Tag Archives: patent trolls

China is poised to overtake the U.S. as the leading patent system

A few years ago a company whose patents were violated in China had little or no chance of defending its rights. 

Determined to move beyond its role as a low-cost provider of look-alike consumer products, and establish itself as an innovation leader, China has learned from the successes – and mistakes – of other intellectual property systems, especially the U.S. The nation of 1.4 billion inhabitants has rapidly emerged as what is currently among the fairest and most patent holder-friendly systems in the world.

Chinese patent courts second only, perhaps, to Germany in quickly and fairly adjudicating disputes.

A fascinating article in the current IAM magazine, “Defending a patent case in the brave new world of Chinese patent litigation,” details China’s rapid rise from low-cost copier to a patent power, and a nation that has caught the attention of major global technology powers who are often defendants.

Damages awards are relatively small in China, with median awards currently around 35,000 Renminbi or about $5,000, but injunctions, the power to stop a likely infringing product from being sold, are now issued over 99% of the time to winning parties. NPEs, what some U.S. companies refer to as patent “trolls,” are treated fairly as long as they their patents are of sufficient quality and are the companies are generally supportive of Chinese welfare.

__________

Patent litigation win rates, according to the article, average around 80%. Startlingly, foreign plaintiffs fare better statistically than Chinese. 

__________

The U.S. effectively ended the granting of patent injunctions in 2006 with EBay v. MercExchange. Now, only operating companies can obtain them in rare circumstances. This removes most of the leverage afforded patent holders. Granted, injunction abuses are a fact of life, and dubious patents have at times been used to enjoin products, costing companies time and money. But without the power to stop a product from being sold, patents have little meaning.

Race to the Bottom

“Largely as a result of the United States’ race to the bottom in terms of patent enforcement, Germany has emerged as a go-to patent jurisdiction, with virtually guaranteed injunctions, quick time to trial and no discovery resulting in a highly efficient system,” writes Beijing-based Erick Robinson, chief patent counsel, Asia-Pacific for Rouse, a global IP strategy firm.

Patent-holder Win-Rates and Median Damages Awards 

screen-shot-2016-12-26-at-11-31-36-am

“Enter China. For years the laughing-stock of all things IP related, the Middle Kingdom was ridiculed for the easy availability of counterfeit handbags, software and DVDs. However, over the last 15 years, and especially in the last two to three, China has put together an extremely effective patent enforcement system. Based largely on the German system and all of its advantages, but with selected portions from US law, China has now become a top forum for patent litigation.”

Unlike most countries which enjoin making, using and selling allegedly infringed products in-country, as well as imports, Chinese law also bans infringing exports from leaving the country. So, for example, if the accused device is Apple’s iPhone, not only can sales of iPhones in China be enjoined, but also exports of the devices from China. This would enable a patent owner to achieve an effective worldwide ban, since iPhones are manufactured in China.

Slippery Slope

With U.S. patent protection significantly diminished over the past decade, and China’s on the rise, the U.S. is on a slippery slope when it comes to stimulating R&D, innovation and investment. It is well on its way to becoming a second-rate patent system, and a slip in disruptive innovation, necessary for the creation of new industries, difficult to measure in real-time, has probably started. Certainly, companies and their stakeholders are thinking twice before pursuing or relying upon USPTO-issued patent protection.

It remains to be seen if China, a continuing source of counterfeit goods that are shipped worldwide, is committed to providing its businesses, as well as those outside of the country, with a legal system that can meet the needs of all business holders, and permit fair and timely resolution of legitimate disputes.

High Win-Rates; Low Damages Awards

screen-shot-2016-12-26-at-11-32-18-am

China is now the second largest filer in the U.S. and, while its companies have rarely resorted to filing suits in the U.S. against U.S. companies, there is little doubt that it will do so in the future. Technology giants include Alibaba, Xiaomi, Huawei and Lenovo.

China is likely to be more aggressive enforcing its patents than U.S. frequent-filer Japan, which has been reluctant to engage in domestic or foreign patent disputes. (There are some signs that is changing.) Samsung, by far the largest holder of U.S. patents in the world, has shown a greater willingness use its patents for licensing and leverage.

