Tag Archives: intellectual property

12-fold increase in China’s U.S. trademark apps; many are said to be fraudulent and improperly filed

Cash subsidies are among the incentives fueling a dramatic rise in U.S. trademark applications by Chinese filers. Thousands are said to be  improperly filed and unlikely to be granted. 

In a national effort to increase IP ownership China is paying companies and individuals, some of them prisoners, as much as the equivalent of $800 to register a trademark in the U.S.

“The U.S officials say many China filings show a pattern of suspicious claims about the goods in question and the qualifications of the attorneys handling them,” reports the Wall Street Journal.

China may be attempting to “disrupt” the U.S. system by flooding it with huge numbers of applications, making it potentially more difficult for business to obtain the marks they desire, especially those that may be associated with products that are sold in e-commerce.

Mark Cohen, UC Berkeley law professor and former USPTO expert on China told IP CloseUp that he did not believe there is a concerted effort to undermine the U.S. trademark system.

“China is metrics-driven, numbers-oriented society,” said Cohen, who is fluent in Chinese. “It wants to achieve government-established goals and will resort to incentives to achieve them. This planned approach can lead to the kind of spikes we have been seeing in trademark applications. The ultimate impact is unclear.”

In addition to paying cash incentives, China has been known, says Professor Cohen, to award tenure, defer income taxes and reduce sentences of prisoners who obtain marks. Similar motivations have been known to exist in the patent space, where China is a leading U.S. filer and number two globally. If the pattern continues, it will soon be number one in both trademarks and patents.

Numbers Game

This rapid rise does not necessarily lead to high quality IP rights or to appropriate use of them. But IP does apparently amount to something of a numbers came to China.

Cohen believes that many of the filers are small businesses selling online goods such as phone chargers and cheap clothing. Whether they are every in a position to enforce their marks, if infringed, remains to be seen.

Representing a number of Chinese trademark filers are foreign attorneys who are not licensed to practice in the U.S., which violates application rules.

These payments by the Chinese government amount to nearly $800 per US trademark registration that is obtained (a potential profit per trademark of $525 after filing fees), reports trademark attorney Josh Groben.

Full-time Job

“Given that the median monthly income for a Chinese citizen is around $1,000,” says Groben, “the government payments make it possible for someone in China to have a full-time income by registering just two US trademarks per month.”

The U.S. received more than 50,000 applications from China in the year through September 2017, accounting for 8.5% of all trademark filings.

It is difficult to know how aggressively legitimate Chinese trademark holders will enforce their rights against infringers. In the U.S. complete failure to enforce will lead to a weakening of an owner’s marks, loss of distinctiveness over time and potential forfeiture of certain available remedies.

Image source: creekmorelaw.com; lexology.com

Can the U.S. compete with China without a focused innovation policy?

More nations today have an innovation policy than do not – that is except for the U.S. 

The U.S. not only has no centralized innovation and intellectual property policy, it has no real strategy for making IP rights more meaningful and American businesses more competitive in the wake of initiatives from China.

Some believe it is not the job of policymakers to tinker with free-markets or favor certain industries. Well, that may have worked in the past, but with China committed to dominating global innovation – and with unlimited capital – the U.S. must reexamine its strategies.

What it is not supposed to do is assume that it is business as usual.

The United States has a tendency to repeat past mistakes, such as in the case of so-called “Japan, Inc.,” which devastated the auto and electronics industries with more advanced products. It is currently contending with China, which has approximately ten times the population of Japan and has quadrupled its investment in technology over the past decade.

“US innovation policy: Time for a makeover,” a fresh take on dealing with competition in the Intangible Investor, can be found in the July IAM magazine, out this week, here.

Innovation policy in the United States is mostly a series of suggested strategies and directives from several government agencies and industry organisations primarily designed to address foreign IP infringement (i.e., theft). It is often tied to science and economic policy, and is typically reactive – not proactive.

