Tag Archives: intellectual property

10th Intl Legal Alliance Summit in NY, June 15, will confer IP awards

The International Legal Alliance Summit & Awards will celebrate its tenth anniversary in New York on June 15, 2017 with approximately 500 in-house counsel and law firms from around the world.

Attendees will discuss such hot topics in domestic, cross-border and M&A intellectual property issues as IP strategies, patent eligibility and IP portfolio management. They will also be present to see honors awarded to the best legal departments and law firms in their respective fields.

Organized by Paris-based Leaders League, the interactive one-day program provided participants with networking opportunities by way of one-to-one meetings, expert-lead roundtables, and seated lunch and dinner and cocktail receptions.

The General Counsel Awards recognized the best legal, tax and intellectual property in-house departments, while the Law Firm Awards Ceremony in the evening will celebrate the best performing independent law firms. For nine years, the International Legal Alliance Summit & Awards has supported the players of the legal industry in the search of expertise, networking and achievement.

Fifty legal department from large international companies will run for the victory during the networking lunch and 150 law firms from more than 25 countries during the gala dinner.

Corporate IP Counsel

Speakers include senior counsel and IP executives from IBM, Philips, Microsoft, Mondelez, Caterpillar, Samsung, Canon, L’Oreal, Total, Lufthansa, MetLife, UBS, Open Invention Network and The Clearing House associations of banks. For the full list of speakers, go here.

The International Legal Alliance Summit & Awards is pleased to present its 10th edition of the Expert Insights conferences. Over 70 outstanding international speakers debated on the latest issues the industry is facing and highlighted the new challenges to overcome with their experiences, knowledge and analysis

Traditional conferences, say the producers, leave to chance finding the best networking opportunities. By using the internet platform, attendees can schedule one-on-one meetings of their choice.

The Expert Insights Conferences are the opportunity to benefit from 60+ experts of the legal industry. The ILA Summit will feature 14 panel discussions

For the 2017 program, go here;

To register, go here.

Image source: www.ilasummit.com

New book: tech elites’ disregard for privacy & IP must be managed

Can Internet monopolies – adept at providing at providing information – be prevented from violating the rights of individuals, businesses and IP holders, and impeding innovation?

They can if they are regulated like utilities, says Jonathan Taplin in his new book, Move Fast and Break Things.

In 2009, Mark Zuckerberg told Business Insider publisher and former Wall Street analyst Henry Bloget, “Move fast and break things is Facebook’s prime directive to developers. Unless you are breaking stuff,” Zuckerberg said, “you are not moving fast enough.”

Eight years later, this Facebook mantra has taken on a darker meaning. A new book by Hollywood producer and former USC Annenberg Innovation Lab director, Taplin (Mean Streets, The Last Waltz), offers a portrait of technology giants without restraints, routinely violating the rights of creatives, consumers and innovators, and propping up their own shares at the expense of investing in the future.

Subtitled How Facebook, Google and Amazon Cornered Culture and Under-mined Democracy, Move Fast and Break Things dissects the inordinate power of a handful of the popular companies and their founders, and what it means for culture, innovation, and personal freedom.

What Taplin does best is connect the dots by distinguishing between true break-through ideas and the ability to provide and mine data, especially personal information, for profit and dominate markets. The confluence of vision, ego, and wealth is for Taplin a dangerous mix that needs to be carefully watched if not closely monitored. Copyright and patent holders need to be especially wary.

Don’t Ask Permission

“The co-founder of YouTube, Chad Hurley, was a PayPal alumnus, schooled in Peter Thiel’s philosophy,” writes Taplin. “He built his company on the same ‘don’t ask permission’ ethic the Larry Page had embraced… ‘Who will stop me?’ [A phrase which can be found in Ayn Rand’s controversial novel, The Fountainhead.] This became the center tenet of Internet disrupters, from Thiel’s PayPal right up to Travis Kalanick’s Uber.”

Taplin writes that Google, who championed the tagline for its corporate code of conduct, “Do no evil,” controls 88% of online searches and search advertising, while Facebook has 77% market share in social media and Amazon a 70% share of e-book sales. He does not consider Apple a monopoly because its main hardware business has many competitors.

“The tech elites jealous guarding of its own monopoly platforms,” says Taplin, “is built upon a blatant disregard for the artist’s intellectual property.”

“More people than ever are listening to music, reading books, and watching movies, but the revenue flowing to the creators of that content is decreasing while the revenue flowing to the big four platforms is increasing. Each of these platforms presents a different challenge for creators. Google and YouTube are ad-supported ‘free-riders’ driven by a permission-less philosophy.”

Permission-less free-riding, or “efficient infringement” in has also come to dominate other parts of the IP workplace, rendering simple patent licenses more arduous than ever.

Consent Decree

How does Taplin propose we prevent Internet monopolies from violating the rights of individuals, businesses and IP holders, and impeding innovation? You regulate them like utilities.

