Design patents have been making the news.  Last summer, Apple’s $1.05 billion verdict against Samsung was famously based, in part, on the finding that Samsung infringed Apple’s rounded-rectangle and edge-to-edge glass designs.  Since then, Yamaha, Thule, Oakley, Nike and Spanx, to name just a few, have litigated in the U.S. over the design of headphones, ski racks, sunglasses, footwear and women’s undergarments.  And just last month, former head of the USPTO, David Kappos, published an OpEd piece describing design as “the new frontier of intellectual property.”

Nothing has fundamentally changed about the nature of design patents.  The first US design patent was granted in 1842.  The Statue of Liberty, Coke bottle, Volkswagen Beatle, Stealth Bomber and Star Wars’ Yoda are all protected by design patents.  Design patents have long played an important role in consumer electronics, automotive, apparel, jewelry, packaging and other industries.

But industrial design is becoming increasingly important, Mr. Kappos explains, because the increasing functionality of man-made devices brings with it increasing complexity, so innovative companies are constantly seeking superior designs, a convergence of form and function that helps make the complex simple and sets their companies apart; and protecting such designs is critical.

On March 28, Apple Inc. appeared in court in Shanghai to defend charges that Siri, its voice-recognition, personal-assistant software, allegedly infringes a Chinese patent. The plaintiff and owner of the patent, Zhizhen Internet Technology Co., claims its version of the software has over 100 million users in China and is requesting the court to ban all manufacturing or sales of Apple’s product in China.

This was not the first time Apple faced patent infringement claims in China.  Last summer a Taiwanese man sued the company in China for alleged infringement relating to its Facetime technology; in 2010 a Shenzhen company threatened to sue concerning iPad design; in 2008 Apple was sued for the iPod; and in 2012, a Hong Kong company launched GooPhone I5, an android-based replica of the iPhone 5, reportedly based on leaked photos of the iPhone.  GooPhone claimed to have patented the design and threatened to sue Apple if it dared to sell the genuine article in China.

Nor is Apple alone.  French company, Schneider Electric lost a $48 million patent infringement verdict in China and Samsung lost one for $7.4 million.  Sony, Phillips, Canon and Dell have all had their battles and GooPhone sells knockoffs of other smartphones in China with apparent impunity.  Of course it’s possible in some cases the Chinese technology may be first and the Chinese patent legitimate.  However, foreign companies face a growing risk that Chinese entities may unscrupulously patent foreign technology in China and demand a toll to do business there.  Not only that, but in coming years companies will increasingly face challenges worldwide from the growing landslide of patents coming out of China.

Not long after it was reported that a Chinese military unit might be responsible for a number of cyber attacks that have taken place on US infrastructure and businesses, the Obama Administration unveiled its strategy to put an end to the theft of US trade secrets by foreign governments and foreign competitors.  More specifically, US Intellectual Property Enforcement Coordinator, Victoria Espinel, who spoke during a recent White House meeting, said that “the Administration will continue to act vigorously to combat the theft of American trade secrets that could be used by foreign companies or foreign governments to gain an unfair commercial advantage over U.S. companies.”

A Five-Step Approach

There were five action items discussed in the strategy document.  The first one suggests that more focus should be placed on diplomatic efforts to protect overseas trade secrets.  The second item calls for private industry to promote voluntary best practices in order to protect trade secrets.  The third action item suggests that domestic law enforcement operations should be enhanced.  The fourth item calls for the improvement of domestic legislation.  And the final action item seeks to provide more public awareness, as well as stakeholder outreach.

This Thursday was a relatively quiet day for Apple published patent applications, as the U.S. Patent & Trademark Office only released 16 of the documents, which is a fair amount less than usual. Many of the applications listed here focus on improvements to media processing and storage, an area of computer systems which has long been a focus for Apple. Other patent applications include improvements to Mandarin Chinese language translations and methods of grading display screens for light leakage.

Method for Disambiguating Multiple Readings in Language Conversion
U.S. Patent Application No. 20130041647

Language conversion software has been available for years and is widely accessible through the Internet. Current models of language conversion between any two written languages relies on statistical models of probability that help the software identify probable word combinations based on language used in the corpus, or a large body of texts used as a basis for proper language use in one language.

In December 2012, the Information Technology and Innovation Foundation (ITIF) issued a report titled Why America Needs A National Network for Manufacturing Innovation. The report asserts, among many other things, that “[t]he federal government must play a catalytic role in bringing NNMI into existence.”

My own view of government precludes me from sharing the ultimate goal of a government should initiate a National Network for Manufacturing Innovation (NNMI). I tend toward the Jeffersonian view of government — that government which governs least governs best. I am also a big believer in the power of incentives. In all walks of life what is obtained is what is incentivized. If employees know how they will be evaluated, for example, even a mediocre employee can achieve high marks by performing tot the evaluation. Tax policy is another excellent example, as is the patent system.