“Better innovation policy not only permits established industries to compete,” says the Intangible Investor, “it facilitates success for the next generation of inventors, authors, designers and software developers. It also helps to supply context for a confused and wary public susceptible to false media narratives – intellectual property is not the enemy, nor are rights holders and lawyers.”

Enforcement is Not Policy

Trump’s anger about China IP violations, justified or not, does not constitute an innovation policy. Innovation policy is not just about enforcement or supporting the science, technology, engineering and math (STEM) curriculum for the next generation of inventors. It is about understanding the current economic and political context and responding as a nation.

“The FAANGs, and others, who dominate the competition and monetize their customers’ information, often without permission, realize they are increasingly symbols of bad business behavior,” Bruce Berman wrote recently in IP Watchdog. “The heat they feel from regulators in Europe and the U.S. will continue to rise.

“IP infringement will come to be seen as an increasingly important part of their bad behavior. The timing is perfect for them to step back and step up and show the leadership they heretofore have ignored regarding IP rights. Movement toward a responsible IP middle ground – a less entrenched position that recognizes others’ rights and actively conveys a greater willingness to share successes, not only defend them, will help to inform a meaningful IP policy.”

Quick-Reading Guide

For further background on U.S. innovation policy, read a timely and insightful perspective on U.S. innovation policy from James Goh, a young Wharton student from Singapore, “Primer: Innovation Policy in the United States.” 

For a linked quick-reading list about innovation and IP policy from the Center for IP Understanding, go to page 4.

Image source: q3research.com; breakinggap.com

 

 

Family Entertainment: This “Rube” saw the future and its foibles

San Francisco-born Reuben Garrett Lucius “Rube” Goldberg, an American cartoonist, sculptor, author, engineer, and inventor, best known for satirical cartoons that depicted complicated devices that performed simple tasks in creatively complex ways.

But Goldberg, born on July 4, 1883, was also a visionary, who saw the impact of personalized communications decades before it occurred. His Forbes cover,“After Color TV: The Future of Home Entertainment,” from March 15, 1967 (below) depicts a family with each member engaged with its own mostly flat screen and targeted content – including the baby and cat. Recall that in 1967 the idea of the color TV, aka “talking furniture,” was still relatively new.

Future Family: Alone Together

Note the types of content, the different screens and the interactive controller used by the father. The baby’s wind-up truck does not have a chance.

The Fun of Getting There

Goldberg is associated with popular cartoons depicting gadgets that perform simple tasks in indirect or complicated but imaginative ways, giving rise to the term “Rube Goldberg machine” for s similar gadget or process. Goldberg received many honors in his lifetime, including a Pulitzer Prize for his political cartooning in 1948.

Goldberg was a founding member and the first president of the National Cartoonists Society, and he is the namesake of the Reuben Award, which the organization awards to the Cartoonist of the Year.

He is the inspiration for various international competitions, known as Rube Goldberg Machine Contests, which challenge participants to make a complicated machine to perform a simple task (kind of the opposite of an invention, which attempts to solve a problem or improve efficiency).

The contest, in which college or high school students build devices to complete a simple task in a minimum of twenty steps in the style of Goldberg, is held throughout the United States, and local winners are eligible to compete in the national contest.

Rube Goldberg reminds us that how a simple problem gets solved can be as fascinating as the solution.

Source: imgur.com

Blockchain patent applications doubled in 2017 to more than 1,200

 1,240 blockchain patent applications were filed worldwide in 2017, up from 594 in 2016 and 258 in 2015. 

Among the leading filers were Bank of America, MasterCard, Goldman Sachs, Walmart, JP Morgan, and IBM.
According to data collected by the Korean Intellectual Property Office, and reported in CryptoCurrency, more than 1240 applications for blockchain-related patents were filed across South Korea, the United States, Japan, China, and Europe by the end of January 2018.

In December of 2017, CNBC reported that ‘patent trolls’ were coming for blockchain individuals and entire firms who seek to make fortunes off of amassing blockchain patents.