It would be very difficult for many people and businesses to live without Amazon, Google, YouTube and Facebook, but it is becoming impossible for many who produce intellectual property to live with them.

This is not something that their founders and shareholders want to hear, but it may be inevitable. Europe is more apt to regulate BigTech than the U.S. – and it is not mere jealousy. If Google, for example, is indeed a monopoly, Taplin, a former tour manager for Bob Dylan, asks, would a consent decree like the one that the government made Bell Labs enter into in 1956 work? He believes it would.

Easy Ride is Over

The Guardian, the British daily, said “Move Fast and Break Things is a timely and useful book because it provides an antidote to the self-serving narrative energetically cultivated by the digital monopolies. They have had an easy ride for too long and democracies will, sooner or later, have to rein them in.”

It would be very difficult for many people and businesses to live without Amazon, Google, YouTube and Facebook, but it is becoming virtually impossible for many who produce intellectual property to live with them.

My full review of Jonathan Taplin’s new book can be found here, on IP Watchdog.

For more information or to buy Move Fast and Break Things, go here.

For a free preview chapter (via Google), go here.

Image source: jontaplin.com

 

97% of Europeans regard IP rights favorably; 41% ages 15-24 believe it is sometimes OK to buy counterfeits

When it comes to intellectual property rights Europeans are highly respectful, except among the young, where buying counterfeits has gown.

That is the primary take-away of an extensive European Community survey of attitudes toward IP rights delivered recently. The findings show that 97% of Europeans believe that IP should be respected, and that inventors, creators, and performing artists need to be paid for their work.

In contrast to the overall positive regard for IP rights, however, 41 per cent of young Europeans, ages 15 to 24, said they believed it was acceptable to buy counterfeits if the original product was too expensive. 15% of those surveyed in that age group said that they had intentionally purchased a counterfeit product in the past 12 months, 9% higher than in a similar 2013 study conducted by the European Union Intellectual Property Office (EUIPO).

“European Citizens and Intellectual Property: Perception, Awareness and Behavior,” a 205-page research report, updates the first EUIPO provides further evidence of how IP rights are regarded by EU citizens at a time when encouraging innovation and creativity is increasingly the focus of economic policy.

“In line with the 2013 results, people do not always act in line with their stated position,” said EUIPO Executive Director, Antonio Campinos, in summarizing the findings. “The key 15-24 age group seems to have become less convinced that fake goods are damaging and is buying more counterfeit goods, mainly for price reasons.”

Significant Sample

“European Citizens and Intellectual Property” surveyed people across all 28 EU Member States about their perceptions of intellectual property survey. It consolidates results of more than 26,000 interviews and confirms the global picture assessed in the EUIPO’s 2013 research.

“Even during a period of economic crisis when household budgets have come under pressure,” the report concluded, “the vast majority of respondents agree that it is important that inventors, creators, and performing artists can protect their rights and be paid for their work.”

Eighty-three percent said they prefer to access digital content through legal or authorized services whenever there is an affordable option available, and 71 percent of those admitting to using illegal sources say they would stop, if they could access affordable alternative options.

Confusion is growing about what constitutes a legal source. In 2016, 24 percent of respondents, five percentage points more than in 2013, wondered if an online source was legal, rising to 41 percent among young people.

Half of the Europeans queried believe that strict protection of IP rights may, in fact, curb innovation, and more than half feel that IP principles are not adapted to the Internet.

Neither the 2017 survey and previous study focused on counterfeits and copyrighted content, or examine attitudes towards patents or trade secrets.

An executive summary for “European Citizens and Intellectual Property” can be found here.

For the full 2017 EUIPO IP perception study, go here.

Image source: euipo.europa.eu

Patent transactions are flat; U.S. asking prices firm at $250K per

The number of patent sales in the 4Q 2016 remained about the same, but the median asking price of sellers of U.S. patents was higher than in recent quarters.

According to data compiled by Richardson Oliver Law Group, a Silicon Valley firm that tracks patent transactions, five of the ten most active sellers were Asian companies, and the most active buyers were led by a variety of operating companies, defensive aggregators, and NPEs. In general, corporate buyers were more active than NPEs.

The median asking price of U.S. patents in the 4Q was $250K; all patents, $150K (see graph below).

As a trend, operating companies represent a higher percentage of overall patent purchases when looking at a five-year sample. The sale of software assets lagged hardware, but not by much, 180 to 234, for some an encouraging trend.  

“Buyers are becoming more comfortable with software risk and understanding what may and may not be ineligible under Alice,” said Kent Richardson, Managing Partner of ROL. 

Sales are flat, which Richardson believes can be interpreted as a sign of relative health, given how badly the case law has gone against patent owners. “Arguably, there should be fewer deals on the market and fewer sales. We won’t know for sure for another 12 months, but it looks like sales rates are climbing back to where they were a couple of years ago.”

Cloud-related inventions are more likely to be technically challenging in terms of patentability, compared with, say, user interface patents. Infrastructure inventions are much more likely to pass an Alice test.