For better or for worse, the United States has not incentivized manufacturing. In fact, the incentives associated with manufacturing are to off-shore manufacturing rather than do it in the United States. There are too many bureaucratic hurdles to opening a business in the U.S., particularly a manufacturing facility. Anyone who doubts this needs to read Great Again: Revitalizing America’s Entrepreneurial Leadership.

Crocs, Inc. (NASDAQ: CROX) announced earlier today that Chinese courts have sentenced 18 individuals to a total of more than 46 years in prison for producing and selling counterfeit Crocs goods. Seventeen individuals were convicted of counterfeiting, and two of the 17 also were convicted of offering bribes. Another individual also was convicted on bribery charges in connection with production of counterfeit Crocs™ shoes. In addition to prison sentences, the above men together face fines totaling RMB 2,832,500 (approximately $450,896).

These cases were originally tried by the Shanghai Yangpu District Court and the Dongguan City No. 1 District Court. Decisions were made between March 13 and September 27, 2012.  Some 128,752 pairs counterfeit Crocs products valued at roughly RMB 60,000,000 (approximately $9,550,690) been seized as a part of these recent investigations.

Throughout China, however, the amount of counterfeit trading involve Crocs is much greater. Through September 2012, more than 600,000 pairs of counterfeit Crocs shoes have been confiscated through factory raids and customs seizures, mainly in Guangdong, Shanghai and Fujiang Province. Typically the number of products confiscated is only the tip of the iceberg.  Counterfeiting is a terrible problem for companies who must constantly remain vigilant.

The diplomatic conference to finalize a new treaty for audiovisual performers was successfully concluded on June 26, 2012 as negotiators from WIPO’s member states signed the Beijing Treaty on Audiovisual Performances– so-named in recognition of the city that hosted the final round of negotiations. The new treaty brings audiovisual performers into the fold of the international copyright framework in a comprehensive way, for the first time.

Welcoming the excellent atmosphere that characterized the talks, WIPO Director General Francis Gurry thanked the Government of China and the Municipality of Beijing for the outstanding organization of the Diplomatic Conference on the Protection of Audiovisual Performances which met from June 20 to 26, 2012. He expressed gratitude particularly to the National Copyright Administration of China (NCAC) and the Municipality of Beijing for taking the lead in staging the Diplomatic Conference and for their generosity.

China State Counselor Liu Yandong and Beijing Deputy Mayor Lu Wei joined WIPO Director General Francis Gurry and over 700 delegates at today’s opening of the Diplomatic Conference on the Protection of Audiovisual Performances here to conclude negotiations on a treaty that will shore up the rights of performers in their audiovisual performances.

Speaking to the opening ceremony, Chinese State Counselor Liu Yandong underlined the importance of innovation in driving economic, social and cultural development. Mrs. Liu said China has made great strides in the area of IP and underlined that her country is committed to IP protection. “The Chinese Government has a very clear attitude and strong position on the protection of IP,” she said. “Last year, China took new steps for and is determined to step up its implementation measures to protect IP. We wish to establish a sound and effective IP strategy and system with a view to unleashing the dynamism of science and technology.’’

Geneva, June 15, 2012 — The stage is set for a new international treaty that would extend the protection for audiovisual performers, granting them both economic and moral rights similar to those already recognized for music performers. Over 500 negotiators from WIPO’s 185 member states, as well as actors, industry and other stakeholder organizations will meet in Beijing from June 20 to 26, 2012 to finalize discussions on an international treaty to update the intellectual property rights of audiovisual performers, such as film and TV actors and actresses. The meeting will be opened on June 20, 2012 at the China World Hotel by WIPO Director General Francis Gurry and high ranking Chinese State and Beijing Municipality officials.

The Diplomatic Conference on the Protection of Audiovisual Performances, convened by WIPO and hosted by the Government of the People’s Republic of China, is the culmination of over twelve years of negotiations. It is expected to result in a treaty that will strengthen the economic rights of many struggling film actors and other performers and could provide extra income from their work. It will potentially enable performers to share proceeds with producers for revenues generated internationally by audiovisual productions. It will also grant performers moral rights to prevent lack of attribution or distortion of their performances.

Approximately three weeks ago inovia, the leading foreign filing platform provider, announced the release of its annual report, “The 2012 U.S. Global Patent & IP Trends Indicator.”  The report shows that the mood for 2011 was cautiously optimistic compared to previous years, with fewer organizations experiencing budget reductions and a greater percentage of IP tasks going in-house or being outsourced in order to reduce costs and retain control. This year saw less than half of those surveyed working on a reduced IP budget going into 2012, compared to nearly two-thirds of respondents in last year’s survey. However, the bulk of respondents don’t expect to increase the number of patent families filed in 2012, indicating the persistence of a “do-more-with-less” attitude as the economy slowly recovers.

