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Sensenbrenner to Kappos: Prior User Rights is Poison Pill


Written by Gene Quinn
President & Founder of IPWatchdog, Inc.
Patent Attorney, Reg. No. 44,294
Zies, Widerman & Malek
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Posted: March 30, 2011 @ 2:10 pm
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Congressman Bob Goodlatte (R-VA), Chair of House IP Subcommittee

Today the House Subcommittee on Intellectual Property, Competition and the Internet, which is a subcommittee of the House Committee on the Judiciary, held a hearing on the America Invents Act, the House version of patent reform. While the House and Senate bills are largely identical, there is one striking difference between the two, and that difference relates to prior user rights. In the United States we have a very limited prior user rights defense today that relates to business methods only, but the House bill would extend a prior user rights defense to all inventions and patents except those that created through funding by the U.S. federal government or those funded solely by Universities.  According to Congressman Jim Sensenbrenner (R-WI) the inclusion of prior user rights might just be the poison pill that kills patent reform.

Personally speaking, I am sick and tired of legislative carve outs. If prior user rights are such a great idea then have them apply across the board. Of course, prior user rights are decidedly not a good idea and the bill could never pass if there were not an exception for Universities. That should tell you something right there!  Unfortunately, the House will be urged to retain prior user rights defenses and some of the arguments in favor at the hearing are flat wrong, disingenuous and border on wanton misrepresentation.

Under a strict prior user rights regime, like the House wants, those who innovated and then concealed that innovation from the public would be able to use their secret, concealed innovation as a defense to a patent infringement action. So, in other words, prior user rights rewards those who hide innovation from the public and penalizes those who disclose their innovations to the public. The entire purpose of a patent system is to disseminate information to allow others to build upon what has come before. That is how a patent system fosters innovation. A patent system that rewards trade secret rights over patent rights is an abomination. Not only does such a system fail to advance the Constitutional purpose of patents, but it retards the primary intent of a patent system.

In his prepared remarks David Kappos, Director of the United States Patent and Trademark Office said: “Expanding the prior user defense, I believe, is pro-manufacturer, pro-small business, and, on balance, good policy.” If Director Kappos said that an expanded prior user defense is pro-manufacturer and pro-big company I would agree with him, but when he adds “pro-small business” there is no way I can agree with that statement. Small businesses, independent inventors and technology start-ups patent their innovations because they need those exclusive rights in order to attract capital investment. There is absolutely no way that a patent that is easier to defend against will benefit those who need patents for business purposes, such as investment.

Prior to Kappos’ prepared remarks, which didn’t start until 2:36pm due to delays caused by voting in the House, Committee Subcommittee Chair Bob Goodlatte (R-VA) informed everyone that Director Kappos was scheduled to leave the country and would not be able to remain and answer questions, but rather would answer any questions in writing.  To this Congressman Sensenbrenner called a point of order and said it was unacceptable to have Director Kappos leave immediately.  Accommodations were made so that Congressman Sensenbrenner could ask at least a couple questions, with Congresswoman Zoe Lofgren (D-CA) following and Judiciary Committee Chair Congressman Lamar Smith (R-TX) wrapped up the limited Kappos availability for questioning so he could get to the airport for his overseas mission.

Congressman Sensenbrenner

It is fair to say that Sensenbrenner’s posture suggested that he was extremely irritated by the inability of Director Kappos to submit fully to questioning, but acknowledged that the Subcommittee needs to do better with respect to scheduling.  Sensenbrenner moved on to his grievance, which is prior user rights.  Sensenbrenner characterized prior user rights as a get out of jail free card for the Chinese to avoid infringing.  Congressman Sensenbrenner even suggested that the existence of prior user rights “could very well be a poison pill.”  I couldn’t agree more!

Director Kappos acknowledged that the Obama Administration currently has no position on prior user rights.  Sensenbrenner asked when one could be expected, and it seems as if the Administration will soon have a position.  Kappos did state that some companies are locating outside the United States in places where there are prior user rights and Kappos said he thought it was a good idea to close that loophole to keep companies from moving.  This was unconvincing for Sensenbrenner, and it strikes me as a very weak argument.  No companies are locating outside the U.S. because of prior user rights.  These companies would still be liable in the U.S. for infringement regardless of the fact that where they locate has prior user rights.

Congressman Sensenbrenner also suggested that Congress should separate out fee diversion because “everyone agrees that getting rid of fee diversion is a step in the right direction.”  Sensenbrenner said “separate fee diversion and let the bill sink or swim.” Not a bad idea probably, and certainly the way to go if it is fee diversion in exchange for prior user rights.  I see absolutely nothing in this legislation worth accepting the terrible effect of prior user rights.

There is something fundamentally unfair about allowing something that is secret to erode a patent right. The inventor who seeks to patent and is thereby required to disclose could never have known about what is kept secret, so even a no-stone-unturned search wouldn’t have revealed the prior use. That is, after all, what is meant by it being secret. Yet, this secret use will effectively limit the scope of the patentees rights? That strikes me as borderline absurd. But for the patentee society wouldn’t have derived any informational benefit from the secret, so why should society set up rules and laws that reward the secret? This is something that has always distinguished American law compares with laws around the globe. In the United States trade secrets are extremely fragile rights and when push comes to shove a patent always wins out over a trade secret because of the fundamental Constitutional purpose that seeks and rewards disclosure. We tolerate the quid-pro-quo of granting exclusive rights in exchange for disclosure. What exactly have those who keep innovation secret done to deserve any kind of quid-pro-quo? Yet they get an enormous quid-pro-quo under a prior user rights system.

Acting as Chair of the Subcommittee Congressman Sensenbrenner recessed the hearing after Kappos wrapped up.  There is a Libya briefing that is scheduled to run through 3:30pm, but such briefings almost always run late.  So the hearing will commence at the call of the Chair, Congressman Goodlatte.