“Crush it”

“Nick (sic) Spangenberg, a notable patent entrepreneur,” reported the publication, said that his firm IPwe “is also looking to make big money by reforming the whole patent world.”

“It is a curious path how a collection of misfit trolls, geeks and wonks ended up here—but we are going to crush it and make a fortune,” said Spangenburg.

Image source: codeburst.io

E-cigarettes is the fastest growing patent class; followed by 3-D printing and machine learning

Vaping may not be a turn-on for everyone, but the fastest growing United States Patent and Trademark Office category over the past five years is e-cigarettes, with a compound annual growth rate of 45%.  

Much of e-cigarette growth, according to patent research company IFI Claims, who conducted the research, was in the subclass A24/47, “Simulated Smoking Devices.” The rapid growth within this classification may be due to full legalization of cannabis in some states, and prescription access in others.

Man smoking e-cigarette

Atria Client Services leads in this group with 90 published applications, followed by Philip Morris Products with 80.

The next fastest growing patent classification, with a five-year compound annual growth rate of 35%, is 3-D Printing. 2017 published application leaders in this area were General Electric (89), Xerox (78) and Boeing (50). HP Development came in at 48.

The third most active patent category at 34% was Machine Learning, sometimes known as artificial intelligence. Companies leading in predictive models and related areas include IBM (654), Microsoft (139) and Google (127). They were followed by LinkedIn, Facebook, Intel and Fujitsu.

Driverless Space is Active

Fourth from the top at 27% was Autonomous Vehicles, USPTO patent classification GO5D. Applications included automatic pilots for air and land vehicles. IBM was the leader in this category, too, with 80 published patent apps, followed by Ford Global Technologies (79), Shenzhen-based, SZ DJI Technology (63), followed by Toyota, Honda, GM and Bosch.

The remainder of the top eight looks like this: Moulding Materials, 27% (Boeing, 3M Innovative Properties, Saudi-based SABIC Global Technologies, Honda, Xerox, Nike and Hyundai); Hybrid Vehicles, 26% (Toyota, Ford, Hyundai, Honda, GM, Scania and Kia); Aerial Drones, 26%, (Boeing, Sikorsky, SZ DJI Technology, Airbus GmbH, Goodrich Airbust Ltd., and Bell Helicopter Textron); and Food, 24% (Nestec (related to Nestle), Abbott, Danone Group division, Nutricia, Dutch multinational DSM IP Assets, Malaysian-based sweetener producer, PureCircle, Conopco (Unilever) and Mars.) This classification is called “Foods, Foodstuffs or nonalcoholic beverages.”

For the complete “Eight Fast Growing Technologies” slide deck, go here.

Image source: ificlaims.com; psu.edu; nebraskamanufacturing.com; datasciencecentral.com

 

Royalty rates paid musicians decline for some streaming services

When it comes to getting paid, the bigger streaming service is not necessarily better for most musicians and song writers.

While the revenue and market share have grown for the leading streaming services, some significantly, the royalties paid to artists have been declining.

According to a recent article in The Trichordist, a publication dedicated to the protection of artists rights in the digital age, streaming royalties paid to artists declined in 2017.

The blog took snapshots from a major indie portfolio for 2017, 2016 and 2013. It found that “when streaming numbers grow, the per stream rate will drop.”

This data set is isolated to the calendar year 2016 and represents a label with an approximately 150 album catalog generating over 115 million streams, a fairly good sample size. All rates are gross before distribution fees.

Spotify was paying .00521 back in 2014, two years later the aggregate net average per play rate dropped to .00437 in 2016, a reduction of 16%, reports the Trichordist. The current effective per stream rate at Spotify has now dropped to 0.00397, a reduction of 9% since last year. This a cumulative reduction of 24% since 2014, which is an average decrease of 8% a year of the per stream rate.

