When it comes to DVR, no one can argue with the convenience of being able to record your favorite shows and watch them later. But when the case of DVR patent infringement came to court, the big lesson was that “later” just isn’t going to work. Earlier this month at the Symposium of SIPO/US Bar Liaison Council with ACPAA held at Cardozo Law School, prominent figures in intellectual property law tackled strategic and ethical issues for patent attorneys in the wake of the TiVo v Echostar case. They came to the conclusion that asserting your rights early and often is the best practice for attorneys faced with injunction cases.

In TiVo v. Echostar, Echostar lost on infringement of TiVo’s patented DVR functionality. Judge Folsom issued an injunction and ordered that Echostar stop offering the service and disable all storage to and playback from the hard disk.  Unfortunately for Echostar, they did not appeal the wording of the injunction and took no action against the disablement provision. Instead they designed around it by downloading new code to get the set-top box to operate in a different way, in what appeared to be a pretty clean design-around. TiVo filed a contempt motion. Echostar was sanctioned on the grounds that there were not “colorable differences” and their design-around infringed. The dissent argued that not only were there colorable differences but moreover the differences established non-infringement. After two years of back-and-forth and one too many trips to Judge Folsom, the original 70 million that Echostar had to pay for the initial infringement rose to 300 million because of Echostar doing what they thought would get them out of infringing. (Ultimately, Echostar wound up settling for 500 million.)

One of the most difficult issues in antitrust and patent law involves “pay for delay” or “reverse payment” settlements. Today, for the first time, the Supreme Court entered the fray, finding – in a 5-3 opinion written by Justice Breyer (with Justice Alito recused) that these agreements are not immune from antitrust scrutiny.

The settlements arise under the Hatch-Waxman Act, the law enacted by Congress in 1984 to foster drug innovation and challenges to invalid patents. Under the Act, the first generic to challenge a brand firm’s patent, claiming invalidity or noninfringement, obtains a valuable 180-day period of marketing exclusivity. This period, however, has encouraged brand firms to pay generics to drop their patent challenges and delay entering the market.

In the past decade, the Federal, Second, and Eleventh Circuits have upheld pay-for-delay agreements. They have emphasized the benefits of settlements, have claimed that payments fall within the “scope of the patent,” and have highlighted patents’ presumption of validity. In the summer of 2012, however, the Third Circuit created a circuit split by finding that pay-for-delay agreements were presumptively illegal.

On Monday, June 17, 2013, the United States Supreme Court issued its much-anticipated decision on so-called “reverse payments” in FTC v. Actavis, Inc.  This decision will impact how brand name drug companies and generics enter into patent settlements to resolve pending patent litigation.  In a nutshell, speaking for the majority, Justice Breyer wrote that there is no valid reason for the FTC to be denied the opportunity to pursue reverse payments as an antitrust violation.  Breyer, who was joined by Justices Kennedy, Ginsberg, Kagan, and Sotomayor, determined that reviewing courts should apply the rule of reason when determining whether reverse payments violate antitrust law.

While the ruling will likely come as no shock to casual observers, or even to those who have long believed that these agreements were anticompetitive, it is a bit of a shock in that the decision seems to present an unrealistic utopian view of how challenges to reverse payments will be litigated.  For reasons hardly explained, Breyer thinks that it will be largely unnecessary for reviewing courts to engage in complicated review of the patent or to engage patent issues, but at the heart of these cases is the underlying patent and associated patent laws that give brand name manufacturers significant and uncompromised rights to exclude.

Chief Justice Roberts explained in his dissent, who was joined by Justices Scalia and Thomas, that it was his view the decision of the majority “weakens the protections afforded to innovators by patents, frustrates the public policy in favor of settling, and likely undermines the very policy it seeks to promote by forcing generics who step into the litigation ring to do so without the prospect of cash settlements.”

