Silicon Valley: Patent Lawyers Have High Hopes for PTO's Valley Branch
Copyright © 2013 Robert Moll. All rights reserved.
Tuesday, April 16, 2013
Friday, April 12, 2013
Micron Suspends Hiring Students at University of Illinois To Teach Your University Can't Sue Us!
In December 2011, the University of Illinois at Urbana-Champaign (UIUC) filed a patent infringement suit against Micron. You might think this is typical news, but this case has taken a strange twist. Apparently, Micron's hiring coordinator decided that she had enough of this lawsuit (after all 16 months is a long time) and wrote the following to UIUC:
Copyright © 2013 Robert Moll. All rights reserved.
Because Micron remains a defendant in a patent infringement lawsuit that UIUC filed against Micron in Federal court in Illinois on December 5, 2011, effective immediately, Micron will no longer recruit UIUC students for open positions at any of Micron's world-wide facilities.
. . . . [T]he Micron Foundation has endowed chairs at the College of Engineering and has sponsored student scholarship and professor research. However, because UIUC's suit imposes costs and risks on Micron that are inconsistent with collaborative relationships among Micron, UIUC, and its students, Micron must regrettably indefinitely suspend its recruitment of UIUC students and likewise suspend participation in other joint activities.Professor Dennis Crouch of Patently-O focuses on UIUC's attempt to enjoin Micron in the following article: Although "without tact", Micron's retaliatory decision to stop hiring University of Illinois Graduates is not Illegal. Professor Crouch relates Micron's behavior to his own experience: "I have a policy that I don't hire anyone who sues me. I think [sic, I] would actually take that personally. So does Micron." But the students did not sue Micron so I am uncertain how Professor Crouch's policy is relevant here. Is eliminating a career opportunity for all students at University of Illinois being used to coerce the University to drop the lawsuit? If so, it is surprising and the loss of talent and PR costs may be greater than the benefits of pushing this patent lawsuit to a settlement.
Tuesday, April 9, 2013
Sara Jeruss, Robin Feldman, and Thomas Ewing - The America Invents Act 500 Expanded: Effects of Patent Monetization Entities
Today, Robin Feldman, Professor of Law at UC Hastings Law School, informed me that she and co-authors, Sara Jeruss and Thomas Ewing, released an expanded study on patent monetizers: The America Invents Act 500 Expanded: Effects of Patent Monetization Entities. One interesting finding is patent monetizers filed 56% of patent infringement lawsuits in 2012. I am still reading it but want to pass it along now. Here is a reformatted version of their abstract of the study:
"Public attention is increasingly focused on patent monetization entities. Known colloquially as “patent trolls” or more neutrally as “NPEs,” these entities derive income from licensing or litigating, rather than producing a product.
In 2011, Congress directed the nonpartisan GAO to study the consequences of patent litigation by NPEs. We provided data for that study, producing and coding a random sample consisting of 100 of cases filed each year over five years from 2007-2011. 500 cases is a small sample. Thus, we have expanded that study to examine all patent litigations filed across four years, 2007-2008 and 2011-2012. This involved analyzing 13,000 cases and 30,000 patents asserted.
We also traced the transfer history of the patents. Our analysis confirms what we saw in the smaller sample: patent infringement litigation by patent monetization entities has risen dramatically. Most striking, as of 2012, litigation by patent monetization entities now represents a majority of the patent litigations filed in the United States. This is a sharp rise from 2007, when patent monetization entities filed only 24%. In addition, of the parties who filed the greatest number of patent litigations in the years we studied, 9 out of 10 are patent monetization entities, and only one is an operating company.
Among other interesting results, our analysis revealed another problem previously unrecognized. Mechanisms for notifying the public when patents have been asserted in litigation are woefully inadequate. Despite federal legislation, the system was not operative for more than two-thirds of the patents asserted."
Also see: Press release and a video of Professor Feldman summarizing the study
Copyright © 2013 Robert Moll. All rights reserved.
"Public attention is increasingly focused on patent monetization entities. Known colloquially as “patent trolls” or more neutrally as “NPEs,” these entities derive income from licensing or litigating, rather than producing a product.
In 2011, Congress directed the nonpartisan GAO to study the consequences of patent litigation by NPEs. We provided data for that study, producing and coding a random sample consisting of 100 of cases filed each year over five years from 2007-2011. 500 cases is a small sample. Thus, we have expanded that study to examine all patent litigations filed across four years, 2007-2008 and 2011-2012. This involved analyzing 13,000 cases and 30,000 patents asserted.
We also traced the transfer history of the patents. Our analysis confirms what we saw in the smaller sample: patent infringement litigation by patent monetization entities has risen dramatically. Most striking, as of 2012, litigation by patent monetization entities now represents a majority of the patent litigations filed in the United States. This is a sharp rise from 2007, when patent monetization entities filed only 24%. In addition, of the parties who filed the greatest number of patent litigations in the years we studied, 9 out of 10 are patent monetization entities, and only one is an operating company.
Among other interesting results, our analysis revealed another problem previously unrecognized. Mechanisms for notifying the public when patents have been asserted in litigation are woefully inadequate. Despite federal legislation, the system was not operative for more than two-thirds of the patents asserted."
Also see: Press release and a video of Professor Feldman summarizing the study
Copyright © 2013 Robert Moll. All rights reserved.
Wednesday, April 3, 2013
America Invents Act - USPTO Rules of Professional Conduct Effective May 3, 2013
Today, the Federal Register published the Rules of Professional Conduct for practice before the USPTO, which will be effective on May 3, 2013. See the Rules and related commentary (here).
The USPTO said it's: "Designed to make life easier for the more than 41,000 practitioners who interact with our agency, they are based upon the American Bar Association’s Model Rules of Professional Conduct. The ethics rules are the first major update since 1985 and reflect the rules in place in 49 states and the District of Columbia. We spent a great deal of time reaching out to stakeholders in the IP community to balance the need of applicants as well as practitioners. Additionally, I am proud to say that the latest rulemaking eliminated the annual practitioner maintenance fee."
Note if you are practicing in California, it has not adopted the Model Rules. See California's Professional Rules of Conduct here.
Copyright © 2013 Robert Moll. All rights reserved.
The USPTO said it's: "Designed to make life easier for the more than 41,000 practitioners who interact with our agency, they are based upon the American Bar Association’s Model Rules of Professional Conduct. The ethics rules are the first major update since 1985 and reflect the rules in place in 49 states and the District of Columbia. We spent a great deal of time reaching out to stakeholders in the IP community to balance the need of applicants as well as practitioners. Additionally, I am proud to say that the latest rulemaking eliminated the annual practitioner maintenance fee."
Note if you are practicing in California, it has not adopted the Model Rules. See California's Professional Rules of Conduct here.
Copyright © 2013 Robert Moll. All rights reserved.
Monday, April 1, 2013
Microsoft Lists All Patents on the Web - The Knowledge Trap
On March 28, 2013, Brad Smith, Microsoft's GC and Executive VP, Legal and Corporate Affairs, mentioned in Enhancing Transparency: Putting Microsoft's Patents on the Web that Microsoft has published information (e.g., patent number, title, and country) regarding all Microsoft owned patents on the Web. The actual content of the patent will be available through the US patent databases (e.g., USPTO, Google Patent Search, and Free Patents Online).