When the hearing resumes the second panel will include Mark Chandler, who is Senior Vice President and General Counsel at Cisco Systems, Inc.  Unless he changes his prepared remarks, he will testify about prior user rights as being essential. He is expected to tell the Subcommittee that “the House should ensure that prior user rights remain in any final legislation. Prior user rights are vital to a functional first-to-file system.” He will then go on to make a statement that is enormously untrue: “Nearly all stakeholders agree that a first-to-file system must have a prior user defense.” Nearly all? Really? Obviously Chandler would like the Subcommittee to believe something that is false. This strikes me as a feeble attempt to marginalize those who are against prior user rights. For crying out loud, it isn’t even true that “nearly all stakeholders agree” on first to file. While I am not against first to file it is impossible not to notice the coalition lined up against first to file. How can anyone who wants to present as a learned industry expert make the statement that nearly everyone agrees that prior user rights are absolutely necessary and desirable? Were you consulted? I know I wasn’t, and I suspect the many fighting against first to file were not consulted either.

Perhaps the biggest misrepresentation at at the Subcommittee hearing will be about the parade of horribles that will befall the industry should Congress not include a prior user rights defense. Chandler is expected to tell the Subcommittee:

Without prior user rights, domestic opportunists and offshore adversaries will accelerate the patent mills they have today to file on every minor change in an American product, and then use our courts to try to extract damages from the true innovators here, or to block us from selling our own products. The effect would be to set off an enormous defensive patent filing race which our current system does not require and would divert the valuable resources of America?s innovators.

I am really trying not to say that Chandler’s testimony is a lie, but he either knows or should know that this statement is absolutely 100% false.  The patent mills are going to file on “every minor change in an American product”?  If Chandler really is an industry expert one would expect that he would be familiar with the most important and influential Supreme Court decision in the patent space in at least half a century — KSR v. Teleflex.  Perhaps Mr. Chandler didn’t get the memo, but the Supreme Court has really ratcheted up the obviousness requirement over the last several years, and the United States Court of Appeals for the Federal Circuit has followed.  It is simply not possible to obtain patents on minor variations and the suggestion that it is possible is borderline ridiculous.

Just recently in Tokai Corp. v. Easton Enterprises, Inc., the Federal Circuit applied an expansive reading of KSR to find that the claims in question were invalid on summary judgment. The invention in question, an improvement to the safety features of a BBQ grill lighter, used mechanical features to make it possible for the trigger to be pulled simultaneously with depression of the lock-releasing button. The closest prior art, which was the base reference upon which obviousness was premised, did not have any safety feature or mechanisms whatsoever. Thus, a utility lighter needed to be combined with other prior art references having a safety mechanism. The Federal Circuit panel found the claims to be obvious over the closest prior art in view of the safety features of the utility lighter.  What makes Tokai particularly noteworthy is that even if all of the pieces and parts identified by the Federal Circuit were combined by one of skill in the art it still could not produce the claimed device in question.  So there was need to modify at least one part using “common sense” before combining.  So in Tokai the “common sense” aspects of obviousness took another large leap forward. For more on Tokai see KSR Fears Realized.

So does Mr. Chandler really expect anyone who understands anything about patent law to believe that patent mills will be able to patent “every minor change”?  I suspect he is hoping that Congress isn’t very familiar with the patentability requirements and has missed completely the handling of obviousness by the federal courts.  It certainly seems to me that he is trying to pull the wool over the eyes of House Members.

Of course Cisco and the other big technology companies want a prior user right defense.  They get sued for infringing the patents of others with regularity and they would greatly prefer those patents to be weaker an easier to avoid.  These big companies have obtained the benefits of the patent system and they seem to in a very straight forward and open way want to make it more difficult for the next generation of start-up company to enjoy the same benefits they received.  If patents are weaker being big and having market dominance is enough to prevail.  You can’t really blame them, who wouldn’t advocate for what is in their own best interest?  But you can hope that Congress gets this right.

Three cheers for Congressman Sensenbrenner!  Keep up the fight!

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Posted in: Congress, Gene Quinn, IP News, IPWatchdog.com Articles, Patent Reform, Patents

About the Author

is a Patent Attorney and the founder of the popular blog IPWatchdog.com, which has for three of the last four years (i.e., 2010, 2012 and 2103) been recognized as the top intellectual property blog by the American Bar Association. He is also a principal lecturer in the PLI Patent Bar Review Course. As an electrical engineer with a computer engineering focus his specialty is electronic and computer devices, Internet applications, software and business methods.

 

 


47 comments
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  1. Chandler just started testifying and he also butchered 102(g). He said that under a first to file system if they didn’t patent something but came up with it first and kept it as a trade secret then no one else would be able to patent it because 102(g) would prevent that. Unbelievable! Obviously he is not very familiar with patent law. Under 102(g) that which is abandoned, suppressed or concealed is not prior art. Furthermore, he said that they don’t patent everything because it is unrealistic. So they could not prevail under 102(g) to prevent those who file the application because they haven’t filed themselves. Extraordinary! Let’s hope Congress figures out that they are being sold a bill of goods.

    Congressman Sensenbrenner needs our support to prevent prior user rights.

  2. I must respectfully disagree. If a company invents and uses something, even in secret, what is the rationale as to why that company should have to quit using that invention just because someone later creates that invention again? I can see rationale for preventing the company from expanding its use of that later invented and patented invention, and I can see rationale for preventing the company from licensing others to use that later invented and patented invention, but the company should be allowed to continue using the invention just as it has been doing all along. The company should not have to disclose its trade secrets to the whole world just to be able to continue using those trade secrets. Without any form of prior user rights – the only way a company can protect itself is to file a patent application disclosing the invention just so that it would be published and become prior art, even if the company is not interested in patenting the invention, or the company could publish an article about it in a trade journal or some other publication, but such non-patent publications may be hard to locate or verify years later. I suggest that limited prior user rights should be the law. Of course, the cynic in me wonders whether a few major lawsuits where there are no prior use rights could be a good business generator for the patent prosecution bar. Please note that these comments are my personal thoughts and in no way represent the opinion of Bryan Cave, its clients, or anyone else in the firm.