“As a test, we are defaulting to ‘Would it be patentable to the Europeans?’,” concludes Richardson. “It’s not a perfect measure, but it works.”

Available Assets Down, Packages Up

The number of patent assets available in the market dropped 13.2 percent to 2,478 new assets in the fourth quarter from the previous quarter.

The number of patent packages listed rose 3.5 percent to 147 from the third quarter. (This could mean that fewer, better quality patents are being offered for sale.) However, 2,855 assets listed in the third quarter were offered in a smaller number of patent packages.

The median asking price per new asset (U.S. and global) listed by patent brokers was $150,000 in the fourth quarter. That reflected increases of 38 percent from the previous quarter and 80 percent from the fourth quarter of 2015.

Brokers matched buyers and sellers for 28 deals on packages of related patents during the quarter, according to ROL data. Those deals totaled 637 assets, comprising 395 granted or pending U.S. patents, while the remaining amount represented granted or pending foreign patents.

By comparison, 565 assets were sold in 35 brokered patent deals during the third quarter of 2016. In the fourth quarter of 2015, 554 assets sold in 33 patent packages.

For information about Richardson Oliver Law Group, go here.

Image source: RichardsonOliverLaw; Bloomberg/BNA

Inventor Kearns’ fight with Ford & other auto cos is 2016’s most read IP CloseUp post; 20,000+ visitors

An article summarizing inventor Robert Kearns’ epic battle against the automobile industry is this year’s most read IP CloseUp post with more than 21,000 visits.

The post summarizes the twelve-year patent suit mounted by Kearns, the inventor of the intermittent windshield wiper, against Ford and much of the automobile industry in the 1980s and 1990s, for stealing his invention.

“Kearns’ Son Still Fuming Over Wiper Blade Fight” generated 21,374 visits thus far in 2016, up from 6,928 in 2015. Total visits are over 30,000, which makes it the most read of almost 300 IPCU posts.

What about this story resonates with readers?

It could have something to do with the 2008 movie, Flash of Genius, that memorialized Kearns’ battle and depicted how it contributed to his mental breakdown and loss of his family.

Bittersweet Victory

Flash of Genius, starring Greg Kinnear as Robert Kearns and Alan Alda, as Gregory Lawson, his ambiguous attorney, opened to mixed but generally positive reviews (59% Tomato Meter; 55% Audience Score). It had a $20 million budget but grossed just $4.8 million at the box office. (Alda, of M*A*S*H fame, BTW, is a champion of understanding science 51yeitvgpaland innovation, and founded the Alan Alda Center for Communicating Science at Stony Brook University.)

The movie has many fans. I suspect that when it it is streamed or runs on a movie channel curious viewers run to Google hopeful of learning more about the enigmatic Kearns and his dispute with auto giants. It pitted him as David to their Goliath. (Thanksgiving weekend alone, which is prime movie-watching time, there were more than 1,500 visits to the post on IPCU.)

Even though Kearns eventually won significant awards, $10.2 million from Ford, and a total of $30 million from Chrysler, it is easy to believe that the struggle, which cost him his family and affected his sanity, may not have been worth it.

Apparently, no one thought so except Kearns, a college professor, former cryptographer in WWII and officer at a U.S. agency that was the forerunner of the CIA. (See the link to his obituary on the original IP CloseUp post, above.)

High Search Ranking

The Kearns’ post’s popularity probably also has something to do with its high Google search ranking under Kearns’ iconic name. It’s the second item after a rather tepid Wikipedia entry.

Supporters of the film include Peter Travers, long-time film critic for Rolling Stone. He gave it three out of four stars, saying “Kinnear takes the star spot in Flash of Genius and rides it to glory… Kearns wasn’t a movie hero. His halting courtroom delivery lacked Hollywood histrionics. Kinnear plays him with blunt honesty, sagging under the weight of stress but maintaining a bulldog tenacity that would win the day. Was the battle worth it? Kearns’ conflict is readable in Kinnear’s every word and gesture. His performance is worth cheering”.

Stephen Holden of The New York Times called the film “a meticulously constructed mechanism, one that wants to convey the same mixture of idealism, obsession and paranoia found in whistle-blower movies like Silkwood and The Insider,” thought it “has the tone and texture of a well-made but forgettable television movie”.

Lead actor Greg Kinnear, who in the lead role is more likable than Kearns was, won the Boston Film Festival Best Actor Award for his portrayal.

kearns-familyThe Kearns story strikes a chord deep in everyone. It is a quintessentially American tale of the forward-thinking little guy against diverse array of nay-sayers, his family included. Kearns’ sincerity as an engineer who craved recognition for his work more than his financial security is not lost on audiences, who see Flash of Genius, weaknesses aside, as an emotional and somewhat cautionary tale that is difficult to forget.