From Mr. Smith's post: "Today, we launched a “Patent Tracker” tool that provides a list of all of the patents Microsoft owns. Through the Patent Tracker, users can obtain the list in two forms: (1) an online list that is searchable by patent number, patent title, country and whether the patent is held by Microsoft or a subsidiary, and (2) a CSV file containing the entire list that is downloadable and searchable in Microsoft Excel. We took this approach so that people can come to our site if they want to run a quick search, but can also download the information if they want to perform deeper analysis. Above is a video providing additional information about the need for transparency and how to use the Patent Tracker.
We take this step today because we believe that all stakeholders of the U.S. patent system – private companies, the U.S. Patent and Trademark Office, Congress and the courts – share responsibility for taking steps to improve its operation. Sensible improvements to the patent system, such as increasing transparency on patent ownership, will yield tangible outcomes that enhance American competitiveness, create jobs and foster growth in nearly every sector of the U.S. economy.
We urge other companies to join us in making available information about which patents they own. By doing so, they will help increase transparency, facilitate licensing, and help ensure that the patent system continues to fulfill its role in promoting and encouraging innovation."
Joff Wild of Intellectual Asset Management states Microsoft's aim to bring greater transparency to their holdings should be welcomed. And in my opinion, downloading a list with numbers, titles, and countries of 41,000 patents shouldn't translate into being imputed with knowledge of any given patent. However, what's logically next? If you review a relevant patent on the list as it may generate the need for a patent license or a opinion that the patent is not infringed or invalid. And if infringement is later found and the opinion is held incompetent, that knowledge increases the risk of willful infringement and increased damages. This is suggested since In re Seagate Technology held establishing willful infringement requires the patent owner show (1) the infringer acted despite an objectively high likelihood its action constituted infringement; and (2) the risk was known or so obvious it should have been known.
Copyright © 2013 Robert Moll. All rights reserved.
From Mr. Smith's post: "Today, we launched a “Patent Tracker” tool that provides a list of all of the patents Microsoft owns. Through the Patent Tracker, users can obtain the list in two forms: (1) an online list that is searchable by patent number, patent title, country and whether the patent is held by Microsoft or a subsidiary, and (2) a CSV file containing the entire list that is downloadable and searchable in Microsoft Excel. We took this approach so that people can come to our site if they want to run a quick search, but can also download the information if they want to perform deeper analysis. Above is a video providing additional information about the need for transparency and how to use the Patent Tracker.
We take this step today because we believe that all stakeholders of the U.S. patent system – private companies, the U.S. Patent and Trademark Office, Congress and the courts – share responsibility for taking steps to improve its operation. Sensible improvements to the patent system, such as increasing transparency on patent ownership, will yield tangible outcomes that enhance American competitiveness, create jobs and foster growth in nearly every sector of the U.S. economy.
We urge other companies to join us in making available information about which patents they own. By doing so, they will help increase transparency, facilitate licensing, and help ensure that the patent system continues to fulfill its role in promoting and encouraging innovation."
Joff Wild of Intellectual Asset Management states Microsoft's aim to bring greater transparency to their holdings should be welcomed. And in my opinion, downloading a list with numbers, titles, and countries of 41,000 patents shouldn't translate into being imputed with knowledge of any given patent. However, what's logically next? If you review a relevant patent on the list as it may generate the need for a patent license or a opinion that the patent is not infringed or invalid. And if infringement is later found and the opinion is held incompetent, that knowledge increases the risk of willful infringement and increased damages. This is suggested since In re Seagate Technology held establishing willful infringement requires the patent owner show (1) the infringer acted despite an objectively high likelihood its action constituted infringement; and (2) the risk was known or so obvious it should have been known.
Copyright © 2013 Robert Moll. All rights reserved.
Friday, March 29, 2013
America Invents Act - Making the Simple Act of Filing a Continuation Complex
A continuation is a patent application that is entitled to the benefit of the filing date of a prior application. The specification and drawings are the same but the claims are different. A continuation allows one to seek different claims to protect different aspects of the invention. Before the America Invents Act, filing a continuation was also relatively inexpensive. One simply copied the specification, added a sentence claiming priority, drafted claims, completed an application transmittal, calculated USPTO fees, and uploaded the application papers at the USPTO.
The America Invents Act has increased the expense of continuation applications filed after September 16, 2012 in that it requires an application data sheet (ADS) form, which was formerly optional, just to claim domestic or foreign priority. See 37 CFR 1.76 and 1.78. Adding to the chore if you file after the application is filed, the ADS form will not permit adding an application number, an attorney docket reference, or the title. You must apparently grab a typewriter or handwrite that information. But you still are not done, because the ADS requires filing an AIA power of attorney with no data field for the application number. Acting in a representative capacity under 37 CFR 1.34 is not an option in the form. What application does the power of attorney refer to? It refers to a statement under 37 CFR 3.73(c) for the application number. But this requires completing the statement, which requires gathering the notice of recordations in the chain of title. USPTO forms should save time, not generate the need to complete more forms! Further, the USPTO should amend 37 CFR 1.76 and 1.78 to be more consistent with Congressional law. There a claim to priority is only required to be contained in an application. These rules requiring priority claims be made in an "optional ADS form" generate filling out additional forms with little benefit to applicants.
Copyright © 2013 Robert Moll. All rights reserved.
The America Invents Act has increased the expense of continuation applications filed after September 16, 2012 in that it requires an application data sheet (ADS) form, which was formerly optional, just to claim domestic or foreign priority. See 37 CFR 1.76 and 1.78. Adding to the chore if you file after the application is filed, the ADS form will not permit adding an application number, an attorney docket reference, or the title. You must apparently grab a typewriter or handwrite that information. But you still are not done, because the ADS requires filing an AIA power of attorney with no data field for the application number. Acting in a representative capacity under 37 CFR 1.34 is not an option in the form. What application does the power of attorney refer to? It refers to a statement under 37 CFR 3.73(c) for the application number. But this requires completing the statement, which requires gathering the notice of recordations in the chain of title. USPTO forms should save time, not generate the need to complete more forms! Further, the USPTO should amend 37 CFR 1.76 and 1.78 to be more consistent with Congressional law. There a claim to priority is only required to be contained in an application. These rules requiring priority claims be made in an "optional ADS form" generate filling out additional forms with little benefit to applicants.
Copyright © 2013 Robert Moll. All rights reserved.
Thursday, March 28, 2013
Google's Open Patent Non-Assertion Pledge - Dipping a Toe in the Water?
Today, I am hearing that Google has a patent pledge (legal terms here) to decrease patent threats to the open source software community. In short, Google pledges not to file a patent infringement suit against a provider or user of open source software (OSS) unless it is sued first. Since the OSS community is unlikely to sue Google for patent infringement, I don't see this is an escape clause. See Google's explanation about the pledge (here).
IBM pledged 500 patents and Sun 1,600 patents to OSS so what's on Google's list? The pledge list (here) says four US patents, four US published applications, and two PCT applications. A published application can generate pre-issuance royalties if a US patent issues, a claim proceeds from publication to issuance unchanged, and an infringer is given actual notice, but a PCT application gives no royalty rights only the right to file later. So does Google file foreign patent applications via the PCT applications or stop at the PCT stage to save some cash? Even if we call it ten patents the pledge involves less than 0.06% of Google's patent portfolio assuming it owns about 17,000 US patents. FOSS says this is a PR stunt (here) but maybe it's the start of a bigger pledge and this is "dipping the toe in the water."