  3. A company may not even be aware that it practices someting that could be claimed as a patentable invention. A company may not care to spend money on patenting something they are doing.
    Why should these companies be prevented from continuing to do what they are doing only because somebody else spent money to get a patent on it?
    The question is not whether there should be prior user rights, but what the limits on these should be, and the procedure for prooving prior use as a defense.

  4. Gene said: “So does Mr. Chandler really expect anyone who understands anything about patent law to believe that patent mills will be able to patent ‘every minor change’?”

    This is the crux of the matter. It isn’t in the least important for Chandler’s audience to “understand[ ] anything about patent law”. His audience is Congress, which, pretty clearly, understands nothing about patent law. Chandler is manipulating the uninformed masses. No surprise there.

  5. “Without any form of prior user rights – the only way a company can protect itself is to file a patent application disclosing the invention just so that it would be published and become prior art, even if the company is not interested in patenting the invention, or the company could publish an article about it in a trade journal or some other publication, but such non-patent publications may be hard to locate or verify years later.”

    Please tell me you are not serious. For a few grand or less they could ensure themselves the right to use their potential discoveries in perpetuity, and you’re worried about the prior art effect of non-patent literature that “may be hard to locate or verify”? Come on, man. That doesn’t even pass the laugh test.

    “Of course, the cynic in me wonders whether a few major lawsuits where there are no prior use rights could be a good business generator for the patent prosecution bar.”

    Last time I checked, the patent prosecution bar didn’t litigate. So maybe you and John Roberts can take your misguided cynicism elsewhere.

    “Why should these companies be prevented from continuing to do what they are doing only because somebody else spent money to get a patent on it?”

    You want to keep something a trade secret, you pay your money and take your risks that someone else will develop the same thing and try to patent it. If they do, then your attempt to secure a long-term monopoly failed and you deserve the consequences. One of the goals of the Patent System is to get the information out there to the public. This has been recognized since the drafting of the Constitution itself. If you choose not to take part, then you can deal with the consequences of your decision.

  6. BioPatAtty said: “Last time I checked, the patent prosecution bar didn’t litigate. So maybe you and John Roberts can take your misguided cynicism elsewhere.”
    No, the patent prosecution bar does not litigate, but companies learn from being sued (by the litigation bar), especially when they lose, and they quickly try to determine how to avoid losing again, such as by publicly disclosing the invention some way or another and, if you are going to publicly disclose your trade secret, why not try to patent it?

  7. Have any of Gene and those who earlier commented read Kewanee v. Bicron recently? I see no logical reason why trade secret rights and patent rights cannot co-exist through inclusion of a prior user rights provision in the patent statutes that applies to all categories of inventions, not just business methods, much as our patent system handled intervening rights in case of a broadened patent upon reissue. Such prior user rights are especially needed to protect inventions relating to industrial processes and equipment the infringement of patents to which are difficult to police, and this applies large multi-national companies equally as it does to a mom-and-pop operation. Any person who creates and uses trade secrets benefits society through such use, albeit arguably not as much as a presumed much broader use once a patent to the same subject matter has expired. By the definition accepted in most [states] jurisdictions, a trade secret must provide an advantage to the party who uses it in comparison to a competitor who does not. Thus, use of a trade secret benefits the company that uses it, and thereby benefits its employees as well as the owners, and thereby provides products as well as revenues, including tax revenues that would not otherwise exist. And, of course, some trade secrets enable manufacture of products that simply would not and could not exist without them, e.g. a Stradivarius violin as one extreme, and there are many industrial processes and techniques without which the products being manufactured could not be manufactured.

    Indeed I worked in an industry in which the product characteristics were constrained by aircraft manufacturers because they were critical to safe operation of the aircraft and formed a key part of the individual and costly FAA certification of each model of aircraft, e.g. no changes in product performance characteristics except increased wear resistance were permitted. Yet, because these products were expensive (over $100/pound) and had a limited service life due to wearing out, the aircraft manufacturers and especially those component manufacturers constantly strove and invested private funds to reduce cost of such products through improvements in manufacturing processes and equipment, and any changes in these also had to be approved by the aircraft manufacturers. Based on actual experience, patents have been proven to be ineffective to protect the commercial position of companies who invented such improvements. Without a prior user right, why should such companies assume the risk of investing in improved process technologies and equipment? Society at large would also lose if an injunction were issued stopping the prior user from continuing due to higher costs and pricing of the affected products which comprise a significant operating expense to airlines.

    Those who drafted our Constitution surely were aware of the existence of trade secrets under common law and envisioned a patent system to encourage people to seek patents rather than continue to hold their creative ideas secret indefinitely for the benefit of society. But they also included another provision prohibiting the federal government from taking private property (which a trade secret is to its creator) without due process. Our legislators today should do the same and enact a broad prior user right. The rights of universities can be addressed as deemed appropriate. Under established law, they already have the right to use any patented invention for philosophic purposes; the problems universities face today are due to their real interest being predominantly commercial — wanting to make money from licensing technology rather than educating students.

  8. If there’s one overarching theme to this patent reform bill it seems to be about encouraging early and complete disclosure. Essentially, the “inventor” is the first to disclose, not necessarily the first ot conceive. Stronger prior user rights would certainly seem to be diametrically opposed to that objective.

  9. @IP3456

    “A company may not care to spend money on patenting something they are doing.
    Why should these companies be prevented from continuing to do what they are doing only because somebody else spent money to get a patent on it?”

    I agree, not only not care, it is not written in law, that anyone with an idea must. The intent of the PTO mission, with the grant of patents, says nothing about superseding ideas of those non-patenting.

    Foster – “to promote the growth or development of; further; encourage: to foster new ideas.”

    The prior user rights must include those, knowing that most all ideas are born outside of the patent system, by those patenting and by those not. PUR must respect the rights of those that aren’t by law, required to patent. To me a contradiction exist within the mission of the PTO, as it seems two definitions of “idea” are without intent being used. Without intent meaning, the problem is with the written law as it is.

    Seems with all the secrecy and security going on, that the patent system is somehow a threat to even those that patent. The superseding of ideas, is not fostering a thing. How could it, when all ideas are threatened. The law has changed over the past 200 years in the United States, nothing wrong or bad about that. If not, would those that vote in the US still be limited ? Seems many are involved and have a right to believe that the law is working toward a fair playing ground — that works for everyone that are willing to work hard and yes even have ideas without fear.

