EOLAS ESCAPES REEXAM - WHAT'S NEXT FOR MICROSOFT? The USPTO has indicated on its public portal that the Examiner has prepared a Notice of Intent to Issue a Reexam Certificate as of yesterday. The document hasn't been made available for viewing yet, but it appears that Eolas convinced the Patent Office that the obviousness rejection under 35 USC 103 was improper.

Specifically, Eolas filed declarations from two of their experts (Robert J. Dolan and Edward W. Felten), along with supporting documents totaling 250+ pages, explaining that the references were not properly combinable to form the obviousness rejection. The Examiner bought their line of argumentation and is prepared to let the patent stand.

You can view the USPTO docket here.

More on the Eolas reexam at Dennis Crouch's Patently-O.

A FRIENDLY FRIDAY REMINDER: USPTO is approaching the end of the quarter, and some needy Examiners still need counts! Do your part today and call your friendly neighborhood Examiner to see if you can't contribute to the worthy cause of increasing his/her production quota.

(Note to PK: I don't mean abandoning pending applications . . .)

EBAY GETS TRIPPED UP IN MERCEXCHANGE REEXAM: After checking in with the USPTO, I found this interesting development: Apparently, in April, eBay's counsel attempted to petition the USPTO, submitting arguments (to the tune of 100+ pages) and prior art in all of the reexaminations and 18 pending applications of MercExchange. In the arguments, eBay petitioned the Examiner to "take notice" of the art submitted, along with all the contentions of invalidity. The petitions filed in the pending applications were in the form of protests (37 C.F.R. §1.291), which also allow allegations of inequitable conduct, and third-party submissions in a published application (37 C.F.R. §1.99).

The big problem for eBay was that the timing (and form) of these submissions were off.

Regarding the reexam, the granting of the request occurred over a year ago and no patent owner's statement was filed. Accordingly, eBay was barred from making further submissions during the remaining course of the reexam. The USPTO noted as such in their dismissal of EBay's petition:

The cursory review shows that the instant petition is a third party paper filed after reexamination was ordered, and the period for filing a patent owner statement and responsive third party reply thereto have long since expired. Therefore, no further submissions on behalf of the reexamination requester will be considered, unless such a submission constitutes "bare notice" of court proceedings such as notices of suits or other proceedings involving the patent and copies of decisions or papers filed in the court from litigations or other proceedings involving the patent. Bare notice of court proceedings must contain no argument(s) or information beyond such notice to the Office. The cursory review further shows that the instant petition is essentially entirely comprised of various arguments regarding the merits of the determinations made, or not made, during the instant reexamination proceeding. See, for example, page 7 clause II (D)(1)(a) and page 16, clause III (B)(2) as two examples of impermissible argument.

As a result, the USPTO dismissed the petition and expunged all of EBay's documents from the file. Not surprisingly, MercExchange was more peevish with EBay's strategy and shot off a veiled threat back at eBay and their own patents in their petition to the USPTO:

Mr. Monahan, the individual signing eBay's filing, is the Intellectual Property Counsel for eBay, and the inventor of at least one patent assigned to eBay, U.S. Patent No. 6,523,037. Mr. Monahan's patent cites all three of MercExchange's patents undergoing reexamination as prior art references. Although Mr. Monahan appears not to be registered to practice before the Office, nonetheless the regulations provide that "[t]he presentation to the Office ... of any paper by a party, whether a practitioner or non practitioner, constitutes a certification under § 10.18(b) of this chapter." 37 C.F.R. § 1.4(d)(2). Of particular note, Section 10.18(b)(2) requires that a party's filing constitutes certification that "[t]he paper is not being
presented for any improper purpose, such as to harass someone or to cause unnecessary delay or needless increase in the cost of prosecution before the Office". 37 C.F.R. § 10.18(b)(2) . . . Given the clear prohibition on eBay's participation in this reexamination, one must suppose that eBay filed its arguments simply for the improper purposes of interfering in the reexamination process and placing MercExchange in the position of objecting, and thereby increasing the costs to the Patent Owner and further burdening the Office.

You can view MercExchange's petition (and the USPTO decision) here. Unfortunately, the USPTO expunged eBay's documents as of last week, and they are no longer publicly viewable (I would love to see what eBay submitted . . .).

