Intellectual Ventures and Patent Aggregators

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

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

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

Copyright © 2012 Robert Moll. All rights reserved.

Yahoo! Threatens to Sue Facebook for Patent Infringement

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

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

Yahoo Picks Patent Fight with Facebook - CNET

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

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

Copyright © 2012 Robert Moll. All rights reserved.

Lobbying to Block ITC from Hearing Non-practicing Entities

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

Copyright © 2012 Robert Moll. All rights reserved. 

iPhone Stripped Bare!

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

Patent Wars: Stripping the iPhone bare

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

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

Copyright © 2012 Robert Moll. All rights reserved. 

Fired CEO Claims Benchmark Stole His Ideas

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

Thanks to Suzie Lipton-Moll on this article! 

Copyright © 2012 Robert Moll. All rights reserved.

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

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

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

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


Copyright © 2012 Robert Moll. All rights reserved.

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

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

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

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

Copyright © 2012 Robert Moll. All rights reserved.

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

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

Copyright © 2012 Robert Moll. All rights reserved.

Third Party Preissuance Submissions of Prior Art

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

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

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

(1) IN GENERAL.—Any third party may submit for consideration and inclusion in the record of a patent application, any patent, published patent application, or other printed publication of potential relevance to the examination of the application, if such submission is made in writing before the earlier of—

(A) the date a notice of allowance under section 151 is given or mailed in the application for patent; or
(B) the later of—

(i) 6 months after the date on which the application for patent is first published under section 122 by the Office, or
(ii) the date of the first rejection under section 132 of any claim by the examiner during the examination of the application for patent.

(2) OTHER REQUIREMENTS.—Any submission under paragraph (1) shall—

(A) set forth a concise description of the asserted relevance of each submitted document;
(B) be accompanied by such fee as the Director may prescribe; and
(C) include a statement by the person making such submission affirming that the submission was made in compliance with this section.

Here are several features and pitfalls to 35 USC 122(e) preissuance submissions:

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

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

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

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

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

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

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

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

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

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

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

Copyright © 2012 Robert Moll. All rights reserved.

USPTO Satellite Office in Silicon Valley?

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

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

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

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

For more about efforts to bring the PTO to Silicon Valley, see San Jose Mercury News Editorial: Silicon Valley deserves a regional patent office
 
Copyright © 2012 Robert Moll. All rights reserved.

Two Different Views - Why Investors Are Focused on Patents

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

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

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

Thanks to Alan Cooper for Ruth's article. 


Copyright © 2012 Robert Moll. All rights reserved.

Are Frequently Litigated Patents Different? Yes!

I want to highlight a few points from an article I read tonight: Allison, Lemley, and Walker's, Extreme Value or Trolls on Top? The Characteristics of the Most-Litigated Patents (2009). The authors found most-litigated patents (8 times or more) had quite different characteristics than once-litigated patents: 

• 70% of the most-litigated patents are software patents 
• 72% of the most-litigated patents are in the computer industry
• The most-litigated patents are disproportionately owned by non-practicing entities (i.e., patent trolls)
• The most-litigated patents include more claims (39 claims v. 24 claims in terms of mean)
• They cite more prior art, backward citations, in terms of means and rounding to nearest integer: 
• 61 to 23 US patents 
• 9 to 4 Foreign patents 
• 53 to 6 Non-patent references (printed publications)
• Later issued patents more often cite the most-litigated patents, forward citations
• The most-litigated patents are part of a patent family with more continuations and divisionals 

It is a 50-page paper based on Stanford IP Litigation Clearinghouse data that compares the 106 most-litigated US patents to 106 randomly selected once-litigated patents between 2000 -2007. 

The abstract states the paper might be useful to guide patent reform, but I think it also indicates what type of patent is likely to be fit for multiple rounds of litigation and what a patent owner should consider if it is heading to litigation. Further, if you plan to enforce or license your patents, you can control nearly all of these characteristics. Even forward citations can be increased by citing to one's previous related patents and published applications. It is not simply a numbers game, as additional relevant references will strengthen validity of a patent and diversity of claims of different scope give more options on what one can assert in litigation. If you are interested in patent strategy, defense or offense, this paper is worth reading. 

Copyright © 2012 Robert Moll. All rights reserved.

US Patent Spending Continues - Intel Adds RealNetwork Patents and Applications

Many are writing about the patent spending spree in Silicon Valley that continues unabated in recent months. On January 26, 2012, the BBC News reports Intel has agreed to pay $120M for about 190 patents and 170 patent applications from RealNetworks and commit to co-develop video encoding software in the future. 