____________________

Whether it was ego, anger, greed, or a combination, that ultimately motivated Kearns to go as far as he did for as long, the inventor’s greatest accomplishment may not be the valuable device he created, which no doubt helped save lives, but his perseverance and drive to prove that it was stolen from him.

___________________

Whether or not Kearns was selfish or unbalanced, patent holders have benefited from his trail-blazing determination and refusal to take settlement money when he needed it most.

Stacked Deck

The environment for inventors and innovative small businesses today who wish to license their rights is not much different from when Kearns fought his epic battles. In fact, the obstacles may be worse.

With “efficient” patent infringement the preferred strategy of many the leading technology companies today, and higher validity and patentability hurdles established by the Patent Trial and Appeal board and the courts, the deck continues to be stacked against IP holders – even those with the capital, time and patent quality to succeed.

[Note: A company that employs “efficient” infringement believes that it is highly unlikely it will be caught using an invention it is not entitled to, and if it does, it is unlikely that it will have to pay much. For them, choosing not to take a license unless forced to by the courts is in their view a prudent business decision, ethics aside.]

Flash of Genius is available from Amazon, iTunes and other sources, to stream, rent or buy. Recently, it became available to Netflix subscribers for free. The official movie trailer can be seen here.

For those interested in the topic of Kearns and independent inventing, the long and thoughtful 1993 New Yorker magazine article by John Seabrook on which the movie is based is not to be missed. It is available for free by going here.

To read the original Kearns post on IP CloseUp, go here.

Image source: allesantiago.wordpress.com; amazon.com

 

EFF’s narrow position on university tech transfer is “wildly misguided”

The Electronic Frontier Foundation (EFF) is attempting to paint a scarlet letter on universities with public funding who benefit from sharing discoveries with those best-equipped to monetize them.

The organization’s suggested sanctions for those schools that out-license research has been described as “preposterous,” and its condemnation of licensing specialists “wildly misguided.”

This is according to Richard Epstein, a highly respected professor of Law at NYU, senior fellow at the Hoover Institution, and senior lecturer at the University of Chicago Law School, in a recent Forbes piece.

Epstein say that the EFF equates all non-practicing entities (NPEs) with so-called patent “trolls” looking to game the system. In fact, a relatively small percentage of NPE suits are filed by those “black hat” businesses with a18063d135cfa169c2f96cce4d167ccdquestionable patents seeking a nuisance settlement.

Recently, the Electronic Frontier Foundation published an extraordinary request to research universities as part of its “Reclaim Invention” campaign: please stop putting your patents into the hands of insidious patent trolls.

EFF, writes Epstein, seeks to put teeth in its proposals by asking state legislatures to enact statutes “to bar state-funded universities from transferring patents to patent-assertion entities, broadly defined and branded as trolls”.  It proposes that these transfers be null and void if they do not meet statutory criteria, and suggest that the universities in question be punished by a forfeiture of research funding and student financial assistance.

In the eyes of the EFF, universities should exercise a higher sense of social responsibility and only sell or license their patents to those companies that “will actually do something with them.”  In its view, universities should resist the temptation to license their patents to the highest bidder. Really?

Its manifesto linking patents and NPEs with important research that is less likely to be shared for the logo_fullbenefit of the community can be found here. EFF sees patents and those who choose to share them through licensing as roadblocks, not bridges.

Blunt Condemnation

Epstein is blunt in his condemnation of the EFF’s proposal: “The first error lies in EFF’s over broad claim that equates NPEs with patent trolls; the second error is to assume that universities have some particular expertise in licensing these patents to potential end users; and the third in its wholesale condemnation of patent enforcement through litigation.”

The Forbes piece can be found here; the EFF “reclaim invention” proposal here. Both are worth reading.

The path of innovation is complex. A short-sighted position regarding who should benefit most from public research funding is self-deafting.

Image source: forbes.com; eff.org

Licensing deal with IP rights group ends YouTube blackout in Germany – “no more red faces”

Tens of thousands of recording artists and musicians in Germany will be receiving payment for their content under the terms of agreement struck last week between YouTube and GEMA, Germany’s leading royalty collection group.

The deal will end a seven-year YouTube ban in Germany, which had previously blocked access to the streaming site over non-payment of performance royalties. It is unclear if the pact is a harbinger of things to come in the ongoing battle between streaming sites, search engines and content providers, such as musicians, or if it includes published works, like books and photographs.

Resolution of the dispute, reports The New York Times, comes “with European officials revamping the region’s copyright rules to give more power to music labels, publishers and other content producers over the likes of Google, which owns YouTube, and Facebook.”

“We remained true to our position that authors should also get a fair remuneration in the digital age, despite the resistance we met,” Harald Heker, GEMA’s chief executive, said in a statement. He added that the agreement covered future royalties, as well as those accrued over the last seven years.

Blocking alert that German YouTube users will no longer see

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“This is a win for music artists around the world, enabling them to reach new and existing fans in Germany, while also earning money from the advertising on their videos,” YouTube’s Christophe Muller told TorrentFreak, a publication dedicated to bringing the latest news about copyright, privacy, and everything related to filesharing.