China may or may not be deliberately attempting to embarrass U.S. and eventually surpass its moribund IP system, but the impact is the same. Continued lack of awareness of what IP rights achieve and for whom, and lobbying, has significantly compromised the once-exemplary U.S. patent system. The Chinese are not too new to capitalism not to see this as an opportunity to compete. For the U.S.’ sake, let’s hope it’s not too late to make invention rights a priority again.

Subscribers can access The brave new world of Chinese patent litigation here.

FUTURE POST: What patent experts believe China’s patent-friendly system means for the U.S. – Experts: Void from U.S. patent “train wreck” is being filled by China’s patent system

Image source: IAM magazine

Trump Jr.’s op-ed reveals a solid understanding of patent licensing

Donald J. Trump, Jr.’s editorial in the The Daily Caller in 2012, a conservative leaning publication that generates more than 16 million monthly visits, indicates that he has had significant experience with patents and disputes, and has a good understanding of the difference between legitimate IP holders and those attempting to game the system.

In Defending Innovatdonald-trump-jr-2ion in America,” young Mr. Trump berates tech companies that infringe software patents.

“What’s lost in the rush is that many of the software breakthroughs that underpin these apps were created years before the boom, when only a handful of companies could see the code’s revolutionary potential.

“Now, bigger companies are scrambling to catch up, and in their anxiousness they are missing or ignoring the origins of the fundamental components that make their apps possible. The violations can quickly spiral out of control, as companies race to copy each other without realizing that their competitor’s app is itself derived from software created by an original patent holder.

“Such runaway proliferation makes it even harder for small patent holders to keep their grip on the rights and returns they deserve.”

Not all Licensers are Trolls

There is a bit of confusion early in the piece as the young Mr. Trump attempts to separate patent abusers from businesses that wish to license truly innovative inventions.

Not everyone agrees that the company in question, MacroSolve, has the patent quality it claims to. TechCruch wrote that in 2014 in the company’s suit against self-described troll-killer Newegg, the company was forced to “fold like a cheap suit.”

Kudos for Recognizing

Kudos to the Donald Jr. for recognizing (in 2012) the difference between IP bulogo_200siness models and between good patents and bad – even if the system frequently does not.

In an article in The American Lawyer on December 13 it reported that “Peter Harter, a consultant and lobbyist on IP issues with The Farrington Group, has noted that Donald Trump Jr. and Trump’s national security adviser, Michael Flynn, have held positions with IP enforcement company Drone Aviation Holding Corp., formerly known as MacroSolve Inc.”

Drone Aviation Holding Corp. (DRNE) trades on the Other OTC exchange. Its website says that the company develops tethered drones and focuses on global agencies and organizations in the commercial, military, research and law enforcement sectors. Customers include the US Army, US Marines, US Navy, US EPA, NREL, Kingdom of Saudi Arabia, Ecuadorian Air Force, many US research universities and US law enforcement agencies.

DAHC is based is Jacksonville, FL. It’s website can be found here.

Image source: redchip.com; businessinsider.com

Gov’t study of economic impact of patent infringement is needed ASAP, experts say

There are abundant statistics on the cost of counterfeit goods, copyright infringement and even the negative impact of patent “trolls,” but nothing on the estimated extent of U.S. patent infringement and the cost in lost jobs, failed businesses and unpaid taxes. 

Global trade in counterfeits or fake goods, such as fashion, automobile parts and pharmaceuticals, has reached $600 billion annually, or about 5%-7% of GDP.  

The U.S. economy alone loses $58 billion each year to copyright infringement (2011 estimate) — crimes that affect creative works. That includes $16 billion in the loss of revenue to copyright owners and $3 billion in lost tax revenue.

The Recording Industry Association of America (RIAA) reports that the U.S. economy loses $12.5 billion in total output annually as a consequence of music theft and that sound recording piracy leads to the loss of 71,060 U.S. jobs, as well as losses in tax income.

Statistics on the cost of counterfeits and copyright infringement are conducted fairly regularly. There is even biased research on the cost of non-practicing entities. (Claims of $29 billion in damage from “trolls” are wildly inflammatory, says a former USPTO commissioner, which despite having been debunked are still cited by academics and reporters.)

Surprisingly, there are no estimates of the extent of patent infringement in the U.S., and the cost in lost jobs, failed businesses, unpaid taxes and other economic impact.