Copyright © 2013 Robert Moll. All rights reserved.
IBM pledged 500 patents and Sun 1,600 patents to OSS so what's on Google's list? The pledge list (here) says four US patents, four US published applications, and two PCT applications. A published application can generate pre-issuance royalties if a US patent issues, a claim proceeds from publication to issuance unchanged, and an infringer is given actual notice, but a PCT application gives no royalty rights only the right to file later. So does Google file foreign patent applications via the PCT applications or stop at the PCT stage to save some cash? Even if we call it ten patents the pledge involves less than 0.06% of Google's patent portfolio assuming it owns about 17,000 US patents. FOSS says this is a PR stunt (here) but maybe it's the start of a bigger pledge and this is "dipping the toe in the water."
Copyright © 2013 Robert Moll. All rights reserved.
Wednesday, March 27, 2013
America Invents Act - Inter Partes Review Available Upon Issuance - Eliminating the Nine Month Dead Zone
The USPTO revised the final rules of practice with
respect to inter partes review petitions challenging first-to-invent patents and reissue patents on March 25, 2013. The rules implement the amendment to 35 U.S.C. 311(c) that eliminated "dead
zones" by allowing inter partes review challenges to first-to-invent patents and reissues during the first nine months after
issuance.
As stated by the USPTO: "Under the AIA, as originally enacted, a petition for inter partes review could only be filed after the later of either: (1) The date that is nine months after the issuance of an original patent or reissued patent; or (2) if a post-grant review is instituted, the date of the termination of such post-grant review. Notably, inter partes reviews were available only for patents that had been issued for at least nine months. Additionally, post-grant reviews were not available for first- to-invent patents and reissued patents where the original patent was no longer eligible for post-grant review (35 U.S.C. 325(f)). See sections 6(d) and (f)(2) of the AIA. That created two nine-month "dead zones,'' namely first-to-invent patents and reissued patents could not be challenged in an inter partes proceeding before the Office during the first nine months after issuance."
For further details see the USPTO release (here).
Copyright © 2013 Robert Moll. All rights reserved.
As stated by the USPTO: "Under the AIA, as originally enacted, a petition for inter partes review could only be filed after the later of either: (1) The date that is nine months after the issuance of an original patent or reissued patent; or (2) if a post-grant review is instituted, the date of the termination of such post-grant review. Notably, inter partes reviews were available only for patents that had been issued for at least nine months. Additionally, post-grant reviews were not available for first- to-invent patents and reissued patents where the original patent was no longer eligible for post-grant review (35 U.S.C. 325(f)). See sections 6(d) and (f)(2) of the AIA. That created two nine-month "dead zones,'' namely first-to-invent patents and reissued patents could not be challenged in an inter partes proceeding before the Office during the first nine months after issuance."
For further details see the USPTO release (here).
Copyright © 2013 Robert Moll. All rights reserved.
Sunday, March 24, 2013
Written Comments on USPTO's Proposals for Recording Ownership During Application Pendency and Patent Term
The USPTO recently proposed to increase transparency regarding ownership of US patent applications and US patents. The drivers of the initiative (e.g., patent trolls use of shell corporations) seem unclear, but it does sound like a good idea-- after all we should be able to efficiently determine who owns a given application or a patent. However, the benefit of identifying "the real-party-in-interest" at all stages will cost something on every application filed as patent attorneys and staff charge to maintain ownership records from the filing date to the end of the patent term. "Dangnabbit, I thought you would do it for free!"
Hopefully, the USPTO will not implement rules to increase transparency until it addresses the costs and other problems raised in some of the written comments from AIPLA, IPO, DOJ, American Antitrust Institute, Article One Partners, Coalition for Patent Fairness, HP, Intellectual Ventures, and Novartis, plus individuals: Professor Colleen Chien, Professor Robin Feldman, Professor Arti Rai, and patent attorney Alan Minsk.
For details see the following written comments made in response to the Notice of Roundtable on Proposed Requirements for Recordation of Real-Party-in-Interest Information Throughout Application Pendency and Patent Term.
Copyright © 2013 Robert Moll. All rights reserved.
Hopefully, the USPTO will not implement rules to increase transparency until it addresses the costs and other problems raised in some of the written comments from AIPLA, IPO, DOJ, American Antitrust Institute, Article One Partners, Coalition for Patent Fairness, HP, Intellectual Ventures, and Novartis, plus individuals: Professor Colleen Chien, Professor Robin Feldman, Professor Arti Rai, and patent attorney Alan Minsk.
For details see the following written comments made in response to the Notice of Roundtable on Proposed Requirements for Recordation of Real-Party-in-Interest Information Throughout Application Pendency and Patent Term.
Copyright © 2013 Robert Moll. All rights reserved.
Wednesday, March 20, 2013
Kirtsaeng v. John Wiley & Sons, Inc. - First Sale Defense Protects Buyer of Authorized Copyrighted Work Made in Foreign Country Reselling Work in United States
Yesterday, in Kirtsaeng v. John Wiley & Sons, Inc., the Supreme Court held that if a copyright owner authorizes manufacture and sale of a copyrighted work abroad, the first sale defense protects a buyer's ability to resell that work in the United States. The Supreme Court concluded the Second Circuit mistakenly imported a geographic limitation (United States only) into the phrase "lawfully made under this title," which reduced the scope of the first sale defense inconsistent with the copyright statute, the legislative history, and the common law. As Michael Barclay of IP Duck deftly puts it in Roundup of Commentary on Kirtsaeng v. John Wiley: "if you buy something, you own it."
Although a copyright case, Harold Wegner of Foley & Lardner expects the Supreme Court to grant, vacate, and remand (GVR) Ninestar Technology Co., Ltd. v. International Trade Commissioner to the Federal Circuit to review the scope of patent exhaustion in view of Kirtsaeng given the certiorari petition asks: "Whether the initial authorized sale outside the United States of a patented item terminates all patent rights to that item."
Update March 25, 2013: The Supreme Court denied Ninestar's petition for certiorari seeking review of the law of international patent exhaustion.
Copyright © 2013 Robert Moll. All rights reserved.
Although a copyright case, Harold Wegner of Foley & Lardner expects the Supreme Court to grant, vacate, and remand (GVR) Ninestar Technology Co., Ltd. v. International Trade Commissioner to the Federal Circuit to review the scope of patent exhaustion in view of Kirtsaeng given the certiorari petition asks: "Whether the initial authorized sale outside the United States of a patented item terminates all patent rights to that item."
Update March 25, 2013: The Supreme Court denied Ninestar's petition for certiorari seeking review of the law of international patent exhaustion.
Copyright © 2013 Robert Moll. All rights reserved.
Monday, March 18, 2013
USPTO Fee Schedule Effective on March 19, 2013
The United States Patent and Trademark Office (USPTO) Fee Schedule effective on March 19, 2013.
Copyright © 2013 Robert Moll. All rights reserved.
Copyright © 2013 Robert Moll. All rights reserved.