Regarding the applications, the USPTO again found that the form and timing of the submissions were improper:

While self-styled as a petition under 37 CFR § 1.182, a cursory review of the eBay communication reveals that it requests that the USPTO take notice of its prior findings alleged to have been arrived at during the course of prosecution of 18 related (common inventorship) patent applications, and that the USPTO apply these findings consistently in the examination of the instant non provisional application.

§ 1.99(d) states that any submission under this section shall not include any explanation of the patents, publications, or other information, and if such is included the USPTO will not enter the submission. While petitioner contends the submission occupies some 53 pages, the document actually subtends some 101 pages herein . . . therefore, the eBay submission contains an extensive explanation of the patents, prior art, and other information, that simply does not comply with § 1.99(d), which prohibits any explanation. Further, the submission facially is untimely within the meaning of § 1.99(e), and given the publication dates of the aforementioned patents and prior art, could clearly have been submitted to the USPTO earlier. Thus, retention of the eBay protest in this published application file is inconsistent with 37 CFR § 1.99.

While 37 CFR § 1.291 is more liberal that §1.99(d) in permitting a "concise" explanation of the information relied on, as opposed to precluding any explanation, the protest was untimely filed i.e., filed after publication. Nevertheless it lacks the permission of applicant required by § 1.291(b)(1) for consideration of a protest filed after publication containing even a "concise" explanation. As the eBay protest is facially not concise, and as it lacks, given the instant petition, any semblance of the applicant's written approval, its retention is likewise prohibited under § 1.291.

These documents were found in the prosecution history of MercExchange's application 09/779,551, and can be found here.

I really have to wonder what EBay was thinking here . . .

FRIDAY FUNNY: From the Inquirer (UK):

Anti-software patent campaigner Florian Mueller received a nomination today as one the EV50 Europeans of the Year.

The award is for campaigning in European politics, and Mueller was notable for his efforts to overturn attempts by lobbyists to rush through software patent legislation.

Mueller's nomination was made by the European Voice, and runs against people like Bono, Sir Bob Geldof, Harry Potter author JK Rowling, German chancellor Gerhard Schroeder and even retiring prime minister, ukele player and Cliff Richard fan Tony Blair.

The poll is open to the public here. Somewhat ironically, the poll in the European Voice has been created in association with Microsoft.

NAPA RECOMMENDS USPTO OVERHAUL: Following up from June's GAO report on USPTO problems, the National Academy of Public Administration issued a 298 page report making dozens of recommendations for fixing management and workforce problems at the U.S. Patent and Trademark Office, which is increasingly criticized for the quality of its work and a mounting backlog of patent applications.

One of the most significant proposals was that lawmakers make the agency a wholly owned government corporation subject to congressional oversight, like the U.S. Postal Service.

USPTO managers were also criticized for neglecting to follow through with actions that, although common in industry, would have required them to negotiate with the agency's powerful patent examiners union, the Patent Office Professional Association. Currently, management's self-reliant, can-do attitude has resulted in them ignoring many recent management innovations that others have used to transform public agencies and businesses, according to the report. The panel members found that even supervisory patent examiners (SPE) often retain an "anti-management mind-set" even after being selected for promotion.

Of course, one of the greatest problems is the high attrition rates, especially among newly hired patent examiners. In fiscal 2004, the average attrition rate was 10.1 percent for patent examiners who review applications for computer architecture and information security software.
The NAPA panel blamed the lack of significant management innovations at the agency for high employee turnover, noting that the incentive system used to reward patent examiners essentially hasn't changed since 1976. And due to the high turnover, only 45 percent of patent examiners have been on the job for more than five years. Agency officials say an examiner needs five to seven years on the job to become proficient. The panel found that USPTO lacks an adequate number of seasoned patent examiners to operate efficiently.

European and Japanese patent agencies have traditionally avoided these attrition problems but it is also a fact that examiners in those agencies have fewer applications to process and more time to spend on each one. One side-effect of this is that applicants often have to wait longer for examination.

I noticed that the EFF added some commentary to the report that is misleading at best. As this blog mentioned before, there is a false perception being promoted, particularly by the anti-software patent people, that examiners are under pressure "to issue as many patents as possible to as many businesses as possible." I have yet to see any evidence of this, and I certainly have not heard anything from my USPTO contacts indicating that such a policy exists.

