INTERVIEW WITH NATHAN MYHRVOLD: Nathan Myhrvold, founder of Microsoft Research and former chief technical officer, is also the the founder of Intellectual Ventures, a somewhat mysterious and controversial start-up.

Combining the disciplines of a venture capital firm, a think tank and an intellectual-property firm, the company gathers well-known inventors for "invention sessions," hoping the get-togethers will one day result in hugely profitable patents. Investors are said to include Microsoft, Google and Intel. Myhrvold sees the company as a forum where brilliant minds will have the room and luxury to simply create.

But critics take a dimmer view of the venture, claiming it will inevitably encourage patent litigation and, paradoxically, discourage innovation. Nevertheless, Intellectual Ventures is likely to become one of the central figures in the ongoing patent debate.

CNET News.com has an interesting interview with Myhrvold that discusses the decline in invention, his company, and why some people get bent out of shape when the conversation turns to intellectual property.

One interesting comment brought up by Myhrvold deals with the level of passion stirred up by patents:

One thing that intrigues me about the whole patent area is the emotion it engenders. If you bring up patents to some people, they really get wound up.

Myhrvold: Yeah, it's very funny to me, and it's a cultural thing in that it depends on what industry you're from. In the medical device industry nobody gets worked up.

Really?

Myhrvold: Try it. Call somebody in Medtronics or U.S. Surgical or anyone of a hundred little start-ups that do medical devices. People generally don't have any problem with the patent system [BLOGGER NOTE: I sure hope this comment was made prior to the case ivolving Gary Michelson and the $1Bil settlement]. They may argue about a specific patent being valid or not. The same runs true with biotech. Go talk to biotech guys and ask them if they want the patent system abolished. They say, "My God!"

The one exception--and frankly, if you look at the world overall, it's one tiny blip of an exception, although it's one where I set my career--is in the computer industry. In computing, there has been a strong sense that patents were not the fundamental secret of success of most of the big companies. Oracle is very up front about them, saying they copied the SQL idea from IBM. And certainly Apple and Microsoft both learned a lot from Xerox.

Another interesting comment deals with the increase in patent litigation:

What do you think of the complaints of how patent litigation is hurting companies? Some days it sounds like the trumped-up malpractice crisis of the '80s.

Myhrvold: Well, this is even stranger. We actually did a study on this. The overall number of lawsuits for patents is growing, but so is the overall number of patents. So explain that to me. If you then look at it and ask, what fraction of those lawsuits are due to companies that have no products, the IP-only companies--it's about 2 percent. If you look at it and say what fraction of lawsuits are due to large technology companies, it's about 2 percent.

Definitely worth a read.

FORECAST FOR IP ATTORNEY HIRING LOOKS SUNNY: A new survey indicates that law firms and corporate legal departments are optimistic about adding staff in the coming year. Fifty-three percent of attorneys surveyed said they would be increasing staff in the next 12 months. Specifically, practice areas such as intellectual property, corporate law, real estate and litigation were forecast as experiencing the most consistent growth.

The survey was developed by Robert Half Legal, a staffing service specializing in attorneys, paralegals and other highly skilled legal professionals. It was conducted by an independent research firm and includes responses from 200 attorneys among the 1,000 largest law firms and corporations in both the United States and Canada.

Attorneys were asked, "Do you expect the number of attorneys employed with your firm or corporate legal department to increase, stay the same or decrease in the next 12 months?"

Their responses:

Increase 55%
Stay the same 41%
Decrease 3%
Don't know 1%

REDUCING BACKLOG MAY TAKE YEARS, BUT CONGRESS LIKES THE IDEA OF POST-GRANT REVIEW: Reducing a backlog of hundreds of thousands of pending patent applications could take several years, despite a budget boost that has enabled the Patent and Trademark Office to hire a record number of examiners this year, PTO director Jon Dudas said Monday.

The current backlog at the USPTO is about 490,000 applications. Dudas said PTO has received a record number of patent applications every year for the past 20 years, but did not begin hiring in record numbers until this year.

PTO received $1.6 billion in FY05, $342 million more than it received in FY04. Dudas said PTO is using much of that increase to hire 860 new examiners this year, for a total of about 4,400.

Judiciary ranking member Patrick Leahy, D-Vt., said lawmakers should consider modifying the process to allow for patent challenges "before costly, highly technical litigation is required."

Judiciary Intellectual Property Subcommittee Chairman Orrin Hatch, R-Utah, said there is a "high degree of agreement" among stakeholders on the need for a post-grant review process.

COULD WE SEE THE CONFLICT BULLETIN AGAIN? (From Law.com) During its ongoing patent litigation action against XFire, Yahoo officials were rather surprised when they walked into a meeting to discuss the company's infringement suit, and found that Xfire had brought along its attorneys, who happen to be from DLA Piper Rudnick Gray Cary.

Why the surprise? Funny you should ask - DLA is also representing Yahoo subsidiary Overture Services Inc. in a separate matter. Predictably, Yahoo asserted a conflict of interest and asked DLA to withdraw as Xfire's counsel.

DLA refused to do so.

Yahoo's attorney, Michael Jacobs, a partner at Morrison & Foerster, was not available for comment. But in a recent court filing, he pointed out that Yahoo's associate general counsel is managing the litigation against Xfire as well as DLA's Overture case.

As the article explains:

The alleged conflict arose as a result of Piper Rudnick's merger with Gray Cary Ware & Freidenrich and then DLA. Piper Rudnick originally represented Overture, and Gray Cary was counsel to Xfire before Yahoo filed its suit against the online gaming company for infringement in January. DLA contends that Overture and Yahoo are separate entities, so there is no conflict in being adverse to one and counsel to the other.

got that?

STORM BREWING AHEAD FOR MPEG LA? (InformationWeek.com) For the second time in just a few weeks, and responding to what it says are ongoing industry concerns about licensing terms proposed by MPEG LA for the Open Mobile Alliance (OMA) Digital Rights Management (DRM), the Alliance has reiterated that it wants to distance itself from MPEG LA and its licensing terms for OMA DRM.

In its second and frustrating sounding statement, the OMA stressed Monday that it does not have a relationship with MPEG LA and did not participate in the development of the license terms suggested by MPEG LA for OMA DRM.

Earlier this year, the MPEG LA licensing agency unveiled a joint portfolio license covering essential patents for the OMA's digital rights management scheme.

While the Alliance's approach is designed for mobile handset applications covering a relatively limited segment of the broader digital rights landscape, industry observers viewed that announcement as the critical first step for sorting out disputes among competing DRM technologies.