____________________

“There have been no studies that I am aware of devoted to quantifying the amount of patent infringement in the United States,” said Gene Quinn, patent attorney and publisher of IP Watchdog told IP CloseUp.

_________________

“”It would be extremely helpful to get some kind of quantification of the amount of harm that befalls innovators through the concerted and calculated ‘efficient’ infrdataingement business practices of those who use technology and simply refuse to pay for their ongoing, and frequently willful, patent infringement.”

Tip of the Iceberg?

Patent damages paid may be the tip of the infringement iceberg. The real damage may be below the waterline.

To provide some context, 15 leading technology companies paid patent litigation damages of more than $4 billion over as 12-year period from 1996-2008.

That’s just a little over a dozen companies who had to pay damages. The figure presumably does not include settlements, licenses, and all of the times they and thousands of other businesses paid nothing for the inventions that they used.

The Impact of Undetected Infringement 

  • Today, with more issued U.S. patents, and much greater difficulty securing a license or winning a patent law suit, the amount of patent infringement that actually takes place but remains unidentified could exceed a trillion dollars.
  • There is no known government, academic or privately commissioned study of the extent of patent infringement in the U.S., and the cost in lost jobs, failed businesses and economic loss.

_________________

“It is not enough just to be aware that there is harm caused by undetected patent infringement,” said Paul R. Michel, Chief Judge of the Court of Appeals for the Federal Circuit (ret.). “The government needs to conduct a proper empirical study ASAP to determine its scope and impact.”

___________________

 

Image source: ltrdigitalgroup.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

Raymond P. Niro, pioneering patent litigator, is dead at 73

Raymond Niro, a highly successful patent litigator who represented primarily inventors and other plaintiffs, passed away on August 9 at the age of 73.

It was reported that he was in ill-health and died of heart failure while vacationing in Italy.

IP Law 360 described him as a “pioneering intellectual property attorney and who often represented patent licensing companies and inventors in infringement disputes against larger corporations.”

“If I had to write my obituary – and I hope that I don’t have to do that very soon,” said Niro in May, “I’d say this is a guy who … dedicated his life to try to promote innovation and to help level the playing field for inventors who had to take on some of the big corporations.”

A chapter that Niro wrote for my 2006 book, Making Innovation Pay (Wiley), asks “Who Benefits from Patent Enforcement?” My introduction to the chapter is below. 

*****

Profile: Little Guys Like Him

“I don’t have to be liked by everyone, just respected,” Ray Niro once told a reporter.

The founder of Chicago litigation boutique Niro Scavone Haller & Niro has developed a reputation for representing independent inventors and smaller companies in patent lawsuits in which he has an equity stake. To his adversaries, he is often painted as a predator or “troll,” or, at least, representing them; to his clients, he is a white knight.

Niro is praised for giving independent inventors and small companies a voice and for helping them to level the playing field. In the high-stakes poker game that is called patent litigation, spending $10 million or more on a dispute that goes to trial is not uncommon. Needless to say, Niro, whose firm foots the bill for his time and costs, is selective about the cases he is willing to take on contingency.

His team conducts extensive due diligence, which he discusses in the following chapter. He accepts fewer than 20% of the cases his firm reviews. By any standard, Niro’s track record is impressive: more than $500 Niro_Raymondmillion won in jury and bench trials and in settlements in more than 200 patent cases over 20 years. His best-known cases include a $57 million jury verdict in a trade secret suit against a snowmobile manufacturer and its engine supplier, which was later increased to $75.5 million; a $48 million jury award against an ink manufacturer; and a $20 million patent infringement award against Square D Company.

In 1997, the National Law Journal named him “one of the ten best U.S. litigators,” and in 1999 it named him “one of the ten best trial lawyers in Illinois.” Contingency wins, where he might share 40% or more of the recoveries, have made Niro a wealthy man. He lives most of the time in Boca Raton, Florida, and has a home in Aspen, Colorado, which he built with former partner, Gerald Hosier, who is best known for generating more than $1 billion in damages and royalties on behalf of inventor Jerome Lemelson, a known patent submariner until a 1996 change in the patent law to 20 years’ exclusivity from filing effectively ended the loophole. (The Lemelson-MIT Program, endowed by the Lemelson Foundation, rewards unsung inventors. MIT describes Lemelson as “one of the world’s most prolific inventors.”)

