With the advent of new digital items and applications that did not exist even five years ago, it is not surprising that the FTC and DOJ are eyeing the handful of large companies that dominate the marketplace for them with a watchful eye (anybody else picturing Sauron right now?) It is even less surprising that Apple, Inc. has been pinched by the Justice Department with claims that it violated the Sherman Act with its anticompetitive behavior. This is not to say that Apple actually did anything illegal – but something about having more cash than your government makes such a suit inevitable. (Ask Google how its $500 million settlement for online advertising felt.) This leads us to today’s topic: the DOJ’s antitrust suit against Apple and six other book publishers alleging e-book price-fixing.
As mentioned in previous Antitrust articles, American Antitrust law is a sprawling and complex body of law. Naturally, then, any article addressing an antitrust issue must stick to a very narrowly defined set of issues. For this article’s purposes, it will suffice to simply define price fixing and examine why the government frowns on it. To begin with a bit of background, American antitrust law (more appropriately called “competition law”) starts with the Sherman Act of 1890, which prohibits agreements or practices that restrict free trading and competition between businesses.
In a rare social media court case, Yahoo recently sued Facebook for 10 patent infringements. Less than two months after Facebook filed to become publicly traded, Yahoo now claims that many of the features that have allowed Facebook to accrue 850 million users, such as the News Feed, infringe on proprietary Yahoo technology. It is unclear how much money Yahoo is seeking in the lawsuit, but one thing is for certain: if this case moves forward it could be one of the biggest spectacles in the history of patent andintellectual property law. Let’s look at the salient features of the case:
The meat of the litigation revolves around patents. For decades patents have been a significant part of intellectual property law, but in recent years they have proven problematic in the development of new software and the technological innovations. Patents will now be at the heart of a cold war between two of the biggest tech companies in the world. Yahoo, which owns about 1,000 patents, is suing Facebook over 10 patent infringements ranging from Internet advertising methods and privacy controls. One of the patents is described as “optimum placement of advertisements on a webpage.” Yahoo had warned Facebook that they would sue if the social network did not agree to license the patents in question, saying that multiple other major companies had complied. Yahoo was true to their word, and called Facebook’s bluff.
Trying to divine what Mayo Collaborative Services v. Prometheus Laboratories, Inc. means for the future in judging the patent-eligibility of claimed methods and processes under 35 U.S.C. § 101 is like using a Ouija board. See The Way Forward from Mayo Collaborative Services is through the Classen Immunotherapies Remand. The first inkling came 10 days after Mayo Collaborative Services in a motion for partial summary judgment in SmartGene, Inc. v. Advanced Biological Laboratories, SA, a case from the District Court of Columbia. When I first read this case, my initial reaction was “oh no, here comes the collateral damage we feared would come from Mayo Collaborative Services.” But having reflected on this case some more, and especially the claims involved, I think Judge Howell’s ultimate conclusion of patent-ineligibility of the claimed process and system under 35 U.S.C. § 101 is defendable. Even so, the reasoning expressed in Judge Howell’s opinion for reaching that conclusion gives pause for concern about the impact of Mayo Collaborative Services on rendering consistent and objective determinations of patent-eligibility under 35 U.S.C. § 101.
SmartGene was filed as a declaratory judgment action by SmartGene, seeking invalidity, unenforceability, and non-infringement of Advanced Biological Laboratories (ABL’s) U.S. Pat. No. 6,081,786 (the “’786 patent”) and U.S. Pat. No. 6,188,988 (the “’988 patent”). After prolonged litigation (including a stay of proceedings of two and a half years), SmartGene filed a motion for partial summary judgment, asserting that the ‘786 and ‘988 patents were invalid under 35 U.S.C. § 101. Both of these patents related to a system, method, and computer program for guiding the selection of therapeutic treatment regimens for complex disorders by ranking available treatment regimens and providing advisory information.
Just over three weeks ago the United States Supreme Court issued a decision in Mayo Collaborative Services v. Prometheus Laboratories, which sent much of the patent world into a whirlwind. In that decision the Supreme Court unanimously found that the claims at issue did not exhibit patent eligible subject matter because the additional steps that were added to the underlying law of nature were well known in the industry. A curious ruling for many reasons, and one that will have to be digested over many years as the United States Patent and Trademark Office and the Federal Circuit struggle to figure out how Diamond v. Diehr remains good law (it was not overruled) and remains consistent with a ruling that seems completely inapposite.
