Posts Tagged: "innovation"

IPWatchdog will host its first Annual Meeting and Conference from March 15-18, 2020. The event will take place at the Renaissance Dallas Richardson in Dallas, Texas. Registration will begin on Sunday, March 15, followed by an opening General Session, and then an Opening Reception. We will begin Monday, March 16 and Tuesday, March 17 with breakfast. Each morning will feature two General Sessions, followed by lunch, and then a series of breakout panels in the afternoon. A Networking Cocktail Reception will be held both Monday night and Tuesday night. We hope everyone will stay and celebrate St. Patrick’s Day with us on Tuesday evening, March 17. We will conclude with an ethics breakfast on Wednesday, March 18, which will provide two hours of ethics credit for those attorneys in attendance.

In late May, news reports surfaced regarding allegations of trade secret theft committed by Chinese telecom giant Huawei Technologies that had been made in an Eastern District of Texas case. The claims targeted an executive working for Huawei who is accused of participating in a scheme to misappropriate trade secrets from California-based semiconductor startup CNEX Labs. The recent filings mark a new turn in the case, which was originally filed in 2017 by Huawei when it accused CNEX of committing trade secret theft and poaching employees in an effort led by a former Huawei employee and CNEX co-founder. CNEX Labs might be a startup, but it has been attracting venture capital funding for its cloud software and solid-state drive controller products from major names in the tech industry, including Dell and Microsoft. While Huawei has made its own allegations against CNEX, news reports indicate that Huawei’s attempt to access a closely guarded research project by working through a Chinese university professor isn’t an isolated incident. In fact, such activities may be a major factor behind the company’s rapid rise in recent years.

Most U.S. patent practitioners are keenly aware of the foreign filing license requirement for filing of U.S. patent applications abroad. Since it is common for U.S. based companies to file a U.S. priority patent application and take advantage of the one-year grace period for foreign filing, a foreign filing license is typically issued without much thought to the matter. Given the propensity for international companies and many universities to routinely carry out inventive activities in multiple countries by inventors of varied citizenships, the opportunities to run afoul of foreign filing license requirements is of growing concern, and this concern extends well beyond the walls of the U.S. Patent and Trademark Office (USPTO).

After three hearings and 45 witnesses, there were few new fundamental arguments advanced for or against reforming patent eligibility law at today’s final Senate IP Subcommittee hearing on the topic, but several key—and some alarming—messages were underscored. A few takeaways off the bat: there are going to be considerable changes to the working draft. In particular, there were four issues that Senator Thom Tillis (R-NC) noted were raised repeatedly. First, both sides agreed the new proposed definition of “utility,” which requires “sufficient and practical utility in any field of technology through human intervention” needs to be further defined; those for reform felt that the language could be too narrowly interpreted, while those against feared it was not definite enough. “Clearly, those terms need better definition or more meat on the bones,” Tillis said. Secondly, everyone was concerned with Section 112(f). Tillis pointed to the practical argument made by inventor Paul Morinville about the impossibility of meeting that requirement in the context of software coding language, for example, while Tillis said the tech companies were afraid the language wasn’t strong enough to weed out overbroad software and business method claims that most agree should not be patent eligible.

Yesterday, the U.S. Supreme Court ruled in Return Mail, Inc. v. United States Postal Service that the U.S. government doesn’t qualify as a “person” for the purposes of petitioning the Patent Trial and Appeal Board (PTAB) to institute inter partes review (IPR) proceedings under the America Invents Act (AIA). The majority opinion was authored by Justice Sonia Sotomayor and joined by Chief Justice John Roberts and Justices Clarence Thomas, Samuel Alito, Neil Gorsuch and Brett Kavanaugh, while Justice Stephen Breyer dissented, joined by Justices Ruth Bader Ginsburg and Elena Kagan. While most in the patent community felt the decision was predictable considering the Supreme Court’s precedent on the topic, some saw the dissent’s point or expressed surprise at the narrowness of the holding and the disparate treatment by the court of the IPR process compared with other administrative procedures. The Return Mail case was argued at the Supreme Court by Beth Brinkmann, co-chair of Covington’s Appellate and Supreme Court Litigation Group, who said, “The Court’s decision confirms that federal agencies do not get an extra chance to challenge privately held patents under the AIA.” Brinkman’s colleague, Richard Rainey, who co-led the Supreme Court team and handled the case before the Federal Circuit, added: “This is a significant victory for Return Mail and for all technology companies and patent holders that may find themselves in the government’s crosshairs. By excluding federal agencies from AIA review proceedings, the Court’s decision limits the government’s ability to bring duplicative challenges to the validity of privately-owned patents.” Here’s what some others in the patent community had to say.