Niro loves to go to trial. At 67 years old, the admitted sports fanatic remains fighting fit and lifts weights for 45 minutes four times a week and cycles in Aspen’s 8,000-foot altitude. He owns a Falcon 10 jet and at one time owned six Ferraris, including two 360 Spiders and a 575 Maranello. He has 10 grandchildren and million, which the trial judge later increased to $20 million. Calabrese died 19 days later. “Frank was grateful for what Ray Niro did for him,” said Kathleen Calabrese, the inventor’s widow.

“Ray was the only attorney we could find [who was] willing to take the case on contingency. He worked hard and never gave up on Frank.”

But not all of Niro’s has been married to the same woman for 41 years. The son of an immigrant bricklayer from Abruzzi, Italy, Niro grew up in Pittsburgh, where he says he learned to root for the underdog and still does.

Trained as a chemical engineer, Niro is still able to connect with juries and judges. “I learned early on that as a litigator you need to tell a story that juries and judges understand,” he told me. “You can’t talk down to anyone. I get great personal satisfaction from helping people to win cases that may not otherwise have been heard.”

Frank Calabrese was an underdog. A Waynesboro, Pennsylvania inventor, he claimed his invention, a patented data relay system, was stolen by Square D in the 1980s. He sued when he discovered that the company had been marketing a similar system and refused to pay him for it. In the four years it took for the case to go to trial, Calabrese developed colon cancer.

“Towards the end of the trial,” says Niro, “Frank, who was dying, told me ‘the money doesn’t matter. I want to be vindicated.’” And vindicated he was on January 26, 2000, when a jury awarded Calabrese $13.2  clients are defenseless little guys. Some are investors, like publicly traded Acacia Technology (NASDAQ: ACTG), which buys patents and asserts them because they understand some companies’ aversion to risk and low tolerance for the costs associated with complex patent litigation. To that Niro responds that while he prefers to work directly with inventors and small companies, middlemen can benefit the system and have the right to exist.

Niro’s chapter, “Who Benefits from Patent Enforcement?” discusses the importance of asserting patent rights not only for the less resourceful plaintiff but for society as a whole and for innovation. “When it comes to using patents for business advantage,” concludes the bearded litigator, “the little guy is not the one who is gaming the system, although many defendants would like you to think so.”

*****

Photo caption from book: It’s the high life for litigator, Ray Niro, who tools around in his Ferrari near Independence Pass (elevation 12,095 feet), not far from his Aspen home.

Those wishing to read Raymond Niro’s chapter in Making Innovation Pay can order here.

Image source: legalexecutiveinstitute.com

Engaging IP book for students is free via iBooks or PDF, $.99 Kindle

The US intellectual property system has been the envy of nations everywhere. Despite this, confusion reigns about what are patents and other IP rights, and whom do they serve.

A new book has been published that makes it easier for college students and non-IP professionals, including inventors, engineers and investors to understand how IP rights work in the real world and how they affect peoples’ lives.

In an increasingly digital, knowledge-driven economy, an understanding of IP rights needs to be part of a core curriculum. The Intangible Advantage: Understanding Intellectual Property in the New Economy serves that mission admirably.

Compiled by an all-star team of writers, jurists, lawyers and professors, The Intangible Advantage (TIA) explains in clear, non-technical prose how the IP system works and the many audiences (aka stakeholders) it benefits. TIA is a revealing journey through the history and practice of IP in the United States. It is the first comprehensive text book for students that explains the IP system’s strengths and weaknesses, and dispels many of the myths surrounding them.

Clear and Concise

Chief writer, David Kline, is co-author of Rembrandts in the Attic (HBS Press), the first serious book about patents for business managers and investors. Kline is a former Pulitzer-nominated war correspondent, who has contributed to many business and news publications.

Serving as the book’s executive editor was David Kappos, Under Secretary of Commerce and Director of the United States Patent and lockup-ipad-verticalTrademark Office, 2009 to 2013. Prior to that Mr. Kappos was chief IP counsel at IBM. Also integral to the project was Hon. Paul R. Michel, Chief Judge for the Court of Appeals of the Federal Circuit (CAFC) who sat for 22 years on the bench, from 1988 to 2010. CAFC is the the highest patent court.