    Thanks

  10. An idea that is kept secret does not promote progress. Disclosure is the key. One is not required to patent an idea. It is sufficient to publically disclose the idea to prevent anyone else from patenting it later, making prior user rights moot. Prior user rights only benefit those who withhold ideas from the public, and thus are not promoting progress.

  11. DaveR-

    You say: “Have any of Gene and those who earlier commented read Kewanee v. Bicron recently? I see no logical reason why trade secret rights and patent rights cannot co-exist through inclusion of a prior user rights provision…”

    I have never said that trade secrets and patents are incompatible or that they cannot co-exist. Quite to the contrary, I write and speak frequently on the fact that trade secrets are incredibly valuable assets. I also point out with great frequency that those who say that trade secrets and patents cannot co-exist are flat wrong. They are either oversimplifying the law or they don’t understand that law. So I will thank you not to put words in my mouth.

    The question isn’t whether prior user rights can exist in a patent system, clearly the answer is yes. The question is whether prior user rights should exist in a patent system, and just as clearly the answer is no. Rewarding those who hide and maintain secrets is contrary to the intent of a patent system.

    It seems you believe that granting a patent to someone where others have concealed, secret use is some kind of a taking. Nothing of that sort has ever been considered a taking and clearly was not envisioned as a taking by the Founding Fathers because they knew some would not pursue patents (i.e., Thomas Jefferson, despite being an inventor never pursued a patent). Given the out of control Supreme Court view relative to eminent domain there is absolutely no chance that patent would be viewed as a taking, so I am perplexed by your comment about the federal government taking trade secret property without due process.

    -Gene

  12. BioPatAtty-

    You say: “Chandler is manipulating the uninformed masses. No surprise there.”

    And that sucks! I’m not disagreeing, but it still sucks! In this area where we really understand what is happening in the weeds it makes me scared to know about how uniformed Congress is when they act in other areas. We deserve better. Hank Nothhaft is 100% correct when he talks about Congress and the President listening to the wrong people. They need to listen to more than just the big company elites.

    -Gene

  13. This is something of a “tempest in a teapot”. Research demonstrates that not one single patent has ever been successfully defended against by using the existing “prior user” statute! Even though there have been tens of thousands of subject “business method” patents issued since this statute was enacted in 1999, and many of such patents have been asserted, This is a large enough and long enough real world test to demonstrate that, even if this statute would be expanded beyond “business method” patents, as proposed in the House bill, it will not be extensively used and does not offer a significant incentive to keep inventions as trade secrets rather than patenting them, even for the limited types of inventions which are maintainable or protectable as trade secrets. [Which is, of course, only those inventions which are not detectable or back-engineerable from commercial products.] Especially with the extensive requirements and limitations for even using this statute, and the extensive limitations on what one gets by using it. All of those are being retained.
    Nor does it make any sense to attack the PTO Director on this issue, which has nothing whatsoever to do with anything the PTO does.

  14. This is a large enough and long enough real world test to demonstrate that, even if this statute would be expanded beyond “business method” patents, as proposed in the House bill, it will not be extensively used

    That is one huge leap of faith – and completely unwarranted.

  15. Re: “There is something fundamentally unfair about allowing something that is secret to erode a patent right.”
    True, but first, we already have such undiscoverable “secret prior art” NOW under 102(g), with later filed applications of others using Rule 131 declarations, etc. The Senate and House bills would REDUCE that.

    Secondly, it would ALSO unfair for a U.S. company spending millions in R&D, tooling and manufacturing that does not patent every nit before its new product launch to get hit with some rush filed paper patent originating in a foriegn country.

    Thirdly, both the present and proposed-amended “prior user” statutes specifically state that: “A patent shall NOT be deemed to be invalid under section 102 or 103 of this title solely because a defense is raised or established under this section.“ That is, there is not effect at all against asserting a patent against the against anyone who did have a previously fully invented invention that was both reduced to practice and being used commercially, and all even they get is a very limited personal license.

    P.S. Note the irony that many of the same people opposing any change in any “first to invent” provisions of patent law are opposing this existing or amended “35 U.S.C. 273 Defense to infringement based on earlier inventor” statute, which IS expressly based on “first to invent” as even its title demonstrates!

    [As always, this is purely pro bono. I have no financial or any other interest in any part of this legislation, merely in a more factual and rational debate.]

  16. Dear “Blind Dogma”
    Since your criticism above is really about challenging statistics, perhaps you could scientifically explain why you do not think that this very large sample over many years has no statistical relevance, much less not being highly statistically relevant in view of its zero deviations?

  17. “So, in other words, prior user rights rewards those who hide innovation from the public and penalizes those who disclose their innovations to the public.”

    “….so why should society set up rules and laws that reward the secret? ”

    The interest of the owner of a trade secret does NOT represent the interest of other players in the business community or the interest of business community as a whole.

    If it is the desire of the owner of a trade secrete to offer his/her ideas to the public for free, he/she would have published her invention/ideas in a journal article thus prohibiting others from patenting the same invention/idea.

  18. so what i meant to say was, a trade secret should only be allowed to be used to protect the interest of the owner of the trade secret and not for protecting the interest every business that may be affected by the subsequent disclosure of the idea/invention through a patent publication

  19. The only lie here is that Gene Quinn is a journalist. The reasons for prior user rights covered as given in congressional testimony were detailed 20 years ago (link below). They’re only bad to militant patent-uber-alles types who ignore other parties in the equation. To everyone else, they strike the appropriate balance between preserving patent rights and protecting existing investments.

    http://heinonline.org/HOL/Page?handle=hein.journals/aiplaqj21&div=19&g_sent=1&collection=journals

    He is right on one thing – the university carve-out is nothing but a blatant special-interest handout with no basis in rational policy. Prior user rights should apply across the board regardless of the patent owner. Moreover, the current language will be a nightmare to administer. This ridiculous carveout is a blight on the bill.