NEW YORK LAWYER SALARY SURVEY: (New York Magazine)

First-year public defender, Legal Aid Society - $45,922
First-year assistant district attorney, Manhattan - $50,000
first-year associate, Weil, Gotshal & Manges - $125,000
Parking-violation judge - $126,072
District attorney Jeannine Pirro , Westchester - $136,700
District attorney Robert Morgenthau , Manhattan - $150,000
Jury consultant and trial strategist - $512,500
Chairman, Sullivan & Cromwell (H. Rodgin Cohen) - $4 million

and, last, but not least:

Judy Sheindlin (Judge Judy) - $30 million

USA TODAY VISITS THE USPTO: This morning, columnist Kevin Maney reported on his trip to the USPTO - and was apparently surprised it wasn't full of nerds:

If you go into the U.S. Patent and Trademark Office to meet actual patent examiners for the first time, you might expect a stereotype — offices full of middle-aged Napoleon Dynamite types who luxuriate in bureaucratic arcana and wear their pants too high at the waist.

But, no. Instead I find Wendy Garber. She has midlength blonde hair and is wearing a pink top, short skirt and funky glasses. If not for the government-issue badge, she'd look like an employee at Vogue. She has degrees in engineering and law and is a supervisor in "technology center 2600," which is patent-office code for telecommunications.

Heh, heh - he "found" Ms. Garber, as if he was wandering unescorted through the USPTO? I can think of at least 3-4 art units where they are geeky and proud of it - is it really necessary to vouch for the "hipness" of groups of people in order to give them credibility?

And I like the reference to technology center designations being "patent-office code" (probably complete with secrets handshakes and such).

Anyways, the purpose of Kevin's article wasn't to provide a couture update on USPTO personnel, but to report on the plight of USPTO Examiner workloads:

It's hard to see how the patent office can catch up. Just look at the numbers. Patent application filings have been growing 6% to 8% a year for more than two decades, so the number of applications has nearly quadrupled since 1980. About 382,000 will be filed this year.

The PTO has 4,200 patent examiners. So in 2005, 91 applications came in for each examiner. If you figure that each examiner works maybe 235 days a year, that leaves 2.6 days — 21 working hours — to review, approve and finalize each patent application if the PTO were to keep pace with the onslaught.

So the PTO keeps falling behind. From 2004 to 2005, 100,000 more patent applications came in than were approved. Over the years, the backlog of applications has grown to 604,000.

If that gets much worse, inventors are going to end up getting patents for technologies after they've already been on the market, peaked and become obsolete.

This need to be repeated over and over to Congress by the press - God knows they don't listen to the patent community. And it would've been nice if he added that one of the reasons for these problems is that Congress keeps diverting USPTO fees to fund unrelated pork projects.

Nevertheless, Kevin assures us that the new Commissioner, John Doll, is on the case:

While at the PTO, I meet John Doll, the new Commissioner for Patents, who comes
across as a go-getter who could be played by Ben Kingsley if there's ever a USPTO: The Movie. [blogger note: HA!]

Doll has hired 940 examiners this year and plans to hire an additional 1,000 each year "for several years," he says. He's overhauling the training system so examiners are cooked much sooner than the current five to six years. And he's continuing to drive automation as he tries to boost the meager number of patents filed electronically. (As of now, the PTO is the world's largest recipient of overnight mail.)

Doll is, all told, shocking the PTO culture and making it feel more like a fast-growing
start-up than a 215-year-old entity shaped by Thomas Jefferson.

I'm not sure about that. USPTO management, to date, has been pretty ineffective at creating meaningful change in the Office. A prime example of this is the utter lack of accountability for strategic milestones. Just like mangement at a strt-up, if you don't produce, you get canned. Is the Commissioner ready to take that step?

CONTINGENCY AIN'T WHAT IT'S ADVERTISED TO BE? The good folks at rethink(ip) tipped off this recent article from IP Today (written by Joseph Hosteny from Niro, Scavone, Haller and Niro) explaining that, with all the reports of "evil" patent owners and their extremely greedy contingent fee lawyers, one might easily be led to believe that both are enjoying windfall after windfall, made by ripping off big companies. However, according to the article, this is not necessarily the case.