Wednesday, March 13, 2013
Design Patents in the Modern World - Stanford Law School on April 5-6, 2013
Professor Dennis Crouch reports Stanford Law School will host Design Patents in the Modern World Conference on April 5-6, 2013. See the above link for registration and details for this free conference.
Copyright © 2013 Robert Moll. All rights reserved.
Copyright © 2013 Robert Moll. All rights reserved.
Tuesday, March 12, 2013
America Invents Act - Repeal of Statutory Invention Registrations (SIRs) on March 16, 2013
Today, the USPTO emailed the following notice:
"Effective on March 16, 2013, the Office will no longer accept requests for Statutory Invention Registrations (SIRs). Section 3 of the Leahy-Smith America Invents Act (AIA) repeals the provisions of 35 U.S.C. 157 pertaining to SIRs. The effective date of the repeal of SIRs is March 16, 2013, regardless of the filing date of the application. The Office will consider any pending requests for SIRs filed before March 16, 2013. Requests for SIRs filed on or after March 16, 2013 will not be treated by the Office. More information on the repeal of SIRs can be found in the Federal Register Notice entitled “Changes To Implement the First Inventor To File Provisions of the Leahy-Smith America Invents Act,” Final Rule, 78 FR 11024 (February 14, 2013) at http://www.gpo.gov/fdsys/pkg/FR-2013-02-14/pdf/2013-03453.pdf"
Copyright © 2013 Robert Moll. All rights reserved.
Wednesday, March 6, 2013
America Invents Act - Narrow Grace Period with High Cost
Under current law, the United States grace period protects an inventor from disclosure of the invention before the filing date. The grace period lasts for 12 months, is unconditional, and it doesn't matter who disclosed the invention.
Beginning March 16, 2013, the one-year grace period only protects a much more limited set of activities, namely, inventor disclosures and disclosures derived from the inventors. I discussed this in more detail in America Invents Act - Uncertain Grace Period for Filing US Patent Application. It's too bad the grace period has become so narrow especially for innovative startups that engage in pre-filing activities.
Not only is the new grace period narrow, it will be costly for applicants. The expense will show up in two ways. First, in prosecution if a prior art rejection is based on a disclosure that the inventor seeks to shield using the grace period, 37 CFR 1.130 requires a declaration describing the details and dates of inventor's disclosure and disclosure to others. Such a declarations will be time consuming and expensive, because it will require talking to all the people involved, and cross-checking facts. Second, to be effective the declaration must be 100% accurate. Even if the examiner allows the case based on the declaration, litigators may have a large budget and time to attack the declaration as (1) incomplete; (2) inaccurate; and/or (3) misleading. Thus, it will add a large expense to prosecuting U.S. patent applications.
Further, these costs will be unavoidable if an applicants seeks to use the grace period to overcome a prior art rejection. If an applicant files a declaration that a court finds incomplete or inaccurate, the prior art that was overcome in prosecution may be used to invalidate the patent in litigation or in a post-grant proceeding. The patent owner may be forced to file reissue or reexamination papers. Of course this may result in intervening rights or no patent. If the court holds the declaration is misleading, the patent may be held unenforceable.
For a copy of the final rules, comments on the rules, and the examination guidelines please see USPTO - Final Rules and Examination Guidelines to Implement the First-Inventor-to-File Provision of the America Invents Act.
Copyright © 2013 Robert Moll. All rights reserved.
Beginning March 16, 2013, the one-year grace period only protects a much more limited set of activities, namely, inventor disclosures and disclosures derived from the inventors. I discussed this in more detail in America Invents Act - Uncertain Grace Period for Filing US Patent Application. It's too bad the grace period has become so narrow especially for innovative startups that engage in pre-filing activities.
Not only is the new grace period narrow, it will be costly for applicants. The expense will show up in two ways. First, in prosecution if a prior art rejection is based on a disclosure that the inventor seeks to shield using the grace period, 37 CFR 1.130 requires a declaration describing the details and dates of inventor's disclosure and disclosure to others. Such a declarations will be time consuming and expensive, because it will require talking to all the people involved, and cross-checking facts. Second, to be effective the declaration must be 100% accurate. Even if the examiner allows the case based on the declaration, litigators may have a large budget and time to attack the declaration as (1) incomplete; (2) inaccurate; and/or (3) misleading. Thus, it will add a large expense to prosecuting U.S. patent applications.
Further, these costs will be unavoidable if an applicants seeks to use the grace period to overcome a prior art rejection. If an applicant files a declaration that a court finds incomplete or inaccurate, the prior art that was overcome in prosecution may be used to invalidate the patent in litigation or in a post-grant proceeding. The patent owner may be forced to file reissue or reexamination papers. Of course this may result in intervening rights or no patent. If the court holds the declaration is misleading, the patent may be held unenforceable.
For a copy of the final rules, comments on the rules, and the examination guidelines please see USPTO - Final Rules and Examination Guidelines to Implement the First-Inventor-to-File Provision of the America Invents Act.
Copyright © 2013 Robert Moll. All rights reserved.
Monday, March 4, 2013
America Invents Act - Uncertain Grace Period for Filing US Patent Application
Today, Hal Wegner blew the trumpet loud and clear. Beginning March 16, 2013, the new one-year grace period, which is currently unconditional, may only give narrow protection with respect to pre-filing disclosures based on a review of 35 USC 102, the recent PTO examination and final rules, certain statements made by principal draftsman Robert Armitage and Joe Matal, and Congressional legislative history. For example, the new one-year grace period may not protect against a third party's disclosure or publication prior to the filing date unless the third party disclosure is identical to the inventor's disclosure.
You may want to sign up for Hal Wegner's free email service for the details. But in a nutshell he advises: if anyone plans to file a U.S. patent application on or after March 16, 2013, they should file the application before disclosure of the invention. If anyone discloses the invention before filing a application, one should file the application as soon as possible to reduce the risk the grace period will be treated as not shielding a non-identical third party disclosure before the filing date. Because the scope of the grace period is uncertain after considerable commentary, this appears to be the safer approach to protect U.S. patent rights until the Federal Circuit gives further guidance.
Copyright © 2013 Robert Moll. All rights reserved.
You may want to sign up for Hal Wegner's free email service for the details. But in a nutshell he advises: if anyone plans to file a U.S. patent application on or after March 16, 2013, they should file the application before disclosure of the invention. If anyone discloses the invention before filing a application, one should file the application as soon as possible to reduce the risk the grace period will be treated as not shielding a non-identical third party disclosure before the filing date. Because the scope of the grace period is uncertain after considerable commentary, this appears to be the safer approach to protect U.S. patent rights until the Federal Circuit gives further guidance.
Copyright © 2013 Robert Moll. All rights reserved.
Thursday, February 28, 2013
The Importance of the Federal Circuit - Chief Judge Rader Speaks Out About Patent Litigation Abuse
I was fortunate to work at Lyon & Lyon after graduating from USC Law. At that time it was the largest patent law firm in LA and a great place to start. As with any large law firm it had different personalities, but a common understanding that in advising a client, formulating strategy, or preparing legal papers what mattered were the decisions of the Court of Appeals for the Federal Circuit (CAFC). Law students learn appeals are where much of the significant case law is developed. Since the CAFC has had exclusive jurisdiction over patent appeals since 1982, it has considered many issues that arise in patent law. Thus, much can be learned about U.S. patent law when a CAFC judge gives a public talk. In that vein, here's Gene Quinn's article Chief Judge Rader Speaks Out About Patent Litigation Abuse.
