The Supreme Court’s Alice decision has introduced a dimension of uncertainty associated with the validity of many of the software patents held by operating companies today. There seems to be a consensus among some of the leading academic and judiciary experts supporting that conclusion, as seen in recent comments made by Stanford Law School’s Prof. Mark Lemley, as well as in recent comments by former Federal Circuit Chief Judge Michel. From a valuation and financial reporting perspective, there needs to be a serious examination of the post-Alice landscape implications on the value of patents as corporate assets. The results of such examination may lead to further action – which could range anywhere from additional disclosure requirements by regulators, all the way to actual corporate asset write-offs. This article highlights some of the key issues that need to be addressed by companies and regulators.
Celebrating 15 Years of IPWatchdog.com
On October 10, 1999, IPWatchdog.com first went live on the Internet. It has been an honor and privilege to get to know so many wonderful people in our industry over the last 15 years, to talk to many industry leaders on the record, and to in some small way continue to push the debate forward. Thanks to our readers and contributors we have been recognized as as one of the top 100 legal blogs by the American Bar Association for 5 years in a row. For 3 of the last 4 years (2010, 2012, 2013) we were recognized as the top intellectual property law blog according to the ABA. In January 2014 we were also honored to be inducted into the ABA Blawg Hall of Fame. CLICK HERE to read more.
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Over the past several months we have had a number of articles that have gotten quite a bit of attention on various social media outlets. If you haven’t read these articles yet take a look, they seem to be driving an interesting debate.
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WASHINGTON – The U.S. Department of Commerce’s United States Patent and Trademark Office (USPTO) and the Korean Intellectual Property Office (KIPO) today announced a major expansion of cooperation in classification activities between the USPTO and KIPO. The agreement, signed by the heads of the two offices during a bilateral meeting in Geneva, Switzerland, is designed to improve the patent granting process through streamlined access to patent documentation. Through this cooperation, KIPO will greatly expand the number of documents included in the Cooperative Patent Classification (CPC) system by fully classifying its patent applications and utility models.
“Today’s historic announcement further illustrates the usefulness of the Cooperative Patent Classification system and demonstrates the excellent bilateral relationship and spirit of cooperation between the USPTO and KIPO,” said Deputy Under Secretary of Commerce for Intellectual Property and Deputy Director of the USPTO Michelle K. Lee. “We hope other offices, particularly IP5 offices, will follow KIPO’s lead in increasing global intellectual property protection for innovators around the world.”
Yesterday the Partnership for American Innovation (PAI), which is comprised of Apple, DuPont, Ford, GE, IBM, Microsoft and Pfizer, submitted comments responsive to a request for public information published in the Federal Register back on July 29, 2014, titled Strategy for American Innovation. Some may recall that in February 2011, President Obama released a Strategy for American Innovation, which described the importance of innovation as a driver of U.S. economic growth and prosperity, and the critical role the government plays in supporting the innovation ecosystem. The Office of Science Technology Policy and the National Economic Council are now tasked with updating the document to create a revised Strategy for American Innovation.
One can hope that this group of venerable American innovators will be able to get through to decision makers who will be responsible for charting the new innovation and intellectual property strategy. Notably missing from the PAI, however, is Google, who will certainly have different views.
Google is known to be one of the primary advocates of watering down, if not outright destroying, the U.S. patent system. This is interesting because Google is a top 10 patenting company according to data from the United States Patent and Trademark Office for 2013. They have also spend tens of billions of dollars acquiring patent portfolios that now due to their lobbying efforts are practically worthless. Regardless of Google’s schizophrenic approach to patents, the arm of Google that seems to loathe patents and the U.S. patent system has particular influence in Washington, DC. Both current and former Google executives are known to have the ear of the White House, which is largely to blame for the substantial anti-patent sentiment flowing from the White House. Unfortunately, all of this suggests that whatever the new strategy for innovation will be it will be one that incorporates significant anti-patent positions support by Google.