In contingent fee litigation, there is no incentive to run the meter with billable hours and extra lawyers. Due to the fact that such litigation only rewards results, it would seem it's a reasonable
way to conduct litigation without the motive to continue to bill. Either the case is good and can be pursued, or is not good, and can be settled. But it won’t go on and on, ad infinitum.

I frankly can't argue with many of the points made in the article, and I particularly got a kick out of the anecdotes related in the article:

• In September, 2004, the New York Lawyer reported that US Airways’ trip through bankruptcy cost the company one hundred and twelve million dollars in only nine months.

• In Chicago, the United Airlines bankruptcy case cost that company two hundred thirty-five million dollars in only 18 months, between December, 2002 and June, 2004. Fees in the United case are now running over eight million dollars per month, with the lead lawyer being paid seven hundred ninety-five dollars an hour. One article reports that, in one instance, three lawyers were sent to do a job that one could have done, and that all three flew first class.

Granted, these are bankruptcy cases, but holy cow! The article goes on to give examples of gold-bricking, where armies of attorneys are dispatched to handle routine matters, and where attorneys needlessly run-up costs by posturing to the opposing counsel via letters and needless motions. And the article goes on to conclude with this biting criticism:

No wonder large companies think litigation is too expensive. Their own need to hire big firms, coupled with runaway legal fees, is the largest part of their problem. A defendant that shoots itself in the foot shouldn’t blame someone else for its own stupidity. Their corporate mentality, which equates size and expense to quality, is the main cause.

Ouch.

SEMICONDUCTOR INSIGHTS AWARDS: Semiconductor Insights (SI), located near Ottowa, Ontario, analyzes a thousand different devices each year from the world's most innovative microelectronics companies. Every year, the analysts identify certain devices that significantly change the performance/cost equation of its segment with a new design or process innovation.

In light of this analysis, SI has developed and sponsored the "Insight Awards" together with Semico. Semico provides a market view of the return winners will derive from their innovations.

SI's 2005 Insight Awards recognize innovations in nine specific categories — Non-Volatile Memory, DRAM, MP3 Players, Handsets, Image Sensors, Process Technology, Logic-Mixed Signal, RF IC's, and RF Architecture.

To date, the following winners have been announced:

Most Innovative Non-Volatile Memory: Toshiba 4Gb MLC 90nm NAND Flash

Most Innovative DRAM: Samsung 90nm 512Mb DDR2 ("C" Rev) SDRAM

Best MP3 Player: iRiver H10 5GB

Today, SI announced that it has awarded Micron's 2-Megapixel CMOS Image Sensor the 2005 Insight Award for "Most Innovative Image Sensor." According to SI, Micron is the first to commercialize a 2.5T design by sharing pixel transistors between adjacent pixels. In other words, the term "2.5T" refers to 5 MOS transistors being shared between two photodiodes, or "2.5 transistors" per photodiode. Sharing significantly increases the fill factor over traditional 4T designs. It allows pixels to be significantly smaller and still meet the required signal-to-noise levels.

Also the MT9D011 uses a shared floating diffusion design typical of the Micron CMOS image sensors. With the help of this design and the integration of the PiP capacitor onto the source follower gate, Micron was able to reduce the pixel cell size from 3.2 x 3.2 microns to 2.8 x 2.8 microns, resulting in a 40% fill factor. High fill factors are extremely important for CMOS sensors to completely displace CCD technology. Improving the fill factor for an active pixel structure like CMOS means reducing transistor count at each site.

More information can be found here.

NAVIGATING THE PATENT MINEFIELD: In the latest EE Times, Carolyn Hayden writes an excellent article explaining how companies can take steps to avoid patent litigation during product development. The article gives some great advice on minimizing the chances of running into serious problems just as you are ready to unleash a new product on the market.

First and foremost, before beginning product development, set up employee agreements and be sure employees understand that their obligations are key. As employees move from company to company, they run the risk of IP moving with them. While having these agreements in place does not guarantee protection, it does provide a framework that allows everyone to understand their obligations to protect company IP.