Copyright © 2013 Robert Moll. All rights reserved.
Copyright © 2013 Robert Moll. All rights reserved.
Wednesday, February 27, 2013
SHIELD Act of 2013 - A Problematic Solution to Patent Trolls
I thought the effort to pass the SHIELD Act died last year, but read Joe Mullin's article tonight: Peeved politicians want "loser pays" rule for patent trolls - SHIELD Act would target patent shell companies, exempt inventors, universities. I was wrong, it's repackaged as the SHIELD Act of 2013! It's changed a bit, but still not a good idea.
Part of the problem is it's a huge departure from centuries of America law. The America rule requires each party in litigation bear its own expenses, including attorney fees. In 1946, the U.S. patent statute was amended to "discourage infringement of a patent by anyone thinking all he would be required to pay if he loses the suit would be a royalty." The Senate Committee at that time noted, "it is not contemplated that the recovery of attorney fees will become an ordinary thing in the patent suits." In 1952, the U.S. patent statute was amended to add that attorney fees would only be recoverable in "exceptional cases." Even then attorney fees are intended to compensate the "good party" for its expenses and not punish the "bad party." So despite the rhetoric U.S. patent law already has a mechanism to tackle patent trolls.
This Act's proposed fee shifting ignores that plus opens a can of worms when parties have vastly different financial resources. For example, if a small company becomes aware a large company is infringing its patent, offers a license, which is ignored, it may need to go to court to seek redress. This bill would encourage defendants to engage a large law firms (many attorneys are assigned to the case) to quickly run up a huge legal bill, which is not difficult if you bill at $600-$1,000/hour, generate a "victory," and hand the entire legal bill (which should belong to the defendant for not exercising any judgment and ignoring the relatively low cost inter partes review in the USPTO) to punish the small company for having the audacity to want to license its patent. Ultimately if passed, the SHIELD Act may just shield large companies who want to freely infringe small companies patented inventions.
The SHIELD Act definitions of a patent troll is also problematic. A company or individual risks being held a patent troll by defendant's motion if (1) it doesn't practice the invention; (2) it doesn't have at least one inventor in its employ; or (3) it is not the original patent owner. Assigning so much importance on practicing the invention has no basis in US patent law. Wouldn't the bill's definition of patent troll be met by companies none of us consider to be patent trolls? For example, is Google forced to litigate as a patent troll under this bill if it seeks to enforce the Motorola Mobility patents? Better not lay off the affected Motorola inventors then. How about Facebook's purchase of AOL and IBM patents? How much practice of the invention suffices to defeat the patent troll label? Could a company avoid the patent troll label by building and selling a prototype? Couldn't someone be exempt from the Act simply by hiring one of the inventors? Maybe plaintiff and defendant could bid for the inventor. Does exempting an original owner but not any subsequent assignee discourage transfer of patents? Congress may mean well, but these types of consequences make the bill worse than the problem.
Copyright © 2013 Robert Moll. All rights reserved.
Part of the problem is it's a huge departure from centuries of America law. The America rule requires each party in litigation bear its own expenses, including attorney fees. In 1946, the U.S. patent statute was amended to "discourage infringement of a patent by anyone thinking all he would be required to pay if he loses the suit would be a royalty." The Senate Committee at that time noted, "it is not contemplated that the recovery of attorney fees will become an ordinary thing in the patent suits." In 1952, the U.S. patent statute was amended to add that attorney fees would only be recoverable in "exceptional cases." Even then attorney fees are intended to compensate the "good party" for its expenses and not punish the "bad party." So despite the rhetoric U.S. patent law already has a mechanism to tackle patent trolls.
This Act's proposed fee shifting ignores that plus opens a can of worms when parties have vastly different financial resources. For example, if a small company becomes aware a large company is infringing its patent, offers a license, which is ignored, it may need to go to court to seek redress. This bill would encourage defendants to engage a large law firms (many attorneys are assigned to the case) to quickly run up a huge legal bill, which is not difficult if you bill at $600-$1,000/hour, generate a "victory," and hand the entire legal bill (which should belong to the defendant for not exercising any judgment and ignoring the relatively low cost inter partes review in the USPTO) to punish the small company for having the audacity to want to license its patent. Ultimately if passed, the SHIELD Act may just shield large companies who want to freely infringe small companies patented inventions.
The SHIELD Act definitions of a patent troll is also problematic. A company or individual risks being held a patent troll by defendant's motion if (1) it doesn't practice the invention; (2) it doesn't have at least one inventor in its employ; or (3) it is not the original patent owner. Assigning so much importance on practicing the invention has no basis in US patent law. Wouldn't the bill's definition of patent troll be met by companies none of us consider to be patent trolls? For example, is Google forced to litigate as a patent troll under this bill if it seeks to enforce the Motorola Mobility patents? Better not lay off the affected Motorola inventors then. How about Facebook's purchase of AOL and IBM patents? How much practice of the invention suffices to defeat the patent troll label? Could a company avoid the patent troll label by building and selling a prototype? Couldn't someone be exempt from the Act simply by hiring one of the inventors? Maybe plaintiff and defendant could bid for the inventor. Does exempting an original owner but not any subsequent assignee discourage transfer of patents? Congress may mean well, but these types of consequences make the bill worse than the problem.
Copyright © 2013 Robert Moll. All rights reserved.
Tuesday, February 26, 2013
Google Motorola Mobility - Standard-Essential Patents
When Google acquired Motorola Mobility, it obtained talented engineers, fundamental cell phone technology and a huge number of patents. It is difficult to place a value on a single patent without monetizing it, much less 17,000 patents, but it appears the standard-essential patents (SEPs) obtained in this acquisition have been particularly difficult to value.
As far as litigation, FOSS Patents reports Google (Motorola Mobility) has only won 1 out of 10 SEP cases asserted against Apple, while Samsung has only won 3 out of 24. Further, all Samsung's wins were outside the USA: two in South Korea and one in Netherlands. See Apple to FTC: Samsung and Google lose most of the cases over declared-essential patents
As far as the FTC, the Proposed Consent Order In the Matter of Google Inc., FTC File No. 121-0120, states Google's settlement with the Commission requires Google withdraw its claims for injunctive relief on FRAND-encumbered SEPs around the world, and offer a FRAND license to any company that wants to license Google's SEPs in the future.
The 25 public comments and related filings relating to the FTC-Google proposed consent decree reveal serious company opposition on injunctive relief being granted for FRAND-encumbered SEPs.
In The CCIA and RIM Tell the FTC Banning Injunctions for FRAND Patents Can Make Smartphone Wars Worse Groklaw decries this situation as robbing Google of its property right (Groklaw's concern is surprising) but in the end this will not influence the FTC or the courts.
So we don't know the value of the Motorola Mobility SEPs, but the answer for now is less than many thought. It is not always wonderful that "everybody in the industry" infringes a patent. Maybe this is the time companies realize the risk of over-declarations that certain patents are essential to an industry standard. At least it will be forseeable that seeking injunctive relief against a company stating a willingness to take a license of a SEP will be a problematic endeavor.
