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.
One of the frequent claims made by those in the anti-software patent community relates to Twitter and the clearly erroneous belief that patents are not important to the company. Indeed, recently when I wrote Fairy Tales and Other Irrational Beliefs About Patents the claim arose in the comments suggesting that Twitter is proof that patents are unnecessary to succeed. Quite to the contrary. If you actually concern yourself with facts, Twitter is a perfect case study to demonstrate just how important patents, particularly software patents, are to a start-up company that has aspirations of going public.
Doubt me? Perhaps you will believe Twitter themselves. In repeated filings with the Securities and Exchange Commission since October 2013, Twitter has explained over and over again just how important their patented technology is to the company. They have also repeatedly explained that unlike other companies and competitors, even with nearly 1,000 patents, their own patent portfolio is extremely small by comparison. This poses real concerns for Twitter, which is why they warn the SEC and investors of the ramifications of such a small patent portfolio with every new filing.
Let’s begin our tale about Twitter at the start. Twitter, founded on March 21, 2006, was initially believed to be of the opinion that patents didn’t matter. Behind the scenes and unknown to many, Twitter was actively filing patents very early on in the development of the company. This is hardly shocking news given that Twitter’s initial round of funding dated back to 2007 and the near universal reality that high-tech investors not only love patents, but they demand patents. Investors love patents because if the company does not succeed at least some valuable patent assets will remain, which can be sold to recoup losses.
Companies in technology sectors, especially social media companies, have seen some incredible investment through recent initial public offerings (IPOs) of corporate stock. Multi-billion dollar valuations for companies like Facebook, Twitter and more gave investors some excitement, but questions about sustainability, revenue generation and user growth has caused stock prices to dip in recent months.
Many of these companies have valuations that seem to fly in the face of their business models, which harkens back to the days of “irrational exuberance” of the “dot com” era. Still, social media companies can enjoy billions of users, but many of them use their services for free and generate negligible ad revenue for the company providing the platform. Will social media evolve into a money-making proposition or will these companies falter? Time will tell, as it tells with all things.
Against this backdrop and with the full knowledge that higher levels of investment almost universally require significant intellectual property holdings, we thought we’d take some time to look at the current state of the social media industry, including revenue and innovations. To accomplish this task we will also take a closer look at some recent inventions patented by major companies in this field.
As the dust settles after the storm caused by the conversion of the United States patent system from a first-to-invent system to a “modified” first-to-file system through implementation of the America Invents Act (AIA) on March 16, 2013, it is essential that companies and inventors avoid inadvertent disclosures of the company’s or inventor’s inventions on social media networks and the company’s website.
Social media websites such as Facebook, LinkedIn and Twitter, have changed the manner that businesses communicate and market their products and innovations. Although these tools may be beneficial by creating market “buzz” for new products through rapid information sharing, they may also be detrimental to a company’s patenting practices for the same reason. If disclosures of up and coming products are made on social media websites without the company first filing for patent protection, and the disclosures are then copied by a second party who then files an application based on the company’s social media disclosures, before the company does, then the first-to-file law could bar the company from patenting the invention, whereas the second party could then obtain patent rights to the invention disclosed on the social media site.
Rachael Lamkin is a patent litigator who recently became Associate General Counsel at Blue Ocean Enterprises, Inc. I have known Rachael virtually for several years, communicating with her both via e-mail and via Twitter (she is @Rachael_IP on Twitter).
Occasionally I have tried to convince her to go on the record with me so we could have a more in depth conversation for publication. After an exchange about six weeks ago relating to patent trolls and the definition of a patent troll I proposed the idea of an on the record conversation about patent trolls, which Rachael accepted. On May 10, 2013, we had the following conversation.
During our conversation we discussed our various definitions for a patent troll, the difficulty of coordinating a joint defense in a patent infringement case, potential solutions and a program that she is involved with called Troll Bono, which is a pro-bono effort to assist companies and individuals who are facing troll lawsuits.