During the product concept stage, the following steps should be taken:

• Establish a patent "landscape" for the technology by identifying patents that the product could potentially infringe. Competitors (along with potential "trolls") should also be identified to establish the risk of potential action being taken regarding the technology. In this stage, it is also important to consider all patents, including those that could be applied across different technologies.
• Perform a portfolio review to help understand the state of your patent portfolio in relation to your product plans. This would include reviewing patents for relevance to the product technology, how strongly the patents can be supported, the patents' life spans and whether the targeted market regions have been covered. With the results of the patent landscape and patent review in hand, a strategy for patent development and threat avoidance can be put into place.

To further protect the product development investment, any new technology related to the architecture of the product should be patented in the relevant markets. If design reuse is being considered, determine whether the design contains any third-party IP and the associated terms of use. Ensure that any terms that may have been accepted previously are suitable for the future product's plans.

This is an excellent article that I recommend to any start-up looking to establish a long-term portfolio. It even provides the following checklist, which includes considerations for open-source subject matter:

• Put employment agreements in place.
• Implement policies and procedures to protect your IP.
• Maintain records, notes and archives of information related to the product.
• Manage the patents within the company's portfolio.
• Identify obvious and nonobvious competitors.
• Patent novel ideas that are key to your product and its future development and target markets.
• Obtain necessary licenses for any industry standards used.
• If you are reusing any design, identify the existence of any third-party IP and obtain the appropriate licenses.
• Before incorporating any third-party or open-source IP, ensure that the distributor of the IP is credible, the IP is clean, the distributor has the rights to distribute the IP and any needed licenses are in place.
• Before sharing information with suppliers, ensure that nondisclosures and agreements are in place.
• When outsourcing design work, the following steps are recommended:

• Have appropriate agreements in place.

  Ensure your IP is protected.

  Clearly identify who owns the IP being developed.

'ERE WE GO AGAIN! EATONI GOES AFTER RIM: As if the NTP litigation weren't enough, Predictive-text technology developer Eatoni Ergonomics has filed a patent infringement lawsuit against Research in Motion (RIM) in the US District Court of Northern Texas. Predictably, Eatoni is asking the court to ban RIM from selling its Blackberry 7100 smart-phone family.

Eatoni has come strong out the the gate, asserting patent number 6,885,317 almost immediately after the patent was granted in April. Since that time, Eatoni and RIM have been bickering over where the lawsuit would be heard - Eatoni wanted New York, RIM wanted Texas - and RIM prevailed.

The '317 patent is titled "Touch-typable devices based on ambiguous codes and methods to design such device" - covers predictive text entry on small form-factor keypads that emulate a QWERTY keyboard (found commonly on T9 systems). A Windows demo of the technology can be found here. Apparently, Eatoni claims that cordless phone users have been flocking to this technology and that Eatoni has licensed it to quite a few DECT-handset makers.

RIM's 7100 devices, codenamed 'Charm', launched a year ago and introduced a new predictive text-entry system named "SureType" which allowed them to squeeze a narrower QWERTY keyboard onto the devices.

That, of course, did not sit well with Eatoni, who thinks this infringes their '317 patent:

1. An apparatus comprising:

encoding symbols;

decoding symbols;

a keyboard comprising a plurality of keys responsive to user activation to generate
sequences of said encoding symbols, said keyboard comprising a plurality of
keys;

an output which selectively outputs sequences of said decoding symbols in response to said user activation of said keyboard;

an ambiguous code which maps said sequences of said encoding symbols to said sequences of said decoding symbols, wherein at least one of said sequences of said encoding symbols is mapped to a plurality of said sequences of said decoding symbols, said ambiguous code characterized in that it is strongly touch typable;

a plurality of decoding-symbol-assigned keys formed by an assignment of said decoding symbols to said keys, said assignment characterized in that it is not even-as-possible, given the number of said decoding-symbol-assigned keys.

Eatoni claims they previously alerted RIM to the alleged infringement and approached them to license their technology, but RIM wasn't too keen on the idea. RIM claims Eatoni's patent is invalid for a number of reasons, including lack of novelty.

An interesting note about the prosecution history of the patent - according to the USPTO, there wasn't even a single office action issued on the application. After a preliminary amendment, an Examiner Interview was conducted (I wonder what was discussed . . .) and the Notice of Allowance was issued a month later.

