QUOTE OF THE DAY: CNET has a report on the software patent debacle in Europe, where they have nitwits like Rufus Pollock from the Foundation for a Free Information Infrastructure (FFII) saying pompous things like "as all informed observers know, promoting innovation is a matter of striking a correct balance between protection and monopoly. Innovation and ideas must be 'adequately rewarded,' and this is precisely what software patents do not do."

Anyways, my favorite line of the article was when they described the members of the EU parliment responsible for debating the software issue:

In September 2003, the European Parliament tried to water down the council's Directive on the Patentability of Computer-Implemented Inventions by adding amendments to it that would restrict widespread software patenting.

This move was rejected by the council in May, and the parliament is expected to begin its work again in November. Because the parliament has appointed former French Prime Minister Michel Rocard--who has described himself as a "supporter of free software"--to lead its response to the council, there is speculation that it could take a hard line.

I wonder how far I could get describing myself as a "supporter of free HDTV DLP front-projector televisions" . . .

ARCHIVING THE DOT-COM-BOMBS: (MSNBC.com) For more than two years, Kirsch, a professor of entrepreneurship at the University of Maryland, has been frantically collecting business plans of the dot-com era. To let these documents lie idle and scattered is to risk losing an important piece of American business and cultural history, he argues.

"How will future historians be able to understand the texture of this time? What information will they have access to, to understand the highs and lows?" he asks. "We can't wait 100 years for documents to wend their way into historical archives. We've got to act now."

Kirsch and a rotating staff of loyal students have created a digital database -- available at www.businessplanarchive.org -- that lists more than 2,300 companies so far, mostly from 1997 to 2002. It is a painstaking process, and the records are far from comprehensive, Kirsch acknowledges, but he hopes the archives may someday prove useful in capturing the craziness of the Internet boom.

For instance, how could a scholar 50 years from now capture the brazen self-confidence of dot-com entrepreneurs? Chapters of exposition might not match two paragraphs in KaoticSpace.com's 2001 business plan that lay out the company's public relations strategy:
"We won't have to bribe or pay any media providers for promotion. It is in their users (investors) interest to know of us. By not providing their users with the most current information on us, they (media providers) would be doing their viewers a disservice, and risk losing said viewers."

Or consider the founders of FreeProductSamples.com. They identified at least 21 other companies trying to make a profit giving away beauty products and household items but were confident they could become cash-flow positive in 12 months and hit the $100 million revenue mark in five years. Executives of ThatNew.com sought to help users keep track of all the exciting Web sites popping up on the Internet by filtering them into categories like "thatnewbusiness.com" and "thatnewshow.com."

To capture more of that history, Kirsch recently launched a second project that allows individuals to share their stories from the bubble. At CreativeDestruction.org anyone who worked at Internet technology companies during the 1990s can log on and write about the experience or take a survey about what the period was like.

- Tip of the hat to James Goedken for passing along the story . . .

OH, WHAT THE HECK: It seems everybody else is posting something of a political nature these days, so I thought I'd throw out something that struck me as monstrously vapid written by the pinko Boston Globe. Of course the Globe, who likes to blame Bush for everything from hurricanes to stubbed toes, came out in its op-ed pages to (surprise!) blame Bush for the vaccine shortages. Not being one to leave well enough alone, Robert Kuttner goes on to give his magical recipe for never being short on vaccines again:

What should the administration be doing? First, it should require several drug makers to work with the CDC to develop flu vaccines. The industry is profitable thanks to extended patent protection, publicly funded basic research, and FDA seals of approval. It should gladly make vaccines at only a normal profit as a civic thank-you for all it gets from government.

Second, Congress should pass a law, as it did in the swine flu crisis of 1976 indemnifying manufacturers and physicians against lawsuits. If the FDA approves a vaccine, that should be sufficient assurance. Government could set up a public compensation fund for the rare victim of a faulty vaccination.

Third, government should be the purchaser and distributor of the vaccines. That would both guarantee manufacturers a market and would create a rational plan for priority distribution. And these vaccines should never be patented. As Dr. Jonas Salk, creator of the polio vaccine, famously said: "Who owns my vaccine? The people! Could you patent the sun?"

Oh dear. Now, for those that feel I may be a little heavy handed on the Globe, consider what was posted in the People's Weekly Word Newspaper a few days ago:

JWJ also estimated yearly savings of $140 billion by stripping drug companies of monopolies over marketing drugs . . .

In addition, JwJ urges the U.S. eliminate patent monopolies by having the federal government finance all drug research. Publicly funded research, plus similar research at nonprofit organizations such as universities and foundations, account for more than half of total U.S. drug research spending, JwJ says. Drug companies spent $33.2 billion on R&D last year, their lobby says. But Families USA points out the drug companies spent more than double that on advertising and marketing.

Just where do they find these people?

NOTE: It is interesting that, although Jonas Salk did not find it appropriate to patent the polio vaccine, he appears to be an inventor on 7 patents related to AIDS prevention and treatment.