Giving Back

The Intangible Advantage is published by the Michelson 20MM Foundation. Established by Dr. Gary K. Michelson, an inventor, a spinal surgeon who responsible for 340 issued US patents and 953 worldwide. Dr. Michelson sold his company for $1.35 billion to Medtronic in 2010 as a settlement in a patent dispute.

The Michelson 20MM Foundation supports and invests in leading edge entrepreneurs, technologies, models, and initiatives with the potential to improve post-secondary access, affordability, and efficacy.  Dr. Michelson also founded the Gary Michelson Medical Research Foundation, which since 1995 has supported forward thinking initiatives in medical science by leveraging the collaboration of engineers, scientists, and physicians to solve real world problems; rapidly moving medical advancements into our society.

Separating Truth from Myth

The Intangible Advantage is written with clarity and charm, a Kline’s trademark that can be found in the books and articles about IP that he has written under his own by-line and those he has co-authored. IP professionals as well as students will gain from the historical insights the book provides, such as that despite media and hoopla about “trolls,” patent trials have remained virtually flat at around 100 for 30 years.

Given the explosive increase in patent filing and grants — About 325,000 US patents were issued each in 2014 and 2015 alone, and there are literally millions in force — the number of disputes that go to trial is extraordinarily low — not what the media would have us believe.

static1.squarespaceWhat The Intangible Advantage does exceedingly well is explain the US patent system and how rights can be used productively. It reminds readers that the system exists to facilitate sharing information about new inventions and stimulate new business, not to keep inventions secret or deter commerce. US IP rights differ markedly from others, especially the 18th and 19th century English system, which was more closely associated with privilege and class. The book underscores that the US system strives to use IP, especially patents, to level power, not to wield it.

TIA is un-intimidating at just 287 pages (1320 KB), a good length for those who want to know more without getting into legal minutiae. The book is available at iBooks for free and on Kindle for just $.99. An inexpensive print-on-demand edition (under $10) is also available. I downloaded a copy to my Kindle in about 15 seconds and read it over several days.

Start Learning Now

For the free iBooks version, go here or to your iBooks app store.

For the 99 cent Kindle version, go here or to the Kindle store.

For the $6.68 print on demand version, go here.

For the free standard Widows PDF version, go here.

The main Michelson 20MM Foundation resource page provides additional information.

In addition to Kline, editorial credits include:

Randall E. Kahnke (Author), Robert G. Krupka (Author), Kerry L. Bundy (Author), David Kappos (Editor),Paul R. Michel (Editor), Phillip J. Kim (Editor), Mayra Lombera(Editor), Marisa S. Moosekian (Editor), Gary K. Michelson (Preface).

The book is accompanied by a series of 3-minute animated videos available on YouTube answering such common questions as “Can I Patent That?”“Is it Fair Use or Infringement?” and “What If Someone Infringes Your Trademark?

Education – the Future of IP

IP literacy is no longer an option, it is a requirement. A rudimentary understanding IP rights and the patent system is essential for individuals to excel in a knowledge-based economy.

Until recently intellectual property has been taught primarily in law schools or the occasional business school seminar. The history and use of US IP rights is an amazing success story, whose impact needs to be conveyed accurately to wider audiences, and repeatedly over time.

The Intangible Advantage – not to be confused with my 2015 book, The Intangible Investor – is the first IP text book for non-IP professionals, especially college students, that makes it easy to learn about an integral part of American history and commerce.

Image source: 20mm.org; michelsonip.com

Media use of patent “troll” is unfair says professor in Stanford Technology Law Review

The use of inaccurate, prejudicial language by newspapers, business publications and technology magazines to describe patent licensing activity biases readers and courts.

That is among the findings from research conducted by Illinois Institute of Technology – Chicago-Kent College of Law Professor, Edward Lee. Writing in the Stanford Technology Law Review, Professor Lee states that while “some courts have even barred the use of the term [patent troll] altogether during patent trials on the ground that the term is unfairly prejudicial. But, among the mainstream media, the term is pervasive.”

“Patent troll,” the term employed by leading newspapers, magazines and online publications to describe how some patents are owned and used, provides a prejudicial impression of patent licensing that unfairly influences attitudes towards disputes.