    Universities don’t like prior user rights because they can’t use the defense themselves. Never mind that they don’t get sued nearly as often as commercial entities. Or that they have much less to fear from injunctions. Or that prior user rights are better for the system as a whole (I know, altruism has no place in Congress). Narrow-minded parochial attitudes like this are why we can’t have nice things. I can’t wait for a court to try to divine legislative intent behind this albatross.

  20. Keen Observer-

    Why do you think it is a lie that I am a journalist? I never pretend to be a journalist. I am a blogger. I am a substantive expert on the topic of patents and I have very definite opinions. I overwhelmingly write op-ed pieces.

    As far as I can tell the “lie” is that prior user rights are good or at all desirable. The only people who want prior user rights are those looking to hide and then copy once an innovator who discloses as part of the social compromise receives a patent. Sensenbrenner was 100% correct. Prior user rights is about those who hide wanting to get out of infringement free.

    I would, however, agree with you. Narrow-minded parochial attitudes like yours is the problem.

    -Gene

  21. Mr. Morgan,

    You state “Since your criticism above is really about challenging statistics” and you are incorrect.

    I am not challenging statisitcs – I am challenging your application of statistics and your projection from one very small subset of the patent spectrum (business methods) which during the length of time that you indicate was more than partially held hostage in the Reject-reject-reject era to the global spectrum of all patent areas.

    Take a moment and think about how silly your position really is. Have a nice glass of Kool Aid while you do so.

  22. @Gene

    “Prior user rights is about those who hide wanting to get out of infringement free.”

    As for those invention disclosure claims for building cases for infringement, it is a matter of establishing how an invention in some form was made available and by what means first. Then the question of how an infringer — called so being based upon a disclosure claim against them, hides, having gained using the invention — after being able to obtain it somehow. Some reasonable degree of responsibility for one’s own work falls on those making the claims, plays a part in the law, or should, when claims are involved.

    In the cases of two invent the same, the patent guy shouldn’t win just because the law may be written that way. A coin flip method would be fair. So, the law needs change, infringement is nothing more then claim, without having proven otherwise — intent for example ? I don’t believe the law makers at this date are going full circle to arrive at the same law as it is now. I as others if in fact have invented without disclosure, doesn’t mean hiding and every invention isn’t the claim of those that patent — in the United States of America even if they are such believers.

    Thanks

  23. @Gene Fair enough, you don’t claim to be a journalist. Whatever you call yourself, it’s impossible to take your work seriously when you are so blatantly partisan, calling things you disagree with a lie. For example:

    “Prior user rights is about those who hide wanting to get out of infringement free.”

    Spoken like a typical IP lawyer. You pigeonhole everything into IP categories. If it’s not patented, it’s trade secret. Reality is lot more complex than that.

    Patenting costs substantial time and money. Companies, especially small ones, can’t afford to patent every little thing they do. Many times they don’t even know what’s patentable. I’m not talking ignorance of patentability criteria – they come up with lots of little innovations around their core business that are new to them, but may have been done before elsewhere. The law even punishes them for investigating whether their innovation is already patented by putting them on the hook for willful damages. Researching the patent status of every little thing your business does is ridiculously expensive and increases your liability.

    On top of which, many of their minor innovations fall into a gray area where no one can be sure if it rises to the level of being patentable until a particular examiner decides it’s sufficiently novel and nonobvious. That’s a huge gamble to invest the time and money reaching that point only to find out your innovation isn’t patentable. Or worse, you get a patent on a trifling invention that the market doesn’t care about. Either way is a colossal waste of your resources.

    No one has the time and money to patent everything they do. Nor is it good policy to encourage patenting of trivial innovations. Why should businesses be punished for not disclosing every little thing? Private information does not automatically become a trade secret (e.g. they must show reasonable steps taken to protect the information). Most businesses are just getting on with the business of doing business, as it should be.

    Without prior user rights, anyone can come along and patent the ground out from under these businesses. Minor innovative processes may not matter much to the prior user business, but switching costs can make it needlessly expensive to change to a new process at a later date. Not to mention the risk from poorly worded patents from a decade ago which can be read upon a broad range of modern technologies the inventor never contemplated or intended.

    Businesses thrive on a stable environment. Prior user rights is about stability – keep doing what you’ve been doing. It’s hugely important in fields like the computer industry where patent maps are completely infeasible due to lack of standardized terms and vaguely worded patents from prior decades.

    But don’t take my word for it. Read the short paper linked in my last post and you’ll see every argument for and against prior user rights discussed in a fair and unbiased way. Like the Greeks and modern philosophy, my work is but a footnote of the ancients.

    Stop thinking like an IP lawyer and start thinking like a business. Those are the people actually using the patent system. IP lawyers are just along for the ride.

    I purposely use “innovation” instead of “invention” above because the former includes new things that don’t rise to the level of being patentable. Every invention is an innovation, but not vice versa.

  24. Gentlemen, gentlemen, let’s back off for a minute.
    I think that a company that wants to use an invention in secret should be allowed to continue doing so, within certain limits. Although that company has not “contributed to the art” in the form of a patent application, that company has contributed to the art in that the invention is now known to at least some of its employees and, when they leave, they will directly or indirectly disclose some or all of that invention, that’s just the way scientists, engineers, technical people, etc., operate. By not filing a patent application within twelve months of use, however, the company has lost the right to prevent others from independently creating and using that invention.
    With respect to the company that later develops the invention and gets a patent on it, good for them. The only reduction in the patent scope is that they can’t stop the first company from continuing to use the invention. Presumably (hopefully) the patent is still worth something even with that carve out.
    So, I think that prior user rights are good idea, and you may choose to disagree, but we shall have to wait and see what Congress “thinks”.

  25. nd, when they leave, they will directly or indirectly disclose some or all of that invention, that’s just the way scientists, engineers, technical people, etc., operate.

    Sigh.

    Charles, please make yourself aware of how trade secrets actually operate (and how they are legally maintained) prior to throwing out an opinion dressed as fact.