A just-released study co-sponsored by the Biotechnology Innovation Organization (BIO) and AUTM provides new evidence of the significant contribution academic patent licensing makes to the U.S. economy. The report is the most recent in a series, and the numbers are astounding. This couldn’t come at a better time. Renewed efforts are underway to subvert Bayh-Dole from an engine driving innovation into a weapon for government price controls. Even though the Bush, Obama and Trump Administrations wisely rejected their theories, the critics keep banging the drum, and some in Congress are dancing to their tune.

Last week, all eyes were on the first two days of historic Senate Judiciary IP Subcommittee Hearings, led by Senator Thom Tillis (R-NC), Chair of the Subcommittee, and Senator Chris Coons (D-DE), Ranking Member of the Subcommittee. The purpose of the hearing was simple: to determine a fix for the disaster foisted upon the industry by the patent eligibility jurisprudence of the Supreme Court of the United States. The testimony of the first 30 witnesses has already been summarized, so there is no need for me to dive into the particulars of who said what here. Suffice it to say that the Subcommittee heard a range of opinions—some better supported than others.

This morning, the U.S. Supreme Court issued its decision in Return Mail, Inc. v. United States Postal Service in which the 6-3 majority held that the U.S. government doesn’t qualify as a “person” for the purposes of petitioning the Patent Trial and Appeal Board (PTAB) to institute patent validity proceedings under the Leahy-Smith America Invents Act (AIA). The majority opinion, penned by Justice Sonia Sotomayor and joined by Chief Justice John Roberts and Justices Clarence Thomas, Samuel Alito, Neil Gorsuch and Brett Kavanaugh, followed Court precedent supporting the presumption that the government isn’t a “person,” while finding the Postal Service’s arguments to the contrary to be unpersuasive. Justice Stephen Breyer penned a dissent, joined by Justices Ruth Bader Ginsburg and Elena Kagan, in which he found that Congress intended to include the government as a “person” when passing the AIA.

This week on Capitol Hill, the Senate IP Subcommittee will hold its third and final hearing on patent eligibility issues that currently exist in the U.S. patent system. Elsewhere in the Senate, hearings will focus on privacy issues posed by data brokers as well as Federal Communications Commission oversight. Hearings over at the House of Representatives will discuss topics including NASA’s science mission, sexual harassment issues within the scientific professions, and research leading towards increased use of renewable energy sources. The Information Technology and Innovation Foundation will also host an event to explore new tax models affecting U.S.-based Internet services companies.

In a June 4 op-ed to IPWatchDog, James Edwards launched a scathing attack against Judge Koh and her 233-page ruling, which found Qualcomm to have engaged in anticompetitive behavior against competitors within the cellular chipset market. However, just as Mr. Edwards claims Judge Koh failed in her undertaking, so too has Mr. Edwards by ignoring the context and facts of the case. His argument against Judge Koh, deliberately or otherwise, does not mention the fact that this case involved the licensing of standard essential patents (SEPs) subject to the FRAND commitment, a contract between the patent holder and the standard setting organization to license the relevant patents on “fair, reasonable, and non-discriminatory” terms. Indeed, Mr. Edwards makes no mention of standard essential patents in a deliberate attempt to obfuscate the facts and fit a narrative that intellectual property rights writ large are under attack by this decision.

Automobiles, smartphones, laptops, medical devices, among other end products, contain scores of individual components supplied by vendors. For end products sold domestically, vendors for the components are often U.S. companies. They design and develop their products in the United States. They deploy teams of marketing and sales personnel in the United States to win incorporation of their components into end products for the U.S. market. They enter general business agreements in the United States with end product companies in the United States. They comply with U.S. certifications, standards and qualifications that make their components fit for the U.S. market. They provide customer support in the United States to end customers located in the United States. In short, they actively compete for a share of the U.S. market for their technological components. Yet, when it comes to facing liability for patent infringement, they claim to be exempt. They claim they don’t make any products in the United States—the products are made by contract-manufacturers located abroad. They claim they don’t actually sell any products in the United States either—the actual purchase orders and invoices, as well as shipment and delivery for specific units, occurs between foreign subsidiaries and contract manufacturers, also located abroad. A case currently pending before the Federal Circuit could upset these tactics: Power Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc., 2019-1246, 2019-1247 (Fed. Cir.).  At the heart of the case is the question of whether patent law has grown out-of-sync from the supply-chain realities of making, selling and marketing technological components for end use in the United States today. For instance, invoicing and shipment for particular units may be farmed out abroad. That creates an ostensibly easy way for companies selling technological components to claim they are neither making nor selling any product in the United States. But it ignores that domestic infringement can nevertheless cause foreign damages. Indeed, the recent decision of the Supreme Court in WesternGeco LLC v. ION Geophysical Corp.138 S. Ct. 2129 (2018) expressly held that foreign damages caused by domestic infringement are recoverable.