Business Model Questions

“If the music business could set a per stream rate that allowed revenue growth, proportionate to consumption growth that would be a much better model,” said David Lowery, editor of The Trichordist and leader of the band Cracker and Camper Van Beethoven. Lowery teaches in the Music Business Certificate Program at Terry College of Business, University of Georgia.

A notable change from last year is that Pandora replaces YouTube with the greatest value gap of streams at 21.56% volume with only 7.86% of revenue. YouTube drops to 8.38% of volume with only 1.70% of revenue.

Indie Label Sample: 115 Million Streams

Top Players

Apple appears to be the lone streaming service that is growing both in market share and revenue, and is paying relatively high royalties. It accounts for 22.29% of the revenue on 10.48% of the streams, and pays approximately six-times the per-stream royalty rate of Pandora. (Apple’s iTunes is a direct purchase model, while Pandora offers a more radio-like format, which precludes on demand listener selection.)

More than 95% of the streams and 98% of the revenue were concentrated in the top ten companies. The top three, Spotify, Apple iTunes and Pandora, comprise about 80% of the streams for this representative catalogue and 82% of the total streaming revenue.

For The Trichordist‘s 2017 streaming sample, go here; 2016, here; and 2013 here.

Image source: thetrichordist.com

 

IP “literacy” matters – Ideas Matter promotes IP understanding for all

A basic literacy about IP rights is everyone’s responsibility. 

While at times complex, patents, copyrights, and trademarks can be widely understood if people are clear about their purpose and who they benefit.

Putting IP rights in perspective is serious business – especially given that knowledge-focused economies place an increasingly high premium on innovation, authorship, and brand.

Ideas Matter, a London-based consortium of IP holders and innovative businesses believes it is necessary to provide audiences more information about why IP rights are important and how it affects people. Recently, it teamed with the Center for IP Understanding at the IP Awareness Summitt in Chicago, to produce a video about the need for everyone to know more about IP rights.

“I think the economies of the world have realized that the market is controlled by innovation and invention,” said Judge Randall Rader (ret.), Chief Judge of the Court of Appeals for the Federal Circuit. “That requires research, that requires development of new ideas and resources, and, of course, those investments need protection.  That’s where the intellectual property system pays benefits.”

Ideas Matter released a video of interviews with IP experts and holders conducted at the IP Awareness Summit in Chicago. IPAS 2017 was held by the Center for IP Awareness (CIPU) in conjunction with Chicago-Kent College of Law, Illinois Institute of Technology.

For background about the video and Ideas Matter, go here. Twitter: @IP_IdeasMatter.

To view the five-minute video, go here or click on the image above.

Image source: ideasmatter.com

IP CloseUp visits up 26% in 2017; page views up 31%; readers drawn from 134 nations and territories

IP CloseUp, the blog of IP perspective, research, and people, grew in 2017 to more than 56,000 views and 44,000 visits, up 26% and 31% respectively from 2016.

Now in its seventh year, IPCU was read in 134 nations and territories in 2017. The top ten readers were the U.S., Canada, India, UK, New Zealand, Australia, Germany, South Korea, Taiwan, and France.  They were followed by the Netherlands, Japan, and China.

The most active month in 2017 was January, with 20,357 views. IPCU averaged a post a week and generated 52 posts for the year. Posts typically include links that make further research and exploration easier.

Since its inception in 2011, there have been more than 120,000 visits to IP CloseUp and 176,000 page views.

The most read post this year was about Robert Kearns, inventor of the intermittent windshield wiper, who was forced to sue U.S. and other automobile companies in the 1980s for patent infringement. The Kearns post generated 17,548 visits in January. A subsequent Kearns post published in 2016 can be found here.

IP CloseUp coverage includes patents, as well as copyrights, trademarks and trade secrets. Subscriptions are free. IPCU can also be followed on Twitter @ipcloseup.