  26. Blind Dogma,

    I know the law (subject to any new pronouncements from the courts), I know about trade secrets, I know about non-disclosure agreements. I also know about engineers, having practiced as one for nine years before going to law school – they like to talk with other engineers about how things work, what needs to be better, what has been tried, what has failed, what might be tried, etc. The information in their brains is still there when they go home at night and when they move to another company. Go study human nature for a while.

    The law is the law, but if everyone followed the law our jails would not be full.

    Have a good weekend.

  27. Charles,

    At the same time – human nature demands that we do have law. Your position is akin to not having law. You hand waive it away as if it were not there and blithely state – engineers like to talk.

    Engineers also like not to be prosecuted for trade secret theft. And while information is in their brains – the information of consequences of theft should be there too. You do not get to ignore that, and as a lawyer, you should be highly cognizant of that. Your admonition to study human nature is very much misplaced.

    KeenObserver,

    You raise some good points, and what is more, you raise some of them in a fairly intelligent manner.

    However….

    Whether you think “IP lawyers are along for the ride” or not rather misses the point that the patent incentive was so important to the founding fathers that they made it an active inclusion into the very body of the Constitution itself. In a certain way, this puts the patent system at a level above the Amendments, which while important, did not make the first cut.

    And while the points your raise deserve careful consideration, the fact that a patent system was so desired by the founding fathers trumps the Trade Secret route as a governing policy (and prior user rights are nothing but an adjunct to the Trade Secret route).

    You are correct – this area is complex. Gene’s blog posts are not intended to be exhaustive (and cannot be so). He has said this on a number of occasions. Thus, any of your comments along these lines are inappropriate to any conclusions you wish to draw.

    One take-a-way that I gather from your post is:

    The imposition of a penalty for those who actually try to use the patent system for its intended use (the imposition of treble damages for willfulness based in part on seeking to know and understand what already has been disclosed).

    To answer this, I would propose that like PHOSITA, all published knowledge be assumed to be known (at least, all published knowledge obtainable through the patent system). Remove the penalty for mere knowledge (and attempted understanding) and actually make it amenable for people to use the disclosures that have been given as part of the Quid Pro Quo.

    Promote the desire to be conversant with State of the Art – as indicated by patents and the patent system – by making it a de facto standard that the information is presumed known.

    As far as minor improvements/incidental improvements – sorry, but that is part of the natural risk of being in business. You might as well as try to legislate away competition (hints of the Pure Socialist Kool Aid present here). The point being that if your business in any way touches upon innovation, part of “the business of doing business is understanding the competition and the flow of innovation. No one promised you a rose garden – so don’t expect one.

    “Prior User Rights” in such a universal application are indeed a “get out of jail free” card, and severely undercut the actual impetus of making disclosures – the underpinning to the Quid Pro Quo. The patent clause expressly does not say “promote secret-keeping and guild-like behavior” – such is the anti-thesis of the patent clause. So in a sense, the world is as Gene portrays – divisible into patent and trade-secret segments. To be fair there is a third area – a zone between the two – wherein the information is not secret, but not patented. However, if you were aware of how the patent system is actually set up you would be aware that such public disclosures are accommodated by the patent system, and thus can be safely included in the non-trade-secret portion of the divided world.

  28. Gene – response caught in the filter – please set free.

  29. KeenObserver-

    Oh… I see… when I point out others are not being truthful or what they say is incorrect that makes me a bad guy. Sorry to burst your bubble, but if you cannot handle the truth then it is YOU who is blatantly partisan, not me.

    You say: “Patenting costs substantial time and money. Companies, especially small ones, can’t afford to patent every little thing they do. Many times they don’t even know what’s patentable.”

    Fine, then just don’t complain when someone gets a patent and stops you in your tracks. That is a business decision and the law should not be in the business of saving businesses from making bad or even self destructive business decisions. Particularly when the law is set up to specifically reward those who disclose. Perhaps you should learn more about the history and purpose of the patent system.

    You say: “Businesses thrive on a stable environment. Prior user rights is about stability – keep doing what you’ve been doing. It’s hugely important in fields like the computer industry where patent maps are completely infeasible due to lack of standardized terms and vaguely worded patents from prior decades.”

    The irony in your position is that prior user rights are almost never an issue, not at least as the statute is written in the US. You have to have actually reduced to practice 12 months prior to the patent owner filing the patent and actually started using before the patent was filed. So it only applies to that which would have been prior art if public, but not prior art because it was kept secret. Very little is actually effectively kept secret, so we are talking about black box stuff here.

    You say: “But don’t take my word for it.”

    You have to be kidding, right? You cowardly hide behind an anonymous name and you want us to take your word for it? You pretend I am biased and you are not, and we are supposed to take the word of someone without knowing who they are or what biases they have? Do you take everyone here for a complete fool?

    As far as your comment that I need to start thinking like a business, obviously you don’t know who I am or anything about me.

    -Gene

  30. Blind Dogma:

    We digress. The point I was trying to make is that, just because a company chooses not to patent something, or to keep it a trade secret, does not mean that the knowledge is forever hidden or lost.

    And, as I stated, I (bold, underlined) think that limited prior user rights are a good idea. You obviously disagree, so we will just have to leave it at that.

  31. Watering down patent rights is not the solution to patent quality problems. That’s a separate discussion. From a practical business perspective, you don’t want to be either too paranoid or too lazy when it comes to IP. If you think you may have something that is both novel and valuable, then it’s worth your time (an hour or so) to do at least a cursory search of the prior art (excluding patents, if you’re worried about willful infringement). If it still looks like you have something, then you decide: trade secret, patent, or defensive publication? And then you live with the legal consequences of your decision. Sure, it’s possible that some troll may come along later and sue you over some obvious thing that you would have never thought to patent. That’s a quality problem with the system and it does need to be addressed. But that’s the exception rather than the rule. It’s just one of the many risks of doing business.

  32. Charles,

    One man’s “digression” is another man’s retreat. I take it that you are retreating from your actual stated point. We can leave it at that. The tautology you want to replace it with is wholly unsatisfying.