Here's a link to the BBC article with details that my friend Alan Cooper sent earlier today:

Intel buys RealNetworks' patents and video coding tech

Thanks again Alan!


Copyright © 2012 Robert Moll. All rights reserved.

From Highly Paid Patent-Defense to Hugely Paid Patent Troll

Well known patent litigators, John Desmarais and Matt Powers, left multi-million dollar partnership draws at Kirkland & Ellis LLP and Weil Gotshal & Manges, respectively, to form practices around non-practicing entities (i.e., patent trolls) to pursue companies for patent infringement.

The WSJ Online has their story: The Amazing Adventures of Mr. Desmarais and Mr. Powers. 

Copyright © 2012 Robert Moll. All rights reserved.  

Stanford Professor Mark Lemley's Things You Should Care About in the New Patent Statute

I had the pleasure of speaking with Professor Mark Lemley at the Advanced Patent Law Institute, Palo Alto on December 8-9, 2011. 

Professor Lemley has authored and co-authored many papers with penetrating insights into the US patent system. He may be even the most prolific patent scholar of our time given he ranks third in total downloads among all law professors. He mostly writes about intellectual property and patent law, presumably niche topics with a small audience, so this is quite a feat. 

I commented we have been around this for years, but it must be difficult for people getting into US patent law now given all these changes. He replied you can imagine the challenge I have teaching two bodies of US patent law (past law and the America Invents Act law (AIA)) to my class at Stanford. 

How do we address the changes and complexity in US patent law today? An important part of understanding the AIA is identifying the effective dates. To help you avoid being buried in all the details, I point to Professor Lemley's Things You Should Care About in the New Patent Statute which outlines twenty significant AIA changes by their effective dates.  

If you are interested here's a link to Professor Lemley's other papers. 


Copyright © 2012 Robert Moll. All rights reserved. 

Twist in Kodak's Bankruptcy - Apple Claims Ownership of Kodak Patents

On January 19, 2012, Apple filed papers claiming ownership of Kodak's digital imaging patents, including US Patent No. 6,292,218.  Apple argues Kodak can't attach an interest on a patent it doesn't own, and Kodak misappropriated and filed patent(s) based on confidential information Apple gave Kodak in the early 1990's.
  
Mr. Macari's article has details: Apple claims ownership in key Kodak patents on digital camera 

Of course, ownership turns on which companies employees are inventors. I expect it will be difficult to establish only Apple inventors (and not Kodak inventors!) should be named on the '218 patent by clear and convincing evidence. It's asking too much of the Kodak employees, don't you think? However, sole ownership may not be necessary. Apple only needs to prove its employee(s) made a small inventive contribution (e.g., 1%) and may allow so generously that Kodak inventors did the rest (e.g., 99%)! This situation would result in equal ownership, allowing Apple freedom of operation with respect to the patent as well as the ability to license the patent to anyone wanting better terms than those offered by Kodak. 

Copyright © 2012 Robert Moll. All rights reserved. 

Need A Patent Litigation Strategy for Europe? Sue in Germany!

The vast majority of European patent lawsuits are filed in Germany today. One source estimates 50 patent infringement suits are filed in the United Kingdom and the Netherlands in a year while as many as 1,300 are filed in Germany. 

Apple, Microsoft Patent Lawyers Spend Fridays in Mannheim helps explain why German courts have become a favorite for patent litigants. 

Copyright © 2012 Robert Moll. All rights reserved.

USPTO Patent Appeal Rules Effective on January 23, 2012

The PTO published the final rules of appeal practice before the Board of Patent Appeals and Interferences. They apply to all appeals in which the notice of appeal is filed on or after January 23, 2012. 

Although detailed (30 pages of fine print), the final rules simplify the current process and level the playing field in favor of appellants. More specifically, the current rules are amended to: 

1. Remove certain requirements for the appeal brief; 
2. Provide the Board take jurisdiction earlier in the process;
3. No longer require the examiner acknowledge receipt of the reply brief; 
4. Allow one to seek review of an undesignated new ground of rejection in the examiner's answer or the Board's decision;
5. Presume an appeal is taken for all rejected claims; and 
6. Clarify a rejection in examiner's answer that relies on evidence not presented in the last Office action is a new ground of rejection.

Fortunately, the PTO withdrew the appeal rules proposed in 2008. They were too technical and had little support from the patent community. However, I don't expect the final rules to do much to reduce the backlog of nearly 25,000 appeals displayed in Patently-O's BPAI Backlog: Only Growth in August 2011. This will require more Board members who are willing to write brief opinions.  

It's usually best to work with examiners, but if a case is ready for appeal, don't let the backlog cause you to "shrivel up"as the PTO may intercept and allow a case after review of the appeal brief without waiting for the Board to decide. See e.g., US Application No. 10/683,204 using PAIR.