Under the proposed patent pool, MPEG LA said royalty rates for patents essential to digital rights management functionality would be $1 per device. That amount would be paid by product manufacturers. Service providers would pay 1 percent of any transaction in which users pay for digital content employing OMA's version 1.0.

That scheme, however, angered the GSM Association, suggesting the 'per device' fee touted by the MPEG LA was unreasonable and excessive, and that its members consider the 'per transaction' fee as unworkable in the market.

DOLBY SKATES ON SUMMARY JUDGMENT AGAINST LUCENT: Dolby Laboratories, Inc. announced that on April 22, 2005, the US District Court for the Northern District of California granted Dolby's motions for summary judgment that Dolby has not infringed, induced others to infringe, or contributed to the infringement of United States Patent No. 5,341,457 (the "'457 patent") or United States Patent No. 5,627,938 (the "'938 patent").

The '457 patent and the '938 patent generally involve a process and means for digitally encoding and decoding audio signals. Dolby filed these motions as part of an ongoing dispute with Lucent Technologies, Inc., and Lucent Technologies Guardian I, LLC (together "Lucent"), in which Dolby contended that Lucent was wrongly asserting that Dolby licensees using Dolby(R) AC-3 audio compression technology (also known as Dolby Digital) required licenses to the '457 and '938 patents.

In granting summary judgment of noninfringement, the court found that Lucent had not presented evidence from which a reasonable fact finder could find that Dolby(R) AC-3 technology infringes either the '457 or '938 patents. The court's April 22, 2005, ruling resolves these issues in favor of Dolby.

PTO ENDORSES REFORMS: Patent Office commissioner Jon Dudas said Monday that federal law should be changed to award a patent to the first person to file a claim and to permit review of a patent after it is granted. Currently patents are awarded to the first person who concocted the invention, a timeframe that can be difficult to prove.

Dudas also endorsed implementation of post-grant opposition ("I think we can implement that"). Of course, Dudas added that "it will take resources, and it will be necessary for us to get the resources in place [through a larger budget]". The Patent Office already has a backlog of 490,000 applications and is planning to hire 800 more patent examiners, bringing its total to 4,400. It approves more than 500 patents per day.

And he also should have added: ". . . and we would respectfully ask Congress to keep it's grubby paws off of the hundreds of millions of dollars in fees that are diverted each year, thus effectively limiting our capability to enact meaningful reform without repeatedly asking for fee increases from applicants . . ."

- but I digress.

EU SOFTWARE PATENT DIRECTIVE: In my (many) discussions with clients and fellow practitioners regarding the EU software directive, I'm surprised to see how much the hysteria over the directive has permeated the reporting on the topic. Specifically, many people that are opposed to the directive always seem to manage to get in a "money quote" into an article that completely distorts what is being accomplished in the EU. Examples of such quotes are:

"They're trying to import the failed US Patent system to Europe",

"Innovation will die, and so will the rest of you once the EU begins allowing software patents",

"My company will be forced to immediately declare bankruptcy once software patents are allowed",

and so on. The truth of the matter is that a new category of software patents isn't being "created" in the EU. Rather, the EU is trying to harmonize existing patent practice, warts 'n all, so that software patents issued from the EU Patent Office will be treated the same way in each participating country's jurisdiction.

This has been pointed out in various commentaries over the last few months. Nevertheless, the latest edition of IP Law & Practice has a great article that chronicles the directive, and the various political mis-steps that occurred along the way:

In 2002 the European Commission--one of the three legislative institutions of the European Union--decided that the patent situation in Europe needed clarification. Software-related patents were issuing under a single set of rules followed by the Munich-based European Patent Office, but when courts ruled on a patent's validity, they followed national law, which varies from country to country. The law didn't vary much, and there hadn't been any major conflicting opinions, but there was the potential for them--and that troubled the commission. It figured that by introducing a uniform law that mimicked the EPO's rules it could, in effect, douse a fire that hadn't yet started.

The plan was simple--until it backfired. To the dismay of the Commission, and pro-patent advocates like Frain, the status of European software patents is now more unsettled--and more precarious--than ever. "Three years ago, there was a wrinkle
in the system," says Frain. "Today practitioners don't have a clue as to what is patentable and what isn't."

It's a good article, worthy of a read.

TGIF (AKA "DIDN'T SEE THAT ONE COMING"): excerpt from Alacritech v. Microsoft (N.D. Cal. 2005) (04–C-03284):

In its motion for preliminary injunction, Alacritech is only asserting Claim 1 of the '868 patent, which states the following:

“A set of instructions executable on a processor, the set of instructions being for performing steps comprising:

establishing a TCP connection, the TCP connection being at least in part identified by a TCP source port, TCP destination port, IP source address, and IP destination address; and

offloading the TCP connection from the processor to an intelligent TCP offload mechanism.” (‘868 Patent, Claim 1).

Microsoft contends that the Court should construe Claim 1 pursuant to 35 U.S.C. § 112 ¶ 6, as a means-plus-function claim.

The Court rejects Microsoft’s contention.

MORE ON PROACTIVE LAWYERING - I've received quite a bit of e-mail on this topic, where no particular consensus was reached whether monitoring and reacting to competitor's patenting activity was "good" or "bad." To clarify my previous post, I just wanted to go on the record to say that being able to monitor prior art and patenting activity is is a desirable course of action for any client. It's no secret that many institutional clients track such information on their own to identify potential licensing/merger partners, and to spot "discounted" patents that may be eligible for a cheap purchase. And yes, they also track patents to spot "roadblocks" and to identify potential infringing activity.

Also, I'm not aware of any instance, where a defendant was found to be willful simply because they were in possession of the asserted patent prior to a lawsuit (I will try to research this more later). And being overly fixated on willfulness is like putting the cart before the horse - you'd better focus first on avoiding direct infringement before you should start worrying about any willful activity.

The part that gives attorneys the greatest anxiety in this regard is the fact that each document sent to a client can be potentially discovered (privileges notwithstanding), and shaped by opposing counsel to mean something that it really isn't in front of a jury. There are many cases where seemingly benign documents are seized upon by plaintiff's attorneys, and formed into key pieces of evidence for a case. And attorneys (being the way they are) will eternally fret over whether or not a letter or document contains something that could potentially prove problematic in later actions (for example, 1.131 affidavits are great ways for breaching the A/C privilege in subsequent litigation, but try getting reasonably broad patents without them (yes, I know - redact, redact, redact!)).

I suppose the anti-disclosure sentiment can be summed up this way: your chances of getting struck by lightning is less than 0.00001% - but everyone knows to run like hell from the golf course when the thunderclouds roll in . . .