TODAY IN HISTORY:

-- In 1636, Harvard College was founded in Massachusetts.

-- In 1793, Eli Whitney applied for a patent for his cotton gin (the patent was granted the following March).

-- In 1922, fascism came to Italy as Benito Mussolini took control of the government.

Is there a connection somewhere in that?

FASHIONABLE FURNITURE KNOCKOFFS THREATENED: (From the NYT) Devotees of midcentury modernist furniture who want to furnish their homes with affordable versions of the period's signature pieces, like Mies van der Rohe's Barcelona chair, may soon be out of luck.

In a decision that could reduce the availability of replicas of classic modern furniture, the United States Patent and Trademark Office last week granted trademark protection to the furniture company Knoll for four famous designs in Mies van der Rohe's Barcelona collection — the chair and a stool, couch and table — as well as his flat-bar Brno chair.

Knoll, a Greenville, Pa., company, has been the licensed manufacturer of the Barcelona chair since 1948. A Knoll spokesman, David Bright, said the decision allowed the company to take action against retailers who sell knockoffs and "gives a green light to U.S. customs to stop unauthorized products from reaching this country."

Knoll, which makes 18 Mies reproductions, has held a trademark on the Barcelona name since 1968. (Knoll reproductions have Mies's signature stamped into the frame.) The new registration extends trademark protection to the actual design of the five products. Mr. Bright said the company filed for protection to stem inexpensive knockoffs. Trademark protection, Mr. Bright added, will help maintain the authenticity of the original 1929 design. He declined to provide sales figures for the Barcelona series but said it is a "perennial favorite." The decision could curb sales of copycat versions by retailers like Design Within Reach, whose customers appreciate the period's design masters but do not want to pay for authentic reproductions.

At the same time, the attempt to restrict replicas may encourage manufacturers to be inventive. "They will make enough changes to ensure the products are legal," said Lee Mindel, an architect at Shelton, Mindel & Associates in New York. "They will morph into other things, like watches on Canal Street."

INDEMNIFICATION - THE KICKER BETWEEN WINDOWS AND LINUX? Steve Ballmer from Microsoft has pumped out a four-page memo explaining why Windows is better than Linux. Ballmer argues that the rising prices companies such as IBM, Red Hat and Novell charge for technical services and support, along with costs associated with indemnification, now outstrip the financial advantages of free open source software. Ballmer explains:

Increasingly, we're hearing from customers that another factor in their consideration of computing platforms is indemnification. In 2003, we looked at our volume licensing contracts to see what we could do to increase customer satisfaction, and a top issue we heard about was patent indemnification, which then was capped at the amount the customer had paid for the software. So later that year, we lifted that cap for our volume licensing customers, who are most likely to be the target of an intellectual property lawsuit.

Today, when a volume licensing customer – a business or organization ranging from as few as five computers to many thousands – licenses a Microsoft product, we provide uncapped protection for legal costs associated with a patent, copyright, trademark or trade secret claim alleging infringement by a Microsoft product. We do this because we are proud to stand behind our products, and because we understand that being on the wrong end of a software patent lawsuit could cost a customer millions of dollars, and massively disrupt their business.

No vendor today stands behind Linux with full IP indemnification. In fact, it is rare for open source software to provide customers with any indemnification at all. We think Microsoft's indemnification already is one of the best offered by the leading players in the industry for volume licensing customers, and we're looking at ways to expand it to an even broader set of our customers. It's definitely something businesses want to think about as they're building or expanding their IT infrastructure.

Techworld.com reports on the memo here.

ONE FROM THE GOOD GUYS: After hearing all the harping against software patents, it was refreshing to see a statement that warns the EU about banning software patents. In a letter sent to members of the European Parliament's legal affairs committee this week, EICTA, the European IT and communications industry association, urges approval of the version of a proposed directive on computer-implemented inventions agreed by European Union governments in May. The group warns that if members of Parliament (MEPs) insist on some of the amendments they requested when they were first asked their views on the directive, it would "seriously threaten research and development in Europe" and put thousands of highly skilled jobs at risk.

EICTA points out, for example, that the version of the legislation approved by the EU governments would not offer patent protection for the software underlying mobile phones, even though the devices use software for their implementation. Finally, the EICTA said that copyright protection alone is not enough to protect inventions. Copyright only protects the actual software or program code, and competitors, it said, can easily get around copyright protection of specific programs. Patents, on the other hand, would protect the "technical function and concept" provided they meet the patentability requirements.

- Hear, hear . . .

CHOOSING YOUR COMPETITION: A good article posted by Eric Sink on his weblog Eric.Weblog(). In an older post, Eric expounds on evaluating a new business idea and has some very good points about pursuing new business opportunities:

One of the first steps in evaluating a new business idea is to find out who else is already doing it. Do some Google searches. Find out who your competition will be. Find people who are doing something similar or related.