TorrentFreak also reports that “Increasingly, music groups are criticizing YouTube for ‘profiting’ from the hard work of artists without paying proper compensations, so it’s not unlikely that similar deals will follow in other countries.”

A prominent L.A.-based producer told IP CloseUp that the deal (which deal? The deals in other countries? “that such deals in other countries”) “appears to be progress,” but Google (which owns YouTube) is too big for the little record companies to fight. “Whenever they try collective action, Google runs to the anti trust authorities.”

Agreement that the Internet has been bad for the music business is not universal. Factors that influence “free” distribution depend on a label’s size, the popularity of its artists and their point-of-view about how best to generate income. Sony has said that impeding YouTube costs the music industry millions of dollars.

One of the people who embraces this positive view of streaming is Edgar Berger, Sony Music’s CEO of international business. In a recent interview he stressed the importance of the Internet, while noting that the increase in Internet sales almost makes up for the decline in physical sales. See a summary of the interview, here.

“There is absolutely nothing to complain about. The Internet is a great stroke of luck for the music industry, or better: the Internet is a blessing for us,” Berger said.

No More Red Faces

“The [GEMA] deal means YouTube will unblock thousands of clips in Germany for the first time in seven years,” wrote Bloomberg News. “When German music fans in the past tried to watch videos of their favorite songs they only got an youtube-sad-face-300x159error message showing a red YouTube sad face with a line saying the content was banned from the portal for copyright reasons.”

The parties did not disclose financial details of the agreement. YouTube has, in the past, struck similar deals with dozens of groups around the world, including one in 2009 with the U.K.’s PRS for Music.

The groups also did not say if YouTube’s familiar sad red face would be replaced with a happy green one.

Image source: theheureka.com

No Monkey Business: Animal selfie raises serious questions about copyright ownership

Who is the legitimate owner of a selfie taken by a monkey, but positioned by a nature photographer? Is it the intellectual property of the animal or the photog?

A novel law suit filed recently by PETA (People for Ethical Treatment of Animals), the animal rights advocates, asserts that a macaque monkey, Naruto, should be declared the author of a selfie, not the photographer, David Slater, who set up the shot and had included it in a book. The suit demands that the monkey receive any proceeds generated by a now-famous 2011 photograph.

PETA is seeking a court order, through a suit filed in federal district court in San Francisco, to allow it to administer all proceeds from the photos for the benefit of the six-year-old Naruto, and other crested macaques living in a reserve on the Indonesian island of Sulawesi.

The photos were taken during a 2011 trip to Sulawesi by British nature photographer Slater. Through San Francisco-based self-publishing company Blurb, reports The Daily Mail, he has published a book called Wildlife Personalities that includes the ‘monkey selfie’ photos.

However, the photos have been widely distributed elsewhere by outlets, including Wikipedia, reports the _85730600_monkey2
news outlet, “which contend that no one owns the copyright to the images because they were taken by an animal, not a person.” 

Monkey See

“‘The facts are that I was the intellect behind the photos, I set the whole thing up,'” Slater said in an email. “‘A monkey only pressed a button of a camera set up on a tripod – a tripod I positioned and held throughout the shoot.’

“‘I sincerely wish my 5-year-old daughter to be able to be proud of her father and inherit my copyrights so that she can make my work into an asset and inheritance and go to university. ‘I have very little else to offer her.'”

Last year, the US Copyright Office issued an updated compendium of its policies, including a section stipulating that it would register copyrights only for works produced by human beings.

It specified that works produced by animals, whether a photo taken by a monkey or a mural painted by an elephant, would not qualify.

Not Species-Specific

However, Jeffrey Kerr, a lawyer with PETA, said the copyright office policy ‘is only an opinion,’ and the US Copyright Act itself does not contain language limiting copyrights to humans.

‘The act grants copyright to authors of original works, with no limit on species,’ Kerr said. ‘Copyright law is clear: It’s not the person who owns the camera, it’s the being who took the photograph.’

If the court rules in Naruto’s favor, reports Quartz, PETA would manage the copyright of the photos on behalf of Naruto and license them for commercial use. “All royalties earned from these pictures would be specifically used for Naruto’s benefit and that of his extended family, who are being impacted by encroaching human development.” PETA is not asking for any compensation.

Animals can be the authors of valuable works of art, and there is a market for art created by animals. In fact, many zoos raise money by selling paintings created by the animals—just recently, the Lincoln Children’s Zoo in Nebraska sold 116 pieces of art in its semi-annual Animal Art event.

Survival of the Fittest

Now, if we can just treat inventors regarding their IP rights as fairly as PETA wishes to treat monkeys, their (inventors’) survival would be less in doubt.    