Image source: http://www.ipcloseup.com

2018 in focus: Videos from IP Awareness Summit explore better IP understanding

The IP Awareness Summit 2017 was the first IP event to focus on perception and awareness of intellectual rights and their impact.

Videos of panel discussions, held at Chicago-Kent College of Law, Illinois Institute of Technology on November 6, have been posted to YouTube and the IPAS event website.

More than a record of the Summit, these videos move the IP awareness discussion to a new level, and are worth perusing whether or not you attended IPAS. (Some observers choose to view/listen while multi-tasking.)

IP Erosion

The presentations include economist and entrepreneur David Teece’s keynote, “IP Erosion: A Growing Threat to U.S. Economic Leadership.”

To access the IP Awareness YouTube channel, please enter “IP Awareness” on YouTube, or go here.

Panelists and their current or prior affiliations are identified on YouTube, beneath the videos.

All eight videos are centralized and can be accessed from the IPAS 2017 website, here. 

For specific IPAS panels, click or tap below.

IP Education Today

Identifying Good and Bad IP Behavior (intro)

Identifying Good and Bad IP Behavior (panel)

IP and Theft: The High Cost of Confusion

Keynote – David Teece, The Tusher Center, UC Berkeley-Haas School of Business
“IP Rights Erosion: A Growing Threat to U.S. Economic Leadership”

Media Coverage and IP

Making IP Awareness a Higher Priority

Breakouts: Impediments to IP Understanding

 

Feel free to tweet, post or otherwise share the IPAS YouTube videos with others. You can also send your thoughts and comments to explore@understandingip.org.

 

Image source: understandingip.org

RPX buyout rumors set share price at a 27% premium, or $800M

Shares of RPX (RPXC) opened today at $13.88, up 2.81%, after rising 5.6% last Wednesday on rumors from two sources that the defensive patent aggregator is a takeover target.

Richard Lloyd of the IAM blog broke the story on December 12, saying the a private group had offered $16.25 per share for the company, or $800 million, a 27% premium.

But some observers doubt whether RPX can fetch that high of a premium. Don Lonkevetch writing in this morning’s Patent Investor said:

“That’s because San Francisco-based RPX’s business has been hurt by its own past success in combatting non-practicing entities and the overall decline in patent litigation since the American Invents Act of 2011 made it cheaper and easier for companies to invalidate patents…

“As a result, big tech companies who have been among RPX’s biggest clients have grown increasingly reluctant to rely on RPX to put together syndicates to keep patents out of the hands of NPEs.”

The Patent Investor cites an anonymous source familiar with RPX (short for Rational Patent Exchange) who suggests  the company is worth about $12 per share.

Below IPO Price

RPX is already up about 24% this year, but is still trading well below its 2011 IPO price of $19 per share. Founding CEO John Amster left the company earlier this year after his suggestion to take the company private at $11 per share were nixed.

Baird analyst Jeffrey Meuler reiterated his Outperform rating last week and $15 price target on RPX Corp.

Earlier in the year, on March 8, CNA Finance reported that “Early this morning, stories started breaking that RPX Corp may soon be acquired. In fact, according to some of the reports, the company has received several offers from private equity companies to take it out of the public sector.”

On that day RPX shares rose 15%. Thus far, the RPX board has not commented.

If RPX were to be acquired at a significant premium to its current $668 million market capitalization, it would be a boost of confidence not only for the company’s shares and public IP companies (PIPCOs), but for patent holders in general. It could be a signal that patent values are headed higher.

On Thursday, USPTO Director Nominee Andrei Iancu was unanimously approved by Senate Judiciary Committee, signaling a further distance from the Michelle Lee-led USPTO that saw a dramatic rise in invalidations before the Patent Trial and Appeal Board.

Image source: rpxcorp.com; laborcosting.com

 

Short-term thinking about intellectual capital weakens the U.S.’ ability to compete

A well-known economist and entrepreneur, whose work has been cited more than 120,000 times as tracked by Google Scholar, says that businesses and managers who fail to properly acknowledge the contribution of intellectual capital, including IP rights like patents and trade secrets, are dangerously short-sighted. 