EU SOFTWARE SLEEPWALKING-FEST CONTINUES: Michel Rocard, economist and former French prime minister, has just published a report on the European Software Patents Directive. He also happens to be the European Parliament's draftsperson or "rapporteur" on the directive.

Predictably, many of the points made in the report are re-hashes of the "technical contribution" canard, and the proposals put forth are the same ones that were previously presented in attempts to neuter any meaningful protection software patents would provide. As Greg Aharonian said in his latest Patnews: "It is becoming a boring game watching European politicians abuse science and language to deny to any degree the patenting of software."

To wit:

Software, formulating an idea, is by nature immaterial. The work that it triggers off inside the computer is internal to the computer and not directly communicable to anyone or anything. For that work to be communicable and have an effect, a part must start to move, an electrical, radio or light signal must be produced, data must appear on a screen, or some physical effect must be unleashed. What is evidently patentable are, firstly, the sensors and, secondly, the effectors that supply the computer with data processable by the software and that obtain from the data
ultimately produced by the software in its language a physical effect constituting the
technical solution to the technical problem posed. The distinction that we are after thus separates the immaterial world from the material, or rather, from the physical
world.

But each of these two words is somewhat inadequate to cover the whole area required. ‘Material’ refers too much to matter and not to energy, while
‘physical’ implicitly suggests a palpable quality.

Your rapporteur’s preference is rather for the following wording, which would find its place in Article 2 of the directive setting out the definitions:

‘Technical field’ means an industrial field of application requiring the use of controllable forces of nature to obtain predictable results in the physical world.

If we agree that even a simple electrical, radio or light signal is composed of energy, this wording covers every possible way of sensing the immaterial data produced by the computer while the software is running to produce an effect perceptible and usable by a machine or human being.

Again, what this really means is anyone's guess. In one of the rare responses criticizing (abeit mildly) this type of thought, the EICTA pointed out that any definition or test based on “controllable forces of nature” or “physical forces” would exclude patents for intangible inventions, e.g. speech coding, communication protocols, radio signal handling, error correction, data compression etc., all of which are currently patentable and traditionally have been patentable for decades.

PROACTIVE LAWYERING - A BAD THING? Bill Heinze, an intellectual property attorney and author of the excellent blog "I/P Updates" has a very interesting thread on proactive lawyering. Specifically, Bill has provides clients with free patent and trademark watch services, where he e-mails alerts about new filings their competitors have entered with the U.S. Patent and Trademark Office:

"I use the free U.S. patent database at www.uspto.gov/patft/index.html and U.S. trademark database at http://tess2.uspto.gov," says Heinze. "I develop a search strategy 'watch list' using the names of the client's key competitors and the types of products that they sell." When a client has an intellectual property problem, the opposing party is added to the list, he explains.

Heinze's secretary runs the searches, and prints out paper summaries. After Heinze reviews the documents, his secretary sends electronic copies to key business and technical managers, whose names he stores in Microsoft Outlook
distribution lists. "I have already given these business leaders a free seminar on how to spot intellectual property problems, so they can quickly spot the ones that might affect current and/or future projects."

"Although various paid services offer additional information (such as unregistered 'common law' trademarks), and we use those sources when we need them, I like to stick with the free stuff when screening these monthly watch services," says Heinze. "The watch service helps me spot IP problems for clients early in the product-development process, while they're still relatively inexpensive to solve. I streamline searches for particular clients and try to find information that will affect their business," says Heinze. "I started doing this as a way to do preventative lawyering, to help clients avoid some of the last-minute crises I've seen them go through. It seems to work."

A fantastic idea. I personally believe that transparency is key to a properly-maintained patent regime. And in many cases, the more information a client has, the better equipped he/she will be in making well-educated and well-reasoned decisions.

However, there will be cases where knowledge is not, in the vernacular, "a good thing." Information that you acquire, and what you do with that information, is not just relevant to the client, but is also relevant to competitors and how they can use that information against you. If you know the identity of the shooter in a triple-homicide, your willingness to acknowledge and potentially divulge that information will greatly depend on whether the police are asking for that information, or whether Mafia enforcers are canvassing your neighborhood to see if anyone saw the shooting.

This can work the same way in patents. In Knorr-Bremse, the Federal Circuit upheld the principle that a potential infringer "has an affirmative duty to exercise due care to determine whether or not he is infringing" when he/she has knowledge of prior patents his/her product may infringe. While the court previously required defendants to consult legal counsel in order to satisfy their duty, the court currently only requires a defendant to consult legal counsel if the "totality of the circumstances" warrants it. Under the totality of the circumstances, one of the considerations will be whether the defendant reasonably investigated the validity of any infringement claims.

The problem with Knorr-Bremse is that federal jurisprudence currently has no "bright-line" definition of what a "reasonable investigation" is. Furthermore, the landmark case provided almost no guidance about the future role of opinion letters in patent litigation, and also failed to resolve the question of "whether the trier of fact, particularly the jury, can or should be told whether or not counsel was consulted (albeit without any inference as to the nature of the advice received) as part of the totality of the circumstances relevant to the question of willful infringement."

The court clearly stated that the existence of a substantial defense to infringement would not automatically bar a finding of willful infringement (see question 4 in Knorr-Bremse). And if willfulness is alleged, the defendant's state of mind will be highly relevant when considering willful infringement (and treble damages), and the information that the defendant had in his/her possession will certainly be a factor in establishing that state of mind. The problem here is that the more information you have, the more vigilant you have to be in determining what information is relevant and what isn't. And if the information is deemed relevant, what do you do with it? This is not only a legal question, but a business question as well - how much time and how many resources do you want to commit to investigating each potential claim against you or your suppliers/distributors/manufacturers?

In the same regard, the more references you acquire, the more prickly your IDS disclosures become. If you begin filing patents in areas where you have amassed a lot of prior art, you'd better make sure you keep on top of all the references, or you may be facing potential inequitable conduct claims in the future (and potential fines from the USPTO if the current legislation pending in Congress passes).

NANOTECHNOLOGY BECOMING ALL TANGLED UP: A gold-rush mentality has taken hold in nanotechnology, and patents are the precious resource being hoarded. As of late March 2005, 3,818 U.S. nanotechnology patents had been issued with another 1,777 patent applications awaiting examination. But entrepreneurs' ability to turn their patents into cash may be limited by crowded claims that overlap with one another, according to a new report from Lux Research entitled"The Nanotech Intellectual Property Landscape."

The study determined that, because so many patents have been filed relating to nanomaterials, and so many of them seem to overlap, companies that want to use these building blocks in products will likely be forced to license patents from many different sources.