The Broken Patent-Eligibility Test of Alice and Mayo: Why We Urgently Need to Return to Principles of Diehr and Chakrabarty*Posted: Thursday, Sep 25, 2014 @ 8:00 am | Written by Eric Guttag | 21 comments
Briefly, the two-part Alice test says: (1) “determine whether the claims at issue are directed to one of those patent-ineligible concepts”; and (2) “search for the ‘inventive concept’ —i.e., “an element or combination of elements that is “sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.” In every court case I’ve read so far, all of those lower court rulings have dogmatically (and restrictively) applied this two-part Alice test to rule the patent claims on systems and/or methods (all involving so-called “business methods”) to be patent-ineligible under 35 U.S.C. § 101. In fact, I’ve only seen one reported PTAB decision (U.S. Bancorp. v. Solutran, Inc.) where patent claims on systems and/or methods involving these so-called “business methods” passed muster under this two-part Alice test.
While much attention has been focused on ICANN’s new gTLD program and the transfer of IANA function to ICANN, a new domain structure positioned outside ICANN’s purview is being developed with the possibility to significantly impact brands and businesses.
The ‘.bit’ domain, a new decentralized domain structure, has secured a small but loyal following, and could one day change the way brands operate online. .bit registrations are not associated with a name, address, or phone number, but are linked to a cryptographic identity, preserving anonymity. Unlike customary domains – such as ‘.com’ – ‘.bit’ cannot be accessed from traditional web browsers or registered using traditional currency. Instead, individuals attempting to gain access to these domains must first download specialized software that allows access to the sites using Windows browsers, and pay for the registration with a crypto currency called Namecoin.
EDITORIAL NOTE: On September 30, 2014, Steve Moore will participate in a webcast with Omar Jabri, Senior Patent Counsel, Global Intellectual Property, at Apotex, and Owen Byrd, General Counsel of Lex Machina, on the new ANDA-specific capabilities of Lex Machina’s Legal Analytics platform. You can CLICK HERE to register for the webcast.
Lex Machina (emphasize the “Mach” followed by “ina”) is a legal technology platform that emerged from a collaboration between experts at Stanford’s Computer Science Department and Law School. Every day, Lex Machina captures data from PACER, the ITC’s EDIS system and the USPTO website. This data is cleansed, coded and tagged, using a proprietary natural language processing and machine learning engine, to provide information about districts, judges, attorneys, law firms and parties, as well as asserted patents. It also sets out in an easy format the outcomes of each case. The tool allows one to search briefs, motions, orders, and every other type of filing made in a litigation by judge, court, attorney etc. As an early adopter, I have seen this product move from a useful information source that provided me information that supplemented standard research tools, to a tool that I now find indispensible to my practice.
I started in patent litigation 25 years ago. At that time, the best analytics available to any patent litigator was to walk up and down the hallway seeking out attorneys who may have had a case before a particular judge or against an opposing party or counsel. Much of the information we relayed to our clients was often little more than conjecture, based on the feelings of the person whom we communicated with, and the necessary supposition we had to make that a judge today would react as he or she had 10 years earlier. Likewise, we often relayed information to our clients about opposing counsel based on the premise that the particular attorney we were facing would act more in line with reputation of their firms, then as they may actually act as an individual attorney. Out of necessity, we often made the leap that a judge viewed all patent cases as the same, and that they resolved a motion in an electrical case in a similar manner as they resolved the same in an ANDA litigation.
EDITOR’S NOTE: This article is an excerpt from Rules of Patent Drafting: Guidance from Federal Circuit Cases, 2014 Edition, which is now available at Amazon.com. This is the sixth installment of this series. To read other installments please see Joseph Root on Patent Claim Drafting.
Broad patent coverage results from broad claims, supported by a broad specification. Neither of these factors springs from the invocation of any magic formula. Rather, breadth results from hard, careful work. This section sets out a group of signposts that a drafter can employ to gauge whether she is writing, or has written, a broad patent document.
“Broad” in this context means “broadest supportable” coverage, limited only by the technology in terms of supportability and by the prior art in terms of outer reach. A failure to achieve such breadth is generally attributable to overclaiming, where one runs afoul of the prior art; underclaiming, where the drafter stop short of claiming all he could; or faulty claiming, where the drafter attempts to achieve breadth, but support issues or drafting errors restrict claim scope. Sound principles, instilled by effective training, cannot substitute for adequate knowledge of the prior art. They can provide the knowledge and thus the confidence to claim out to the limits defined by that art.