Copyright © 2013 Robert Moll. All rights reserved.
As far as litigation, FOSS Patents reports Google (Motorola Mobility) has only won 1 out of 10 SEP cases asserted against Apple, while Samsung has only won 3 out of 24. Further, all Samsung's wins were outside the USA: two in South Korea and one in Netherlands. See Apple to FTC: Samsung and Google lose most of the cases over declared-essential patents
As far as the FTC, the Proposed Consent Order In the Matter of Google Inc., FTC File No. 121-0120, states Google's settlement with the Commission requires Google withdraw its claims for injunctive relief on FRAND-encumbered SEPs around the world, and offer a FRAND license to any company that wants to license Google's SEPs in the future.
The 25 public comments and related filings relating to the FTC-Google proposed consent decree reveal serious company opposition on injunctive relief being granted for FRAND-encumbered SEPs.
In The CCIA and RIM Tell the FTC Banning Injunctions for FRAND Patents Can Make Smartphone Wars Worse Groklaw decries this situation as robbing Google of its property right (Groklaw's concern is surprising) but in the end this will not influence the FTC or the courts.
So we don't know the value of the Motorola Mobility SEPs, but the answer for now is less than many thought. It is not always wonderful that "everybody in the industry" infringes a patent. Maybe this is the time companies realize the risk of over-declarations that certain patents are essential to an industry standard. At least it will be forseeable that seeking injunctive relief against a company stating a willingness to take a license of a SEP will be a problematic endeavor.
Copyright © 2013 Robert Moll. All rights reserved.
Monday, February 25, 2013
USPTO Public Forum to Discuss First-Inventor-to-File, Micro Entity, and Patent Fee Final Rules on March 15, 2013
The USPTO has changed the time of the public forum on the first-inventor-to-file, the micro entity and fee final rules. Here is the agenda: First-Inventor-to-File, Micro Entity, and Patent Fee Public Forum Agenda
The forum will be held at the Madison Auditorium on the Alexandria campus 1-4 pm ET, Friday, March 15, 2013. This enables the West coast to participate by webcast, but remains close to the effective date of the final rules: first-inventor-to-file rules become effective on March 16, 2013 and micro entity and fees rules become effective on March 19, 2013.
Here is the WebEx Webinar Access Information:
Event number: 996 254 133
Event password: 123456
Event address for attendees: https://uspto-events.webex.com/uspto-events/onstage/g.php?d=996254133&t=a
Copyright © 2013 Robert Moll. All rights reserved.
The forum will be held at the Madison Auditorium on the Alexandria campus 1-4 pm ET, Friday, March 15, 2013. This enables the West coast to participate by webcast, but remains close to the effective date of the final rules: first-inventor-to-file rules become effective on March 16, 2013 and micro entity and fees rules become effective on March 19, 2013.
Here is the WebEx Webinar Access Information:
Event number: 996 254 133
Event password: 123456
Event address for attendees: https://uspto-events.webex.com/uspto-events/onstage/g.php?d=996254133&t=a
Copyright © 2013 Robert Moll. All rights reserved.
Sunday, February 24, 2013
Software Patent Debate - BSA and National Association of Manufacturers Capitol Hill Briefing on February 21, 2013
On February 21, 2013, a group of leading executives and lawyers came together at a Capitol Hall briefing event co-hosted by the BSA | The Software Alliance and National Association of Manufacturers to talk about software patents. The software industry is vital to the growth of the U.S. economy so how we protect software innovation has become important.
Among those attending this event: panel discussion moderator Robert Stoll,a law firm partner and former Commissioner of Patents, panelists Dorian Daley, Senior VP, GC and Secretary of Oracle, Brad Smith, GC and Executive VP of Microsoft, Neil Abrams, VP and Assistant GC of IBM, David Kahn, CEO of Covia Labs, and Thomas Lange, Director of Corporate RD, Modeling and Simulation for Procter & Gamble.
This briefing is welcome because the anti-software patent camp garners lots of press that drowns out the views of those in favor of software patents. They speak of problems (some imagined) engendered by software patents and patent trolls leading one to conclude let's just abolish them. Problem solved, right?
The Capitol Hall briefing lets the public consider the benefits. The major companies are well aware. That's why Amazon, Apple, Facebook, Google, IBM Microsoft, and Oracle have heavily invested in software patents. Is it just "mutually assured destruction?" Some tell me this is less the case today, and the current problem is patent trolls. If so, the cure should be narrowly aimed at abusive patent trolls not at software patents. Otherwise, you reduce or eliminate protection large and small operating companies require to protect software in the USA.
The value of software patents isn't lacking. What's lacking is a full discussion in the press. Part of the USA's strength is it believes in a marketplace of ideas and the public's ability to sort out what is the best ideas. I am comfortable with America's ability to make good choices if presented with both sides. So it makes sense for the public to hear from leaders how software patents have an important role in fostering software innovation, have encouraged investment in startups, and have proposals for improving the U.S. patent system. Here are some related articles on BSA's views:
Microsoft's Brad Smith: The Patent System: Fix What's Broken, Don't Break What's Working
BSA President & CEO Robert Holleyman: Clear Thinking on Software Patents
Copyright © 2013 Robert Moll. All rights reserved.
Among those attending this event: panel discussion moderator Robert Stoll,a law firm partner and former Commissioner of Patents, panelists Dorian Daley, Senior VP, GC and Secretary of Oracle, Brad Smith, GC and Executive VP of Microsoft, Neil Abrams, VP and Assistant GC of IBM, David Kahn, CEO of Covia Labs, and Thomas Lange, Director of Corporate RD, Modeling and Simulation for Procter & Gamble.
This briefing is welcome because the anti-software patent camp garners lots of press that drowns out the views of those in favor of software patents. They speak of problems (some imagined) engendered by software patents and patent trolls leading one to conclude let's just abolish them. Problem solved, right?
The Capitol Hall briefing lets the public consider the benefits. The major companies are well aware. That's why Amazon, Apple, Facebook, Google, IBM Microsoft, and Oracle have heavily invested in software patents. Is it just "mutually assured destruction?" Some tell me this is less the case today, and the current problem is patent trolls. If so, the cure should be narrowly aimed at abusive patent trolls not at software patents. Otherwise, you reduce or eliminate protection large and small operating companies require to protect software in the USA.
The value of software patents isn't lacking. What's lacking is a full discussion in the press. Part of the USA's strength is it believes in a marketplace of ideas and the public's ability to sort out what is the best ideas. I am comfortable with America's ability to make good choices if presented with both sides. So it makes sense for the public to hear from leaders how software patents have an important role in fostering software innovation, have encouraged investment in startups, and have proposals for improving the U.S. patent system. Here are some related articles on BSA's views:
Microsoft's Brad Smith: The Patent System: Fix What's Broken, Don't Break What's Working
BSA President & CEO Robert Holleyman: Clear Thinking on Software Patents
Copyright © 2013 Robert Moll. All rights reserved.
Wednesday, February 20, 2013
USPTO Software Patent Roundtable - Presentations
I posted an article USPTO Seeks Software Community's Input on Software Patents that noted the USPTO planned roundtables at Stanford and NYU. For details see the Federal Register: Request for Comments and Notice of Roundtable Events for Partnership for Enhance of Quality of Software-Related Patents.
