The sky is falling! Those who feel the Supreme Court’s decision in Mayo Collaborative Services v. Prometheus Laboratories, Inc. is terrible are right, although many won’t likely fully apprehend the gravity of the situation at first. Those in the biotech, pharmaceutical and chemical industries have just been taken out behind the woodshed and summarily executed by the Supreme Court this morning. An enormous number of patents will now have no enforceable claims. Hundreds of billions of dollars in corporate value has been erased. But that might be a good thing. Immediate attention now must turn to Congress. Thank goodness that the technical amendments to the America Invents Act are outstanding. This will provide a perfect opportunity for Congress to save an industry that employs many millions of people, while at the same time undoing a pathetic, narrow-minded decision of the Supreme Court.

AP’s common law misappropriation claim has its origins in a remarkably similar suit AP brought against a competing news service almost a century ago. In INS v. AP the Supreme Court, in 1918, enjoined INS, a competing news service, from free-riding on the work product of AP. The misappropriation action was based on INS re-distributing information to its customers which AP had previously released into the public domain. INS was enjoined from using the information for a limited time period while it was hot news (i.e. while it had commercial value as news). The Supreme Court’s decision was based on two rationales: (1) preventing unacceptable conduct in the form of a commercial enterprise free-riding on the investment of time and money by a competitor; and (2) avoiding the resulting ruinous competition that could result from a commercial enterprise free-riding on the efforts of a competitor.

Ray Niro is a nationally recognized trial attorney specializing in the enforcement of patent, trade secret and related intellectual property rights. The name Niro, however, is not like any other in the patent industry. It was as a consequence of a lawsuit one of his clients brought against Intel in 2001 that the term “patent troll” was coined. On March 12, 2012, Niro went on the record with me in an exclusive interview. We discussed many things, including the nearly constant attempts to erode patent rights, make it more difficult for patent owners to seek redress for infringement and what the America Invents Act will mean for patent litigation moving forward. We also discussed the undeniable reality that there are bad actors in the industry.

The United States Patent and Trademark Office (USPTO) and the Association of University Technology Managers (AUTM) announced on Friday, March 15, 2012, the launch of the USPTO/AUTM Patent Examiners Training Initiative, a joint program designed to improve the strength and quality of U.S. patents through specialized training between patent examiners, innovators and scientists.

Where the en banc decision gets particularly interesting (and adversarial) is with respect to the second question, namely when does “intervening rights” apply to reexamined claims? By a 6 to 4 vote, (and a reversal of the panel decision), a majority of the en banc Federal Circuit also concluded “as an alternative ground for affirmance” of the district court’s judgment that “intervening rights do not apply to claims that have not been amended and are not new.” The majority opinion by Judge Lourie (the dissenter in the panel decision) was joined by Chief Judge Rader, and Judges Newman, Bryson, Prost, and Linn (who was one of the 5 “nay” votes on the meaning “biocompatible). The dissenting opinion on the “intervening rights” question by Judge Dyk (who wrote the majority opinion in the panel decision) was joined by Senior Judge Gajarsa (who also joined the majority opinion in the panel decision), Judge Reyna, and Judge Wallach.

Raymond P. Niro is patent litigator with tremendous experience and a reputation that is larger than life. To some he is a champion of independent inventors and small business community, frequent clients of his. To others he is nearly the definition of evil. It was as a consequence of a lawsuit one of his clients brought against Intel in 2001 that the term “patent troll” was coined. He has been trial counsel in literally hundreds of intellectual property cases, and since 1996, has won verdicts and settlements for his clients totaling more than $1 billion. On March 12, 2012, he went on the record for this exclusive interview.

Despite difficult economic conditions worldwide, international patent filings under the WIPO-administered Patent Cooperation Treaty (PCT) set a new record in 2011 with 181,900 applications – a growth of 10.7% when compared with 2010, and the fastest growth since 2005. China, Japan and the United States accounted for 82% of the total growth, and the Chinese telecommunications company ZTE Corporation was the largest filer of PCT applications in 2011. 2011 also saw the highest number of international trademark applications ever filed under WIPO’s Madrid System for the International Registration of Marks (“Madrid system”) with 42,270 applications, or a 6.5 % increase compared to 2010.

The telework program affords employees the ability to work from home from 1 to 5 days a week, and the largest of these telework programs — the Patent Hoteling Program (PHP) — had 2,600 patent examiners participating at the end of fiscal year 2011. With so many patent examiners working from home does the “brain drain” affect the learning curve of new patent examiners who have fewer people around to help and mentor. The Inspector General’s report does not address the issue of “brain drain,” but does quite clearly demonstrate that those examiners that work from home are more productive than examiners who report to work on campus at the USPTO.

A conversation with Matthew Bryan, who is the Director of the PCT Legal Division at the World Intellectual Property Organization (WIPO) regarding what WIPO is doing to combat patent schemes that plague the industry. As you will see, these schemes are lucrative. In one case that Bryan tells us about, in which he was an expert witness, a court in Florida “found that in the 2 years of operating, FIPTR had received over 2.5 million dollars in payments from PCT users just in the State of Florida.” With that kind of money potential it is easy to see why the scams persist.

This lawsuit could set a precedent in Israeli copyright laws concerning television formats and could reveal behind-the-scenes industry secrets. The Israeli Copyright Law 2007 does not provide copyright protection for an idea, but only its expression. As for TV formats, Israeli Courts have yet to regulate this issue and have not set a binding precedent in this matter.

Contrary to popular belief, things are getting much better in business methods. Applications filed in 1999 had prosecution times of over 10 years (lower green arrow). These and subsequent applications jammed up the system leading to excessive delays to first office actions. Applications filed in 2004, for example, had delays to first office action of 6 years (middle red arrow). Sometime around 2010, however, things started to improve. A lot more patents started issuing and the delays to first office action dropped to around 2 years (upper red arrow). That’s not to say that it’s easy to get a patent in business methods, but at least examiners and applicants are making much better progress in reaching agreement on allowable claims in a reasonable amount of time.

On January 12, 2012, the Internet Corporation for Assigned Names and Numbers, more commonly known simply as ICANN, began accepting applications for new gTLDs. Until March 29, 2011, entrepreneurs, businesses, governments and communities around the world can apply to introduce and operate a generic Top-Level Domain of their own choosing. Currently there are approximately two dozen gTLDs, but as the result of ICANN’s decision to expand the number of gTLDs there could be hundreds in the not too distant future.

Prior user rights also implicate free rider problems with respect to a subsequent patent that an inventor obtains covering the subject matter of the secret prior user. At the point of publication the prior user no longer maintains a trade secret. At the point of issuance, the patentee and the prior user relatively co-exist with each other in the market. The patentee excludes others from the market except for the prior user. The prior user then enjoys the benefits and advantages associated with the patentee excluding others from operating in the market, while being free from liability to the patentee. In this regard, the prior user enjoys the period of time operating the technology in secret in addition to 20 years of excluding others provided by the competitor.

With all of this in mind, like many others I tell inventors that if they are going to do it themselves they should consider getting a patent attorney to review their application before they file. Having said that, it is unrealistic to believe that a patent attorney can review what you have done in 1 hour or less. Furthermore, it is foolish to believe that an application reviewed for 1 hour or less will result in a work product that will be as good as if it were drafted by the patent attorney in the first place. If you want to do it yourself and have a qualified, experienced patent attorney review your work you should budget at least 6 to 10 hours of their time to review everything, critique what you have done and provide feedback and guidance for you to continue to build upon.