To continue to provide a variety of perspectives on this landmark ruling what follows is the reactions of those in the industry. Without further ado…
A dissection of most any patent claim will reveal, at some level, a law or a product of nature. The holding in Prometheus does not hinge on whether a naked “law of nature,” e.g., gravity, is patent-eligible–clearly it is not. Rather, the question we will be grappling with in the coming years is: what additional elements must be included in the claim to render the claim sufficiently “unconventional” or “inventive” so as to confer patent-eligibility? The claims in Prometheus, included steps in addition to the “law of nature” that were determined by the Federal Circuit to be transformative. The Supreme Court, however, concluded that the steps were insufficiently “unconventional” to confer patent eligibility. In contrast, the Court distinguished a patent-eligible “law of nature” claim in the landmark 1981 Supreme Court case Diamond v. Diehr as “add[ing] to the [law of nature] something that in terms of the patent law’s objectives had significance–they transformed the process into an inventive application of the formula.” (Prometheus. at p. 12).
Commerce Secretary John Bryson announces the release of the USPTO/ESA study on Intellectual Property and jobs at the White House.
Today I attended the an event on Intellectual Property and the US Economy which was held in the Eisenhower Executive Office Building on the White House grounds. The purpose of the event was to unveil a study — Intellectual Property and the U.S. Economy: Industries in Focus— prepared by the Economics and Statistics Administration and the United States Patent and Trademark Office. The study found that intellectual property intensive industries support at least 40 million jobs in the United States and contribute more than $5 trillion dollars to U.S. gross domestic product (GDP). That is to say that 27.7% of all jobs in the U.S. were either directly or indirectly attributable to IP-intensive industries, and the amount contributed to the U.S. economy represents a staggering 34.8% of GDP.
“This first of its kind report shows that IP- intensive industries have a direct and significant impact on our nation’s economy and the creation of American jobs,” said Commerce Secretary John Bryson. “When Americans know that their ideas will be protected, they have greater incentive to pursue advances and technologies that help keep us competitive, and our businesses have the confidence they need to hire more workers. That is why this Administration’s efforts to protect intellectual property, and modernize the patent and trademark system are so crucial to a 21st century economy that is built to last.”
For over ten years I have been writing articles and commentaries in hopes of educating independent inventors and small businesses on patent and intellectual property issues. For those who are new to the innovation business it can be an extremely daunting task to come up to speed on the topic, particularly given the diverse, sometimes counter-intuitive, issues and obstacles that need to be successfully navigated. I have long wanted to write a book for inventors myself, but now there is no need for that endeavor. Simply stated, if I were to write a book on the topic it would have been this book — Making Millions with Your Simple Idea or Invention. Time and time again as I read this book I found myself nodding my head in complete agreement. For new inventors who seriously want to succeed this book should be required reading.
As the US economy continues to trend toward an innovation and technology based economy intellectual property rights, and patent rights in particular, have continued to become more and more important. To paraphrase Bruce Springsteen — the manufacturing jobs are gone and they are not coming back, as many Americans well know. Prosperity is tied to innovation, and a prerequisite to successfully innovating and making money from innovation is to understand the process, which is capably and thoroughly set forth by Janessa Castle.
HAPPY INTERNATIONAL BE KIND TO LAWYERS DAY! (Previously known as National Be Kind To Lawyer’s Day!!) Have you not heard of it? Have you not read my article on this Special Celebration from years past? If your answer to these questions is NO, then you, my friend, are missing out (especially if you are a lawyer)!
So, what is this International Be Kind To Lawyers Day? I am so glad you asked! Steve Hughes, a non-lawyer from St. Louis, has been working with attorneys for many years now through his consulting firm Hit Your Stride, LLC. Whenever Steve merely mentions that he works with lawyers, he is more often than not met with snide comments, jokes and scowls. He hears things like, “Lawyers? I bet that’s a treat.” Or, “Lawyers? You poor thing.” So he asked himself, “Is it too much to ask to be nice to lawyers for just one day?” And in answer to his question, not to mention as a result of his playing defense counsel for an entire profession, the idea for National Be Kind To Lawyers Day was born.
How to Write a Patent Application is a must own for patent attorneys, patent agents and law students alike. A crucial hands-on resource that walks you through every aspect of preparing and filing a patent application, from working with an inventor to patent searches, preparing the patent application, drafting claims and more.
Without hesitation I recommend One Simple Idea and think it should be required reading for any motivated inventor. There is so much to like about the book and so much that I think author Stephen Key nails dead on accurate. The book is educational, information and inspirational. For the $14 cover price it is essential reading.
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