David Teece, Director of the Tusher Center for the Management of Intellectual Capital, at UC Berkeley’s Haas School of Business, says “We are at a critical junction in the evolution of our society and the economy. If we continue to protect and reward just the production of tangible goods (objects), while short-changing intangibles (ideas, inventions, creative-works, know-how, relationships, etc.), we will be out of step with technological progress and the march of civilization.

“Economies will eventually stutter if the creation of intangibles is compromised through poorly designed and weakly enforced intellectual property rules.”

Brief and Keynote

These remarks were part of a brief he wrote for the Tusher Center, which can be found here. He delivered more detailed remarks as the keynote at the first IP Awareness Summit in Chicago in November. The title of his talk was “IP Rights Erosion: A Growing Threat to U.S. Economic Leadership.” For the complete Intangible Investor column, “Short-changing intangibles – is risky business,” in the January IAM magazine, out this week, go here.

Dr. Teece believes that improving awareness of and attitudes towards intangible assets ought be part of industrial and innovation policy debates. “Nations that rely on creativity,” he says, “must be vigilante in maintaining systems that permit innovation, authorship and creativity to thrive.”

For the outline of Dr. Teece’s talk, go “IP Rights Erosion: A Growing Threat to U.S. Economic Leadership.”

Image source: berkeley.edu; understandingip.org

 

Update: 62 weird but strangely useful facts about bitcoin

$100 invested in bitcoin in July 2010 is worth about $6M today. For many, it is still unclear if blockchain is a viable alternative currency, an investment or a scheme that has made some people rich.

One Bitcoin today currently equals $7,416.88, up from under $500 over a year ago.

With those multiples you can see why patent and other IP holders are highly interested in the future not only of bitcoin, but other blockchain based crypto-currencies and transaction platforms. If bitcoin, which started it all, is far from perfect, blockchain, the technology that provides its basic infrastructure, can be seen as bitcoin 2.0.

The number of cryptocurrency and blockchain-related patent applications being submitted and published in the US has nearly doubled in 2017, reports Coin Desk.

Data from the US Patent and Trademark Office (USPTO) database indicates that there were 390 patent applications related broadly to blockchain technology published between January and July of this year.

“Overall, this represents a 90% increase compared to the same period in 2016, when 204 applications were sent to the USPTO,” said the publication.

The dataset includes combined keyword search results using terms such as “bitcoin,” “ethereum,” “blockchain” and “distributed ledger,” among others.

Bank of America has been among the most active filers. Three new submissions, initially filed with the USPTO early last year, add to a total of 20 blockchain and cryptocurre

ncy-related patent applications filed by the bank since 2014.

Diversity of Perspective

Not everyone agrees that bitcoin should be greeted with unbridled enthusiasm.

“Right now these crypto things are kind of a novelty,” JP Morgan CEO Jamie Dimon told a CNBC-TVreporter in New Delhi. “People think they’re kind of neat. But the bigger they get, the more governments are going to close them down…”

“It’s creating something out of nothing that to me is worth nothing,” he said. “It will end badly.”

Dimon was concerned that with bitcoin, ethereum and various initial coin offerings (ICOs), there are now cryptocurrencies everywhere. Several nations have even banned bitcoin.

Early Adopters

Despite Dimon’s comments, 69% of banks that participated in an Infosys survey reported that they were experimenting with permissioned or private blockchains, and some governments and an increasing number of companies, including Dell, Microsoft and Expedia accept bitcoin as payment.  The FBI, states the image below developed by a gambling site bitcoinplay.net the developed the image, owns 1.5% of all bitcoins.

Below is an infographic that updates an earlier IPCU post. It’s called “62 Insane Facts About Bitcoin.”

 

Image source: bitcoinplay.net; bitcoin.com

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