Maybe it’s just me?  In my 15 years of practicing patent law, I have never felt uncomfortable interviewing potential clients in order to obtain the essential information needed to file a patent application on their behalf.  This was the case until now!  Ever since March 19, 2013, I have been feeling slightly uncomfortable asking one question to some of my new clients.  What is that question you ask?  It is: “What was your household income in the preceding calendar year?”  So, why am I asking a question that makes this Registered Patent Attorney sound more like a Certified Public Accountant?  Answer:  The AIA.

The Leahy-Smith America Invents Act (“AIA”), was signed by President Obama on September 16, 2011, after receiving overwhelming bi-partisan support by passing the House 304-117, and the Senate 89-9.  The AIA has been recognized as the first major overhaul to the patent system in almost 60 years!  Under the AIA, the USPTO now offers a three-tier pricing structure for a majority of its patent-related fees.

Headquartered in Armonk, NY, the International Business Machines Corporation, also known as IBM, is an international corporation involved in the development of business technology and computer consulting services. In terms of annual profits and number of employees, IBM is one of the top American companies in the technology sector. Recent announcements involving the upcoming development of mobile-based enterprise software show IBM’s desire to continue providing computer solutions for the corporate world.

The U.S. Patent & Trademark Office deals with a heavy amount of paperwork each week that has been assigned to IBM, including both patents and applications. This week in IPWatchdog’s Companies We Follow series, we’ll take a look at the multinational technology corporation and some of the more intriguing applications and patents that have been published recently for the company.

Business interests and developments to enterprise software are seen in a number of applications we feature this week. One application assigned to IBM would protect a system of allocating software resources to a user’s network account once their presence is detected at a facility. An patent awarded by the USPTO protects an IBM invention involving a visual-based help tool for button icons within software applications.

As the dust begins to settle on the Supreme Court’s recently issued opinion in AMP v. Myriad, and hopefully as the misguided “gloating” by the media and the ACLU settles down to a dull “roar,” what does the Myriad decision really mean?

The ruling that was handed down by the Supreme Court in Myriad was pretty much as I expected, and could have been far, far worse.  Again, let’s not get lost in the mistaken (and misrepresentative) hype and hyperbole of the media and the ACLU, i.e., the “patenting of human genes has been blocked by the Supreme Court” which the Myriad case was never about in the first place. Frankly, the “doom and gloom” I’m seeing and hearing from the patent law world (including a depressing and mind-boggling statement I saw from the AIPLA about the potential impact of the Myriad decision on biotechnology) isn’t warranted in my opinion.

And please also note that Myriad’s stock initially shot upwards in price significantly Thursday after the Myriad decision came out (although it also fell back again Friday) which suggests investors are not necessarily as “bearish” about the financial impact of this decision compared to the media, and at least some in the patent law world.

For more on earlier proposals to address patent trolls see A Review of the SHIELD Act.

The latest incarnation of the SHIELD Act was introduced on February 27, 2013, and changes direction as if the first iteration were waived off in disgust before it could even lower its gears.  SHIELD Act 2, scuttles the “reasonable likelihood of succeeding” idea floated and introduces a new tool aimed at walling off the troll: a bond requirement.  If the plaintiff is not an original inventor or assignee, did not make a substantial investment in practicing the invention, or is not a university, that troll must post a bond.

“Patty Sue Just Won’t Go Away.”  So went a 2002 article in the San Francisco Chronicle, one of a many articles spanning several years about Patricia McColm, a vexatious litigant blacklisted since 1994.  She was the Most Vexatious Pleader of the vexatious litigants.  If she were a patent attorney, frightened examiners would give her a 100% allowance rate without amendments.  If the anti-joinder provisions of the America Invents Act (“AIA”) applied to Patricia McColm, she would have her own clerk’s office.

One draws similarities between the problems presented by firms such as Intellectual Ventures, Acacia, and Lodsys and those presented by Ms. McColm, and a flurry of proposals were recently introduced in Congress.