 

table1. Total Number of Uses of Each Term and Contested Uses

Moral Panics

Patent Trolls: Moral Panics, Motions in Limine, and Patent Reform, published on April 22, is the first empirical study of how the term patent trolls is treated in the media, and the results confirm what some courts have already stated: patent trolls is an inaccurate and often misleading term.

The scholarly paper states that starting in 2006, the U.S. media surveyed used “patent troll” far more than any other term, despite the efforts of scholars to devise alternative, more neutral-sounding terms (see table). The tipping point was the combination of the controversial Blackberry and eBay patent cases in 2006 — prior to that time, “patent holding company” was the most used term.

table3. Top Seven Sources Reporting

Since then, the media more often portrayed such patent entities in a one-sided, negative light with very little analysis or factual support.

Until now, few works have provided statistics or discussion of any studies to support their negative portrayal. Practically no articles mentioned the lack of a working requirement in U.S. patent law, which permits all patentees not to practice their inventions, should they so choose. Lee’s findings provide support for the recent judicial decisions that have barred, at trial, the use of the term “patent troll.”

Further Exploration

A useful next step would be to drill down below this Professor’s Lee’s excellent initial work to determine which reporters at what types of publications have used patent troll and other misleading terms, and when they took place.

This type of media analysis – sorely lacking in the IP space – will be conducted by the Center for Intellectual Property Understanding, a non-profit education organization that I recently established with several thought-leaders.

CIPU board members include Marshall Phelps, Keith Bergelt and Harry Gwinnell. Retired Chief Judge for the Court of Appeals for the Federal Circuit, Hon. Paul Michele, also is a supporter and assisted in the formation. The Center for IP Understanding focuses on improving attitudes towards patents through better awareness and innovative education.

table2. Types of Works Describing Entities in Positive or Negative Light

“The findings of this study,” concludes Professor Lee, who is Director of the Program in Intellectual Property Law at IIT, “suggest that the term may operate as a moral panic in a way that is detrimental to reasoned analysis and consideration of the root problems related to the issue of abusive patent litigation tactics.”

To view the full article, Patent Trolls: Moral Panics, Motions in Limine, and Patent Reform, click here.

A motion in limine (lim-in-nay), n. Latin for “threshold,” is a motion made by a party at the start of a trial requesting that the judge rule that certain evidence may not be introduced.

Image source: Stanford Technology Law Review

*A version of this post originally appeared in IP Watchdog.

Responsible Patent Licensing is focus of Wall Street event

Not all patent licensing businesses are alike.

“NPE 2016: The Business of Responsible Licensing,” scheduled for March 22 at the Convene conference in New York, will differentiate patent monetization companies by examining their business models, strategies and the managers who run them.

The conference will focus on the non-practicing entity (NPE) industry, including both public and private companies. In 2015, the NPE 2016 brought together leaders from the licensing company sector and the wider corporate IP and investment communities to discuss the challenges and opportunities of running a patent licensing business, especially in today’s challenging climate.

NPE 2016 is the only gathering that examines how NPEs operate and contribute to the innovation and the economy.

3J6A3349Moderator-led panel discussions with audience Q&A at the end of each will be featured. Sessions are designed to focus on the specifics of building and running successful NPE, as well as on the opportunities available to investors.

Beyond Monetization

This year’s sessions will consider licensing best practices, building and managing a patent portfolio, licensing dos and don’ts, litigating in Europe once the Unified Patent Court has been launched, licensing opportunities in new sectors and moving IP commercialization beyond monetization.

Last year’s attendees included:

• NPE executives
• In-house counsel and legal directors
• Private practice lawyers
• Licensing executives
• Patent brokers
• IP policy professionals
• Investment professionals

IP CloseUp readers who use the promo code IPCLOSEUP before February 19 are eligible for a $150 discount off of the full $895 registration.

For more information about NPE 2016 or to register, go here.

For he full program, go here.

 

websiteimage

Image source: convene.com; iam.com

 

Quinn: Patent PERPs are the real bullies of the licensing world

A disturbing article by IP Watchdog’s Gene Quinn asks “Who are the real bullies of the patent world?” It’s not patent trolls. They are far less of a problem than Patent PERPs – Practicing Entities that Refuse to Pay.