 

Image source: dailymail.co.uk, via AP; photo credit: Naruto 

 

“All Prior Art” algorithm won’t stop bad patents or actors

Stopping new inventions dead in their tracks by making them “automatically” unpatentable might sound like a good idea to some.

However, programming a computer to disclose an endless combination of dubious inventions is more effective at stopping bad patents in theory, not practice.

At least that is what three experienced patent attorneys told me recently. Publishing millions of pieces of supposed prior art will not stop bad patents (really, unpatentable inventions)  from being issued or make legitimate invention-ownership less difficult to discern.

More Style than Substance

All Prior Art is a project that attempts to “algorithmically create and publicly publish millions of pieces of possible new prior art, thereby making the disclosed concepts unpatentable.”  All Prior Art is trying to take highly obvious ideas out-of-play. Unfortunately, preventing patents from being granted, even those that do not deserve to be, is not a simple fix.

In order to be admissible, prior art must be enabling; i.e. the disclosure must describe how the invention can be produced — not something that All Prior Art addresses.

Cf2sxeUWEAE864bThe brainchild of Alexander Reben is a self-described engineer and artist with a background in robotics and applied math.  Mr. Reben’s random configurations have been described to me as “a mishmash of questionably inventive ideas.” Even if there are millions of combinations, it is highly unlikely that they will serve to invalidate a perspective patent, let alone one that an NPE may be enforcing.

All Prior Art may be more style than substance. Sure, inventions that do not meet the appropriate tests of novelty should be prevented from issuing or invalidated if they are enforced (or, maybe, even if they are not). Even if this scheme were to work, it would weaken the prospects of many inventors, universities and SMEs, and dissuade investment in innovation.

Missing Description

The theory behind Mr. Reben’s invention is that if a computer can spew out enough combinations of prior art — i.e. publish millions of pieces of data that describe inventions — the subject matter disclosures will preempt patent issuance. It’s just not that simple.

The problem is that for any prior art reference to serve as an invalidating disclosure, it has to be enabling. And the fact that no human being has come up with the combination is a pretty good argument against enablement.

The means it must be described so that a “person of ordinary skill in the field of the invention can practice the subject matter based on the reference, without undue experimentation.” (Sanofi-Synthelabo v. Apotex, Inc., 550 F.3d 1075, 1082 (Fed. Cir. 2008).

When it comes to All Prior Art’s prior art, the “description” is missing, according to Bloomberg BNA’s Tony Dutra.

“The virtually infinite number of combinations will generate over 99 percent dreck,” chides Mr. Dutra. “But, like the ‘infinite monkey theorem’ that predicts a monkey hitting typewriter keys at random for an indefinite time will almost surely, eventually type a given text, Reben believes his project will generate at least some combinations that someone, someday might try to patent. It’s that someone [Reben] aims to stop.”

Patent the Universe

NPLThe tech media, notably the DailyDot, encouraged by with the idea of that patents can be neutered, has taken an ill-conceived idea and made it worse with a misleading, inaccurate headline: “One man is trying to single-handedly create every patent imaginable.”

A sister website All The Claims is attempting to achieve a similar objective, but with the use of claims and a more verbose alternative.

“Hard to Take Seriously”

“Bruce, this approach is hard to take this seriously, especially with an admission that most of the inventions generated will be nonsensical,” one patent attorney wrote to me. “Pertinent excerpts from the Patent Office Examiner guidelines illustrate that:

‘In determining that quantum of prior art disclosure which is necessary to declare an applicant’s invention ‘not novel’ or ‘anticipated’ within section 102, the stated test is whether a reference contains an ‘enabling disclosure’… .’”

“To be invalidating prior art as to make a meaningful contribution,” a former USPTO examiner, inventor and Fortune 100 Chief Patent Counsel told me. “If utility is missing, it will not be seen at invalidating. Prior to be taken seriously by an examiner or in litigation needs novelty and utility, or specific application.”

“There are billions of combinations, but so what? There needs to be novelty and utility to qualify as prior art. This scheme might be well intended bu ti hurts the little guy more than the big tech player. I doubt that courts will take it seriously or that automated generation of inventions will have a meaningful impact.”

Trivial Variations

“Is Mr. Reben really attempting to automate the generation of trivial, random variations of existing stuff?” asked another patent attorney. “It is already difficult to patent trivial variations, as they are ‘obvious’.  The term ‘automated generation of patentable’ is kind of an oxymoron. This approach  should be titled ‘automated generation of trivial variations of existing inventions’.”

Non-Patents

So for now, at least, bad patents (really, non-patents) will continue to be issued by the USPTO and other major patent offices in large numbers because they lack the resources to prevent them.

Inter Partes Reviews and other mechanisms will continue to try to eliminate or to help fix erroneously issued patents, and litigation will remain the only reliable, albeit, costly way to determine if a patent is valid and infringed.

If it were easy to solve patent problems algorithmically with a PC, mathematicians would be higher paid than patent attorneys. That’s not likely to happen anytime soon.