SURVEY SAYS: PATENT QUALITY STINKS! The Intellectual Property Owners Association (IPO) released recent results of a survey showing that its corporate members perceive the quality of patents granted by the U.S. Patent and Trademark Office to be "less than satisfactory." The breakdown for rating the quality of patenes is as follows:

• 51.3 percent - less than satisfactory or poor (47.5 percent "less than satisfactory" and 3.8 percent "poor")
• 40 percent - satisfactory
• 8.8 percent - more than satisfactory (0% said outstanding)

Not particularly surprising, since the USPTO has made itself a scapegoat for all of the problems in the patent system. Also, the only group reporting "poor" ratings was the electronics/computer/software industry, although their dissatisfaction wasn't all that different from other industries (in fact, the industry had one of the more positive outlooks on patent quality as compared to 3 years ago).

Nevertheless, an interesting finding by the survey was that the largest companies were the most critical of patent quality:

• large (>$50 bil) -------------------------------- 62.6% "less than satisfactory or poor"
• medium-large (between $10 and $50 bil) - 48.3% "less than satisfactory or poor"
• medium (between $1 and $10 bil) ----------- 53.8% "less than satisafactory" (0% poor)
• small (<$1bil) ------------------------------------ 33% "less than satisfactory" (0% poor)

I was initially surprised by this, since it is the larger companies that file the bulk of patents at the USPTO. But then I learned the survey defined "high quality patents" as those that will hold up if challenged in court (what a weird and amorphous definition, BTW). It would make sense that, since large companies spend more time defending against patent infringement lawsuits than enforcing them, they would also be jaundiced towards the patents being asserted against them.

The survey rightfully points out the USPTO's shortcomings, partially caused by fee diversion, and also by failures to modernize the agency's operations. However, I was surprised that there was no discussion on the manner in which courts handle patent litigation and claim construction, particularly since "quality" was so closely tied to a court's proclivity to uphold particular patents.

One question I was disappointed that the survey didn't ask was "how do you rate the quality of examination with regard to your company's portfolio?" It's pretty easy to bad-mouth other people's patents, but it's another matter to critically analyze your own portfolio.

WHAT DOES THE CHIEF JUSTICE DO ANYWAYS? In light of the confirmation hearings and current "water-cooler talk" with fellow attorneys (such exciting lives we lead . . .), it would appear that there is some uncertainty over what the responsibilities of the Chief Justice of the United States.

In addition to the duties of the Associate Justices, the Chief Justice has the following duties:

• In any vote, the most senior Justice in the majority has the power to decide who will write the Opinion of the Court.
• Chairs the conferences where cases are discussed and voted on by the Justices. The Chief Justice normally speaks first, and so has great influence in framing the discussion.
• Preside when the Senate tries an impeachment of the President of the United States.
• Administers the oath of office at the inauguration of the President of the United States.
• Serves as the head of the Judicial Conference of the United States, the chief administrative body of the U.S. federal courts. The Judicial Conference is empowered by the Rules Enabling Act to promulgate rules to ensure the smooth operation of the federal courts.

While most people are at least generally aware of the above duties, there are some additional duties bestowed upon the Chief Justice that may be lesser known:

• Serves as the Chancellor of the Smithsonian Institution;
• Approve appointments and salaries of some court employees;
• Approve rules for the Supreme Court library;
• Approve appointments made by the Architect of the Capitol of employees to care for the Supreme Court building and grounds;
• Approve regulations prescribed by the marshal of the Supreme Court for protection of the Supreme Court building and grounds;
• Appoint two members of the judiciary to the Commission on Executive, Legislative and Judicial Salaries;
• Authorized to report to the president that the chief judge of the Court of Claims, the Customs Court or the Court of Customs and Patent Appeals has become unable to discharge his duties;
• Designated chancellor of the Smithsonian Institution;
• Named to the Board of Trustees of the National Gallery of Art; and
• Named to the Board of Trustees of the Joseph H. Hirshhorn Museum and Sculpture Garden

An interesting factoid is that the office is often, but incorrectly, referred to as "Chief Justice of the Supreme Court." The United States Code specifies the title as "Chief Justice of the United States," and thus, not just of the Court itself. The title changed at the suggestion of Chief Justice Salmon P. Chase, who wished to emphasize the Court's role as a coequal branch of government. By contrast, the other eight members of the Court are Associate Justices of the Supreme Court of the United States, not "Associate Justices of the United States."