The founder and editor of IP Watchdog, one of the leading IP blogs, pointed a finger at reluctant patent licensees today in “A Patent Owner Defending Property Rights is NOT a Bully,” an article that attempts to reveal who are the real villains of patent licensing.

Exhibit One in Quinn’s indictment of the twisted rhetoric that surrounds patent licensing is Colleen Chien, a Santa Clara University law professor and former senior IP adviser to President Obama. Professor Chien wrote in the The Wall Street Journal recently, “that small businesses may want to simply ignore letters they receive from patent owners alleging infringement of a patent.”

Ignore the Nuisance

“This is rather astonishing for several reasons,” says Quinn. “First, a patent is a right granted by the federal government that is supposed to imagesbe legally presumed to be valid. A recently departed senior adviser to the President who is advising potential infringers that they should just ignore notices telling them they are infringing speaks volumes about how the Executive Branch views patents and patent owners. Once upon a time patents and inventors were very highly regarded in our society, today they are seen as a nuisance that can and probably should be ignored, even by the White House apparently…”

“A patent owner that seeks to prevent another from infringing is NOT a bully, period. A patent owner that takes action to prevent infringement is merely protecting the property right they have been granted; a right purposefully granted by the federal government after a lengthy examination process. It should be self-evident to everyone that you cannot be a bully when you are standing up to protect a right you have been given. It is utter nonsense to even suggest that a patent owner seeking vindication from the trampling of rights could ever in any fair way be characterized as a bully…”

PERPs are Perpetrators 

“Frankly, if we want to be perfectly honest about the state of the industry, we would be talking about those Patent using Entities that Refuse to Pay (PERPs),” concludes Quinn. “Thanks to the confluence of patent reform and Supreme Court precedent the people who are getting bullied the most are patent owners. These PERPs simply ignore all inquiries even from those with large portfolios and valid patents that are being infringed. They engage in a game of efficient infringement, or so it is called. Efficient infringement is such a sanitary way to say – willfully stealing without paying.

“With the deck so substantially stacked against the patent owner, companies know that if they simply ignore all inquiries, both legitimate and those smaller number that are extortion, they can willfully infringe patented technology without having to pay anything. lady-justice-head-sand-ignoranceSo why pay? That is efficient infringement; a cold business calculation that results in the patent owner being screwed.”

Negative Right

Efficient infringement means that given the risk-reward of using someone else’s invention, it is economically viable for most companies, in many industries, to infringe patents at will most of the time. It’s like a parking violation. First, they have to catch me breaking the law. What are the chances? And if they do, paying the price of the ticket is often easier (and cheaper) for large companies than obeying the law.

A patent is a negative right – the right to sue to protect an owner’s intellectual property, an invention. A patent suit is a costly and time-consuming process, and defendants know that. Patents are meant to be used (enforced) where appropriate. Quinn is saying that the behavior of those refusing to pay a license (PERPs) – and who invent delaying tactics to avoid doing so – is ethically questionable, legally suspect and damaging to innovation.

For the full IP Watchdog article go here.

Image source: ipwatchdog.com

Google’s patent buying program, an apparent success, is thinly reported

Better than one-in-four of the patents offered to Google for purchase as a result of its Patent Purchase Promotion in May were acquired by the search engine.

The only article we could find about IP buying experiment’s results appeared in IEEE Spectrum, which is published by a professional association of engineers. IP CloseUp has learned that IEEE Spectrum obtained the purchase data directly from Google. A Google search did not reveal other media coverage of the results.

The magazine article, “Google Tries to Keep Patents Out of the Hands of Trolls,” states that the search engine purchased 28% of the patents offered to it. This buy-rate seems high considering the poor quality of most patents being offered to most buyers. It is comparable to that of Intellectual Ventures in the early years (2003-2006) when it bought much of what it was shown, but typically at about $40,000 per patent.

“Google’s Patent Purchase Promotion,” reports IEEE Spectrum, “which the company says received ‘thousands’ of submissions during a three-week window [May 8 – May 27], may prompt similar experiments in keeping patents out of the hands of what it considers the bad guys of intellectual property.”