To analyze the landscape of nanotechnology IP, Lux Research and Foley & Lardner systematically reviewed 1,084 U.S. patents - representing 19,485 claims -- that relate to five nanomaterials: 1) dendrimers, 2) quantum dots, 3) carbon nanotubes, 4) fullerenes, and 5) nanowires. The patents were reviewed manually on a claim-by-claim basis; no software automation was used. The team broke down patents for each nanomaterial platform by application and rated them according to how much "white space" remains for new claims and how entangled existing patents look, using a rigorous, quantitative methodology.

A summary of the findings can be found here.

TIEMANN ON PATENTS: Michael Tiemann, vice president of open source affairs at Red Hat:

"Every time a software patent blooms, it's a promise to cease innovation in that space for 20 years"

-- MySQL Users California Conference 2005

SOMETIMES, NEGOTIATION AND CROSS-LICENSING ISN'T ENOUGH: (ControlDesign.com) Intermec Technologies and Symbol Technologies have reportedly become embroiled in a legal battle, alleging that they have infringed on each other's patents. At the heart of the dispute is the technology of RFID (radio frequency identification). Intermec holds key patents regarding RFID's "air interface" and is demanding royalties from other RFID manufacturers for its intellectual property.

The current dispute follows the failure of lengthy talks to resolve the intellectual property issues. Intermec is now suing Symbol, accusing it of infringing its RFID patents. Symbol says it tried to end the dispute through a cross-licencing agreement with Intermec, but was unsuccessful.

Then, in March, Symbol suddenly terminated an agreement to supply Intermec with laser scanning engines for its barcode equipment. It also filed a lawsuit accusing Intermec of infringing some of its wireless communications patents. (Symbol claims to have developed the world's first commercial wireless local area network in 1989, and its technology was the basis for the IEEE 802.11 "WiFi" standard.)

Two weeks later, Intermec hit back with its own lawsuit, accusing Symbol of infringing six Intermec patents related to wireless access, terminal and software technologies. Intermec is seeking damages and an injunction to prohibit further infringement of these patents.

Intermec expects the patent dispute to be resolved by negotiation, without involving end-users . . .

;)

TROLL OR NO TROLL? David Barker, a JD candidate at Duke University School of Law published a good article, titled "Troll or No Troll? Policing Patent Usage With an Open Post-Grant Review" in the latest edition of the Duke Law & Technology Review. The article discusses the recent phenomenon of "patent trolling" and briefly touches upon the FTC's recent proposal to bolster reexamination practice as an alternative to litigation.

One of the more interesting propositions put forth in the article is to establish an "open review" process, instituted each time a a patent is sold or a patent holder is required to pay maintenance fees to retain his patent rights. The party who purchases the patent would be responsible to pay for the review and the patent holder would have the initial burden of coming forth with some evidence showing active use and enforcement of the patent:

If the patent holder or purchaser does not satisfy the burden of coming forth with some evidence of valid enforcement, the patent would be declared invalid and the technology would enter the public domain. If, however, the patent holder or purchaser satisfies the burden of production, the PTO would issue a public notice and allow third parties, for a limited time period, to submit contrary evidence which the PTO would review. If the PTO decides the evidence is sufficient to challenge the assertion of active enforcement, it would give the challengers the option to initiate an adverse proceeding between the patentee and any challengers. Only then, if the challengers decide to proceed, would the identity of the challengers be made known to the patentee.

The proceeding would be similar to a declaratory judgment action of invalidity and the challengers would have the burden of proof. The challengers would be required to prove elements similar to those of laches and estoppel discussed above. However, instead of being elements of an affirmative defense, they would become the elements of the challenger’s cause of action. The two factors for laches and the
three factors for estoppel would be taken into account; yet, the claims would retain their equitable nature and allow the judge to consider all elements of the case.

Similar to other proposed third-party reviews, the proceeding would be held in front of an administrative patent judge who would have greater legal training than most patent examiners. The FTC and the National Research Council of the National Academies have written detailed descriptions of the procedural aspects of such an open review.

I think this is a great idea in principle, but it would never work for a couple of reasons. First and foremost, the described review process would be horrifically expensive, and would likely place such a great financial burden on patentees, that it would effectively weaken the whole purpose of patent protection.

When one gets a patent, it provides you with the right to exclude - it does not mean that you have to exercise that right. Patents aren't just legal instruments - they're business tools as well. A company's patent portfolio can provide a great boost to a company's valuation without necessarily resorting to litigation or engaging in an active licensing program. When you want to affirmatively introduce your patent to the business world, you want to do it on your terms (i.e., when your calculated revenue streams would be at their highest), and not just at any time because you have to "do something" to avoid a subsequent equitable challenge.

Furthermore, such a review process would undoubtedly include some forms of discovery (the financial albatross of litigation). How would discovery be limited in such cases? Presumably, most of the information regarding potential litigation and licensing is privileged or subject to work-product immunity. It would seem that patentees would thus be subject to a Hobson's choice of sacrificing privileged information to preserve the patent, or maintain any privilege and risk losing patent protection.

Also, how would the review be applied to cases like mergers or bankruptcy? If company A, who has 500 patents, is being bought out by company B, would A be liable for costs if a third party (who wants to spoil the merger) requests review of the entire portfolio? Would trustees have to deal with this as well when assets are sold off?

Now, proving laches and estoppel is a difficult thing to do, except under the most egregious cases. But that doesn't mean that the process isn't open to abusive tactics by third parties.

- PHOSITA Blog has additional comments on the article here.

MUST BE SOMETHING IN THE WATER - ACACIA PULLS THE TRIGGER ON INTEL AND TI: Acacia Research Corporation announced today that Microprocessor Enhancement Corporation, a wholly owned subsidiary that is part of the Acacia Technologies group, a leader in technology licensing, has filed a patent infringement lawsuit in the District Court for the Central District of California against Intel Corporation and Texas Instruments Corporation.

The lawsuit alleges patent infringement by Intel's Itanium line of microprocessors, and certain series of digital signal processors sold by Texas Instruments. Intel does not break out individual chip sales, but analysts have predicted that sales of Itanium processors will reach several billion dollars a year by 2007.

Microprocessor Enhancement Corporation's patent generally relates to an architecture employed in advanced pipeline processors. This architecture allows for conditional execution of processor instructions, and a later determination of whether the instructions executed should be written back to memory. By conditionally executing instructions in this architecture, improvements in processor speed can be achieved.

TRADING TECHNOLOGIES GETS EU PATENT: Chicago-based Trading Technologies has been awarded a patent for its MD Trader product from the European Patent Office, extending protection of its intellectual property across the continent.