Image source: ttconsultants.com

PIPCO stocks soar in a surprising first half for the second quarter

In what some patent holders are hoping will be a harbinger of things to come, publicly traded IP licensing companies are enjoying an unusually strong second quarter.

Year to date performance for some of the key players include Marathon (MARA), up 40.62% as of the close of the market on May 17. This is as the S&P 500 performance has dwindled to a mere .16% YTD.

MGT Capital Investments (MGT) is up an astounding 1,704.35%, in part because cybersecurity pioneer, John McAfee, is about to be named CEO.

“Until stock-featrecently, relentlessly negative information about patents and holders has been a challenge to patent licensing and sales activity,” one analyst observed.

“It may finally be hitting opcos and the courts that not only are there opportunities out there for amiable transactions that benefit all parties and avoid disputes, but an asymmetric market for patent transactions that depresses value is potentially very dangerous for everyone.”

Others performers were Inventergy (INTV), up 14.91%, Finjan (FNJN), ups 19.13% and WiLAN (WILN), which has risen an impressive 95.4% since January 1.

Not all PIPCOs have performed well. Stalwart RPX (RPXC) was down 17.82% and Spherix (SPEX) was down 24.56%.

Improving Conditions

The stock performance is a result of a diverse contributions, including $10 million in financing for Finjan, and $25 million settlement for Marathon from Apple.

Additionally, the courts have been ruling more favorably for patent enforcers, including increasing the likelihood of wilfulness. The Patent Trial and Appeal Board (PTAB) is showing some signs of acting more fairly, too.ipcu30-blurb2-21

Operating company patent acquisition activities have increased, too, in a sign that we may have hit a bottom and patent values will be creeping up if they have not already.

For a more complete list of PIPCOs and their recent performance, visit the IP CloseUp 30® here.

Image source: 3dprinting.com

“Building an Innovation Economy” is focus of latest Hoover IP² event

IP², an initiative of the Hoover Institution at Stanford University, last week hosted a more than 60 IP scholars, economists and practitioners to hear and challenge research about “Building and Innovation Economy – The Mechanics of the Patent System.” 

Hoover IP2 is a working group on intellectual property, innovation and prosperity. Its goals are to build a network of scholars from a variety of academic disciplines, to undertake research based on evidence and reason, and to disseminate the research results. Conferences, such as this, that include economists, legal experts, political scientists, and practitioners and that present original research, help achieve these goals.

Lively Discourse

Presenters, discussants and moderators participated in the sessions, to which I was invited to attend, in a room with two tiers of circular seating. The setting encourages discourse, as well as abundant audience questions in the true spirit of peer-review.

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Presenting participants included:  Jay P. Kesan (University of Illinois College of Law), F. Scott Kieff (ITC Commissioner, formerly of George Washington University School of Law and a former Senior Hoover Fellow), Colleen Chien (Santa Clara University College of Law) and Bo Heiden (the Center for IP Studies in Gothenburg, Sweden), James Pooley (former World IP Organization head), Damon Mateo (formerly IP executive with H-P and PARC), and IP2 Steering Committee Chair, Stephen Haber (Stanford School of Humanities and Sciences and a Hoover Fellow).

For the agenda and presenters, go here.

Audience participants included Irv Rappaport (formerly Chief Patent Counsel at Apple and National Semiconductor, and an expert witness), Ron Laurie (a director of WiLAN and former partner in the Palo Alto office of Paul Weiss), Suzanne Harrison (The Gathering 2.0) and Dr. Ron Katznelson (an inventor, patent analyst and scholar).

Sharing Ideas

Lively discussion and cordial debate ensued. Opinions were divided on some topics, such as patent assertion entities (PAEs) and the value of standards essential patents (SEPs). However, all of those present had an opportunity to have their perspective heard and responded to.

Hoover IP²’s goals are to:

  • ip2-logo130Build a dense network of scholars, from a variety of academic disciplines, who are engaged in research on the US patent system
  • Analyze the implications that may be drawn from those research results
  • Publish the resulting scholarship in peer-reviewed venues
  • Disseminate that scholarship to the larger public

More the this lively interaction is needed, and Pfizer and Qualcomm are to be commended for their lead support. For more information about Hoover IP² or past programs, go here.

Image source: hooverip2.org

 

The impact of higher patent licensing hurdles may not be fully understood

Most patent holders would agree that licensing patents for revenue has gone from bad to awful — from difficult less than a decade ago, to virtually impossible today.* 

Determining if the courts and lawmakers have facilitated improvements or simply over-corrected for weaknesses in the patent system largely depends on whom you ask, and when.

While obvious to some, the fairness of the U.S. patent system is no longer apparent to all.

In 1996, the days of the first tech bubble, there was some uncertainty regarding patent validity. Patent licensing was not easy back then, but it was viable and still could be conducted on a business basis. Out-licenses could be negotiated without first filing suit, and significant damages awards were occasionally paid, although not as frequently has some would have us believe. The threat of an injunction that would freeze product sales was still a very potent weapon for those considering enforcement.

