One of the real problems with the debate over patent litigation abuse is that it hasn’t focused on litigation abuse at all. Instead, the debate has focused on attempts to characterize patent owners with pejorative labels, such as calling anyone who has the audacity to seek to enforce their rights a “patent troll.” Unfortunately, the term “patent troll” has evolved to mean “anyone who sues me alleging patent infringement.” This has lead the media, the public and Members of Congress to incorrectly believe that there is a “patent troll problem,” which has influenced decision-makers all the way from Capitol Hill to the United States Supreme Court, who increasingly seems to be deciding patent cases with one eye firmly on what is a completely non-existent problem.
You have probably heard the narrative start something like this: there is an explosion of patent litigation. The objective reality, however, is that there has not been an explosion of patent litigation. The Government Accountability Office, after an exhaustive review of patent litigation, concluded that there was no patent litigation crisis. The same GAO report also found that 80% of the patent lawsuits filed are brought by operating companies suing other operating companies. Thus, those who profess there to be rampant problems associated with patent trolls and non-practicing entities suing for patent infringement are simply telling a tale that the factual data doesn’t support.
More recently Lex Machina has come forward with some eye opening statistics as well. A recent report from Lex Machina concludes: “Plaintiffs filed 329 new federal patent cases in September 2014, a 40% decrease from the 549 cases filed in September 2013.” Indeed, if you dive deeper into the 2013 and 2014 statistics you see that through the first nine months of 2013 there were 4,548 patent infringement lawsuits filed, but during the first nine months of 2014 there were only 3,887 patent infringement lawsuits filed, which represents a 15% reduction in patent litigation in 2014 compared with 2013. Furthermore, in 7 of the 9 months during 2014 there have been fewer patent infringement lawsuits filed during 2014 than during 2013. The statistics and independent GAO report just do not support a narrative that proclaims there to be a run away problem with patent litigation run amok.
A famous song entitled When You Believe by Mariah Carey and Whitney Houston is about believing in yourself and not losing hope. When you are working on a new idea and blazing a new trail, your self-belief and your passion drive you forward, and inspire you and others around you.
Passion is required, but passion alone is not enough. True passion will make you get up early in the morning, stay up late at night, or work for free. However, in addition to pursuing the ideas that you are passionate about, it’s equally important to take steps to protect your ideas. In a recent post, Doesn’t #NFC Stand for National Football Conference?, I wrote about our early entry into mobile payments. In that article I shared that, “In addition to taking action, risks and being customer focused, we also invested heavily in IP.”
Investing in IP is especially valuable when you are early in a market. It’s a mixed blessing though. On the one hand, it gives one an opportunity to file patents with broad claims, which is great for those who recognize the value in that strategy. For example, one of our early investors and board members was Chuck Russell who was one of the first CEO’s of Visa and reminded me of John Wayne. He was a great guy – very smart, charismatic, and honest. When I gave him a presentation on my company, which included one slide on the patents that we had filed, he asked, “Young lady have you ever heard of VHS and BETA?” I replied of course. He then went on to tell me that while VHS won the video tape war, because BETA had a patent on the technology, they were able to close their office and set up a PO box to collect monthly royalty checks. Chuck explained that I could do the same if I wanted. Based on the fact that I had filed patens in mobile payments, he made a significant investment in my company and joined our Board Of Directors.
Gene Quinn at the AIPF Annual Meeting in Washington, DC, September 29, 2014.
Today I am going to talk about what I call the patent pendulum. When Todd Van Thomme and I originally started talking about what I would talk about today I said that there would undoubtedly be something that comes up at the last minute. I even joked that I might wind up talking about how the Supreme Court actually got the Alice decision right, surprising us all and saying once and for all that software is clearly patentable. We all know it didn’t turn out that way. So the title of my presentation today is this: Dark Days Ahead: The Patent Pendulum.
As you are probably all familiar, patent law never stays the same in the same spot. It is always swinging one or another, either swinging more towards stronger patent rights and the patent owner, or away from strong patent rights and away from the owner. It has been that way throughout history.
Normally what’s happened is that we’ve seen the pendulum swing over longer periods of time, like over decades, and then it’ll move away. For example the 1952 Patent Act was premised on the fact that Congress didn’t like the way the law was developing over the preceding years and wanted more things be patentable, hence the 1952 Patent Act did away with the flash of creative genius test. So things swung back toward a more patent friendly law, at least for a while. And then in the 1970s no courts ever saw a patent that actually had valid patent claims. This famously prompted Congress to create the Federal Circuit. Under the guidance of Chief Judge Markey and Judges like Giles Sutherland Rich and Pauline Newman, who is still on the court, the pendulum swings back toward the patent owner once again.
We are at a point in time where the overwhelming sentiment is against the patent system. Rather than celebrating innovators the public, and our leaders, vilify anyone who has the audacity to seek patent protection. The simple reality is that without a strong patent system investment in innovation will cease. This truth should be self evident to anyone with half a brain, but sadly it is not. There are many truly ignorant individuals who actually believe that investment in research and development will continue even if the day an innovation reaches the market it can be copied without recourse by competitors. What a fairy tale!
As Dr. Kirstina Lybecker has explained: “Incentives are essential to innovation due to the expense of research and development activities, and the public-goods nature of the resulting knowledge.” Indeed, there is no business person in the world who would ever invest the hundreds of millions or billions of dollars necessary to bring ground-breaking innovations to market without the expectation of the competitive advantage provided by a strong patent. In the real world investors seek a reasonable return on investment given the risk, which is quite substantial in the high-tech, innovative world. To ignore this reality one must be firmly planted in fantasy and not the real 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.