THE INTERMEC FACTOR: It would seem that things were getting settled this week when Symbol and Intermec agreed to a (temporary) cease-fire in their patent litigation wars, the latest one being filed in June by Intermec against Matrics (which was subsequently bought up by Symbol). In a statement reminiscent of the old Tareyton cigarette ads, interim president and CEO of Symbol Sal Ianuzzi proclaimed that "we prefer to negotiate rather than litigate." Intermec and Symbol also agreed to negotiate settlements to their other intellectual-property disputes, including a 90-day moratorium as they look for a resolution to all intellectual-property disputes between the two companies.

As part of the cease-fire, a cross-license was unveiled, where Symbol will join Intermec's Rapid Start licensing program for RFID intellectual property, which provides unlimited access to its portfolio of more than 145 RFID patents, in return for an initial fee plus royalty fees ranging from 2.5% to 7.5% of the finished product price. In exchange, Intermec will get access to elements of Symbol's RFID intellectual property by exercising cross-licensing provisions of the Rapid Start program. Symbol holds about 50 RFID patents and patent applications.

While this is certainly welcome news for Intermec and Symbol, there is the nagging issue of Intermec's refusal to join the RFID technology licensing consortium to provide less-complicated access to RFID patents, as well as easier management. The consortium's goal is to offer a structured approach for holders of RFID patents to receive fair compensation for them so they can offer reasonable prices to users. Accordingly, the consortium plans to manage patent licenses for RFID chips, tags, labels and readers to release patent holders from having to do so. Further, it plans to integrate complementary technologies to reduce costs.

Intermec, so far, has seen no need to join the consortium, since they believe they hold key patents on core RFID technologies. In fact, some of the founding consortium members have already signed a license agreement with Intermec and others are in the application process. “Being a member of the consortium does not remove the need to have a license from Intermec to our broad RFID portfolio,” said Tom Miller, Intermec’s president.

TOYOTA PRIUS TRANSMISSION TARGETED FOR INFRINGMENT: Solomon Technologies, Inc. announced today that it has filed an action against Toyota Motor Corporation in federal district court in Tampa, Florida for infringement of Solomon's Electric Wheel patent. Solomon alleges that the hybrid transmission drive in the Toyota Prius and Highlander infringes a number of claims contained in its U.S. Patent No. 5,067,932. In the lawsuit Solomon is asking for an injunction barring further infringement as well as damages for the unauthorized use of its patent by Toyota.

Toyota said it may sell as many as 250,000 hybrid cars this year, mainly the Prius model. In 2006 it plans to produce as many as 400,000 hybrids, while trying to lower costs, President Katsuaki Watanabe said Monday in New York. Sales may rise to 1 million in 2010.

The patent generally deals with an integrally formed combination of a motor device and a transmission device, having two power inputs (one being electrical) and a power output having a continuously variable speed of rotation over a large range. Claim 1 reads as follows:

1. A combination motor and transmission device comprising

first power input means for receiving a first input of electrical power,

second power input means for receiving a second input of electrical power, and

power conversion means for converting said electrical power of said first and second inputs for output, said power conversion means including a mechanical power transmission unit, said power transmission unit having two inputs for respectively receiving mechanical power corresponding to said first and second power inputs provided to said first and second power input means and an output for outputting the converted power as rotational mechanical power,

wherein the rotational speed of said output is continuously variable, and said power conversion means includes, for each of said first and second power inputs, a respective integral combination of a respective electric motor element and an element of said mechanical transmission unit, each said integral combination involving said two respective elements thereof being directly associated mechanically and geometrically with each other without substantial spacing or other elements including bearings and shafts therebetween.