To start, on August 2, 2012, a “bipartisan” bill was introduced in the House aimed to fix the perceived problems caused by patent trolls, or Non-Practicing Entities (“NPE”), entitled the “Saving High-Tech Innovators from Egregious Legal Disputes Act of 2012,” or the SHIELD Act.  The main point of the bill was to make patent holders pay the fees of those they allege infringe to (1) invalidate the patent or (2) defend an infringement action.[i]

On June 4, 2013, President Obama announced a set of 12 initiatives – 7 proposed legislative actions and 5 executive orders – intended to address perceived problems from Patent Assertion Entities (PAEs).  The announcement quoted aspersions Obama had cast at PAEs earlier in the year: PAEs “don’t actually produce anything themselves;” instead their purpose is “to essentially leverage and hijack somebody else’s idea and see if they can extort some money out of them.”

Obama’s action plan was heavily influenced by a report, “Patent Assertion and U.S. Innovation,” which was released by the President’s Council of Economic Advisers, the National Economic Council, and the Office of Science & Technology Policy.  The full text of the report can be read here.

It is surprising that a report that was prepared by such an august and high-level set of entities could be so blatantly biased and one-sided.  The body of the report slams PAEs and points to everything that’s bad about them. It creates an artificial distinction by referring to “good” patent middlemen as “patent intermediaries,” although there is no indication in the report of what are the characteristics of a good “patent intermediary” versus an evil PAE.

Trademarks are an important protection for any business, but nowhere in Canada is this as vital as in Québec, where failure to have a registered trade-mark may lead to notices and fines for business owners. These are precipitated, but not imposed, by the Office de la langue française (translated to: Office of the French Language), or OQLF, a public organization mandated to uphold the quality of the French language, and to ensure it become the “normal and everyday language of work, instruction, communication, commerce and business” in the province of Québec.[1] Since the 2012 provincial election that saw a return to power for Québec’s leading sovereigntist party, the Parti Québecois, the OQLF has been implicated in a few high profile cases that have muddied the waters for businesses operating in Québec.

Most famously, in November 2012, major retailers such as Walmart, Gap and Best Buy, decided to take the organization to court after receiving notices and potential fines. Many major retailers have already made francization efforts: notably KFC to PFK (“Poulet frit Kentucky”) and Starbucks, who added “Cafe” before their brand name. The OQLF is looking for the other big retailers to follow suit, adding a French descriptive such as les magasins (“stores”) to their signs. Louise Marchand, former head of the OQLF, made the bold statement, “Displaying the name of the company in French is a show of respect for the law.”[2]

Earlier today the United States Supreme Court issued a decision that fundamentally changed the law of patent eligibility that has existed in the United States for the past 30 years, calling into question at least many tens of thousands of issued patents and many tens of thousands of pending patent applications. See Supremes Rule Isolated DNA and some cDNA Patent Ineligible.

With lightening speed, the United States Patent and Trademark Office has sent a memorandum to patent examiners relating to the aforementioned Supreme Court decision in Association for Molecular Pathology v. Myriad Genetics, Inc. The 1-page memorandum from Drew Hirshfeld, who is Deputy Commissioner for Patent Examination Policy, is direct. “Examiners should now reject…”

UPDATED June 13, 8:24pm ET (see comment #15 & #19)

Earlier this morning the United States Supreme Court issued its much anticipated ruling in Association of Molecular Pathology v. Myriad Genetics. Justice Thomas wrote for a a nearly unanimous Court, only Justice Scalia wrote separately and he concurred in part and concurred in the judgment. The decision is not long, and approximately half of the decision is background, yet at the end of the day much damage has been done to the biotechnology industry, the medical industry and the patent system. Indeed, the assault on patents continues.

According to Todd Dickinson, Executive Director of the American Intellectual Property Law Association, the outcome was fairly predictable given the oral argument, although 9-0 was a bit surprising. Dickinson told me via telephone earlier today the the decision itself is disappointing because it “keeps framing an anti-patent narrative.” He went on: “Patents are terribly useful to incent innovation and necessary to provide funding. If we undermine the patent system further I think we will be shooting ourselves in the foot.” I couldn’t agree more!