The presently pending petition for en banc review in Athena Diagnostics, Inc. v. Mayo Collaborative Servs., LLC has been addressed by Sherry Knowles and Meredith Addy and is supported by a number of amicus briefs. The patent in issue has been described by the present author as a paradigm of patent eligibility, supporting the argument that en banc review is merited. Mayo has now filed its response brief, submitted on May 7, and argues that the panel’s decision invalidating the asserted claims as ineligible properly applied the two-step Alice framework in light of precedent, that the full Court need not re-examine it, and accordingly, that Appellants’ petition should be denied.

Last week at the Patent Trial and Appeal Board (PTAB), 23 institution decisions were issued based on petitions to challenge the validity of patents via inter partes review (IPR) proceedings. Only four petitions were denied institution last week, while four petitions that were instituted were joined to other IPR proceedings already ongoing at the PTAB. Qualcomm faced two institution decisions, adding to the legal troubles the company has faced in recent years in enforcing its intellectual property. Apple secured three successful decisions to institute, including two IPRs that are joined to other proceedings brought by HTC Corporation. Visa, Netflix and Guest Tek Interactive Entertainment also saw successes with their IPR petitions, while ResMed had two petitions instituted and two denied by the PTAB. 

Wednesday’s Senate hearing on patent eligibility reform, which began more than 30 minutes late due to votes on the floor, opened with Senator Thom Tillis (R-NC) reiterating that his goal in holding three hearings on this topic and receiving testimony from 45 witnesses, which is not common, is to address the major concerns on all sides of the debate. Tillis noted that he and Coons had specifically invited many of the high-tech companies that do not appear on any of the rosters for the three hearings, but they chose not to participate and instead to be represented by David Jones, Executive Director of the High Tech Inventors Alliance (HTIA), who spoke today. While Tillis said, “that’s ok,” he noted that “silence is consent. What we want here is people working out of the shadows, collaboratively.” HTIA’s members include Amazon, Google, Adobe, Intel, Cisco, Oracle, Dell, and Salesforce. Many of today’s panelists raised more substantive issues with the proposed section 100(k) and 112(f) than did yesterday’s speakers. Section 100(k)defines the term “useful” in the new section 101 and section 100(f) would eliminate functional claiming. Barbara Fiacco, representing AIPLA; Henry Hadad of Bristol-Myers Squibb and the Intellectual Property Owners Association (IPO) President; Paul Morinville of U.S. Inventor; and Phil Johnson, representing the Coalition for 21st Century Patent Reform, all raised various concerns about one or both of these sections. Notably, Hadad said that IPO has not yet taken an official position on the draft, although it meshes with its own 101 proposal, and Fiacco said that AIPLA feels 112(f) and 100(k) are areas for “further consideration.” In addition to Senator Chris Coons (D-DE) and Tillis, Mazie Hirono (D-HI) and Richard Blumenthal (D-CT) asked several questions of the panelists.

In the midst of the first two hearings on reforming patent eligibility law, the Senate IP Subcommittee has published the witness list for next week’s final hearing on Section 101 reform, to be held on Tuesday, June 11. Again, it is decidedly pro-patent compared with previous congressional hearings on patent issues. As with the first two hearings, the Senators will hear from three separate panels of five witnesses each. The first panel will include Manny Schecter of IBM, who has noted in past articles for IPWatchdog that some of the most groundbreaking inventions of our time would likely fail or be invalidated under the current patent eligibility landscape. He will be joined by Laurie Self, Senior Vice-President and Counsel, Government Affairs, at Qualcomm; Byron Holz, Senior Intellectual Property Rights Licensing Counsel at Nokia; Kimberly Chotkowski, Vice President, Head of Licensing Strategy and Operations at InterDigital; and Sean Reilly, Senior Vice President and Associate General Counsel at the Clearing House Payments Company.