The patent relates to TT's MD Trader product, the market-depth-style order-entry screen incorporated in its X_Trader platform, which has been the subject of a number of patent lawsuits filed by the vendor against other software providers - both brokers and vendors - in its core market. Trading Technologies has already released an open letter to the futures industry in the US, laying out the licensing terms for their patents.

Unfortunately, none of the press releases mention the patent number, and I haven't had time to do a search for it. What is interesting is that, under current EPO practice, business methods are not patentable per se, and any kind of claim feature that is not "technical" will be parsed from the claim language during examination. I would love to have a peek at the allowed claims - could this be the precursor for a European invasion by TT? If it is, get ready for a lot of headline news (and the predictable clamor for the abolition of software patents) . . .

ATTORNEY NETWORKING MEETS THE PATENT SYSTEM: Contact Networks, a next-generation enterprise search company, today announced that Mintz, Levin, Cohn, Ferris, Glovsky and PopeoP.C., an Am Law 100 law firm, has selected Contact Networks' application to enable its entire staff of 450 attorneys to quickly find introductions and contacts from the extended network of relationships of their own colleagues.

Contact Networks offers a private social networking application for corporations, allowing employees to share contacts with their colleagues in a secure and private system. The application is automated to discover and index relationships without requiring manual data entry or maintenance. Users manage their own participation and choose when it is appropriate to make introductions on behalf of their colleagues.

Contact Networks application is installed within Mintz' own secure corporate infrastructure. The patent-pending technology automates the process of creating and maintaining firm-wide contact lists.

- Interesting stuff - but what happens if the company ultimately is granted a patent, and then begins enforcing it? I imagine that this could give migranes the staff at Minz, trying to figure out solutions to all the possible conflicts of interest that would arise from such a scenario.

TRADING TECHNOLOGIES ON THE WARPATH AGAIN: Man Group Plc, the world's largest publicly traded hedge-fund manager, was accused recently of infringing trading software developed by Trading Technologies Inc.

Trading Technologies sued London-based Man Group and its Man Financial unit on April 13th in U.S. District Court in Chicago, alleging infringement of patents on a program used by traders to buy and sell futures contracts. The suit asks the court to block Man Group from using the software.

The lawsuit is the fifth filed by Chicago-based Trading Technologies since it was granted patents to the technology last year. A judge in February said Trading Technologies would probably win a similar infringement case against Espeed Inc., the electronic bond-trading unit of Cantor Fitzgerald LP.

Interestingly enough, Trading Technologies (TT) was awarded two UK patents on its MD Trader product, which it claims is used for half of all global electronic futures trading. The software allows traders to enter orders and compare prices across exchanges and TT claims this entitles it to a 2.5 cent per trade fee on the 'big four' futures exchanges – the Chicago Board of Trade, Chicago Mercantile Exchange, Eurex US and Euronext.

Query: has Trading Technologies (or any other holding company, for that matter) ever attempted to enforce any of their foreign-filed patents? To my knowledge, I have never seen any of the holding companies sue defendants outside of the US. It would seem that places like the EU, which is considerably more hostile to software patents, would be good test cases for advertizing and marketing systems that would putatively be "free" from such infringement actions. Now, I imagine that getting around the inducement/contributory infringment issues would be a prickly situation, but it could be interesting to see if the anti-software types could produce real-world examples of pro-competitive environments being encouraged in the absence of "pure" software patent protection.

Just a thought . . . .

I JUST REALIZED I HAVE CASES PENDING BEFORE THIS GUY . . . Dennis Crouch, of Patently-O wrote about Todd Jack, who is an Examiner at the US Patent Office (PTO):

In 2000 Mr. Jack alleged to the FBI that he had been approached by employees of the PTO who “proposed that he join them in a scheme to sell patents and perform patent searches for persons outside the PTO for cash payments.” Mr. Jack made several other allegations regarding identity theft and bribe-taking by PTO employees and he brought his case to several agencies, including a congressional office, the Secret Service, Department of Commerce security officers, and the Office of Inspector General.

Later, in 2002, Mr. Jack’s supervisor gave him a written and oral warning that his performance was “unacceptable.” Another supervisor proposed that Mr. Jack be removed for “(1) Harassing and threatening behavior exhibited toward your supervisor and co-workers; (2) Making false statements concerning another employee; (3) Creating a hostile work environment; and (4) Inappropriate behavior in the workplace."

In January 2003, the PTO sustained all the charges against Mr. Jack, but reduced the proposed removal to a 120–day suspension.

Mr. Jack filed an appeal at the PTO Board. The administrative judge assigned to the appeal held that the Board lacked jurisdiction and that Mr. Jack had failed to make a non-frivolous allegation that would be protected whistle-blowing activity.

On appeal again, the Court of Appeals for the Federal Circuit (CAFC) did not touch the issue of “whistle-blowing activity.” Rather, the appellate panel found that Mr. Jack’s claims regarding improper procedure at the Board were without merit, and thus, upheld the Board’s decision denying his appeal.

I just realized today that I have 2 pending cases with his name on the Office Action. I haven't decided if this is a good thing or a bad thing yet . . . .

BUYER'S REMORSE FOR RIM? Research In Motion, maker of the ubiquitous BlackBerry, last month paid $450 million to settle a furious legal battle over five patents held by NTP. The markets welcomed RIM's decision to settle, boosting its stock 8% overnight, to $64.85. But now, journalists are wondering if RIM might soon regret that it ever made a deal in the first place.

As reported previously, the U.S. Patent & Trademark Office rejected one of the five patents NTP had accused RIM of infringing and gave a strong indication that the other disputed four might soon be rejected upon reexamination as well. The agency has been taking a second look at more than 2,000 claims made on a total of eight NTP patents, including the five that RIM allegedly infringed, ever since Arlington (Va).-based concern sued RIM in December, 2002. After more than two years, the officials have rejected all 523 claims NTP made on three of those patents.

Now, I understand that reexamination is taken one step at a time, and that current statistics regarding USPTO reexamination favors NTP emerging from the reexamination with a valid (although potentially narrowed) patent. But what if the reexam vitiates common and potentially infringing features from the claims? Surely that is on the mind of anyone that follows cases like this.

To date, there have not been any high-profile cases where reexamination has carried the day for the defendant. But I maintain that reexamination procedure is a powerful weapon for anyone accused of infringement to deploy. And once defendants start beating down some of the weaker patents out there, I see no reason why reexamination (yes, even inter-partes) shouldn't become the weapon of choice.