Mariano Rivera knows something about perfection. The New York Yankees now-retired pitcher is regarded by many experts as the greatest closer in the history of major league baseball. For those who are not aficionados of America’s Pastime, the closer comes in after the game has largely been played, and his sole job is to get the last several opposing batters out. For seventeen seasons, Mariano Rivera (a.k.a. “the Sandman”) dominated at his position and was virtually unhittable.
The USPTO Director also knows something about perfection, albeit in a far different context than baseball. For six years, the USPTO Director has dominated opposing patent practitioners, who have gone hitless against the Office in cases involving reciprocal ethical discipline.
“Reciprocal discipline” is a process for disciplining an attorney in a second jurisdiction after the attorney has been ethically disciplined by another jurisdiction. A patent or trademark attorney who is publicly disciplined in another jurisdiction is subject to reciprocal discipline by the USPTO, even if the attorney’s conduct has nothing to do with their practice before the Office. And while it is theoretically possible for a patent or trademark practitioner to avoid reciprocal discipline in the USPTO, in reality they would have a better chance of hitting a Rivera cut fastball blindfolded with one arm tied. To date, the USPTO’s record in Section 11.24 cases is a perfect 77-0, and counting. Practitioners, meet the “Sandman.”
EDITOR’S NOTE: Gene Quinn will host a free webinar discussion about the PTAB past, present and future with Scott McKeown on Tuesday, September 23, 2014 at 11:00 am Eastern. You can register by CLICKING HERE.
At the end of July, the Patent Trial and Appeal Board (PTAB) hosted a press conference to discuss ongoing progress with patent trials which have been or are being conducted under the terms of the America Invents Act (AIA). Scott Boalick, Acting Vice Chief Judge of the PTAB and head of the PTAB’s Trial Section, answered questions from the audience on various aspects of the AIA trials, as well as offer questions for public comments being sought by the U.S. Patent and Trademark Office in its attempts to determine how and if the AIA patent proceedings can be improved.
The online webinar was not the first time that the PTAB and USPTO have worked to gain feedback from various stakeholders on the progress of AIA trials. Earlier in spring and early summer of this year, representatives of the PTAB attended eight roundtable discussions in cities across the United States. Although one goal of these meetings was to educate the public about AIA trial proceedings, the PTAB was also interested in collecting feedback from those involved in trial proceedings. Of great importance to the board is methods of making these trial proceedings more effective at challenging patent validity than filing cases in district courts; encouraging the use of these type of legal proceedings is a major goal of the law.
Under the America Invents Act, it is possible to challenge the validity of a patent after its issuance. Some have argued in the past that allowing for third-party input in this way could improve patent quality, even after a patent is issued. However, with litigation involving patent validity as such a major issue in recent weeks, it’s understandable why the PTAB would reach out to stakeholders and see if the rules were serving them well.
EDITOR’S NOTE: I will host a free webinar discussion about the PTAB past, present and future with Scott McKeown on Tuesday, September 23, 2014 at 11:00 am Eastern. You can register by CLICKING HERE.
The American Invents Act (AIA) created three new ways to challenge the validity of claims in already issued patents. While the AIA was signed into law on September 16, 2011, the new post grant proceedings did not become effective until one year after the signing, on September 16, 2012. These three new post grant proceedings are post-grant review, inter partes review and covered business method review, which is a variety of post-grant review that is limited to business methods relating to the financial industry. Because post-grant review was specifically limited in applicability to patents that were examined under the new first to file law, only patents that have an effective filing date on or after March 16, 2013, are capable of being reviewed in a post-grant review proceeding. Therefore, so far the USPTO has only seen inter partes review and covered business method cases.
On August, 14, 2012, the United States Patent and Trademark Office promulgated final rules applicable to these new proceedings, and at that time the USPTO said that they anticipated that 420 petitions for inter partes review would be filed in fiscal year 2013. The USPTO also said they anticipated that in fiscal year 2014 there would be 450 petitions for inter partes review filed. See 77 FR 157 (August 14, 2012) 48713. The Patent Office severely under estimated the popularity of post grant proceedings, particularly inter partes review.