The experimental program was an attempt to intercept patents that individual inventors, operating companies, and others may have otherwise sold to organizations that don’t make products but rather use the patents to extract license fees from operating companies, which do… The program offered a chance for anybody to sell patents to Google “at a price set by the patent holder.”

“Google wound up buying 28 percent of the offered patents that it deemed relevant to its business, according to Kurt Brasch, the company’s senior product licensing manager,” reported the magazine.

GoogPatSales

The median price of the patents sold to Google, excluding those offered at US $1 billion or more, was $150,000, and the compant paid prices ranging from $3,000 to $250,000.

IP Watchdog and others are less certain about whether the program is designed to thwart trolls and enhance innovation, or to improve Google’s patent position.

The IEEE Spectrum article can be found here.

A summary of Google’s Patent Purchase Program can be found here.

 

Image source: IEEE Spectrum

 

 

The future of IP will be examined at the 10th IP Summit in Berlin

Uncertainty is putting pressure on patents, trademarks and copyrights. All are facing more scrutiny and a challenging future.  

Scrutinizing these fundamental issues on December 3rd and 4th in Berlin will be more than 600 IP holders, executives and investors attending the Intellectual Property Summit. Organized by Premier Cercle, it will be the tenth edition of the popular conference, held previously in Paris and Brussels.

This year’s Summit will attempt to deconstruct global IP trends and explore the future of IP rights – patents, trademarks, copyrights and trade secrets – as business assets. There will be 100 speakers from Europe, North America and Asia.

Plenary topics include:

  • What is the future of IP in the 21st century?
  • Is your nation ready for open innovation?
  • More IP rights or better enforcement?
  • The future of injunctive relief in Europe?

On Friday, December 4 at 2:20 (14.20), your intrepid IP CloseUp editor, BB, will moderate a panel on Patent Quality – Always Challenging; Never Simple. Panelists will include:

>Valencia Martin Wallace  Deputy Commissioner for Patent Quality  USPTO / US

>Daniel G. Papst    Managing Director  PAPST LICENSING Gmbh & Co. KG / DEU

> Christian Vejgaard   European Patent Attorney  ERICSSON / SWD 

Chair : Bruce Berman Principal  BRODY BERMAN ASSOCIATES / US  

11A Patent Quality – Always Challenging; Never Simple
Defining patent quality
– What is a good patent?
– Distinguishing validity from invention quality and value
– Establishing more reliable patents
– The impact of poor quality

The patent quality session will be followed by a session on patent transactions on which IBM, Samsung, Chipworks and Unified Patents and are scheduled to participate.

This year’s IP summit partners include IP CloseUp and Brody Berman Associates. 

For the full agenda go here.

To register go here.

imgres

Image source: premier cercle; i-mop.biz

Google’s patent giveaway is not really about saving startups from predators

The Patent Starter Program announced last week by Google may be less about how the company can help protect young companies from patent “trolls” than re-thinking how patents are most effectively used.

 A provocative article running on the Fortune blog by Jeff John Roberts, Google’s new patent plan: how it will and won’t help startups,” suggests that Google is packaging incentives to discourage companies from enforcing patents or selling them to businesses that do.

Roberts believes that the Patent Starter Program could create big long-term ripples in how the tech industry views and deploys patents, and leverages brand recognition. It is an indication of Google’s growing sophistication in the IP space, and shows its willingness to participate in patent transactions (buy and release, similar to Allied Security Trust) if they can help to achieve the tech leader’s business goals.

*****

“The real significance of the Google Patent Starter Program,” writes Roberts,”is instead more subtle, and should be seen against the backdrop of other moves wpid-google-inc-offers-to-sell-patents-to-startups-as-company-fights-patent-trolGoogle is undertaking to change the economic incentives that have made patents such a problem for the tech sector in the first place.”

“Perhaps the search giant is actually tempted to follow the example of older companies like Microsoft and Qualcomm which, as their capacity for product innovation fades, have turned to their patent portfolios as a new revenue stream.”

Google lawyer Kurt Brasch said that was not the case and that the goal of the purchase program was in part to create more realistic expectations about the actual value of patents in the secondary market.

*****

The new starter program obliges the startups who receive Google patents to sign up for the LOT network, “a condition that’s easy to accept,” says Fortune, “since Google will pick up the first two years of the membership tab.”

Image source: techno-stream.net

%d bloggers like this: