MORE PEOPLE COMING OUT AGAINST SOFTWARE PATENTS: Speaking at the Emerging Technologies Conference at M.I.T. on Wednesday, World Wide Web inventor Tim Berners-Lee said that royalty-free standards are key to advancing the online world.

Berners-Lee, director of the World Wide Web Consortium (W3C), told several hundred attendees at the MIT conference that it's "very important" that everyone involved makes sure the Web is not "tripped up by software patents."

"If you want a good laugh, go look at patent applications," he said, adding that companies seeking royalties for patents are "always a threat" to emerging technologies.

SCORE ONE FOR THE PATENT WATCHDOGS: (article) Microsoft's attempt to create a lucrative future revenue stream from its patent portfolio has tripped at the first hurdle. After an appeal, the US Patent Office has struck down Microsoft's '517 patent (USPTO 5,579, 517) on the FAT file system. Camera makers, amongst many other consumer electronics manufacturers, use the FAT file system on compact flash cards and other removable media.

Microsoft introduced FAT in version 2.0 of MS-DOS in 1982, but was not granted patent '517 until 1996. Last year Redmond used it as the basis of its first ever licensing program, offering manufacturers the right to use the ubiquitous file system in return for a low royalty rate. At the time, Microsoft described this as "liberalization". Industry watchers noted how earlier in the year, Redmond had hired Marshall Phelps, the IBM attorney who in the Eighties, built up Big Blue's IP program from nothing into a multi-billion dollar business.

But an appeal citing prior art from IBM and Xerox, filed by the Public Patent Foundation, has proved successful. Dan Ravicher, the Foundation's executive director, urged licensees who'd signed up for Microsoft's FAT licensing program to tear up their contracts.

AND IF THE TV COMMERCIALS WEREN'T BAD ENOUGH, NOW THEY'RE LITIGATING THEIR PATENTS: PowerOasis sells "pay-as-you-go" Internet service at public kiosks and wireless hotspots in 21 US airports and a handful of public buildings. Customers log onto the system and use a credit card to pay for Internet access by the hour or by the day. PowerOasis also holds four patents related to pay-as-you-go Internet service; the most recent of them was issued in April. On Monday, PowerOasis filed suit in federal court in Boston, seeking a preliminary injunction against Wayport that would stop the company from offering many of its online services.

PowerOasis has just four employees: Tom Duff, the company president; his wife, Linda; Bill Joransen (chairman of the board of directors); and co-founder Chuck Schelberg, whose name is also on the patents. Business has not been good for PowerOasis, who recently had to tear down most of its non-wireless terminals as other vendors moved in with wireless connections.

Accordingly, PowerOasis turned to its patent portfolio to start going after competitors. Needless to say, some commentators are not happy with PowerOasis over its strategy.

WIPO BEGINS ASSEMBLIES IN GENEVA: The meetings of the Assemblies of the World Intellectual Property Organization (WIPO), which bring together WIPO’s 181 member states, are currently being held in Geneva.The Chairman of the WIPO General Assembly, Ambassador Bernard Kessedjian, said the Assemblies is a significant time in the work of the Organization as it allowed member states to take stock of the Organization’s work over the previous year and to take decisions on future work. He highlighted the importance of intellectual property as a tool for progress and sustainable development and its relevance to all people. "Intellectual property does not only concern a few people - it is a concern for all. It is a powerful engine of growth and progress," he commented.


The agenda for the WIPO meeting can be found here.

PFIZER APPEALS VIAGRA DECISION IN CHINA: Pfizer Inc., the world's biggest drugmaker, has appealed to a Beijing court against a decision to overturn its China patent for its erectile dysfunction drug Viagra, a newspaper said on Wednesday. The court had not decided whether the appeal should be heard but a decision would be made after week-long National Day holidays, which begin on Friday, the China Daily said, quoting court sources.

VERDICT IS IN - $109 MILLION: Medtronic Inc., the world's biggest maker of spinal implants, was ordered by a jury to pay $109 million to an inventor for violating contracts and infringing his patents.

The federal court jury in Memphis, Tennessee, said Medtronic failed to adequately credit Los Angeles spinal surgeon Dr. Gary K. Michelson for his inventions, violated some provisions of its contract with him, and shortchanged him on royalties. Still, the jury rejected Michelson's arguments that Medtronic purposely failed to develop some of his inventions.

Medtronic spokesman Bob Hanvik said the company was preparing a statement on the verdict. The company may have to pay additional money because the jury found that Michelson is entitled to punitive damages, which will be set in a separate proceeding.

A good article from a good website on TRIPS and compulsory licensing.

HOLD ON TO YOUR HATS: After a month of deliberations, a jury in Tennessee federal court has reached a verdict in a complex patent case involving Fridley-based Medtronic Inc. and the inventor of some of its spinal fusion technologies. But the decision won't be known until later this morning. Michelson, a Los Angeles-based spinal surgeon, alleged in a countersuit that Medtronic shorted him in royalty payments and failed to properly market his inventions. He is seeking $1.7 billion in compensatory damages in addition to punitive damages.

I'll keep you posted . . .

MY KIND OF THINKING: Physicists at Imperial College London are developing a new optical disk with so much storage capacity that every episode of The Simpsons made could fit on just one disk. Speaking at the Asia-Pacific Data Storage Conference 2004 in Taiwan today, Dr Peter Török, Lecturer in Photonics in the Department of Physics, will describe a new method for potentially encoding and storing up to one Terabyte (1,000 Gigabytes) of data, or 472 hours of film, on one optical disk the size of a CD or DVD. All 350 scheduled episodes of The Simpsons, totalling 8,080 minutes of film, could be easily stored on the new disk, dubbed MODS - for Multiplexed Optical Data Storage - by the Imperial College team.