The next step is where a lot of would-be entrepreneurs make a wrong turn: The strong tendency is to drop an idea as soon as we find somebody else is already doing it. We somehow convince ourselves that we have to keep searching for ideas until we find something completely new. Innovation is glamorous. We love to hear stories about the guy who makes a fortune by inventing something completely new. And besides, there's no sense starting with established competition from day one, right?

To be fair, I'll concede that competition should not be taken lightly. Entrenched competition can be tough to beat. Picking the wrong competitor as your goliath can be suicide. However, avoiding competition altogether is usually not a good strategy for getting a business going.

The big problem with avoiding competition is that you are also avoiding customers. The existence of a competitor indicates the existence of paying customers. If you can't find anyone who is making money with your idea, you really need to wonder if there is any money to be made there at all.

IS NANOTECH WALKING THE "BUSINESS METHODS" PATH? (From ZDNet.com) The USPTO's decision to set up Class 977, as the new category for nanotechnology, is a recognition that a swarm of nanoscale inventions is headed the patent office's way. However, some nanotechnology inventions are already on the market, including fibers for clothing and mattresses that are highly stain resistant and water resistant; particles of titanium dioxide that make sunscreen transparent; and nanocrystals of silver for antimicrobial bandages.

These products are the vanguard of a technology that is expected to touch every part of the economy, the way computers have. But there is an important difference, according to Lux Research, a technology research company in New York. Information technology was about recording and analyzing the physical world, but nanotechnology is about changing how the physical world behaves.

For example, a hospital computer may keep track of when a patient will receive a hip-implant operation, how his blood tests came back and who his insurer is, but a nanoscale coating on the surface of his implant affects how it performs in his body.

Depending on how you define it, nanotechnology may already be contributing billions of dollars to the economy. The National Science Foundation predicted in 2001 that nanotechnology would contribute $1 trillion by 2015, and some experts, including the people at Lux, think that figure might be low.

The nanotechnology surge is confronting the patent office with a familiar problem--assessing claims of innovation that do not match up neatly with the way patent examiners are trained to categorize them--but on a whole new scale. The danger is that an examiner trained in, say, chemistry will be running into nanotechnology patent claims that also touch on physics and biology, and may overlook previous inventions or publications in those fields that are relevant to whether a new claim is patentable.

The patent office began training its examiners in nanotechnology concepts and terminology in November, and has set up a working group of outside lawyers and researchers to give advice. But that has not been enough to head off confusion in a realm where the same invention might be called a carbon nanotube, an elongated cylinder made of carbon or a carbonaceous cylinder in three separate patent applications, according to experts like Stephen B. Maebius, an intellectual property lawyer in Washington and former patent examiner.

As a result, Maebius and other lawyers say, a number of overlapping patents have already been issued. The potential for years of legal battles could freeze development in its tracks, according to Matthew Nordan, vice president of research at Lux.

"It's the biggest threat to commercialization," Nordan said.

India gets set for WTO patent regime - India is gearing up for the introduction of new legislation on intellectual property that will bring it into line with its World Trade Organisation commitments.

The country’s long-awaited Third Patent Amendment Bill is likely to be introduced in Parliament at its winter session in December, according to local news reports. The bill increases protection to include product patents as well as process patents, and according to the WTO should be passed into law by 1 January, 2005.

However, there are signs that its implementation may be delayed, as there is still disagreement at ministerial level about certain key aspects of the legislation, including the definitions it employs for patentability.

If the bill is not passed in the winter session, it will be referred to a standing committee which will then re-introduce it in the budget session starting in February 2005, said BK Keayla, convenor of India's non-governmental National Working Group of Patent Law.

India’s 280-billion rupee (€4.8bn) pharmaceutical industry is looking forward to the launch of a new patent regime, because they believe it will lead to an increase in the number of foreign companies - once assured of product patent protection - seeking local partners.

One key element of benefit to the Indian industry will be its standing as a source of actve pharmaceutical ingredients (APIs). Industry sources expect the domestic pharmaceutical sector's revenue from the US generic market alone will quadruple in the next five years to $2.17 billion with similar growth expected from Europe. The US generic market was worth $16 billion in 2003, with Indian companies capturing a 3.5 per cent share.

St. Clair vs. Fuji - St. Clair, a patent holding company from the Detroit area, is awaiting a jury's verdict this morning in its case against Fuji Photo Film Co. in U.S. District Court in Wilmington, Del. St. Clair seeks $18 million in the trial, which started last week, shortly after another jury awarded St. Clair $34.7 million in its case against Canon. The disputes are over technology that allows digital cameras to take pictures in more than one format, such as TIFF and JPEG files. The technology also covers cameras that can take short video clips besides still pictures.

Maybe it's me, but I'm starting to notice more and more patent attorneys that are starting their own holding companies and are making a veritable killing off of their portfolios. I have even heard rumors that some of the more "famous" patent plaintiff firms are quietly building portfolios through which they hope to yield similar results. If anyone knows whether the rumor about the firms are true (I'll give you a hint - they are located in Chicago and Minneapolis), please e-mail me with the details - inquiring minds want to know . . .

For example, this outfit has been suing everyone in the last few years, and seems to be making a pretty penny from their efforts.

IT HAS TO BE FRIDAY: A Maryland man, facing charges of possessing biological weapons, was sentenced Friday to more than five years in federal prison for trying to extort millions of dollars from a Connecticut company. Myron Tereshchuk, 42, of Hyattsville, Md., had pleaded guilty in June to extortion for attempting to force a Connecticut trademark information company to pay him $17 million.

Prosecutors said Tereshchuk had harassed East Haven, Conn.-based MicroPatent for more than a year. Tereshchuk ran a small business called Potomac Filewrapper Service that was a competitor to MicroPatent. Tereshchuk sent MicroPatent's clients hundreds of e-mails, many of which were "spoofed" to resemble authentic MicroPatent correspondence.

The e-mails contained statements derogatory to MicroPatent, attached sexually explicit patent applications, and disclosed MicroPatent documents that were believed to have been confidential, according to prosecutors. Prosecutors said that in March Tereshchuk began sending e-mails to MicroPatent, using an alias and demanding $17 million. "Once again, a serious criminal thought the anonymity of cyberspace would protect him, and once again, law enforcement has proven him wrong," said Paul J. McNulty, U.S. Attorney for the Eastern District of Virginia.

- LOL! Nothing like sending "sexually explicit patent applications" as a threat to someone. Maybe I'll try that with some opposing counsel in the future . . . .

TOO FUNNY: From Scientific American - The U.S. intellectual-property system has distinguished itself in the past several years for such gems as patents on privatizing government, a method for using a playground swing, and a computerized system that handles reservations for going to the toilet. But patenting the obvious is by no means confined to the land of reality shows and SUVs.

In recent years, Costa Rica has given new meaning to the legal term "patent enforcement." It all has to do with the country's popular canopy tours, in which visitors strapped in a harness slide along a cable between treetop platforms. For Costa Rica, decade-old canopy tours are big business, generating a reported $120 million annually. It is estimated that a quarter of the more than a million tourists who come here every year patronize one of the 80-plus tour operations.

But the future of many of these businesses may now be in the balance because of a patent. In 1998 Darren Hreniuk, a transplanted Canadian entrepreneur, received a 20-year patent from Costa Rica's Industrial Property Registry for "an elevated forest transport system using harnesses and pulleys on a single horizontal line, using gravity for propulsion."

Last spring Hreniuk began to "enforce" his rights in the most literal sense of the word, according to reports in two Costa Rican newspapers, the Tico Times and La Nacion. With a cease-and-desist order from the country's Industrial Property Registry, issued on April 25, 2003, Hreniuk and police officers went to 14 canopy tour operators and tried to close them down unless each agreed to pay at least $75,000 for a franchise.

The U.S. Patent Office has created a cross-reference digest designed to improve the ability to search and examine nanotech-related patents.

The office said in a written release that the digest seeks to guide the search for prior art, serve as a collection of issued U.S. patents and published pre-grant patent applications, and help develop an expanded cross-reference art collection classification schedule. That schedule, ultimately designed to replace the new digest, will include definitions, sub-classes and search notes.

MORE ANTI-SOFTWARE BLOWHARDS: A new campaign against software patents in the EU was launched today in 12 languages at www.NoSoftwarePatents.com. The campaign is managed by Florian Müller of SWM Software-Marketing GmbH, a software industry veteran with almost 20 years of expertise, and is supported by three corporate partners: 1&1, Red Hat, and MySQL AB. The campaign manager will discuss the issue of software patents with politicians and the media."Software patents are used for anti-competitive purposes, stifle innovation, and would cost the entire economy and society dearly", Florian Müller said. "On the bottom line, they create more injustice than justice. There is only a small group of people in the patent system who would benefit from them, and some large American corporations have ulterior motives. "

This is getting tiresome. Unfortunately, what many of the anti-software-patent crowd doesn't seem to get is that the whole reason software became patentable in the U.S. was that the USPTO and the courts could not reconcile what a "software" or "algorithm" patent really was. If you look at the USPTO web site, you can see that software patents were being granted prior to the USPTO's "Guidelines" issued in 1996, and certainly before the State Street decision in 1998. Any patent attorney worth his/her salt can tell you that disclosures can be manipulated to describe and claim inventions in terms that technically recite one thing, but can be easily interpreted to mean another.

I will be the first to admit that software patents have their problems, but these problems are mostly logistical (i.e., proper examination before the USPTO, having decent search tools, having effective ways to challenge patents, etc.), and banning software patents outright (like many in Europe are advocating) is certainly not the answer.

A good history of software patents can be found here.

WHO NEEDS NANOTECH WHEN WE HAVE THIS: Inventor Karl Friedrich Lentze has claimed that he has invented a device that can straighten bananas. The 56-year-old Lentze from Berlin, who has applied for a patent for the method he calls cigar banana, said that he has received endless calls from people who are keen to use the novel method. Lentze's patent application includes sketches showing how bananas will be carried along on a conveyor belt while robots chop out the curvy bits. "This is the biggest thing since sliced bread - the straight banana. Depending on the degree of the curve, chunks will be cut out of the banana, which are then resealed using a biologically safe plaster," Bild newspaper quoted Lentze as saying.

Well, the Japanese buy square fruit, so why the heck not?

USPTO On Line for Independent Inventors Today at 2 pm - Senior officials of the United States Patent and Trademark Office, as well as a representative from the Patent and Trademark Depository Library Program, will be available live on line today from 2 to 2:30 pm (EDT). In response to some of the more complicated technical questions, USPTO experts will take more detailed questions for a half hour, but will not answer them until later. The answers to the questions will be posted on the USPTO website as soon as possible following today's online discussion.

To join the discussion, click here - registration begins at 1:30PM (EST)

MERGER MANIA CONTINUES: Piper Rudnick LLP and Gray Cary Wareand Freidenrich LLP, today announced a merger that will create one of the largest law firms in the United States. The new firm will be named "Piper Rudnick Gray Cary LLP." With more than 1,300 lawyers, the combined firm will become one of the 10 largest law firms in the U.S. The firm will have 20 offices located in various business and technology markets throughout the country and projected revenues for 2004 that will approach $800 million, which would have placed the merged firm sixth in last year's AmLaw 100, which ranks U.S. law firms based on revenues. The merger, which takes effect on January 1, 2005, was announced jointlyby Piper Rudnick's co-chairs, Francis B. Burch Jr., and Lee I. Miller, andGray Cary's chairman and CEO, J. Terence O'Malley.

CUBAN PATENT IDEA GIVEAWAY: Mark Cuban, who sold Broadcast.com to Yahoo for $5.7 billion and is now president of HDNet, a provider of high-definition TV programming, rattled off a trio of ideas he said were potentially patentable, though he was not personally inclined to file the applications.

"These are businesses I would be looking at starting and software I would look at writing if I were so inclined," Cuban wrote Sunday in his blog. "Instead, I decided to throw them out--free for all...If I were a patent terrorist like some, I could probably even patent these ideas."

Cuban's first idea is a software program that takes advantage of the time TiVo subscribers spend watching their commercials fast-forward. Where subscribers now sit glued to the blur of fast-forwarding frames, Cuban suggests displaying a static advertisement.

Cuban's second idea is for software that would let people use the Internet and VOD services to piece together their own TV schedules and share them with friends.

The third idea, following the second, would let people emulate existing cable TV programming.

HAPPY BIRTHDAY TO YOU: I have no idea what this is about, but a private Chinese company has claimed to have registered the words to "Happy Birthday" as its trademark in 25 countries, including the US, Japan and European Union members, earler this month.

PATENTING E-MAIL FROM BEYOND THE GRAVE: One company has launched a new service that allows people to send a will or messages to their loved ones by e-mail in the event of sudden death. Digital Media, Korea’s peripheral computer equipment vendor, said Monday it had started the posthumous e-mail services in June at www.goodbyemail.com.

To check whether a customer is alive, Digital Media sends e-mail twice a month that must be answered within 30 days. If a customer fails to send a reply for one month, the firm will then ask a pre-specified trustee about the client’s status.

When a trustee confirms the death of a customer, the parting messages will be delivered to the pre-chosen receivers, be they family members, relatives or friends, through the Internet or by post. Digital Media has acquired a patent for the new offering and is looking to apply for international patents soon.

UK PATENT OFFICE REPORT ON FILINGS: Electronics firms have dominated the UK Patent Office's list of top patent applicants.

Four of the top five firms applying for patents were electronics firms in 2003, with NEC holding the highest number of applications. Ericsson came 7th and Motorola 8th.
Marconi came 29th with 42 patents granted. Overall patents granted in the UK increased by 12 per cent from 2002 to 2003.

The most number of patents awarded by sector was won by the electronic circuit and telecoms sector, with 1,353 granted in 2003.

The nanotechnology sector notably saw the number of patents applied for slump from 532 in 2002 to just seven last year and only one nanotechnology patent was actually granted, compared to 352 granted in 2002.

NAVIGATING THE RFID PATENT LANDSCAPE: About 70 patents lawyers, representatives of RFID vendors, and venture capitalists gathered at a hotel near San Francisco last week to discuss issues surrounding RFID intellectual property (IP). Speakers at the International RFID IP Conference differed on just how many patents are covered by EPCglobal's IP policy and what that means for vendors building products based on the EPC Gen 2 specification.

more than 4,000 RFID patents have been issued globally and that existing free-licensing agreements provide "only limited protection" for vendors building any RFID products, including products based on EPCglobal's Gen 2 standard, which is near finalization.

The issue is important to end users because it could affect the price they pay for RFID hardware. If EPCglobal's IP policy, which calls for a free-licensing program for vendors that sign the policy and agree to donate their own IP royalty-free, does not fully protect vendors, then they may have to pay royalty fees to patent holders. That cost would inevitably be passed on to consumers of the technology.