NOKIA TAKES LICENSE FROM ACACIA: Acacia Research Corporation announced today that VData, LLC, a wholly owned subsidiary that is part of the Acacia Technologies group, has entered into a license with Nokia Corporation covering a portfolio of patents that apply to certain multi-dimensional bar codes.

"Nokia is our first licensee of this multi-dimensional bar code technology, which represents a significant licensing opportunity for our company. Multi-dimensional bar code technologies are gaining widespread use because more information can be contained in the codes than with ordinary bar codes. In addition, multi-dimensional bar codes can be used in smaller items such as integrated circuits and microprocessors," commented Paul Ryan, Chairman and CEO of Acacia. "We have now begun generating revenues from four new patent portfolios since the beginning of the year, as we continue to expand our revenue base," concluded Mr. Ryan.

The multi-dimensional bar code technology generally relates to encoding and reading a data matrix consisting of an array of data cells with a border. The data matrix can contain a variety, amount, and depth of information that would not fit on to an ordinary bar code. This patented technology can have many applications in the manufacturing, distribution, operations, accounting, and security industries such as tracking the movement of products, collection of data, improved production capabilities and anti-counterfeiting.

LONGHORN HITS A MAJOR SNAG: In another suit alleging improper conduct by Microsoft (see also the Burst.com saga here and here), Alacritech, which claims to be the sole provider of network acceleration products for Microsoft Windows-based systems, sued Microsoft in Federal District Court on August 11, 2004, alleging that Microsoft's existing and future operating systems containing the "Chimney" TCP offload architecture uses Alacritech's SLIC Technology architecture.

On Wednesday, a district court judge granted the networking and storage software vendor a preliminary injunction that could prevent the world's largest software maker from making, using, offering for sale, selling, importing or inducing others to use its "Chimney" TCP offload architecture. Microsoft is planning to ship its next version of Windows, code-named Longhorn, in 2006.

TCP Chimney, which offloads the TCP protocol stack to a Network Interface Card for better network performance, is slated for use in both Longhorn and in the Scalable Networking Pack for Windows Server 2003.

The suit is based on two of Alacritech's fundamental patents relating to scalable networking: U.S. Patent No. 6,427,171 and U.S. Patent No. 6,697,868, both entitled "Protocol Processing Stack for use with Intelligent Network Interface Device."

According to Alacritech, the company met with Microsoft and described its own Dynamic TCP Offload architecture, known as SLIC Technology, under a non-disclosure agreement in September 1998. Then, in April 1999, at Microsoft's request, it delivered a detailed document describing how SLIC could be integrated with Windows. It then shipped its first product based on SLIC in April 2000.

Microsoft broke off communications with Alacritech in June 1999, according to Alacritech, then presented Chimney in May 2003.

THE BRAVE NEW WORLD OF AMPEX: (Business Week) Just a couple of years ago, Ampex Corp. looked like a long-fading technology pioneer finally slipping into oblivion. The Redwood City (Calif.) company, founded in 1944, proved itself one of Silicon Valley's greatest innovators in its early days. Among other things, it invented the commercial video recorder in 1956 and developed the first U.S. tape recorder in 1948. But Ampex lost its magic touch decades ago. A string of new ventures flopped. After losing money for years, Ampex was dumped from the American Stock Exchange at the end of 2003, with its stock at 68 cents.

Surprise, surprise -- Ampex is back. The forgotten innovator has one of the hottest stocks on earth, with the share price skyrocketing in the past year from $1 to $40. What happened? In a word, patents. Ampex dusted off a number of its patents and began filing lawsuits against a Who's Who of consumer-electronics giants, including Sony, Sanyo Electric, and Eastman Kodak. Ampex' claim: It holds the intellectual-property rights to how digital images are displayed in nearly every digital camera, camcorder, and camera phone on the market.

It's no empty bluff. Since last fall a string of Asian companies have cut licensing deals with Ampex, agreeing to pay a total of $77 million. Sony alone is spending $40 million for the right to use Ampex' patents through April, 2006, and then will pay ongoing royalties. The largest outstanding claim may be that against Kodak, which so far has refused to cut a deal. Ampex' prospects have improved to the point that the company says it will apply for a listing on NASDAQ by the end of April.

While Ampex has come under fire for its aggressive pursuit of royalties, there's no question its patents have become a gold mine. One patent covers the display of compressed digital images, individually or in a group of up to 16. Nearly every digital camera, and many other devices, let people view such thumbnails to help them navigate through a series of images quickly. Royalties from that broad patent helped Ampex turn a profit of $47.1 million in 2004 on revenues of $101.5 million, according to its preliminary financials, after losing money the five previous years.

- An impressive feat, indeed. One problem though, is that almost all of Ampex's royalties are stemming from US Patent 4,821,121, which was granted in 1989. Doing the math, the patent will expire on April 11, 2006. While Ampex claims to hold 600 other patents, there is almost no information on the potential value of these patents, and Ampex is refusing to disclose who (if anyone) is taking licenses on any of these patents, and under what terms. Some are starting to speculate that the lack of disclosure by Ampex may be running afoul of SEC rules. The commission requires companies to file a summary of commercial agreements at the time a deal is struck and the full agreement with its next quarterly statement, if the agreement is "material." So far, Ampex has said virtually nothing to its investors regarding their major deals.

Now this could simply be a matter of a holding company (which Ampex has essentially become) tightly guarding information with regard to it's patent portfolio. However, I've been always suspicious of companies that become excessively secretive regarding their patent portfolio. In such cases, one can't help but think that there's a skeleton lurking in that closet somewhere. It'll be interesting to see if anyone will manage to drag one out over the next year . . .

THE IP "AXIS OF EVIL": As the value of IP becomes more evident by the day, our economic future becomes less tied to what we manufacture, and instead becomes more dependant on what we invent. Unfortunately, the nature of IP is such that it is easy to steal - especially compared, say, to an automobile factory. Some nations specialize in reverse-engineering: discovering the chemical composition of a drug. Others wink at domestic factories that make rip-off software and movies. The main protection for IP lies in patents and copyrights, recognized internationally and enforced vigorously.

Lately, some powerful developing countries are putting the global regime that protects IP in serious jeopardy. They're not playing by the rules. The three main culprits are China, India and Brazil — a group that James Pinkerton, New America Foundation fellow and former White House policy adviser, calls the "IP Axis of Evil."

On April 4, the U.S. trade representative delayed a decision on whether to punish Brazil for violating a special agreement with developing countries, the Generalized System of Preferences. Brazil is the 11th-largest economy in the world and a major trade partner and competitor of the United States (Brazil even makes planes that compete with Boeing). Under GSP, we let $3 billion in Brazilian goods enter our country duty-free.