From U.S. Patent No. 8,729,723, entitled “Removable Offshore Wind Turbines with Pre-Installed Mooring System.”
Alternative forms of energy which can create electricity in much cleaner processes than fossil fuels have been an area of intense development in recent years. Here at IPWatchdog, we’ve covered recent developments in solar and hydrogen energy generation technologies in the past, and alternative energy is a frequent topic, particularly during our Earth Day coverage each year. We dive into this topic given that reports from the U.S. Department of Energy have led to a lot of optimism in recent days about the future of wind energy, specifically wind energy collected from offshore sources.
A developed network of offshore wind turbines could power the entire United States of America. According to the National Renewable Energy Laboratory, there is a potential 4,150 gigawatts of energy which can be collected from offshore wind collection around the country’s waters. The total electric generating capacity of the entire nation was 1,010 gigawatts as of 2008. All of this energy can be collected from waters within 50 nautical miles of America’s shorelines.
Over the years, I have developed and observed a wide variety of best practices for fostering and establishing on a sustainable basis a genuine culture of innovation. These must be embraced at all levels of the organization to be effective. What follows is discussion of some key lessons for maintaining a culture of innovation.
Innovation, like the spreading of fertilizer, is messy, lumpy, smelly, expensive, and unpredictable. Innovation rarely happens in a neat and sequential fashion. Imposing too many rules or protocols will retard or overly restart the process. And there must be a commitment to spread the fertilizer frequently, consistently, and across the entire field, not just once in a while to “pet” projects. And the results are not always what you would predict or expect. If you create processes that are appropriate for the levels of innovation and creativity goals that have been set, you create an environment that supports this process. If you are overly process oriented budget driven or linear in your thinking, you may be putting too many walls around a process that needs room to breathe.
There’s a famous Chinese curse “May you live in interesting times” which certainly applies now. It seems that every cornerstone we’ve relied on has slipped, creating instability in all aspects of modern life. As humorist Ogden Nash remarked: “Progress might have been all right once, but it has gone on too long.”
We live in a world where seemingly everyone has a cell phone —and a rifle. Every day we learn of breathtaking scientific discoveries and atrocities straight from the Dark Ages. Thanks to technology images of beheadings travel instantly around the world.
Debates rage over hot button topics widening divisions in society. One is over the merits (or demerits) of the patent system. That’s really a subset of a larger question: does innovation lead to prosperity for most people or does it merely widen the gap between the haves and have not’s?
What, if anything, should be done to correct “income inequality” is a point of contention in our political system. President Obama says that growing income inequality and a lack of upward mobility is “the defining challenge of our time.” Sen. Elizabeth Warren (D-MA) ads: “Trickle down (economics) doesn’t work. Never did.”
The pharmaceutical industry is widely criticized for wasteful spending on duplicative research to develop “me too” drugs, and focusing their efforts on “evergreening” patents. Those who argue that incremental innovation and follow on improvements to existing therapies aren’t worthy of patent protection need to look more deeply at the reality of what subsequent innovation provides. The case for protecting incremental innovation is laid out in a new publication by the Fraser Institute (released 19 June 2014), in which a thorough exploration of the therapeutic and economic value of follow-on pharmaceutical innovation is provided.
Pharmaceutical innovation is an inherently dynamic process; one innovation builds on another and improvements draw from a long history of earlier technological advances. Sir Isaac Newton once stated, “If I have seen far, it is by standing on the shoulders of giants.” In her classic paper on innovation, Scotchmer cites this quote and emphasizes that virtually all technical progress builds on a foundation provided by earlier innovators. Innovation is an undeniably cumulative event, and progress happens both in leaps and bounds (radical innovation) and in small steps (incremental innovation). In the context of the pharmaceutical industry, radical innovations encompass breakthrough discoveries of the ‘first-in-class’ medicine with a new mechanism of action. In contrast, incremental innovations may expand an existing therapeutic class through the development of a new drug based on differences in adverse effects, delivery systems, dosing schedules, or heat stability. In 2012, 45 new drugs gained regulatory approval from the US FDA, the highest number since 1997. Currently there are 907 biologics, medicines and vaccines in development, targeting more than 100 diseases. Much of this innovation can be considered incremental, resulting in so-called ‘me-too’ or follow-on drugs. These are therapies that largely replicate the action of existing drugs. All indicators suggest that a significant share of medical progress is happening through incremental innovation.
As the sweltering heat of summer begins to set in across the country during the summer months, people all over the country are running to their thermostats or single-unit air conditioners to stay cool. Just by pressing a few buttons, a typical American homeowner has the capability to completely control the temperature and humidity in a space. This innovation has revolutionized the demographics of our entire country, allowing many people to live comfortably in southern climates which would otherwise be oppressively hot.
IPWatchdog is returning once again to our Evolution of Technology series to take an in-depth look at how AC technologies have developed over the years. Modern air conditioning goes back more than one century in America, although the evidence showing human attempts at cooling the air goes back millennia. Today, we’re sharing a quick timeline of heating, ventilation and air conditioning (HVAC) technologies, with a special focus on beating the heat. We also take a closer look at the current state of air conditioning technologies, including a trio of patents related to air conditioning within automobiles..