    Gene,

    Not all uses of anonymous names should be labeled “cowardly.” I posted previously a few reasons why – defending IANAE at the time. Be that as it may, “anonymous” is not universally synonymous with “unknown.” Quite a few anonymous names have garnered a consistent reputation and credibility (or lack thereof), and thus are “known” entities for the views and positions advocated.

    Further, KeenObserver was stating “don’t take his word for it” – rather, I believe, recognizing that “KeenObserver” has not been established as a source of credibility, KO was leaning on the credibility of his source. Of course, even such referral is marred by starting your introdcutroy piece accusing the blog master in essence of being a liar. Not the best step to take. Also of note, the article referenced was written by Keith M. Kupferschmid. Unforutnately, that name may just as well have been the anonymous tag of “KeenOberver” for the amount of credibility that I give to that source. In other words – none.

  33. @KeenObserver – Never mud wrestle with a pig. You get dirty and the pig enjoys it.

  34. JoeV-

    Your type of comment is what I LOVE about the Internet. So helpful, illuminating and lucid. We are all the wiser for your brilliance.

    -Gene

  35. “The only people who want prior user rights are those looking to hide and then copy once an innovator who discloses as part of the social compromise receives a patent.”

    It’s “copying” to use an invention PRIOR to the filing of a patent? It is copying a patentee to use an invention conceived of BEFORE the patentee? Really?

    And more generally, it is quite simplistic to talk in the abstract about “weakening” or “strengtheningIf” the patent system. If we extended your logic just a bit, and removed “not having actually infringed at all” as a defense to infringement, that would indeed “strengthen” the value of patents (and thus not removing that defense would “weaken” patents relative to removing it).

    But such “weakening” (or rather, not “strengthening”) would unambiguously be a good thing in that case. Which is why railing against policies because they “weaken” the patent system in the abstract is absurd. Now, you do go into specifics here as to why you think prior use rights are a bad idea, so you deserve credit for not only making the “weakening” argument. But you still manage to slip in there the “weakening” bit whenever you write about a patent decision/law that isn’t as logically pro-patent as possible (as if “weakening” is always a bad thing, as you define it).

    “Rewarding those who hide and maintain secrets is contrary to the intent of a patent system. ”

    But it happens to be exactly the intent of trade secret protection. Not everything is about the patent system. Something can still be contrary to the intent of a patent system, yet still be a good idea.

    “Fine, then just don’t complain when someone gets a patent and stops you in your tracks. That is a business decision and the law should not be in the business of saving businesses from making bad or even self destructive business decisions.”

    I think the point of this would be to make such a businesses decision not a bad decision (and certainly not a self destructive business decision). Why should the law make it so keeping one’s IP secret is somehow a bad business decision (at least insofar as the ability to practice their inventions in the future)? Of course we should reward disclosure (and prior use rights would not stop this reward, since the patent doesn’t get invalidated) — but that doesn’t mean we should go out of our ways to harm companies who invent before the patent was issued yet chose not to disclose.

  36. In my opinion, for something that is novel enough to be patentable, trade secrecy is an inferior alternative in terms of IP protection. Trade secrecy is most appropriate when the value of the information depends more on its confidentiality than its novelty. For example, IBM keeps some of its proprietary mainframe hardware/software interfaces secret, not because they are particularly novel, but because it allows them to inhibit competitors from offering compatible alternatives to IBM’s core products. If it’s novel and non-obvious, then patent protection is by far the best choice. Relying on prior user rights would be ill-advised, and I see no value to society in encouraging such a practice.

  37. Interesting. I am a software developer, and what I am reading out of some people here is this… “If you have a good idea and don’t have enough money to patent it or don’t even think it is patentable, tough. We do have the money and we are going to take your idea, patent it, and force you to either pay us big money or stop using something you wrote yourself long before we got it patented.”

    And you can sleep with yourself at night. Amazing.

    As far as the cost, it’s not the filing fee that kills ya, its the money you have to pay an attorney to search (maybe that explains some of the posts here… some of you must be attorneys). My son filed what I considered to be a trivial patent and it cost him $10,000. For one patent application. And as an examiner I would have turned it down, I thought it was obvious and has been used before in software programs. Multiply that 10 grand by the number of possible patents or subject matter that MIGHT be patentable and you can go broke in a hurry if you try. And the sad fact is we can’t afford to do that.

    The way I see it as a software developer is there is absolutely nothing that can be written anymore that does not “violate” any number of generally and loosely worded patents that will be enforced upon you at the point of a gavel, probably in East Texas. This (dare I say) “extortion” either drives up the cost of software for everybody that wants to buy or drives people out of small business. Which is apparently OK with some here (oh, yeah, sorry, I forgot there for a second… the Golden Rule… he who has the Gold makes the Rules).

    Maybe Henry VI had it right.

  38. @Software Developer

    If you’re going with the approach “you can sleep with yourself at night”, here, is not going to make the point I believe you are trying to make. You’re giving too much control to patents, and then pin that on those in the business of patents. First, much software is developed un-patented and stands as prior art. Yes, even with a 12 mo window for exams at the PTO, software prior art still gains and those developments large or small once disclosed and more often put into use, are not patentable. The answer here is to have the PTO see and then take that prior art for what it is, the work of others outside the patent system IP.

    Second, what you’ve missed is a balance, in that picture of those in the patent business, as if they are without responsibility, without answering to the law, with the result of one being out of the business and facing serious charges. It isn’t as simple as you make it sound. The patent problem is with the law itself, the same law the PTO follows as those in the business of patents. Understand ?

    The only way to change the patent system, and those issues I have with it, is through the law.

  39. As a software developer, entreprenuer, and part-time patent agent, who at different times has also personally found himself at both ends (plaintiff and defendant) of a software patent infringement matter, and who is by no means wealthy, I still believe that patent protection is both appropriate and effective for software. There is admittedly a quality problem with patents in general, and software patents in particular, but I believe that that the situation can and will improve, with more resources for the USPTO, more examiners with a software background, and more third-party involvement in the process. But even the current flawed process is better than not having patent protection avaliable for software. Most software patents at this point are very narrow and application-specific. No one is likely to be sued for basic run-of-the-mill coding, even in east Texas :).