CLAIM CONSTRUCTION PROJECT: Professor Polk Wagner has created a web page entitled the "Claim Construction Project" that analyzes the United States Court of Appeals for the Federal Circuit's jurisprudence of claim construction—the interpretation of patent claim language—in order to (1) describe and assess that court's performance, (2) improve legal-policy discussion surrounding the court's treatment of the issue, and (3) provide litigators and patent scholars additional tools for analysis. This is an amazing bit or statistical analysis on court methodologies, and even has a "predictor tool" that proclaims "you enter the panel, we'll return the result!".

Dennis Crouch of Patently Obvious reported on this yesterday. I encourage anyone who reads this blog to check out his blog - he has been on top of his game lately, reporting on some fascinating developments in patent law.

SUN JUMPS ON THE "PATENT REFORM" BANDWAGON: Smarting after a devastating loss to Kodak, Sun president Jonathan Schwartz proclaims that, while useful, Intellectual Property has its limits.

"My view on the patent system in the United States is that we are too free to issue patents, so someone can patent one-click shopping, which to me is ridiculous," he said. "That's like patenting scroll-bars".

Schwartz said companies' garnering of "spurious patents" and subsequent wielding of them against innovators threatened the future of smaller companies' abilities to invest in intellectual property. He stressed, however, that such assaults did not really impact on larger players like Sun. "There's nothing in the Kodak suit that is going to threaten our long-run R&D roadmap," he said.

Sun would, he said, continue to build a "good defensive software patent portfolio" to mitigate the threat posed by those with malicious intent. "We'll stop issuing software patents on the day that spurious litigators cease suing us," Schwartz said.

Sun has been in the news lately over patent applications, with Schwartz having filed applications for the company's per-employee software pricing plan and two in relation to the company's three-dimensional Looking Glass user interface. However, Schwartz this week stressed that Sun itself had never issued "offensive patent litigation".

"That's not what we do for a living," he said.

"We choose to use innovation as a competitive weapon, not litigation. And when will we use litigation? When the breach is so severe and so fundamental and so in all likelihood echoed by a government that we choose to step into the fray. So when a contract is breached, you bet we'll get involved in litigation. When anticompetitive actions take place in the marketplace, you bet we will be a part of that discussion".

-- I have read Jonathan's blog, where he supports the patenting of software, but his statement above, as well as some of the statements in his blog, make no sense. Is there something virtuous about not engaging in "offensive patent litigation"? If so, then why bother to patent in the first place? Any practitioner knows that the only reason you patent is to acquire the capability to sue someone on those patents. The reason why so many Fortune 500's are "commoditizing" their patent filings is not just to keep their competitors in check, but also to establish a stack of patents to threaten competitors with counter-suits should they come after them in an infringement action. And I also found it curious that contract breaches were singled out as a reason to call out the lawyers (regardless whether the lawsuit was "offensive" or not), but patents were implicitly exempted from warranting legal action.

This reminds me of Xerox and their treatment of the Star UI graphical user interface which they decided not to get patent protection on back in the 70's. For those that know the legend, the GUI developed by Xerox was ultimately used by Apple and subsequently became the underpinning of the Windows operating system. People are still debating the ramifications of that decision to this day.

OUT ON TRAVEL: apologies to all, but I am currently on travel and have not had the opportunity to post blogs this week (I originally thought I could, but what are you going to do . . .) I will be back by Thursday evening and should hopefully start posting more stuff by Friday morning.

ACACIA STARTS SUING WI-FI OPERATORS - Alternately titled "Man, Are They Keeping The Attorneys Busy Over There" - Wi-Fi hotspot operators must pay $1,000 a year or face a lawsuit from a patent enforcement firm. Acacia Technologies Group says it is enforcing a patent it says covers the methods wireless ISPs, WLAN aggregators and other Wi-Fi networks use to redirect users to a common login Web page. The company claims it owns the technology behind gateway page redirection.

A Wi-Fi hotspot customer requesting a Web page will often be first redirected to such a page where the user can be authenticated with a username and password before being sent to the Web site initially requested.

The Newport Beach, Calif.-based company is sending out information packets to Wi-Fi operators informing them of the patent claim and including a licensing agreement. Companies have 30 days to either ask questions, sign the licensing pact, or prove to Acacia the wireless operator is not infringing the patent.

The licensing pact demands hotspot operators pay Acacia $1,000 a year for up to 3,500 redirected connections. After which, operators would have to pay 5 to 15 cents for each redirected connection.

"Anybody who operates a hotspot with redirection can assume they'll hear from us," Acacia's executive vice president of business development and general counsel Rob Berman told Wi-Fi Networking News.

SUN AND KODAK SETTLE JAVA PATENT DISPUTE: Sun Microsystems will pay Kodak $92 million to settle a patent infringement action in respect of Java, the platform-independent programming language developed by Sun, it was announced yesterday. Kodak had been claiming over $1 billion in damages.