Four years ago, the U.S. trade representative put Brazil on its watch list for chronic flouting of our copyright laws. According to the International Intellectual Property Alliance, "estimated losses due to the piracy of copyrighted materials (by Brazil) totaled $785 million in 2003" — and that doesn't even include losses from patent piracy.

UNIVERSITY OF ILLINOIS DEVELOPS "WORLDS FASTEST" COMPUTER CHIP: Researches at the University of Illinois claimed to have developed an experimental chip, where transistors cycle on and off 600 billion times a second, breaking the previous record of 560 billion cycles set by Japanese researchers. U of I scientists hope to increase the speed to 1 trillion cycles, or hertz, by next year. Current chips cycle transistors 60 billion to 100 billion times per second, where these relatively sluggish speeds cause communications bottlenecks.

The university has applied for a patent on the chip, built from indium phosphide and indium gallium arsenide semiconductors.

Initially, such chips would cost about 100 times more to manufacture than conventional silicon chips, however, mass production could cut manufacturing costs by about 90 percent. Before that happens, though, engineers would have to figure out how to reduce the chip's power usage so that it doesn't overheat (also referred to as "current density")

REPORT FROM THE 33rd INTERNATIONAL EXHIBITION OF INVENTIONS: (From Deutsche Welle) The Swiss city of Geneva played host to some of the most creative minds on the planet: Over 1000 inventions from 42 countries were on display at the 33rd annual Geneva inventors fair with every single one being exhibited for the first time ever. All exhibitors were looking for a patent, and a sponsor.

Inventors have long had to contend with being portrayed as wacky eccentrics stumbling from darkened laboratories to blink self-consciously in the light of publicity once their work is done.

While the stereotype remains, the reality shows that inventors are no longer the bumbling social misfits whose imaginations forge the world around us. Many are driven as much by financial success and acclaim as by the desire to help humanity.

The jury prize went to an invention from France: a new, non-polluting method of cleaning the hulls of boats, without taking them out of the water. The Inventors Oscar prize went to Ahmed Alhashash from Kuwait for his airbags which can be incorporated into shirts, jackets or suits, for motorcyclists.

The fair attracted inventors from all over the globe and has become very popular with some nations, in particular Malaysia, Russia, France and Iran over its recent history.

Around two-thirds of the exhibitors were companies or institutes, with the remaining third made up of individual inventors. The fair is mainly a place for investors and inventors to meet but actual sales of products are restricted to a small area where 40 exhibitors show off their wares.

IBM HERALDS "NEW ERA" OF PATENT-SHARING: IBM has been busy ratcheting up it's PR with respect to last January's "giveaway" of 500 patents. Now, none of these patents were identified as particularly earth-shattering, but it does represent a significant step in companies such as IBM making strategic choices in determining which patents may provide a greater benefit by being effectively donated to the general public. This move is seen as a larger part in a huge experiment in the business world in figuring out what parts of intellectual property should be open and/or closed.

SONY'S "MATRIX" PATENT: There's been a lot of buzz regarding Sony's "Matrix" patent, on a device for transmitting sensory data directly into the human brain. It is envisioned that, through the patent, movies and computer games will have smell, taste and even have "feel" to them.

The patent seems interesting enough; claim 1 of the patent recites:

1. A non-invasive system for projecting sensory data in a part of a human brain, the system comprising:

a primary transducer array configured to emit acoustic energy as a coherent signal source toward the human brain;

a secondary transducer array positioned between the primary transducer array and the human brain; and

a sensory data processing system coupled to the secondary transducer array, wherein the sensory data processing system sends an acoustical pattern signal to the secondary transducer array, the secondary transducer array producing a diffraction pattern for the emitted energy from the primary transducer array, the diffraction pattern altering neural firing timing in the brain.

The patent descibes a non-invasive pulsed ultrasonic signal that alters the neural firing timing in the cortex, where changes in the neural firing timing induce various sensory experiences, depending on the location of the firing timing change in the cortex. The system induces recognizable sensory experiences by applying ultrasonic energy pulsed at low frequency in one or more selected patterns on one or more selected locations of the cortex. Under the system, moving images, tastes and sounds can be transmitted directly through the brain, potentially giving blind or deaf people the chance to see or hear.

There have also been a number of continuations/CIP's filed on the original application, one of the later ones being Application 2004/0267118, in which claim 1 recites:

1. A method for generating perceived sensory experiences comprising:

directing an acoustical signal toward a human neural cortex; and

scanning the acoustical signal across the human neural cortex.

Whoah. Talk about a difference in claim scope. Now I realize this is only an application, and there is a substantial likelihood that the claims will be narrowed during prosecution. But that sounds to me a lot like a method currently being performed by iPods across the neural cortex of millions of communters every day . . .

USPTO Systems Will Be Down at Times During Late April to Late July - USPTO systems will be unavailable at certain times on week ends between April 29 and the end of July for the move of the USPTO Data Center from Crystal City to Alexandria.

The move of the USPTO Data Center, the backbone of automated services such as the Order Entry Management System (OEMS), Patent Application Information Retrieval (PAIR), Revenue Accounting and Management (RAM), and Trademark Electronic Application System (TEAS), will be done from 6pm Fridays to 5:30 am Mondays to minimize disruption to employees and the public. On Memorial Day weekend and the Fourth of July work will continue until 5:30 am on the Tuesday following those Monday holidays.

During the weekend hours of the move, many systems may be unavailable. Automated search service options available through the Public Search Facility and Patent and Trademark Depository Libraries (PTDLs) will also be affected by the upcoming moves. In addition, online and telephone assistance available through the USPTO Contact Center and Patent Electronic Business Center may be reduced during move periods.

A consolidated schedule of planned outages is posted on the Internet Outage Schedule. Please note that the posted schedule reflects current estimates. The schedule is expected to change during the project.

A NEW ERA OF PEACE BETWEEN JAPANSE AND KOREAN TECH COMPANIES? Yesterday's settlement between Matsushita and LG have pundits speculating whether the cessation of recent hostilities among Japanese, Korean and Taiwanese companies is a precursor to a larger spirit of cooperation for companies currently battling it out for a leading position in the burgeoning market for digital electronics.

Frankly, I quietly suspected that this was the case all along. Most practitioners that have represented clients (both large and small) in competitive markets have seen this situation all too often. Typically, the story plays out like this:

Company A, which holds a number of important patents, runs some numbers and determines that company B, which also holds a number of important patents, also has access to technology that would be beneficial to A.