Now who could argue with that kind of progress?

UK ANNOUNCES ONLINE PATENT APPLICATION SERVICES: The UK Patent Office's customers can now apply for their patents over the Internet - thanks to a new system which came into service in August 2004. The new service, known as epoline, provides a common approach to electronically filing each type of patent application which helps to keep the costs and complexity for applicants to a minimum. Developed and tested over several years, the new service was a joint collaboration between the UK Patent Office, and the European Patent Office. The application service also applies to international patent applications under the Patent Co-operation Treaty made to WIPO in Geneva.

NYT THROWS ITS HAT INTO THE "PATENT REFORM" MOVEMENT - The NYT reprinted portions of Josh Lerner and Adam B. Jaffe's pending book entitled "Innovation and Its Discontents: How Our Broken Patent System is Endangering Innovation and Progress, and What To Do About It," to be published in November by Princeton University Press. The article has some good points, but there are some generalizations made that are rather dubious. Two of these assertions are that the "breakdown" of the patent system has its roots based in the creation of the Federal Circuit (!) and the institution of fee-based funding for the USPTO:

Mr. Lerner, a professor of investment banking at the Harvard Business School, and Mr. Jaffe, a professor of economics at Brandeis University, trace this breakdown to the early 1980's, when a single federal appeals court was established to hear patent lawsuits, replacing 12 regional courts of appeal.

Then in the early 1990's, Congress changed the patent office's financing, so the agency could pay for itself with user fees.

From his home outside Boston, Mr. Lerner last week described the patent system, 20 years after the reforms, as mired in "the land of unintended consequences."

"Again and again in the patent system, we see people set out to do reforms with one thing in mind, but that have quite an unintended effect," he said. "The easier it became to get patents, the more people wanted to apply for them, and that led to a situation where examiners grappled with more patents to review, which led to them being pressed to do quicker reviews and a degradation in quality of patents
issued."

The patent agency has often struggled to keep up with the times. In recent years, the agency has confronted entirely new areas like biotechnology, software-related inventions, financial and business methods, Internet-based inventions and other information-technology innovations.

Some of the changes designed to deal with these occurred amid extensive public debate. Others got little attention because they seemed like innocuous administrative reforms - like the ones that made patents easier to get, Mr. Lerner said. But many of those patents caused a secondary reaction, he added.

"The ability to litigate and expect to get substantial award from litigation increased," Mr. Lerner said. "So as a result we've got somewhat of a vicious cycle. Once you get one firm in an industry beginning a strategy of aggressive patent enforcement, it creates an almost inevitable response - an almost arms-race dynamic - where everyone else in the industry says, 'We better be doing the same thing.' "

He suggested that these changes for the worse occurred because "there's a relatively small group of people in the D.C. patent bar, and they have a very powerful influence on how patent policy gets decided. There is a powerful incentive for them to keep a patent system that is complicated, and one that involves protracted, costly litigation."

Also, Mr. Lerner said, businesses often fail to understand the importance of subtle changes in patent law. "It is perhaps because of the complexity of patent issues, and because there is no long tradition of work by economists in this area, because a lot of corporations see it as second order relative to tax policy changes, for example, which directly affect their bottom line," he explained. "Patent policy has an indirect affect."

So patent practitioners are colluding to keep patent laws "complicated"? If anything, most of the changes enacted over the last few years were made to simplify the patenting process, and I think that there has been some measure of success in that regard. But these comments don't make sense on their face - you can't argue on one hand that patent practice is needlessly complicated, and then complain on the other hand that getting patents has become too easy.

Great site for Strange Judicial Opinions

DESPITE BEING NICKED, EBAY DECIDES TO KEEP HALF.COM: EBay Inc. announced Thursday that it will keep its Half.com subsidiary open indefinitely, scrapping previous plans to shutter the e-commerce site in mid-October.

EBay spokesman Hani Durzy said executives decided to keep Half.com open because it still generates revenue and brings customers to eBay. EBay does not break out traffic or revenue data specific to Half.com, but Durzy said that nearly half of all eBay listings for books, music, video and games come from Half.com sellers.

Half.com is also the subject of a festering lawsuit.

Earlier this year, jurors ruled that the eBay division violated patents filed by Thomas G. Woolston, an entrepreneur who founded an e-commerce company called MercExchange in Great Falls, Va. In May, a federal jury awarded Woolston $35 million, and patent experts said the ruling could force eBay to close Half.com. EBay appealed, and the case is still in the courts.

-- An interesting note here - while the Washington Post describes Mr. Woolston as an "entrepreneur", he also happens to be a registered patent attorney as well. MercExchange has been pretty active in obtaining licenses from many of the players in online auctions. Let's see what the Federal Circuit has to say when the EBay case goes on appeal . . .

PriceWaterhouseCoopers tells the EU that software patents are a "threat" to ICT efforts - the EU is currently trying to establish a set of rules and protocols to facilitate the transition towards e-business in the EU and to enhance the competitiveness of the ICT and publishing sectors in particular. The ICT group engages particularly in economic analysis, policy co-ordination with EU Member States, public-private partnerships with non-profit organizations and co-operation with European Standardization Organizations.

Anyways, PriceWaterhouseCoopers issued a report to the ICT group, and in that report, they bad-mouthed the practice of patenting software. More specifically, they said that

there are particular threats to the European ICT industry such as the current discussion on the patent on software. The mild regime of IP protection in the past has led to a very innovative and competitive software industry with low entry barriers. A software patent, which serves to protect inventions of a non-technical nature, could kill the high innovation rate.

The full report may be viewed here. I think they are wrong in principle, but there will likely be "growing pains" if the EU adopts algorithmic patenting (prior art databases and all that). But I find it hard to believe that the EU can resist patenting software indefinitely, especially since the US has become such a haven for software entrepreneurs and business . . .

More Universities See the Light: Wake Forest University reported a 77 percent increase in its licensing revenue for its 2004 fiscal year, largely because of interest in a medical device that can heal wounds faster than traditional methods, Michael Batalia, the acting director for the Office of Technology Asset Management, said yesterday.

Wake Forest reported about $34.3 million in licensing revenue for its fiscal year ending June 30, nearly double the $19 million it reported during its 2003 fiscal year.

Most of the revenue was generated by patents from Wake Forest University Health Sciences, particularly the university's Vacuum Assisted Closure wound-therapy device.

Hilarious: (AP - Pittsburgh) The state Supreme Court ruled that Pennsylvania's drunken driving law can't be enforced against people on horseback, a decision that inspired the dissenting justice to wax poetic.

The court ruled Wednesday in a case against two men in Mercer County in 2002. Riders Keith Travis, 41, and Richard Noel, 49, were charged with drunken driving along with a man driving a pickup who allegedly rear-ended the horse Travis was riding away from a bar on a dark country road.

All three men failed field sobriety tests, police said, but a judge threw out the charges against Noel and Travis after they argued that the word "vehicles" in the state's drunken-driving law doesn't apply to horses.

Prosecutors said the code specifically includes people riding animals. But the majority justices cited a similar case in Utah, where judges said such a statute is confusing and too vague about which regulations would apply to animals as well as vehicles.

Justice Michael Eakin, who is fond of writing rhyming opinions, summed up the lone dissent with two stanzas mimicking the theme song of "Mister Ed" — a 1960s TV sitcom about a talking horse:

"A horse is a horse, of course, of course,

but the Vehicle Code does not divorce

its application from, perforce,

a steed as my colleagues said.

"'It's not vague,' I'll say until I'm hoarse,

and whether a car, a truck or horse

this law applies with equal force,

and I'd reverse instead."

Munich Ho! A very interesting article from IP Law & Business on Jones Day and the firm's decision to run its' own EU patent practice out of Munich (home to the German and European patent offices), in lieu of hiring local counsel. One of the criticisms of German practitioners was that they weren't "American" (read: aggressive) enough:

Kahrl, who works in the firm's Cleveland office, says that clients pushed Jones Day into Munich. They were disappointed with the German firms that represented them in patent-related matters. "The kind of hard-driven advocacy we're so accustomed to in the U.S.--and in Britain--is not present in Germany, where appearances before a judge tend to be more of an academic discussion as opposed to a presentation of the client's interests."

Clients found EPO opposition proceedings particularly nettlesome, Kahrl says. In an opposition, one party tries to block another's patent from issuing, or to cancel a patent after it's issued. In a number of EPO opposition proceedings, Kahrl says, German lawyers didn't press their case with a detailed presentation the way American lawyers would before the U.S. Patent and Trademark Office. This is critical because patent disputes in Europe are generally resolved in opposition hearings, says Paul Kimball, a patent partner in the Washington, D.C., office of Womble Carlyle
Sandridge & Rice. In the United States, patent disputes typically are resolved with litigation.

Others are saying it's a bad idea, because such moves risk alienating foreign counsel that often send work to U.S. firms. However you view it, it's an interesting strategy for Jones Day, and time will tell how this all plays out.

HELP WANTED:

Job Description:

The Chief Information Officer (CIO) for the United States Patent and Trademark Office (USPTO) serves as the principal information technology advisor to the Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office. The CIO helps lead the USPTO as a performance based, e government agency. The CIO oversees the evaluation of information technology, the architectural design of automation initiatives, and the development of strategic information technology plans, including the development and implementation of automated systems for the USPTO using a matrix management structure.

Requirements:

Demonstrated experience in exercising an extremely high degree of leadership, project management skill, initiative, judgment, and ability in managing a major IT program. Must have managed a minimum of 75 staff. Breadth of IT experience, to include knowledge of logical and physical data architectures, network communications, data base/application/web servers, middleware, and telecommunications. • Knowledge of IT security design, operations, encryption, information access, and authentication processes. • Ability to develop performance measures and enterprise wide performance management practices such as service level agreements, customer surveys, internal assessments, and other appropriate performance evaluation techniques. • B.A./B.S. degree highly preferred, plus 12 20 years experience.

Benefits/Salary:

Compensation $104,927 $145,600 (SES)

Any takers?

(ouch) - Immersion Corporation, a developer and licensor of touch feedback technology, today announced that a jury returned a verdict favorable to Immersion in its patent infringement suit against Sony Computer Entertainment, Inc. and Sony Computer Entertainment of America, Inc. (Sony). The jury found that Sony infringed all the asserted claims of U.S. Patent Nos. 6,275,213 and 6,424,333 and that those claims were valid. The verdict also awarded Immersion damages in the amount of $82.0 million. A judgment has not yet been entered, and Immersion expects that post-trial motions and other actions by Sony will be filed with the Court with respect to the jury's decision and other matters. Immersion intends to ask the court to issue a permanent injunction to enjoin Sony's continued infringement.

Patent attorneys, voting machines, and profit-making - what better combination could there be for a feature article? Since this is in my home town, I couldn't help but notice this article in Crain's Business about two patent attorneys that developed a new voting machine and are looking to roll it out for the next election. Naturally, they are predicting pennies from heaven from the venture . . . best of luck.

A two-part article describing the new public electronic access to the details of the negotiations that lead to issuing or denying a patent. The first part of the article explains why the PTO recently celebrated milestones for implementing programs called IFW and Public PAIR. The second part (to be published tomorrtow) describes why people outside the PTO have reason to celebrate these milestones.

A Dark Side To Public PAIR? Recently, the USPTO has been touting the public PAIR system as a way for applicants (or other interested parties) to access the file wrappers of issued patents and public applications. Many people weren't aware however, that under 37 C.F.R. 1.14, once an application is published, ALL of the file wrapper becomes publicly available. That means any 37 C.F.R. 1.131 declarations ("swear-behinds") or 1.132 statements (oaths or declarations traversing rejections) will become public knowledge once your application publishes.

An interesting note here is that statements under 37 C.F.R. 1.627 (preliminary statements made pursuant to an interference), which are supposed to be under "seal" are now trumped by 1.14 - so everything now becomes available.

EU Patent Litigation De-Harmonization - The European Union's highest court may rule that member states can't impose orders blocking the use of a patent across the EU, a decision that would force companies to fight intellectual property suits separately in each country.

Europe-wide patent injunctions may be illegal under EU law, Leendert Geelhoed, an advocate general at the European Court of Justice in Luxembourg, wrote last week on a case involving two German makers of car parts. Such opinions are adopted by the court in about 85 percent of rulings.

The case highlights Europe's fragmented patent enforcement system. Without an EU-wide tribunal, companies such as Boston Scientific Corp. and Baxter International Inc. have used courts in the Netherlands or Belgium to block alleged infringers from marketing their products anywhere in the 25-nation bloc. A ruling in this dispute, expected next year, may put an end to that ad- hoc system and raise costs, lawyers said.

FOR SHAME: Senate agrees to hike USPTO fees and decides to continue fee diversion within the USPTO. The AIPLA reports it this way:


A Periodic Notification of AIPLA Activities and Current Developments
in Intellectual Property Law

September 16, 2004

Senate Bill Would Fund PTO for One Year Without Stopping Fee Diversion

The Senate Appropriations Committee on September 15, 2004, approved the fiscal year 2005 Commerce, Justice, State, the Judiciary, and Related Agencies Appropriations bill (S. 2809). The Senate bill includes a version of the PTO fee increase legislation that passed the House, amended to apply for only one year and to drop the anti-diversion compromise that was struck in the House.

Last March, the House passed fee legislation (H.R. 1561) with fee increases to provide the PTO with the revenues needed for its 21st Century Strategic Plan. The fee increases were tied to the processing complexity of the application filed. Although the bill was reported by the House Judiciary Committee with a provision to take the PTO "off budget," it was passed with a compromise provision to end diversion by establishing a system for rebating user fees when PTO fee revenues exceed appropriations for a given year. Last April, the Senate Judiciary Committee approved H.R. 1561 exactly as it was passed by the House.

The Senate appropriators did not buy into the House compromise. The fee provisions incorporated into S. 2809 call for most of the fee increases in H.R. 1561 (although each relevant provision includes language to limit the increases to FY 2005). However, the Senate bill drops the rebate system that would have deposited fee revenues in excess of the appropriation into a trust fund from which the PTO would rebate fees at the end of the fiscal year.

Besides the elimination of the fee rebate system, other differences between the Senate and House fee provisions include the following:

• The Senate bill drops a House provision to permit the Director to refund part of the application fee if a declaration of express abandonment was filed before examination.
• Both bills designate separate filing, search and examination fees that are payable upon filing, and both would permit outsourcing of searches by "a qualified search authority". However, the Senate bill drops the House provisions requiring the PTO to conduct a pilot project on the reliability of outsourced searches.
• The Senate bill drops the requirement that the PTO and the Small Business Administration study and report on the effect of patent fees on the ability of small entity inventors to file patent applications.
  

As for the appropriation provisions themselves, the differences are as
follows:
S. 2809 H.R. 4754
Appropriates $1,336,000,000 $1,314,000,000
Fee incr. rev. 208,754,000 218,754,000
Total $1,564,754,000 $1,533,407,000

In addition, the Senate bill places great emphasis on the protection of U.S. intellectual property overseas. S. 2809 earmarks $20,000,000 of the total PTO appropriation for "initiatives" to protect U.S. intellectual property overseas, presumably in support of the PTO Office of External
Affairs. The report on the legislation includes language no doubt endorsed by Senator Judd Gregg (R-N.H.): "Within the amount made available for the USPTO, $990,000 is for a grant to the Whittemore School of Business [of the University of New Hampshire] for an intellectual property rights pilot project."

The legislation also provides for the first time an appropriation ($20,000,000) for the National Intellectual Property Law Enforcement Coordination Council (NIPLECC), an interagency body created in 1999 to coordinate domestic and international intellectual property law enforcement. To head up NIPLECC, it creates a new Coordinator for International Intellectual Property Enforcement, a presidential appointee to whom the co-chairs of would NIPLECC report. Of the funds appropriated to NIPLECC, $5,000,000 must be transferred to the Office of the U.S. Trade Representative to establish a position of Chief Negotiator of Intellectual Property Enforcement, and $1,000,000 must be transferred to the State Department to support a new Office of International Intellectual Property Protection and Enforcement.

The House appropriations bill includes no direct references to overseas IP enforcement, but includes several explicit provisions on PTO manpower, setting floor levels for hiring patent and trademark examiners and ceiling levels for staffing the Office of General Counsel. Also included in the House bill and missing from the Senate bill are prohibitions against: (1) PTO employees accepting payment or reimbursement for attending conferences or meetings from an entity representing persons subject to regulation by the PTO unless the entity; and (2) the use of funds "to issue patents on claims directed to or encompassing a human organism."

AIPLA and the Intellectual Property Owners Assoc. addressed a letter to the Senate appropriators about S. 2809 prior to the markup of the bill: "Let us be very clear: we absolutely oppose any fee increase without legislation to ensure that all user fees will either be available to the U.S. Patent and Trademark office (PTO) or returned to PTO users." The ABA Governmental Affairs Office has written to Senators Orrin Hatch (R-Utah) and Patrick Leahy (D-Vt) urging their opposition to the fee provisions of S. 2809.

Senator Hatch and Senator Arlen Specter (R-Pa.) addressed a September 10, 2004, letter to the appropriators, seeking "language that achieves our goal of ending fee diversion but also preserves the jurisdiction and prerogatives of the Appropriation Committee and budget process to determine the PTO's annual appropriation."

-- This is, plainly put, garbage.

USPTO Funding Update: Senate appropriators have expressed skepticism over requests from the Patent and Trademark Office for more money to overhaul itself. Key senators in the debate, meanwhile, continue to urge members of the Appropriations Committee to craft language that would end the diversion of fees generated by PTO services.

In a committee report on the annual spending measure that funds PTO and other entities, Senate appropriators said the agency needs more funding to execute its five-year overhaul plan.
But the committee added that it still questions whether PTO's "past failure to attain these objectives was the result of inadequate funding" and whether the agency needs to hire "hundreds, if not thousands, of additional personnel" to achieve its objectives.

Turning a Corner in China? Swiss agrochemicals firm Syngenta has won a lawsuit against two Chinese companies that infringed patent laws by selling one of its insecticides without permission.

The ruling is seen in some circles as a sign that the Chinese authorities are making more efforts to protect intellectual property rights.

Syngenta is one of a number of foreign investors in China taking more aggressive legal steps to crack down on what they see as blatant copyright and patent infringements.

Well, it was worth a shot . . . : We know it’s hard to believe, but nobody was willing to pony up $850,000 in an eBay auction earlier this month for the U.S. provisional patent to build dual display laptops (apparently a crudely photoshopped mockup wasn’t enough to convince anyone to drop the cash on it). Set aside the reality that few PC makers are trolling eBay looking for patents, the thing is, despite the seller’s claims, you wouldn’t have first crack at a build a laptop with two screens anyway, even if you don’t count the 2-VU, the Xentex Flip-Pad Voyager has been out for awhile now.

(courtesy of engadget.com)

Yes, I know it's a Sham, But Just Think of the Potential Licensing Fees! Local researchers are claiming they may have found the cure for the common cold. The wonder drug is called Echinilin, and instead of masking cold symptoms like other over-the-counter products, it stimulates the immune system and attacks the invading virus, say officials with Factors R & D Technologies.

"The end result was an immediate and marked reduction in both severity of symptoms and duration of the infection," said Dr. Richard Barton, co-director of human clinical studies for the $5-million project. Developed and tested over the past eight years, the drug relies on Echinacea extract to kill the common cold. Researchers say it can also be taken for immune-system maintenance and provides immune-system support.

Press Picks Up on Fish-Ropes Merger Talks: Boston's Ropes & Gray has courted IP boutique Fish & Neave for years. And in mid-September, Fish & Neave spokesperson James Haggerty confirmed the two were again in "extremely preliminary merger talks." But this time, Ropes might land the catch.

Since 2003, 12 partners have left the 160-lawyer Fish & Neave to join expanding IP practices at Latham & Watkins, Kirkland & Ellis, Quinn Emanuel Urquhart Oliver & Hedges, King & Spalding, and Wilson Sonsini Goodrich & Rosati. At least 20 associates have left, too.

Several IP boutiques have closed in recent years, including New York's Pennie & Edmonds, Los Angeles's Lyon & Lyon, and San Jose's Skjerven Morrill. During the past year, a host of Fish lawyers have looked around, says Anna Tsirulik, managing director of Major, Hagen & Africa's New York office.

Is the 126-year-old firm (which counseled Thomas Edison) going the way of the phonograph? Reached before the merger talks became public, managing partner Jesse Jenner said no. "We are recognized in most quarters as being the leading IP firm, if not on everybody's list of the top three or five," he said. Jenner couldn't be reached for comment on the Ropes & Gray talks, but in earlier interviews he conceded the firm would consider a merger. "We would be crazy not to consider anything that would enhance our practice," he said.

A short and timely article on attorney-client privilege, in light of Knorr-Bremse . . .

West Releases Andrews' Patent Litigation Reporter: West and Andrews Publications recently announced the release of Andrews’ Patent Litigation Reporter, providing legal professionals with coverage of federal court rulings in patent cases.

Andrews’ Patent Litigation Reporter covers a wide range of topics, from filing patent requests to challenging the validity of a patent that has already been issued, as well as how to file patent infringement claims. Andrews’ Patent Litigation Reporter is published monthly and ensures that subscribers are aware of the latest developments and legal theories in this rapidly changing field.
Topics covered by the Patent Litigation Reporter include

Applications

Validity of patent

Patent infringement

Jury verdicts

Settlements

The print version of the Patent Litigation Reporter is now available at 12 issues for $525 a year. For more information or to subscribe, call (800) 344-5008 or visit west.thomson.com.

Knorr-Bremse Post Mortem - (courtesy of the Internet Patent News Service): Greg Aharonian provides his opinion on the Knorr-Bremse decision and brings up an interesting point: since claim construction is a matter of law, how can one ever claim to know the true meaning and scope of a claim? Here are some of Greg's comments:

Willful infringement of a patent requires that the infringer understand the exact scope of the patent claims, i.e., the infringer saw the boundary and crossed it. But unmentioned in its Knorr decision, is another CAFC decision, Markman, which says that only judges can draw the lines of the boundary. Until the Markman hearing, and especially without Jepson claims, there are no boundaries to be crossed, making willfulness impossible.

The CAFC can't have it both ways. It can't say the public can't scope claims if they are on a jury, but then say they can scope claims to willfully infringe. (I am ignoring the issue of exact copying, which for technologies like software where many opinions are sought, is rarely the case).

Since patent lawyers are not judges, Markman implies that their opinions are almost as useless as the analysis of the infringer. And given the rate of cases being overturned, Markman implies that the decisions/opinions of district court judges are as useless. So it doesn't matter if an infringer asks a lawyer for an opinion or not, and it doesn't matter if the infringement opinion says there is infringement or not, none of this matters in light of Markman. I mean, companies now have to deal with the problem of worrying if the district court judge is not as smart as their lawyers (imagine your lawyer, with an excellent argument, saying you don't infringe, only to later to have deal with the judge construing the claims another way).

Yet the CAFC in Knorr doesn't mention Markman. That defies logic. The implications of Markman are still a big legal mess, and at least one CAFC judge knows how very deep this legal mess is to be a lie.

Greg Aharonian

Rumor Mill Alert: It has been reported by unsubstantiated sources that the NYC IP boutique Fish & Neave will be merging with Boston GP firm Ropes & Gray. If true, it is big news and another blow to the IP boutique community. Details will follow . . .

D'oh! Details of the momentous Sun-Microsoft deal signed in April have started to raise eyebrows in the open source world.

As part of its SEC filings, Sun revealed this week that under the deal, users of its Open Office software would be exempt from legal action from Microsoft. But from 1 April 2004, all non-Sun users of the open-source software suite will not be.

What this says about Sun's approach toward the open-source movement is already being hotly debated. It has however also demonstrated Microsoft's controversial approach to business.

Having reached agreement to leave the way open to sue users of Open Office, this week it was telling the Open Office community it wanted to work with it, prior to its exhibit at an Open Office conference.

The Sun-MIcrosoft agreement says Microsoft can seek damages from Open Office users or distributors for any copy of Open Office installed after 1 April 2004. However, users of Sun's commercial distribution of Open Office, called StarOffice are protected from legal liabilities.

Be Careful - Or Else: This article from ADTmag paints a rather bleak picture for the software patent community. It has the standard "sky-may-be-falling" lines, like:

Imagine a post-patent-apocalypse world where no new software can be written because even the most basic software patterns cannot be used without paying a massive fee. And even if you wanted to pay $1 million to incorporate a "For ... Next" loop in your program, you can't transfer the money -- the banks are closed because the software and business processes they rely on belong to someone else.

I think this is pretty over-the-top, and ignores many of the tenets of patent law. For example, I can build an engine comprising many patented sub-parts (spark-plugs, fuel-injections, etc.). However, unless I plan on manufacturing each of these parts myself, I simply approach the manufacturer of each part and purchase it. The patent rights are inherently bundled in my purchase (the "first-sale doctrine" allows a party to collect a royalty on the sale of a product only once), and once I legally possess the patented part, I can use it pretty much any way I want.

I recognize that software has some peculiarities that make it different from traditionally manufactured product, but these differences are not great enough to warrant such doomsday pronouncements.

Judicial Plagiarism? The 3rd U.S. Circuit Court of Appeals has ruled that federal judges must write their own opinions and cannot simply sign an opinion that was "ghostwritten" by lawyers.

In Bright v. Westmoreland County, a unanimous three-judge panel issued a stiff rebuke to U.S. District Judge Arthur J. Schwab of the Western District of Pennsylvania after concluding that defense lawyers had submitted a "proposed opinion" and that Schwab adopted it "nearly verbatim" as his own. "When a court adopts a party's proposed opinion as its own, the court vitiates the vital purposes served by judicial opinions. We, therefore, cannot condone the practice used by the district court in this case," U.S. Circuit Judge Richard L. Nygaard wrote in an opinion joined by 3rd Circuit Judges Theodore A. McKee and Michael Chertoff.

Nygaard found there was "no record evidence which would allow us to conclude that the district court conducted its own independent review, or that the opinion is the product of its own judgment. In fact, the procedure used by the district court casts doubt on the possibility of such a conclusion." As a result, Nygaard concluded that the 3rd Circuit was forced to remand the case to Schwab with an order requiring that he "engage in an independent judicial review."

Report Search: PricewaterhouseCoopers has highlighted software patenting as a threat to the growth of the Information Communications Technology (ICT) sector in Europe. According to the report, very few European companies have made any preparations for the introduction of a software patent regime.

- If anyone knows where this report can be found, please e-mail me

FEDERAL CIRCUIT EN BANC DECISION: In Knorr-Bremse v. Dana, the federal circuit ruled that no adverse inference that an opinion of counsel was or would have been unfavorable flows from an alleged infringer's failure to obtain or produce an exculpatory opinion of counsel. Precedent to the contrary is overruled.

Instead, the court determined that willful infringement should be examined under the totality of circumstances where numerous factors, such as evidence of direct copying, are brought into play. The three questions answered in the en banc decision are as follows:

(1) When the attorney-client privilege and/or work-product privilege is invoked by a defendant in an infringement suit, is it appropriate for the trier of fact to draw an adverse inference with respect to willful infringement?

• The answer is "no." Although the duty to respect the law is undiminished, no adverse inference shall arise from invocation of the attorney-client and/or work product privilege.

(2) When the defendant had not obtained legal advice, is it appropriate to draw an adverse inference with respect to willful infringement?

• The answer, again, is "no." The issue here is not of privilege, but whether there is a legal duty upon a potential infringer to consult with counsel, such that failure to do so will provide an inference or evidentiary presumption that such opinion would have been negative

(3) If the court concludes that the law should be changed, and the adverse inference withdrawn as applied to this case, what are the consequences for this case?

• The district court based its willfulness determination on several factors in addition to the adverse inference arising from the assertion of attorney-client privilege by Haldex and the failure of Dana to obtain legal advice. This court has explained that "there are no hard and fast per se rules" with respect to willfulness of infringement. Precedent illustrates various factors, some weighing on the side of culpability and some that are mitigating or ameliorating. Because elimination of the adverse inference as drawn by the district court is a material change in the totality of the circumstances, a fresh weighing of the evidence is required to determine whether the defendants committed willful infringement.

(4) Should the existence of a substantial defense to infringement be sufficient to defeat liability for willful infringement even if no legal advice has been secured?

• The answer is "no." Precedent includes this factor with others to be considered among the totality of circumstances, stressing the "theme of whether a prudent person would have sound reason to believe that the patent was not infringed or was invalid or unenforceable, and would be so held if litigated." However, precedent also authorizes the trier of fact to accord each factor the weight warranted by its strength in the particular case. We deem this approach preferable to abstracting any factor for per se treatment, for this greater flexibility enables the trier of fact to fit the decision to all of the circumstances. We thus decline to adopt a per se rule

Microsoft Patent Update: Microsoft has been granted a patent from the U.S. Patent and Trademark Office on a process known as tabbing through a Web page in order to find links. The patent (number 6,785,865) is officially titled "Discoverability and navigation of hyperlinks via tabs."

Microsoft filed for the patent in March of 1997. It covers the process of shifting between links on a Web page using the computer's tab button. The patent specifies that a "user may discover and navigate among hyperlinks through the use of a keyboard. For example, a user may press a tab key to discover and navigate to a first hyperlink that is part of a hypertext document." The abstract also said a user may also tab to a link that is actually a placeholder for an image "in order to make a decision whether the image should be downloaded or not."

Not surprisingly, the open source community is not happy - but I am surprised that articles on software patents are including comments from people like the EFF and the Public Patent Foundation

Best Served Cold: The litigation-prone RIAA, a trade group that claims to represent the US recording industry, has itself been accused of patent infringement by Altnet Inc, a Californian P2P firm. Also in the firing line are several RIAA partners that make anti-piracy software products - Overpeer Inc., Loudeye Corp. and Media Sentry Inc.

Loudeye acquired Overpeer in March this year. Altnet filed the lawsuit in a Los Angeles district court last week. It alleges that RIAA and its partners infringed on Altnet's patented file-matching technology that identifies file requests sent over a P2P network. The suit claims that RIAA encouraged Loudeye and others to propagate popular P2P sites like Kazaa with bogus or damaged files that were disguised as user file requests. It also claims the methods used to match their files with users infringe its patented technology.

Altnet is a close partner of Sharman Networks Ltd., the company behind Kazaa. Woodland Hills-based Altnet is seeking an injunction to stop RIAA and its partners from further use of its patented technology. It is also seeking monetary damages, but did not specify a dollar amount at this stage of proceedings. In many ways the lawsuit is part of a concerted campaign waged by Altnet against a number of firms, including those in the current lawsuit, since last November when it issued a series of warning letters.

Historical predictions offered up in a new book, "In Praise of Slowness" by Carl Honore (courtesy of Worthwhilemag.com):

• Benjamin Franklin predicted that the technological advances of the late 1700s would lead to four-hour work weeks.
• In the late 1800s, George Bernard Shaw predicted that we would work two hours a day by the year 2000.
• In 1956, Richard Nixon foresaw a four-day work week in the "not too distant future."
• In the mid-1960s, a U.S. Senate subcommittee heard a prediction that by 2000, Americans would be working about 14 hours a week.

And you'd think people would stop listening to such hype after all these years. "Two hour workdays"? Please . . .

Forgent creates website to manage patent litigation: Forgent Networks announced today it has added an enhanced intellectual property area to the corporate web site. The site provides information on Forgent’s intellectual property program and the litigation recently initiated against 40 technology companies for infringement of United States Patent No. 4,698,672 (the '672 Patent) in the United States District Court for the Eastern District of Texas, Marshall Division as well as the complaints filed in the United States District Court for the District of Delaware.

According to Forget, the site was developed to enhance communication and improve the information flow with shareholders and interested parties about the complicated litigation process. Web site visitors can view selected court filings in a simple time line format according to the particular case. Over the last two years the intellectual property business has generated approximately $90 million from licensing the ‘672 Patent to over 30 different companies in Asia, Europe and the United States.

The company claims that the ‘672 Patent - which relates to digital image compression, and fields of use include digital still image device used to compress, store, manipulate, print or transmit digital still images such as digital cameras - extends beyond digital cameras and includes many digital still image devices such as personal digital assistants, cellular telephones, printers, scanners, and other devices used to compress, store, manipulate, print or transmit digital still images. Forgent claims the exclusive right to license and enforce all the claims under the ‘672 Patent in all fields of use involving digital still image compression.

Patent Battle Royale: Akamai v. Speedera: Speedera Networks spends almost as much money on lawyers as it does on payroll for its roughly 100 employees.

Most of those legal bills are from the Santa Clara start-up's bitter cross-country fight with its much larger rival, Akamai Technologies of Massachusetts. The two companies offer competing services for helping Web sites with heavy traffic speed content along the Internet.

Speedera's existence in recent years has been as much about litigation as innovation.

The conflict with Akamai has been festering ever since it erupted two years ago. It started when Akamai sued Speedera, resulting in a series of lawsuits and countersuits over patent disputes.

The FBI at one point even searched Speedera's offices after Akamai claimed that a Speedera executive had stolen trade secrets.

The spat is likely to heat up again next year, when the first of the four cases involved in the battle goes to trial in February.

Micron's Mounting Legal Bills: Micron Technology has seen a surge in legal actions in recent years — ones which also have become more complex and potentially serious.

Losing just one current lawsuit — a claim that the company is improperly using someone else's technology — could cost it hundreds of millions of dollars. The world's third-largest maker of electronic memory — and the Treasure Valley's largest employer — faces more than 25 class-action lawsuits, claims of fraud and a U.S. Department of Justice investigation.

And that's just for starters.

Micron's legal costs are escalating as it faces a tangle of lawsuits that have erupted in the past two years. The Justice Department in June 2002 began a continuing investigation on price-fixing, prompting two dozen civil lawsuits around the country that have been consolidated into one case in California.

-- There is a strange comment made by a corporate counsel in the above article: the counsel worries that patent infringement cases could drive American businesses offshore. "There are some real concerns because there's an ever-increasing number of (patent) cases and there's a trend toward going after major manufacturers, particularly in the U.S. It makes it difficult to be a manufacturer here. We could be an IP (intellectual property) company and have someone in China manufacture for us. These trends ultimately are making it more difficult for U.S. manufacturing companies."

My question is how legal ramifications are avoided by moving offshore? If you make, use, sell or import infringing technologies, you are liable just the same as everyone else. Granted, there are some tricks to skirt around certain damages by locating offshore, the economic impact can still be just as devastating . . .

Acacia Update: In an attempt to get more colleges and universities to pay royalties on revenue-generating distance-education programs that include the use of streaming video, Acacia Research Corp.--the company that claims to own the patent on streaming video technology--will issue a revised licensing proposal to schools. The letter, which schools should begin receiving this week, marks the latest salvo by Acacia in the fight for streaming video and audio technology ownership on the Internet.

The letter comes because schools have been slow to respond to Acacia's initial requests for royalty payments. Though a few academic institutions reportedly have acquiesced and entered into agreements with the company, the majority of schools thus far have resisted. Paying up to a 2-percent royalty for every audio and video clip streamed by students and professors is ridiculous, they assert, and threatens the very existence of distance-education programs in America's schools.

Amid the schools' concerns, Rob Berman, Acacia's general counsel, said the company reworked its original proposal, issued in July, to provide a more school-friendly licensing structure.

Under the original agreement, Acacia had demanded a minimum payment of $5,000 from any school that uses streaming video or audio for "educational purposes," including online and traditional courses, virtual campus tours, sporting events, and promotional spots for prospective students.

Guidant v. St. Jude Medical Inc. Gets a New Trial: Guidant Corp. won a new trial in its bid for as much as $140 million in damages from St. Jude Medical Inc. over implantable defibrillators.

The U.S. Court of Appeals for the Federal Circuit said two Guidant patents are valid, and a judge was incorrect to overturn a jury's finding of validity. The appeals court sent the case back for a new trial on whether Canada-based St. Jude infringes one of the Guidant's patents.

The Federal Circuit denied a Guidant request to simply reinstate the $140 million jury verdict that had been thrown out by the trial judge in Indianapolis.

The Washington-based appeals court said U.S. District Judge David Hamilton erred when he said the Guidant patents were obvious variations of earlier innovations. Guidant's inventions relate to defibrillators that are permanently installed under the skin and send electric shocks to the heart muscle when they sense abnormal activity.

"Recognition of the problem of treating complex heart arrhythmias does not render obvious the eventual solution," Circuit Judge Pauline Newman wrote for the three-judge panel.

Judge Hamilton ruled in February 2002 that the $140 million in damages was "grossly excessive," since it equaled more than 80 percent of St. Jude's 2001 net income. He also ruled that the jury verdict on damages was tainted by Guidant's chief expert witness, who, the judge said "deceived the jury, deceived the court and deceived St. Jude."

Guidant was ordered to pay some of St. Jude's legal fees as a sanction. Hamilton said if the appeals court reinstated the case, Guidant should accept $28 million in damages.

The Future of RFID Technology: A revolution is being predicted in so-called RFID "smart tags". RFID spending is set to explode in the next few years, growing from $1 billion this year to $4.6 billion in 2007, estimates Wall Street research firm Robert W. Baird & Co. Almost all of this will be in backroom warehouses and distribution centers -- not on grocery shelves or mall store racks. Consultants and analysts have been spinning tales about the virtues of RFID, such as digitally encoding receipts for paperless returns and warranty claims. But most of these sophisticated uses require tagging on the item level. That's happening in a few pilot tests of high-price or high-margin goods. But among North American manufacturers that expect to start using RFID in 2005, only 3% will do so at this level, according to Accenture (ACN).

A Good Idea From the UK Patent Office: New and small businesses in West Yorkshire will get advice on how to maximise profits from their new ideas at the Business Advice Open Day taking place at the Hanover International Hotel, Bradford, on Thursday, 30 September 2004.

Patent Office experts will be explaining how managing intellectual property can be key to business success. The team will be covering all aspects of patents, copyright, trade marks and designs.

SMEs will have the opportunity to sign up to the Patent Office’s ‘What is the key?’ campaign to receive a free information pack on how to benefit from their IP and the chance to win a free consultation with a legal expert. The campaign reinforces the increasing worth of intellectual assets in the knowledge economy as highlighted in Department of Trade & Industry Innovation Report.

The Patent Office is also inviting visitors to attend a free seminar, entitled ‘Intellectual Property – what’s that got to do with my business?’ where guests can gain an insight into the very real intellectual property issues that impact on the success of their business.

The event is part of a series of HM Customs & Excise Open Days programmed for 2004 where experts from over 30 organisations will offer free help and advice on practical issues and regulations affecting businesses.

The Federal Bar Association September Monthly Luncheon will be held on Wednesday, September 15 at 12:15 pm at the Chicago Bar Association, 321 S. Plymouth Court. The topic of this luncheon is "Does the patent system need fixing?" There will be a panel discussion on the Federal Trade Commission Report "To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy". The moderator will be Alan Barry of Bell, Boyd & Lloyd and the panelists include Susan DeSanti, General Counsel of the FTC, Timothy Holbrook of the Chicago-Kent College of Law and Harry Roper of Jenner & Block.