Kodak sued Sun in the US District Court for the Western District of New York in February 2002, alleging that Java infringes on three patents governing, in general terms, the way that different programs and different types of data interact. It argued that Java works in the same sort of way, and last Friday, after a three-week trial, the trial jury agreed.

BARBADOS SAYS PATENT TERMS ARE TOO LONG: The Minister with responsibility for Barbados’ foreign trade is calling for a revamp of the legislative framework as it relates to the Patents Act of Barbados, found at Chapter 314 of the Laws of Barbados.

The Honourable Kerrie Symmonds, Minister of State in the Ministry of Foreign Affairs and Foreign Trade, noted his concern as it relates to the relevance of the said Act, while speaking to the Barbados Advocate recently. Taking issue with the length of time with which a patent could be held by the Holder of such a document which conferred the sole right of that individual to make, use or sell some invention, Symmonds stated that the period of time was too long.

“Under the Act, a Patent can be held for as long as 15 years, with a right accorded to the holder of the Patent for it to be extended by another five years.”

A period of two decades was exceptionally long for one to be able to sit on a piece of intellectual property, he asserted. Waiting such a lengthy period of time before an idea could be improved upon by further innovation would not be of benefit to the economy of our country.

-- I wonder if this may be the next course of action for the "patents hinder innovation" crowd . . .

HONEYWELL GOES POSTAL ON LCD PATENTS: Honeywell has filed a lawsuit against 34 electronics companies claiming infringement of a Honeywell patent for technology that increases the brightness of images and that reduces the appearance of certain interference effects on a liquid crystal display (LCD).

Honeywell's lawsuit claims the company's patented technology is being used in a variety of consumer electronics products, including notebook computers, cell phones, personal digital assistants, portable DVD players, portable LCD TVs, video game systems, and digital still cameras.

OUT WITH THE OLD: Ever wonder what Charles E. Smith was going to do with all the vacant office space in Crystal City, now that the USPTO moved to Alexandria? Well, here is your answer.

- Claim ONE! (aaaah - aaaah -ahhh!) Claim TWO! (aaaah - aaaah -ahhh!) . . .

TASTE-AND-SMELL PATENTS: THE NEXT BUSINESS METHODS? A must-read article from futurist Thomas Frey on obtaining IP protection on tastes and smells.

On October 4, 2004, two Americans were awarded the Nobel Prize in medicine for discovering how people can recognize and remember an estimated 10,000 smells, ranging from smelly garbage to expensive perfume.

The two researchers, Dr. Richard Axel and Linda B. Buck, won the prize for scientifically describing how odor-sensing proteins in the nose translate specific tastes and smells into information in the brain. Their breakthrough stemmed from a 1991 discovery of a family of genes devoted to producing different odor-sensing proteins, called receptors, in the nose. Their work showed that people have a few hundred types of odor receptors, each of which can detect only a limited number of odors.

When a person sniffs cologne or fresh chocolate chip cookies, for example, a mix of different types of molecules flows over the receptors in the back of the nose. That activates an array of the receptors, but only those primed to respond to those particular molecules. The brain notes which receptors are activated, and interprets this pattern as the smell.

This receptor patterning is not exactly the periodic table of elements for the nose, but its setting the stage for one. Patenting smells in the past was limited to describing the chemical composition of the substance. Receptor patterning opens the door for a variety of new patenting possibilities, as well as a world filled with infringement pitfalls.

As the science progresses, the first patents will center around a defining system giving the odor world its own digital or numeric taxonomy, producing some sort of portable odor meter to "test the air" any time, any place. Then the fun begins.

The Patent Office will not allow the protection of existing products just because we now have a way of describing them, but in all likelihood crafty patent attorneys will figure out ways of making the old products sound new again. When determining if an idea is new and worthy of a patent, the Patent Office searches existing patents. Without anything to search, we can expect many “trial balloon” patents will issue.

Perhaps more important will be the decision as to whether smells can be trademarked as symbols of the products or services they represent. Sounds and colors are commonly trademarked today because of the commercial impression they leave on consumers. Smells cannot be far behind. Unlike patents, which expire after twenty years, a trademark can go on forever.

IP ATTORNEYS DO POST-MORTEM ON KODAK: When Eastman Kodak Co. won the initial round of its Java lawsuit against Sun Microsystems Inc., it sent shock waves through not just Sun and the Java community, but in the legal community as well. On Oct. 1, the U.S. District Court of Rochester, N.Y., found that Sun infringed on three of Kodak's patents when it created Java. While Sun is expected to appeal, for now the companies are arguing over what penalty should be imposed on Sun. Kodak is seeking more than $1 billion in damages.

Robert Krebs, co-chair of IP (intellectual property) & trade regulation group and partner in the San Jose, Calif., office of Thelen Reid & Priest LLP, isn't sure the case will get that far.