Copyright © 2012 Robert Moll. All rights reserved.

PTO Reports - Prior User Rights and International Patent Protection for Small Businesses

On January 13, 2012, the PTO delivered to Congress the Prior User Rights Report and the International Patent Protection for Small Businesses Report as required by the American Invents Act (AIA).  The following links lead to PDF copies of the reports:

• Prior User Rights Defense Report
• International Patent Protection for Small Businesses Report

The Prior User Rights Defense Report compares US prior user rights with that of foreign countries. It considers prior user right's impact on innovation, startups, small businesses, and individual inventors. And it looks at how first-to-file in the AIA relates to the prior user rights defense.

Under current law, the prior user defense is limited to business method patents. The AIA expands the defense to any subject matter provided (1) the subject matter was reduced to practice and commercially used at least one year before the patent's effective filing date or the patent owner's disclosure of the invention, whichever is earlier; and (2) the subject matter wasn't derived from the patent owner or an entity or person in privity (having a legal interest in the patent) with the patent owner.

The International Patent Protection for Small Business Report considers how to help small businesses with respect to foreign patent protection.

The PTO prepared the reports with the United States Trade Representative, the Department of Justice, the Department of State, the US Small Business Administration and incorporated input from public hearings and comments.

Copyright © 2012 Robert Moll. All rights reserved.

Software Patents - Merely A Dog or Software Startup's Best Friend? - Part 2

A startup may consider it has arrived when a giant software company engages them about a possible acquisition or a joint venture. In that glow, the giant reviews the technology of the startup to determine how much competitive advantage can be obtained by the proposed acquisition or venture, and investigates the scope of the startup's intellectual property protection. During the diligence period, the startup is typically asked to progressively disclose its technology. 

During this period, some startups have assumed its non-disclosure agreement (NDA) will suffice to protect their interest, but giants may require using its own NDAs, which may have loopholes. One of the more brazen is a residual term which says something like this: "any information disclosed (by the startup) but not expressly designated in writing as confidential and retained in the memory of the recipient (giant) is not considered confidential and can be used by recipient for any purpose ...."

The NDAs may also say signing the NDA is not a license of either party's intellectual property, which likely works in favor of the giant who typically has a much larger portfolio of intellectual property. 

If the giant determines during diligence that it makes economic sense to code the software without buying the startup and has enough residual information, it may decide to enter the market without the startup's help so the acquisition or joint venture game is over. After all, the giant must decide in favor of its shareholders. 

So how does the startup disclose its products to a giant software company without creating a big competitor? Seek effective software patent(s) on your technology. In negotiations seek to delete the residual term from the NDA. However, if you don't have the bargaining power to delete the residual term, stay within the scope of what is designated confidential in the NDA and within the scope of your patent claims to reduce the risk.


Copyright © 2012 Robert Moll. All rights reserved.

Software Patents - Merely A Dog or Software Startup's Best Friend? Part 1

In A Generation of Software Patents (2011) James Bessen examines patenting behavior in the software industry since the 1990s. He argues we saw a large increase in software patents after In re Alappat in 1994, because the Federal Circuit held a novel software algorithm with "a trivial physical step" eligible for a US patent. I'm not sure why it was "a trivial physical step" given Alappat's claims are drawn to a rasterizer to smooth waveform data prior to displaying a waveform on an digital oscilloscope. On the other hand, I agree software patenting increased dramatically in the 1990s.

Mr. Bessen concludes software patents are not a net societal benefit, but acknowledges they account for one quarter of all US patent grants and one quarter of the lawsuits. Even if his numbers are only roughly accurate, they speak to a motive for continued controversy regarding software patents-- big money is at stake. 

Software patents will continue to be sought by startups and large companies. Nearly 2/3 of VC backed software companies seek patent protection. Large software companies also perceive their value and have sought to patent or purchase as many software patents as possible (e.g., Apple and Microsoft's $4.5B purchase of the Nortel patents and Google's $12.5B purchase of Motorola Mobility). In 2011, Microsoft was sixth in US patent grants. According to Freepatentsonline.com Microsoft owns 19,405 US patents, Apple owns 4,509 US patents, among which 2,606 mention software, Oracle owns 2,431 US patents, and Adobe Systems owns 1,248 US patents. Do I need to mention IBM? 

Twenty years ago, Bill Gates sent a confidential memo to senior executives. It indicates what has led to Microsoft's major increase in software patenting:

I feel certain that some large company will patent some obvious thing related to interface, object orientation, algorithm, application extension, or other crucial technique. If we assume this company has no need of any of our patents, then they have a 17-year right to take as much of our profits as they want. The solution to this is patent exchanges with large companies and patenting as much as we can. Amazingly we haven't done any patent exchanges that I am aware of. Amazingly we haven't found a way to use our licensing position to avoid having our own customers cause patent problems for us. I know these aren't simple problems, but they deserve more effort by both legal and other groups. For example, we need to do a patent exchange with HP as part of our new relationship.

Sure Mr. Gate didn't foresee patent trolls but in other respects his insight has proven correct. Around this time, the League for Programming Freedom questioned the value of patent exchanges for small companies stating they only allow companies like Microsoft, Apple, and IBM to continue and would shut new companies out of the field. As we watch the continued growth of the software industry, this prediction has not occurred. However, small companies may not be in good shape if they have nothing to exchange. For details see my post on You Have to Pay for that Banana! As the League paper stated, "A future start-up with no patents of its own will be forced to pay whatever price the giants choose to impose. That price might be high: established companies have an interest in excluding future competitors." 


Copyright © 2012 Robert Moll. All rights reserved.

Microsoft's Patent Licensing Program - 70% of Android Smartphones Sold in US Licensed

Today, Microsoft announced that LG, the second largest smartphone manufacturer, had signed a patent license agreement covering Android devices. Samsung the largest smartphone manufacturer and others have signed up. Microsoft taunts Google which has not....

Horacio Gutierrez, vice president of intellectual property and deputy general counsel at Microsoft, said "This agreement with LG means that more than 70 percent of all Android smartphones sold in the U.S. are now receiving coverage under Microsoft's patent portfolio."

Microsoft did not reveal the patent license terms, but Citibank's Walter Pritchard previously reported Microsoft's patent license with HTC is $5 per Android device.

See details in the San Jose Mercury News today.

Copyright © 2012 Robert Moll. All rights reserved.

Three Interviews of Patent Leaders at other Blogs

The Web has made it easy to hear from many smart people. Staying with this thought, let me point to some interviews of leaders in the patent community this week:

1.  IBM was announced as the leader in US patent grants in 2011. No surprise here but still perfect timing for Gene Quinn's interview of IBM's Chief Patent Counsel Manny Schecter.

2.  In Gene Quinn's second interview of PTO Director Kappos, Director Kappos talks about the never-ending (impossible) job of getting examiners to uniformly apply US patent law, PTO rules, and policies to the various inventions they review.  

3.  The Reexamination Center interviews patent attorney Dr. Nancy Linck on post-grant review, inter partes review, and ex parte reexamination in the past and under the America Invents Act.

Copyright © 2012 Robert Moll. All rights reserved.

Track I - Prioritized Patent Examination

Blogger Gene Quinn interviewed Director Kappos about challenges facing the PTO.

Director Kappos showed enthusiasm for Track I prioritized examination. An applicant requests Track I by filing a one page PTO form and paying $4,800 (large entity) or $2,400 (small entity) for a maximum of 30 claims and 4 independent claims. This should result in a 12-month patent process. 

The PTO has received a few thousand Track I requests since the program began on September 26, 2011. The program closes (unless extended) this fiscal year once 10,000 requests are granted.  

The early results are remarkable compared to the status quo. Instead of years of delay, a patent application is examined in one month. Further, the Commissioner of Patents, Peggy Focarino reports that the PTO has mailed Office actions in all Track I applications within 70 days of the filing date.

Track I could result in a quick final rejection, but I don't see how this is worse than receiving a final rejection after a long passage of time. In any event, Commissioner Focarino blogs the denial/grant rate is similar to regular patent applications. 

Whatever the case, on December 19, 2011, this PTO press release states the rules now permit requesting Track I after filing a request for continued examination (RCE). 

Professor Crouch's blog post provides additional details on Track I. 

Track I can speed the patent process as long as you are willing to spend the money.  

Copyright © 2012 Robert Moll. All rights reserved.

PTO Publishes Four Proposed Rules for the America Invents Act

On January 5-6, 2012, PTO Director David Kappos announced publication of four proposed rules to implement the America Invents Act (AIA). See the details in the links below:

• Inventor’s oath and declaration
• Third party submission of prior art in a patent application
• Citation of prior art in a patent file
• OED Statute of Limitations

Publication opens a sixty-day comment period on the proposed rules. Director Kappos encouraged the patent community to comment on the rules and attend an AIA roadshow where the PTO will discuss proposed rules and receive public feedback. 

See the Leahy-Smith America Invents Act Implementation web page for details and the AIA Roadshow schedule in 2012.


Copyright © 2012 Robert Moll. All rights reserved.