The USPTO proposed three topics: (1) establishing clear boundaries for claims that use functional language; (2) future topics for the software partnership; and (3) oral presentations on preparation of patent applications.
After the Stanford roundtable, the USPTO published the following presentations:
Chien, Colleen SCU Professor & Karkhanis, Aashish SCU student [PPT]
Ellis, John [PPT]
Gutierrez, Horacio, representing Microsoft
[PPT]
Hewitt, Carl [PPT]
Molino, Tim, BSA [PPT]
Patel, Aseet, Banner & Witcoff, Ltd. [PPT]
Russell, Jeremy [PPT]
To better understand the presentations, you may want to watch the webcast of the NYU roundtable at 9 am - noon, February 27, 2013:
Event number: 392 887 849
Event password: 123456
Event address: https://fedgov.webex.com/fedgov/onstage/g.php?d=392887849&t=a
Copyright © 2013 Robert Moll. All rights reserved.
The USPTO proposed three topics: (1) establishing clear boundaries for claims that use functional language; (2) future topics for the software partnership; and (3) oral presentations on preparation of patent applications.
After the Stanford roundtable, the USPTO published the following presentations:
To better understand the presentations, you may want to watch the webcast of the NYU roundtable at 9 am - noon, February 27, 2013:
Event number: 392 887 849
Event password: 123456
Event address: https://fedgov.webex.com/fedgov/onstage/g.php?d=392887849&t=a
Copyright © 2013 Robert Moll. All rights reserved.
Wednesday, February 13, 2013
USPTO - Final Rules and Examination Guidelines to Implement the First-Inventor-to-File Provision of the America Invents Act
Today, the USPTO published the final Rules implementing the first-inventor-to-file provision of the America Invents Act (AIA) effective on March 16, 2013.
See the Federal Register publications: Changes to Implement First Inventor to File Provisions of Leahy-Smith America Invents Act and Implementing First Inventor to File Provisions of Leahy-Smith America Invents Act: Examination Guidelines
The USPTO also published guidelines setting forth its interpretation of how the first inventor to file provision changes the current novelty and obviousness requirements. The guidelines inform how the law has changed (expanded) the scope of prior art and changed (narrowed) the scope of the grace period.
The Acting Director of the USPTO Teresa Stanek Rea states: "Migration to a first-inventor-to-file system will bring greater transparency, objectivity, predictability, and simplicity to patentability determinations and is another step towards harmonizing U.S. patent law with that of other industrialized countries."
Usually if the law changes radically, a litigant will push for a favorable interpretation of the new law. Until the court decisions build up and limit possible interpretations, the law is likely to be less predictable. On the other hand, the first inventor to file system provision may bring greater predictability in the long term, since many priority disputes will be resolvable by filing date.
The USPTO is also giving a fair level of customer support. It will give more information on the first-inventor-to-file provision at a public training session held at the USPTO in Alexandria, Virginia on March 8, 2013, which will also be available on the Web. See details at www.uspto.gov/americainventsact. Also one may contact the AIA help line at 1-855-HELP-AIA (1-855-435-7242) or send an email to helpaia@uspto.gov for first-inventor-to-file and other AIA questions. The USPTO also suggests if we have questions regarding the final rules to call Ms. Susy Tsang-Foster, Legal Advisor, Office of Patent Legal Administration, Office of the Deputy Commissioner for Patent Examination Policy, at 571-272-7711 and direct questions about the first-inventor-to-file final examination guidelines to Ms. Mary C. Till, Senior Legal Advisor, Office of Patent Legal Administration, Office of the Deputy Commissioner for Patent Examination Policy, at 571-272-7755.
Copyright © 2013 Robert Moll. All rights reserved.
See the Federal Register publications: Changes to Implement First Inventor to File Provisions of Leahy-Smith America Invents Act and Implementing First Inventor to File Provisions of Leahy-Smith America Invents Act: Examination Guidelines
The USPTO also published guidelines setting forth its interpretation of how the first inventor to file provision changes the current novelty and obviousness requirements. The guidelines inform how the law has changed (expanded) the scope of prior art and changed (narrowed) the scope of the grace period.
The Acting Director of the USPTO Teresa Stanek Rea states: "Migration to a first-inventor-to-file system will bring greater transparency, objectivity, predictability, and simplicity to patentability determinations and is another step towards harmonizing U.S. patent law with that of other industrialized countries."
Usually if the law changes radically, a litigant will push for a favorable interpretation of the new law. Until the court decisions build up and limit possible interpretations, the law is likely to be less predictable. On the other hand, the first inventor to file system provision may bring greater predictability in the long term, since many priority disputes will be resolvable by filing date.
On the flip side, unpredictability may arise in the new derivation proceedings that are intended to ensure a person will not be able to obtain a patent even when filing first for an invention that he or she did not actually invent. The scope of the one-year grace period is another area to expect unpredictability. Sure patentability of an invention is not defeated by the inventor’s own disclosures, disclosures of information obtained from the inventor, or third party disclosures of the same information as the inventor’s previous public disclosures, but what happens when the third party disclosure is not identical to the "first" inventor's disclosure? Do we have a one-year grace period against the third party disclosure? Further, do we have a grace period for an third party offer for sale or public use? Thus, unpredictability exists on the grace period of the new law.
The migration to the first inventor to file system is another step toward harmonizing U.S. patent law with that of the rest of the world, but the US definition of prior art and scope of the grace period is different. And the steps proceed in parallel for better or worse. For example, the USPTO implemented a common classification system for the USPTO and the EPO to enhance examination on January 1, 2013. The so-called Tegernsee Group is another effort to harmonize patent law among the major offices.
The USPTO is also giving a fair level of customer support. It will give more information on the first-inventor-to-file provision at a public training session held at the USPTO in Alexandria, Virginia on March 8, 2013, which will also be available on the Web. See details at www.uspto.gov/americainventsact. Also one may contact the AIA help line at 1-855-HELP-AIA (1-855-435-7242) or send an email to helpaia@uspto.gov for first-inventor-to-file and other AIA questions. The USPTO also suggests if we have questions regarding the final rules to call Ms. Susy Tsang-Foster, Legal Advisor, Office of Patent Legal Administration, Office of the Deputy Commissioner for Patent Examination Policy, at 571-272-7711 and direct questions about the first-inventor-to-file final examination guidelines to Ms. Mary C. Till, Senior Legal Advisor, Office of Patent Legal Administration, Office of the Deputy Commissioner for Patent Examination Policy, at 571-272-7755.
Copyright © 2013 Robert Moll. All rights reserved.
Friday, February 8, 2013
CLS Bank v. Alice Corporation - Oral Arguments Recording
The United States Court of Appeals for the Federal Circuit heard oral arguments regarding software patent eligibility in CLS Bank v. Alice Corporation today. The Federal Circuit has an oral argument recording page and the oral arguments are at the top of the list today. The recording is 74 minutes and downloadable as a MP3 file. For later retrieval search on the case name or the appeal number 2011-1301.
Professor Crouch's CLS Bank v. Alice Corp: Oral Arguments Lead to More Questions analyzes the oral arguments, Federal Circuit law, and gives readers' comments.