"The damage phase of this trial may present an opportunity for reaching a settlement. In fact, even if Sun appeals on issues of infringement and validity of the Kodak software patents, a business resolution of this controversy might still be reached subject to the contingencies of the outcomes of the appeals," said Krebs.

Other IP lawyers look beyond the specifics of the case and see it as another example of a patent system getting in the way of the software business.

KODAK/SUN WHOPPER - Eastman Kodak Co. will return to U.S. District Court next week to seek $1 billion in damages from Sun Microsystems Inc. now that a federal jury has ruled in its favor in a dispute over the Java computer language.

The jury decided in Rochester on Friday that Sun infringed on technology belonging to Kodak when it developed and introduced Java more than a decade ago. The computer language is now used heavily by software developers, on the Internet and in computer schools.

Kodak in pre-trial documents indicated it would ask for $1.06 billion in lump-sum royalties – a figure that represents half of Sun's operating profit from the sales of computer servers and storage equipment between January 1998 and June 2001. The argument: Java provides the engine for such computer equipment. Sun executives have publicly estimated that Java is a "key factor in 90 percent of Sun's sales," Kodak said.

-- Groklaw has a rather lengthy (dare I say "long-winded") discussion about this case, along with a large number of rants against software patents. Some are even calling for a boycott on Kodak products, because they chose to enforce their patents . . . .

MORE ANTI-SOFTWARE PUBLICATIONS: The League for Programming Freedom has this interesting article on why software should not be patentable. Some of the rationale given is that software isn't just something new, software is something fundamentally different. Abstract and slippery, it doesn't conform to the ordinary constraints of the real world of objects. The nature of software has created not only a different kind of intellectual challenge, but a different kind of industry with its own particular economic structure. And because software is largely free from physical constraints, complexity has grown to the current state where a single large computer program cannot be completely understood by any one person. The complexity of software means that it is dependent on many technologies. The abstraction of software means that it is hard to classify these technologies, so there is a combinatorial explosion of potential patent coverage which removes any kind of certainty about what is patented and what is not.

The result is that:
Software patents are expensive to search.
Software patents are expensive to analyze.
Software patents are expensive to fight over in court.

In short, because of their broad coverage and complexity, software patents introduce far more uncertainty than do their non-software cousins. And uncertainty is bad for business. Uncertainty makes it difficult to decide the best strategy to pursue. Which patents might you be in violation of? Will the patent owners take any action? What royalties will they request? Will they sue? Will you be able to get the patent overturned? What damages might be awarded?

PATENTS BEING ADDRESSED IN PRESIDENTIAL RACE - OK, well, not really. Slashdot has an interview with Green Party candidate David Cobb, and - surprise! - he is against patenting software. Whatever one thinks about the Green Party (and personally, I don't think much of it), kudos to Mr. Cobb for actually being able to address patent/IP issues in his discussions. Some of the comments made by Mr. Cobb are as follows:

The Green Party supports protection of software (free or proprietary) by means of the copyright. We strongly oppose granting of software patents. Mathematical algorithms are discovered, not invented, by humans; therefore, they are not patentable. The overwhelming majority of software patents cover algorithms and should never have been awarded, or they cover message formats of some kind, which are essentially arbitrary. Format patents only exist to restrain competition, and the harm falls disproportionately on programmers who work independently or for the smallest employers."

For most of the history of the US Patents and Copyrights Office, most patent applications were denied. Most "inventions" didn't meet the triple test of being novel, useful/valuable, and not obvious to "someone skilled in the art." Patents that were granted lasted 12 years which was considered to be a third of an invention's useful life. Today, the patent office rubber stamps just about anything. We don't need a new policy, we need the old policy. Let's give standing to all stakeholders to challenge and strike down mistaken or overly broad patents, or patents granted despite the existence of prior art. (Besides genetic patents being a particularly vile abuse of corporate power, genes are, by definition, prior art. We oppose the genetic modification of organisms, as well, but that's another topic.) There's also a place for an eminent domain process for striking down a patent when there is an overriding public interest, as in the case of absurdly overpriced life-saving drugs.

You know, I admire him for being able to discuss these issues intelligently, but is there anything these guys see that doesn't require overbearing government regulation? To each according to his abilities, I guess . . .

INTERESTING WORK BEING DONE BY FOUNDATIONIP: FoundationIP is discovering missing files as they implement their comPAIR module. comPAIR is the first tool of its kind -- it employs rules-based intelligence to verify information in the US Patent and Trademark Office against an organization's system and vice versa. The module has discovered not only the expected errors, but has also alerted users to missing files.

According to Leon Steinberg, CEO of FoundationIP, "Our system was designed to identify data inconsistencies between the USPTO and the law firm system. We do not just verify a firm's information against the USPTO, we also do it the other way around. This is a subtle, but hugely important difference. By verifying the USPTO information against firm information, we discover information that the USPTO has that the law firm does not. Finding such information is very scary for a firm, because it means that no one is watching the dates associated with these files. In other words, it is malpractice waiting to happen."