By now you are probably aware that on March 19, 2013, the United States Patent and Trademark Office issued U.S. Patent No. 8,401,009 to Twitter, and more specifically to Jack Dorsey and Christopher Isaac Stone. The Twitter patent is titled: Device Independent Message Distribution Platform. In other words, Twitter was awarded a patent on “Tweeting”!
Now those of you who know me and have read my posts in the past, know that I am not a patent attorney myself (although I am married to one who is rather well known). Rather, I am a social media strategist — sometimes called The Social Media Diva™ — who uses Twitter and other social media platforms to assist my clients in their online marketing strategies. Quite frequently we will feature posts that analyze the technologies of an issued patent from the IP attorney perspective. We thought it would be fun for me to analyze this patent from a non-attorney standpoint as it pertains to social media platforms as a whole.
For the patent professionals who are reading you may find it interesting to see the complete file history for the Twitter patent.
For decades, the Nielsen Rating has measured audience size for television programming. Since 2006, Twitter allowed users to provide real-time comments, or tweets, on just about anything they wish. Twitter users often use Twitter to discuss television shows as they are being aired. Because of this, Nielsen and Twitter and joining their powerful forces to create the Nielsen Twitter TV Rating.
Starting in the fall of 2013, the Nielsen Twitter TV Rating will chart the conversations that take place on Twitter about television shows. It will measure the total audience for each show’s social activity. According to a representative at Nielsen, this new rating system will provide the “precise size of the audience and effect of social TV to TV programming.”
Nielsen, is a global company that measures television and other media forms such as online, mobile and trade shows. They have a strong presence in about 100 countries and have headquarters in New York and the Netherlands.
Whether you are just getting your feet wet in the wild world of inventions and patents, or you already have your business up and running, social media can help expand your business. Everywhere you look, there are Facebook “Like” buttons, LinkedIn “Share” buttons and Twitter “Tweet” buttons. Even Google has entered the social sharing game with Google+ allowing you to “+1” content. Social media can help catapult your business into overdrive – if you know how to use it effectively.
Here are some tips to using social media to expand business.
1. Choose which social platforms you want to use
There are many social networks out there – Facebook, Twitter, LinkedIn, Google+, Pinterest, the list seems to be constantly growing. You want to channel your hard work into a select amount of platforms, and make sure that they are the right ones for your business. But with so many choices, how can you be sure which is right for you? Well that depends on what your goal is. Twitter is very up-to-the-minute, a place that provides short blurbs about news, insights and just about anything else. Facebook will allow you to post pictures, talk about events and what’s new with your business. LinkedIn caters to the professional crowd and will allow you to highlight your business credentials, but there is a social side to it that is beneficial for businesses.
Twitter users are no doubt familiar with the familiar “#FF” followed by a number of names. ”#FF” stands for “Follow Friday.” On Fridays many Twitter users will suggest who others should follow by tweeting with the hashtag #FF. This can be a great way to find interesting feeds to follow that you might otherwise never have known about.
Last Friday I wrote about a handful of U.S. government Twitter accounts that relate to innovation and various intellectual property issues. Today I give you 10 great Twitter accounts to follow if you are interested in staying up on intellectual property around the world, with a heavy emphasis on Europe and Australia because those are the primary jurisdictions that speak English.
If you are a user of Twitter you have probably seen more than a few tweets, always on Friday’s, using “#FF” followed by a number of names. ”#FF” stands for “Follow Friday.” On Fridays many Twitter users will suggest who others should follow by tweeting with the hashtag #FF.
For me Twitter is about news and information. It is one of the ways that I keep my finger on the pulse of what is happening, so I put a premium on those who convey information, but don’t like following people who tweet constantly all day every day.
Periodically I will take a moment to provide a list of those who I think you might find it useful to follow. Today’s “follow Friday” recommendations focus on those in the U.S. government who tweet about innovation and intellectual property, with a focus on those who are lesser-known, at least based on the number of Twitter followers.