Also see my related articles:
CLS Bank v. Alice Corp. - US Government's Amicus Brief Addressing Software Patents
CLS Bank v. Alice Corp. - Amici Briefs Addressing Software Patents
CLS Bank v. Alice Corp. - Federal Circuit Revisits Test for Software Patent Eligibility
Copyright © 2013 Robert Moll. All rights reserved.
Professor Crouch's CLS Bank v. Alice Corp: Oral Arguments Lead to More Questions analyzes the oral arguments, Federal Circuit law, and gives readers' comments.
Also see my related articles:
CLS Bank v. Alice Corp. - US Government's Amicus Brief Addressing Software Patents
CLS Bank v. Alice Corp. - Amici Briefs Addressing Software Patents
CLS Bank v. Alice Corp. - Federal Circuit Revisits Test for Software Patent Eligibility
Copyright © 2013 Robert Moll. All rights reserved.
Monday, February 4, 2013
Parallel Networks Seeks to Vacate Arbitrator's $3 Million Award to Former Contingency Fee Law Firm Jenner & Block
Joff Wild of IAM has a story (see link below) about a law firm's fee dispute with a non-practicing entity. It might illustrate many things, but to me it indicates a contingency fee arrangement with a hourly fee fall back provision may misalign the lawyers and patent owners interests.
Parallel Network's appeal papers to the district court give a compelling story of what happened. Parallel Networks engaged the Jenner & Block law firm to represent it in a patent enforcement and licensing program. As part of the program, Parallel Networks sued Oracle. After losing a summary judgment motion filed by Oracle for non-infringement, Jenner & Block decided to terminate the atttorney-client relationship. Parallel Networks used Jenner & Block's emails to show how it weighed the economics in handling the appeal on contingency or quitting and seeking payment on an hourly basis. It seems the "contingency" fee arrangement gave no incentive to stay in the case if it got difficult.
Even though some Jenner & Block attorneys felt the basis for appeal was good because of three reversals of this judge in the past and possible error in this case, Jenner & Block decided it was time to quit. Initially, Jenner & Block did not seek the legal fees for the work performed. But after Parallel Networks reached a $20 million settlement two years later with another firm, Jenner & Block demanded $10 million in fees on an hourly basis.
When Parallel Network refused to pay, Jenner & Block sued to have the unpaid fee arbitrated. After arbitrator awarded Jenner & Block $3 million, Parallel Networks filed a motion and petition to vacate the arbitration award of $3 million, arguing the hourly basis provision was unenforceable in Texas.
Even if the provision is held unenforceable, it appears Jenner & Block should be paid something for its services as the record below was likely the foundation required to win the appeal. At the same time, Jenner & Block decision to quit seems influenced by the contingency fee arrangement with the hourly fall back provision. If it goes to trial, I will be interested to see if such a provision is enforceable in Texas.
See Mr. Wild's article: NPE, a law firm and a claim for $10 million in unpaid fees
Copyright © 2013 Robert Moll. All rights reserved.
Parallel Network's appeal papers to the district court give a compelling story of what happened. Parallel Networks engaged the Jenner & Block law firm to represent it in a patent enforcement and licensing program. As part of the program, Parallel Networks sued Oracle. After losing a summary judgment motion filed by Oracle for non-infringement, Jenner & Block decided to terminate the atttorney-client relationship. Parallel Networks used Jenner & Block's emails to show how it weighed the economics in handling the appeal on contingency or quitting and seeking payment on an hourly basis. It seems the "contingency" fee arrangement gave no incentive to stay in the case if it got difficult.
Even though some Jenner & Block attorneys felt the basis for appeal was good because of three reversals of this judge in the past and possible error in this case, Jenner & Block decided it was time to quit. Initially, Jenner & Block did not seek the legal fees for the work performed. But after Parallel Networks reached a $20 million settlement two years later with another firm, Jenner & Block demanded $10 million in fees on an hourly basis.
When Parallel Network refused to pay, Jenner & Block sued to have the unpaid fee arbitrated. After arbitrator awarded Jenner & Block $3 million, Parallel Networks filed a motion and petition to vacate the arbitration award of $3 million, arguing the hourly basis provision was unenforceable in Texas.
Even if the provision is held unenforceable, it appears Jenner & Block should be paid something for its services as the record below was likely the foundation required to win the appeal. At the same time, Jenner & Block decision to quit seems influenced by the contingency fee arrangement with the hourly fall back provision. If it goes to trial, I will be interested to see if such a provision is enforceable in Texas.
See Mr. Wild's article: NPE, a law firm and a claim for $10 million in unpaid fees
Copyright © 2013 Robert Moll. All rights reserved.
Friday, February 1, 2013
Silicon Valley Ranks No. 1 in US Patent Grants 1988 - 2012
Today, the San Jose Mercury News published an article Silicon Valley is the nation's top dog for innovation that uses US patents to measure innovation leadership. As Mr. Steve Lohr states in NY Times Patent Producers Clustered in Only a Few Cities: "Patents, for all their flaws, are a widely used proxy for innovation."
The Brookings Institution Report below discussed in the Mercury News states that Silicon Valley (i.e., Santa Clara County) received more US patents than any other metropolitan area in the United States in 2012. Mr. Rothwell, an author of the Brookings report stated: "The Bay Area is extremely strong in every measure of innovation and in many industries" such as those relating to computers, electronics manufacturing, data processing, software, telecommunications, and web hosting.
The Mercury News says No. 1 Silicon Valley received 12.57 patents per 1,000 employees, The No. 2 metropolitian area centering on Corvallis, Oregon, had 5.27 patents per 1,000 employees. No. 4 Santa Cruz County had 4.24 per 1,000 employees, and No. 6 San Francisco East Bay had 3.96 per 1,000 employees. Silicon Valley has been on top for US patents grants every year since 1988.
Thanks to Mr. Alan Cooper for passing along Mr. Lohr's NY Times article, which had a link to a PDF copy of Brookings Institution Report by Jonathan Rothwell, Jose Lobo, Deborah Strumsky, and Mark Muro's Patenting Prosperity: Invention and Economic Performance in the United States and its Metropolitan Areas.
Copyright © 2013 Robert Moll. All rights reserved.
The Brookings Institution Report below discussed in the Mercury News states that Silicon Valley (i.e., Santa Clara County) received more US patents than any other metropolitan area in the United States in 2012. Mr. Rothwell, an author of the Brookings report stated: "The Bay Area is extremely strong in every measure of innovation and in many industries" such as those relating to computers, electronics manufacturing, data processing, software, telecommunications, and web hosting.
The Mercury News says No. 1 Silicon Valley received 12.57 patents per 1,000 employees, The No. 2 metropolitian area centering on Corvallis, Oregon, had 5.27 patents per 1,000 employees. No. 4 Santa Cruz County had 4.24 per 1,000 employees, and No. 6 San Francisco East Bay had 3.96 per 1,000 employees. Silicon Valley has been on top for US patents grants every year since 1988.
Thanks to Mr. Alan Cooper for passing along Mr. Lohr's NY Times article, which had a link to a PDF copy of Brookings Institution Report by Jonathan Rothwell, Jose Lobo, Deborah Strumsky, and Mark Muro's Patenting Prosperity: Invention and Economic Performance in the United States and its Metropolitan Areas.
Copyright © 2013 Robert Moll. All rights reserved.
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