That's a lot of claim terms to chew over (and that's one of the broader claims), and pretty much all of the claims are in means-plus-function format. This is going to be an expensive case to litigate. Usually, companies like Toyota aren't all that interested in scorched-earth litigation, so I will predict here that this case will settle by this time next year . . .

ePLUS MARCHES FORWARD WITH SAP AG IN THE CROSSHAIRS: EPlus, which specializes in enterprise cost management software, filed a patent lawsuit April 18 in the U.S. District Court in Richmond, Virginia, alleging that German business application vendor SAP AG infringed three of its patents for e-commerce-related technologies. Last June, SAP filed their Answer and Counterclaims, arguing that it had not infringed on the ePlus patents and that the patents were invalid. The case is set for trial in March 2006.

The asserted patents, along with exemplary claims are as follows:

US Patent 6,023,683 - "Electronic sourcing system and method" (filed 8/10/94 - issued 2/8/00)

26. A method comprising the steps of:
maintaining at least two product catalogs on a database containing data relating to items associated with the respective sources;
selecting the product catalogs to search;
searching for matching items among the selected product catalogs;
building a requisition using data relating to selected matching items and their associated source(s);
processing the requisition to generate one or more purchase orders for the selected matching items; and
determining whether a selected matching item is available in inventory.

US Patent 6,055,516 - "Electronic sourcing system" (continuation of the '683 patent)

16. An electronic sourcing system comprising:
at least two product catalogs containing data relating to items such that an item in a first catalog is generally equivalent with an item in a second catalog; and
converting means for converting data relating to said item from said first catalog to data relating to said item from said second catalog.

US Patent 6,505,172 - "Electronic sourcing system" (divisional of the '516 patent)

1. An electronic sourcing system comprising:
a database containing data relating to items associated with at least two vendors maintained so that selected portions of the database may be searched separately;
means for entering product information that at least partially describes at least one desired item;
means for searching for matching items that match the entered product information in the selected portions of the database;
means for generating an order list that includes at least one matching item selected by said means for searching;
means for building a requisition that uses data obtained from said database relating to selected matching items on said order list;
means for processing said requisition to generate purchase orders for said selected matching items.

For those that follow ePlus, they filed this suit fresh after cashing in on their settlement with Ariba after a E.D. VA jury found that Ariba willfully infringed their patents. An interesting note on the Ariba case was that it was one of the first jury cases that decided willfulness after the Knorr-Bremse decision. Another factoid that surprised me was that the Ariba case went from complaint to jury verdict in less than 10 months - "rocket docket" indeed.

Anyways, it looks like SAP may have some legwork to do if they are looking to invalidate these patents. ePlus has already survived a first challenge to the validity of the patents, and the USPTO literature is pretty crappy prior to 1995. That means lots of digging in documents preceding the Electronic Commerce Coordinating Council (I can't imagine what IEEE journals could produce). I'm not saying that SAP won't find anything, but usually once a patent gets vetted through to verdict, things get a lot more prickly for finding invalidating art.

What is more interesting is that SAP is a German company, and it is entirely possible that they have servers set up outside the US - perhaps they can avail themselves of the Federal Circuit's RIM decision to claim non-infringement due to steps performed outside the US . . .

Stay tuned.

FREE SOFTWARE FOUNDATION THINKING OF PATENT RETALIATION CLAUSE: The Free Software Foundation says it is considering plans to introduce a patent retaliation clause into the next version of Richard Stallman's General Public Licence.

The Free Software Foundation (FSF) was established in 1985 to promote computer users' rights to use, study, copy, modify, and redistribute computer programs. The FSF promotes the development and use of free software through the GNU operating system. The GNU Project was launched in 1984 to develop a complete UNIX style operating system which is billed as "free software" (GNU is a recursive acronym for “GNU's Not UNIX”; it is pronounced “guh-noo.”) Variants of the GNU operating system, which use the kernel Linux, are now widely used, and though these systems are often referred to as “Linux”, they are more accurately called GNU/Linux systems.

In order to promote the development of the software, the Foundation is thinking about adding a clause in the General Public License that states that if a participant decides to enforce a patent against a co-developer, the participant could lose the right to use or distribute the free software product. Provisions for copyright enforcement are being considered as well.

Although the open-source community keeps trying to skirt around patents, I don't think this is going to do anything substantive to the perceived patent threats. If anything, the provision only protects GNU users only from themselves - anyone looking to take a shot at GNU with their patents isn't likely to come from the ranks of the FSF.