    @Software Developer – if you could provide a patent number for the trivial patent you mentioned, I’d be interested in looking it over.

  40. There are, no doubt, plenty of trivial patents out there.

    But that is a red herring.

    If one were to take a step back (with apologies to my friend for using his moniker), and remember that “software” ushered in a technological new era and is precisely the type of thing that is envisioned to be promoted through the patent system. I would expect the exact same type of trepidation in the future with each wave of new advances. I think it normal to feel some level of such trepidation, but I think that there are those that feed the trepidation with ulterior motives and thus create the market for my wonderful Kool-Aid.

  41. @BD

    “There are, no doubt, plenty of trivial patents out there.”

    That is one problem and it should only serve as only a place marker for those to reference, if they are having questions about patents that seem to have, from a personal view, little value. No one said to, but to ignore the problem is somehow passing it on to those in the future to deal with again.

    “I would expect the exact same type of trepidation in the future with each wave of new advances.”

    True, I couldn’t agree more, and it is the most important reason why the law needs change to have such advances in the future. Without some knowledge now of what advances “we’re” talking about, seems limiting in scope in thinking about the future and advances. Many “advances” fall flat, never making it to market, while others are accepted but not always “life changing”. The question will always be: Of all the things so many people are thinking up, believe they are on the next big thing — actually are ? This process of people’s thinking of ideas makes for much of the friction going on today. Friction when so much is passed as “advances” within the patent system, with little or no recognition that others may just already have that “advance” idea.

    So, “advances” is another question and remains to a large extent a personal view of the inventor. The patent system must have an approach that not only promotes, but understands this to not step on any idea of the future — as now and in the future, without intent !
    Such a balance in the law will take those with a fair hand when making such laws, taking that ideas are a Human activity and not a function of any patent system or anything like it.

  42. New Here,

    Do you understand the concept of “red herring”? Perhaps you should look that up before pursing your line of thought and using any such as a “place marker.”

    As to the rest of your post, thank you for taking care to put your thoughts into readable sentences. However, I still cannot fathom just what you are trying to say. It appears that you are saying that the patent system needs to change, but it is unclear just why you are saying this. You appear to say that the “new ideas” must be divorced from the patent system, which evidences a fundamental misundersanding of what the patent system is for.

    As to “trivial” types of patents, the notion that only those things that are (subjectivley) non-trivial shuld be patented smacks of the discredited “Flash of Genius” superiority complex that was expressly refuted inthe 1952 Patent Act – in response to the Supreme Court’s anti-patent stance. As Judge Rich, in his construction of the statute (and anyone who understands the actual serendipity of advancement) would know, there is no way to tell which stepping stone of today – which so seemingly trivial advances – will actually generate the next huge wave of innovation. The patent system is expressly not only for the “non-trivial.” The “Flash of Genius” school would want the patent system aligned with an elitist school of thought that just doesn’t match with how the law has been constructed.

    Stan,

    How is the new Elitist Elixer Funky Flash drink coming along?

  43. “but it is unclear just why you are saying this. You appear to say that the “new ideas” must be divorced from the patent system, which evidences a fundamental misundersanding of what the patent system is for.”

    No,

    “Without some knowledge now of what advances “we’re” talking about, seems limiting in scope in thinking about the future and advances”

    And,

    “The patent system must have an approach that not only promotes, but understands this to not step on any idea of the future — as now and in the future, without intent !”

    “Such a balance in the law will take those with a fair hand when making such laws, taking that ideas are a Human activity and not a function of any patent system or anything like it.”

    From the last quote, if this is what you’re calling a divorce I have to say, that too much importance is place upon the patent system for a definition of “idea”. The last quote is about respect, people think and not only in terms of the patent system. As I’ve said before, no law exist that states you must patent in order to promote advancement, it is only the mission of the Patent Office and not the law that it is the only way to advance.

    AS for “red herring”, believe it or not, I didn’t agree with your use regarding trivial patents. The “place marker” was an alt, meaning those patents should be kept in mind and not overlooked.

    Thanks.

  44. New Here,

    It is your choice to “believe it or not”, but your having that choice does not change what “it” actually is. Ignoring the law and the policy of the law is not a good idea. I thought that I have pointed out Bobby as such a good example of this.

    As for the rest of your comment, I still cannot fathom what you are talking about. I realize that English as a second language can be inhibiting, but you need to take it slow and spell out one thought at a time and then with sentences capturing that one thought at a time, put the sentences in order so that they make sense. You may know what you mean to say, but what you actually say just does not make any sense.

    My best guess is that you are saying that advancement can happen outside the realm of the Patent system. You should realize that no one is arguing otherwise. No one is saying that there MUST ONLY BE the patent system in order to have advancement. I do not know why you think anyone is saying that, much less arguing that position. It appears that you are arguing with ghosts.

    But then you start talking about the law, and the only law governing innovation is Patent Law – hence my comment about your serious misunderstanding is perfectly apt (I hope you realize that Patent Law encompasses the sharing of information in a public way that does not earn a patent).

  45. @BD

    No one is Ignoring the law and the policy of the law, where did you fathom that, if I may ask.

    The law isn’t written in stone, the law you talk about has a history and isn’t without challenges. As any read of the recond of changes to law as well passing of new laws show.. The changes on the table in the House are just another example of those following the law and the policy of the law. It seems someone other then me is making a real point of what change would serve this US better. If that “better” happens to change things for those in law, that is what has happen before, throughout history in the US.

    Thanks.

  46. those following the law…

    No. The changes are not law yet, thus, “following” them as the law is simply wrong.

    … and the policy of the law.

    That is very debatable – and is being debated.

    Now then, once a new bill is passed, then we can have the discussion you seem to want to have now (a bit prematurely, I might add).

    I fathomed that you were ignoring the law and the policy of the law from your comments. You seem to think that the existing law is already gone and that the policy behind the existing law is no more.

    You are wrong on both accounts.

    Is that clear enough for you?

  47. [...] have previously written about prior user rights, see Prior User Rights is Poison Pill and Expanded Prior User Rights is a Bad Idea, so today I will focus on inter partes review.  Inter [...]

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