Things became very difficult in 2006 (high uncertainty), when injunctions became virtually impossible to obtain and NPEs, the businesses that tended to enforce the best patents most frequently, were characterized as a virulent strain of a disease that needed to be eradicated. Lost in defendants’ anger is that those who enforce valid patents may actually facilitate innovation and competition, and play a positive role in job creation.

Weighing In

Weighing in on whether the over-corrected patent pendulum has finally started to swing back towards the middle are Brian Hinman, Chief IP Executive at Philips, and Ashley Keller, Managing Director at Gerchen Keller Capital. In Balancing Act, in the May Intangible Investor simple-pendulum-suspensionin IAM, they speculate on what it will take to move the patent pendulum more toward the middle where it belongs.

In 2016, with the emergence of an extreme degree of uncertainty, patent licensing became virtually impossible. (Degree of uncertainty licensing can be compared to degree of difficulty” in a gymnastics competition, although their are no bonus points for successfully enforcing an infringed patent.) Of no help was the rise of preemptive, defensive litigation (declaratory judgments), forcing many patent holders to sue first and (maybe) talk later.

Factors responsible for patents’ loss of reliability include the American Invents Act (AIA) which permitted Inter Partes Reviews (IPRs), litigation-like, post-issuance examinations of patents that invalidated many invention rights filed under previous guidelines and slow enforcement. A number of  district court, Court of Appeals for the Federal Circuit (CAFC) and United States Supreme Court cases have gone against patent holders wishing to license for revenue, including the Alice decision, which rendered many software patents and business methods invalid.

Another major set-back is Non-Practicing Entities or NPEs, also known as patent “trolls” or owners who do not commercialize or sell products but hope to generate ROI through royalty payments. All NPEs have been lumped together and have been universally demonized as “black hats” who are the primary source of all that ails the U.S. patent system and that wish to enforce questionable rights and shake down otherwise innocent companies wishing to avoid costly disputes.

However, many of the largest corporations engage similar practices themselves (aka privateers), while decrying other NPE’s.  As a result of the actions of anti-patent proponents — many large patent holders themselves — patents have become even more uncertain, and litigation longer and more costly. NPEs continue to be held responsible for the need for more anti-patent legislation, and have become a sort of obsession for some businesses and lawmakers wishing to re-frame the discussion and absolve many tech companies of serial theft.

According to Patent Progress, “a project of the Computer & Communications Industry Association (CCIA)” that endeavors to limit patents reach, there are six bills currently before Congress that still endeavor to reel-in or otherwise weaken patents and deter enforcement.

Only one piece of patent legislation, the STRONG Act, which is before the Senate, attempts to roll back some of so-called improvements introduced over the past several years, much of which in retrospect looks like an overreaction to a much smaller problem.

Fourteen bills were introduced in the 113th Congress (2013–14) alone to deal with one or more aspects of the patent troll issue. For a list of these and other bills, go here. Computer and Communications Industry Association members include Amazon, Facebook, Google, Microsoft, Red Hat and Samsung.

More and Higher Hurdles

The diagram below, “Patent Licensing: Higher Hurdles for Protecting New Ideas,” is a graphic reminder of the progressive number and nature of impediments added since 1996 that discourage the licensing of U.S. patents. It was prepared by Brody Berman Associates for a client who has given permission for it to be shared. Key court decisions diminishing patent value and creating more uncertainty can be seen in a second slide below.

case2Patent TimeLine

“Risk-Adjusted Theft”

For technology companies the era of the licensing discussion is all but over. Uncertainty has never been greater, nor has hostility to owners offering an invention for license, no matter how good the patents or fair the terms. This leaves no alternative but to litigate.

“Efficient” infringement, a term we are hearing more of lately, is really a kind of risk-adjusted theft. Simply put, the deck is all but stacked against patent licensors (who are now forced to sue) because it is more economically viable today for most businesses to steal what they use than pay for it.

The courts, lawmakers and media will need to start soon if the damage that has been done to patent licensing is to be reversed. The Supreme Court decisions below speak volumes for the imbalance and how far patents have to go to bet back to the middle. It is not so much that Alice made software unpatentable as it rendered most existing business methods and many software patents invalid under the narrower guidelines that the Court established.

If proponents of fewer and lower hurdles feel the system has over-corrected and is doing damage, they had better turn up the volume. The courts, legislators and even most patent holders do not appear to be listening.

casesPatent TimeLine

 

*My gratitude to Irv Rappaport who assisted in writing this article. Irv has served as the head of IP departments at Apple, National Semiconductor and Medtronic, and was a consultant to Intel responsible for suggesting the Intel Inside® campaign. He has served as an expert witness more than 70 cases and is named more than 20 U.S. patents. He also served as a USPTO patent examiner and a U.S. Army officer.

Image source: Brody Berman Associates; tutorvista.com

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