Not wanting to "show its hand," company A tries to communicate to company B that company A's patents are important in the industry, and that company B would benefit by licensing these patents, or otherwise partnering with A in a related venture. Of course, company A at this point desires company B's patents more than the other way around, but A's negotiating position would likely be compromised if A just came out and said what it really wanted.

Company B, who reacts with suspicion to company A's communication, either drags its feet or otherwise ignores company A's offers.

Company A gets impatient with company B and starts getting more aggressive in its letters to company B - ultimately A files a complaint against B.

Company B, not to be outdone by company A, files a counterclaim of patent infringement on one of its patents against company A (along with an assertion of nvalidity) . Company A answers that company B's patents are invalid as well.

Companies A and B exchange pleadings for a while, perhaps conduct a bit of discovery, and both sides weigh the potential pros and cons of each claim.

Company A contacts company B (or vice versa) and proposes that "you give me access to patent X, and I will you access to patent Y - whaddaya say?"

The wraggling and dealing begins, and cross-licenses are eventually drafted. All is soon forgotten.

Of course, things don't always turn out this way, but it happens more often than not. In the case of Matsushita and LG, they were apparently in tie-in negotiations 4 years ago, and some of the terms of the settlement indicate that the settlement is simply a furtherance of previous negotiation attempts. For example, as part of the settlement both companies agreed to exchange parts and materials for air conditioner compressors, as well as swapping patents related to microprocessors used in PC's as well as those involved in making DVD-related products.

LG was the world’s leading supplier of plasma panels in the final three months of 2004, with a market share of 23.6 per cent, according to DisplaySearch. Samsung SDI was second, with 22.8 per cent, and Matsushita third with a 21.7 per cent slice of the market.

One could easily conclude that Matsushita is currently making a push to increase their share in the lucrative plasma display market. One could also conclude that LG had plasma technology that Matsushita was greatly interested in, while Matsushita had other technologies that were of interest to LG. And through age-old techniques of business negotiation tactics (and with a little help from the lawyers), both sides presumably obtained a benefit that was mutually agreeable.

Is this a new age of cooperation? Perhaps. The electronics markets are very competitive right now, so parties may be better off negotiating, rather than fighting it out in court. Or perhaps companies are taking a page from Homer Simpson's negotiation with Ned Flanders in house-sitting Ned's beach house for the summer: "Deal! See, Flanders, you give a little, you get a little."

I HOPE THE USPTO NOTICED THIS: According to the Royal Gazette, approximately 13,500 registered trademarks in Bermuda have been lost from the computerized Trademark Registry following a crash. A back-up system which is supposed to rebuild the database failed, meaning only half of the computerized information was restored. Staff at the Registry General are pulling the original files to manually input all data since 1999.

The failure occurred about three weeks ago and it has forced the Registry General to suspend processing of new trademark registrations. So far, lawyers acting for companies which have registered their trademarks can’t search the system to see if their intellectual property has been protected. Registry General staff are hoping to have basic service resumed in two weeks.

(Insert your "Bermude Triangle" joke here)

- IPKat also has some comments regarding this comically tragic event.

YAHOO TO FINDWHAT: "LET'S GET IT ON" - (Clickz News) The patent-infringement suit filed by Yahoo!'s Overture against FindWhat.com is heading for trial later this month, after surviving the latter firm's efforts to have the case dismissed. A decision in the case could settle once and for all the issue of who owns the bid-for-placement technology that has fueled the paid search advertising boom.

A California judge two weeks ago denied FindWhat's motion to dismiss the case, saying there were questions that needed to be resolved at trial. FindWhat had contended Overture's patent was invalid and was filed too late.

The dispute centers around the bid-for-placement business model and technology used by both Yahoo!'s Overture division and FindWhat. In July 2001, Overture was granted U.S. Patent No. 6,269,361, "System and method for influencing a position on a search result list generated by a computer network search engine." Yahoo! claims the patent protects its bid-for-placement products and another patent it holds protects its account management tools.

FindWhat started the legal battle by filing suit to have Overture's patent invalidated. Overture later sued both FindWhat.com and Google to protect the patent.

Though legal questions have long swirled around the validity of the patent, the issue has never been tested in court. The suit against Google was settled in August 2004, right before Google's IPO, for 2.7 million Google shares, worth $270 million in August.

That settlement called for Overture to dismiss the suit against Google and grant the rival firm a fully paid perpetual license to the patent, as well as to several related patent applications held by Overture.

Pre-trial motions in the FindWhat.com/Overture case are set to be heard by the judge on April 11, and a jury trial is set to begin on April 19, unless a settlement is reached first.

CHINA TOUTS UPSWING OF IP FILINGS - the People's Daily News is reporting (take from it what you will) that the Chinese State Intellectual Property Office is anticipating a banner year in IP filings.

More than 2.3 million applications have been handled in the area of practical novelty patents, industrial design patents and trade marks since 1985 when the country launched this service. 90 percent of the filings are submitted by domestic applicants.

One interesting tidbit was that China took 15 years to issue 1 million patent applications but only 4 years to issue another 1 million.

MATSUSHITA AND LG SETTLE THEIR DIFFERENCES OVER PLASMA TECHNOLOGY: Last November's plasma display patents dispute between South Korea's LG Electronics and Japan's Matsushita has been resolved, it has been reported in the Japanese press.

Matsushita (i.e., Panasonic) sued LG, alleging the company had infringed its intellectual property rights, by using its patented method of dispersing heat from the screens. It asked the Tokyo District Court to ban LG from importing the allegedly offending displays into Japan and from selling those units already there.

LG immediately countersued, claiming Matsushita had infringed its own plasma patents. It then asked South Korean trade authorities to block the importation and sale of Panasonic plasma display products, and said it was considering filing a similar lawsuit in Tokyo. It also threatened to complain to the World Trade Organisation if Matsushita triumphed in the Japanese court.

The lawsuits (along with sniping comments from both sides) provided a backdrop for a potiential international patent-battle-royale. However, in the end, cooler heads prevailed, and both companies have agreed to cross-license their intellectual property.

Details have not yet been made public - neither party has yet to comment on the matter in pubic - but Japanese newspaper Nihon Keizai Shimbun this weekend said the deal is believed to involve LG paying a royalty to Matsushita, in return for access to the latter's IP; Matsushita also gets access to LG's IP.

Nevertheless, the legal battle is the latest of such incidents as Korean and Japanese firms have begun to squabble more frequently over technology. Toshiba and Hynix are trading blows over Flash memory patents, for example. Sony and Samsung, on the other hand, were able to come to an agreement, reached last December, without first threatening each other with court appearances.