Throughout the month of January, inovia surveyed 150 companies and universities both quantitatively through an online survey and qualitatively with follow-up interviews among a select cross section of respondents. Organizations spanned industries and ranged from small enterprises filing a single patent family to multinational organizations filing more than 100 patent families in 2011. All survey participants are involved in the IP strategy and patent filing activity of their organization, with job functions ranging from patent manager, to general counsel and up to executive leadership positions.

Several weeks ago, on December 11, 2011, U.S. Commerce Secretary John Bryson set out his vision for how the Department of Commerce can best partner with the business community to support President Obama’s jobs agenda.  If the past is any indication of the future, President Obama and it senior team will do whatever they can leading into the new year to jump start the economy and get Americans back to work.

At his speech at the U.S. Chamber of Commerce, Commerce Secretary Bryson outlined his top three priorities to help American businesses “build it here and sell it everywhere,” focusing on supporting advanced manufacturing, increasing our exports, and attracting more investment to America from all over the world.  The key to emerging from the Great Recession is, of course, manufacturing.  Manufacturing jobs have left the U.S. in favor of more business friendly climates in other countries, taking with them U.S. jobs and U.S. intellectual property.  But moving into a Presidential election year will government be able to do anything that is at all likely to help?

Earlier today the United States Patent and Trademark Office announced what they are referring to as “landmark Patent Prosecution Highway Pilots” with China’s State Intellectual Property Office (SIPO).  David Kappos, Under Secretary of Commerce for Intellectual Property and the Director of the USPTO and SIPO Commissioner Tian Lipu announced the start of Paris Route and PCT Patent Prosecution Highway (PPH) pilot programs beginning on December 1, 2011.  Meanwhile, the USPTO, in a separate press release, also announced the launching of a new pilot project for the Patent Prosecution Highway (PPH) with the Icelandic Patent Office (IPO).

As with other PPH pilot programs, these new SIPO and IPO agreements will permit each office to benefit from work previously done by the other office.  The work-sharing benefits of the Patent Prosecution Highway are what every Patent Office around the world is after given the global demand for patents only continues to rise.  Work-sharing arrangements of one kind or another are virtually required given the reality that patents are more valuable than ever, more desirable than ever and due to legal requirements and litigation applications need to be far more detailed than even just 10 years ago.  Indeed, there is really no comparison to the level of disclose found in patent applications today compared with detail found in patent applications a generation ago.

It is on the minds of everyone in the business world, regardless of the subject matter of the business or technology involved. How exactly do you do business in China while maintaining a firm grasp on the intellectual property rights associated with your most valuable innovations? With over 1.3 billion people in China the market is quite attractive to many — if not all — businesses. At the same time it makes no sense to turn over the keys to your kingdom in order to only have a variety of Chinese companies competing with you domestically in China, as well as around the globe.

1.3 billion people simply cannot be ignored, that much is certainly true. In my experience, however, when potentially ridiculous sums of money are at issue people, including otherwise shrewd business executives, suddenly seem to lose double digit points off their IQ.  Believing that you can successfully navigate the potentially treacherous waters of doing business with China without careful planning and competent, experienced counsel is simply naive.

As the second largest economy in the world, China is emerging to the center of the world’s economic stage. This emergence has been accompanied by constant changes in its legal and economic sectors. The intellectual property sector also has witnessed numerous recent changes. There have been significant new advances in China’s national innovation policies. New trends in Chinese patent filings have emerged. A growing number of Chinese companies are creating their own IP and increasingly filing infringement suits against foreign companies and their local competitors in China. China’s third patent law amendment has materially changed patent practice and procedures in that country.

These changes and trends will have profound impacts on foreign companies doing business in China, especially in intellectual property areas. What are the best ways to deal with these important changes? The following several considerations should be evaluated in determining a company’s patent strategies in China.  I will also discuss these and other considerations in my upcoming Practising Law Institute presentation IP in China: Strategies for Doing Business While Maximizing and Protecting Your IP, which will take place on Wednesday, November 16, 2011 from 1pm to 2pm ET.

A few weeks ago, I took an afternoon Internet off-the-main-road cruise with the hope that a few unplanned detours would cure my midday highway hypnosis. The following item at Bloomberg.com caught my eye: Land Rover, NFL, Citadel: Intellectual Property.

Seeing those organizations lumped together piqued my interest: What could each have happening in the Intellectual Property domain that was significant enough to be blurb worthy?

Silly me. While the NFL and Citadel items were ho-hum (a clothing company nailed for selling unauthorized Steeler’s merchandise; Citadel Broadcasting using a copyrighted photo on its webpage), some of the other items made me feel sorry for people in the olden days (like me), who once had just had soap operas and gossip rags for entertainment.