LEGISLATION AND COMPUTER-RELATED PATENTS IN INDIA : A.B. Rajasekaran, who is an Examiner of patents and Designs for the Indian Patent office, has published an interesting article on Patents for Computer-Related Inventions in India. The article generally describes the computer-patenting systems in the US and in the EU, and then proceeds to India:

The Patent system in India is governed by the Patents Act 1970 (hereinafter 1970 Act). Unlike the US and Europe, it was not any existing case laws that brought computer-related inventions under patentable subject matter but rather, it was the Patent Act as amended in 2003 that made the new area of technology a patentable subject matter.

The 1970 Act did not exclude explicitly patents for computer related inventions, as computer technology at that point of time was relatively unknown, but the definition of the term invention itself excluded patents for computer programmes. The 1970 Act was amended in 2002 to bring it more, if not full, compliant to the TRIPs agreement which India had signed in 1994.

The Patents Act 1970 as Amended by (Amendment) Act, 2002 (hereinafter, the second Amendment Act) radically changed the definition of invention and also excluded computer programme per se from patentability. It was generally understood that a product embedded with a computer programme producing a technical effect and having an inventive step is patentable.

The latest amendment brought through an ordinance to bring in major changes in the 1970 Act like, introduction of product patent for chemicals and drugs and the introduction of post grant opposition among other things amended the clause 3 (k) excluding computer programme per se from patentable subject matter. Sec. 3 of the Patent Act lists nonpatentable subject matter, Sec.3 (k) excluded a mathematical or business method or a computer programme per se or algorithms for being patentable. The Ordinance divided the contents of Sec.3 (k) into two; Sec.3 (k) now reads, computer programmes per se other than its technical application to industry or a combination with hardware and the new Sec.3 (ka) excludes mathematical method or a business method or algorithms from being patentable.

It was the highlighted phrase that purportedly expanded the scope of patentability of computer-related inventions (reported earlier on this blog), and predictably caused the Indian software industry to go bananas. There was some valid concern here from a logistical standpoint, since Indian courts had virtually zero judicial precedence in determining what this phrase would mean. The other rub was that the law used the term "technical application" (as opposed to "technical effect" or "technical contribution" used in parts of the EU).

The European Board of Appeal, which first emphasized the need for the invention to make a "technical contribution", never used the term "technical application". Why, you may ask? According to the article, there are specific differences:

"Technical Effect"

• Solves a technical problem or produces a technical effect either inside the
  machine or outside the machine
• Utilizes technical means to solve a technical problem
• Utilizes technical means to produce a technical effect

"Technical Application"

• Need not solve a technical problem or produce a technical effect
• Since a computer as a machine uses forces of nature every application that runs on a computer is technical

Thus, under the "technical application" interpretation of computer-implemented inventions, just about anything can be patented, since computers, by their very nature, are "technical" machines, and could feasibly be used to obtain business-method patents as well (even though other provisions in the Act expressly prohibit it). Interesting stuff.

- One thing that greatly disappointed me while reading the article was the conclusion of the article:

It is generally understood now that there is no correlation between the Innovativeness of the companies, particularly software companies, and the strength of patent protection. In fact, it is now understood that stronger patents for software-related inventions has not increased the inventiveness of the companies but rather is an inhibitor.

Sequential value addition and interoperability is the inherent characteristic of software related inventions. India as dynamic technology adopter has more chance on making sequential innovations. But, the broader protection that was offered would have only benefited the technology leaders like the US and Europe to use it more as defensive strategy.

A weaker protection at this point of time, when Indian software industry is on the early stage of the learning curve is a necessity to redo the classic Indian pharma act.

There are so many things wrong with this sentiment that it's hard to determine where to begin. It was like drinking a delicious cup of coffee, only to find a dead roach at the bottom of the cup. It is "understood" that software patents inhibit innovation? Oh really? And the notion that early-stage technological development benefits from weaker patent protection is ludicrous. And what happens when the technological development "matures" - exactly how do they plan to catch up in terms of patent protection?

But I digress . . .

AND DON'T LET THE DOOR HIT YOU . . . Florian Mueller, the manager of a European anti-software patent campaign (and a favorite whipping boy of this blog), is quitting his post as an anti-patent crusader and is returning to his computer games business. As campaign manager of the NoSoftwarePatents.com organization, Mueller stirred up opposition to software patents and to Microsoft, the leading proponent of software patents.

Mueller said he is folding http://www.nosoftwarepatents.com/, although its work will be carried on by another anti-software patent organization, the Foundation for a Free Information Infrastructure (FFII). Hartmut Pilch is the president of the FFII, based in Munich.

VIA EXPANDS H.264 PATENT POOL WITH 8x8 INC.: 8x8 announced trhat they are contributing U.S. patent #6,249,318, the technology for implementing motion estimation within the AVC video compression standard, to Via Licensing's H.264 portfolio of patents essential for implementation of the joint ISO/IEC (ISO/IEC 14496-10) and ITU (ITU-T Rec. H.264) video coding standard.

Motion estimation is a video compression enhancement process accomplished by examining the movement of video information between individual and/or multiple past and/or future video frames and optimally encoding the movement of this information. 8x8's motion estimation technology has been independently evaluated as an essential component of the Baseline, Main and Extended profiles of the H.264 standard.

H.264, one of the newest emerging standards for standards-based video compression, provides greatly enhanced compression performance and is suited to a broad range of applications, including video telephony, Internet protocol streaming, gaming, high-definition DVD, mobile device broadcast, and compressed personal video recording, among many others. AVC is estimated to be two to three times more efficient than the widely deployed MPEG-2 video codec.

- These patent pooling arrangements are quickly becoming essential practices for small companies looking to gain access to markets incorporating standardized technologies. Joint licensing programs (i.e., patent "pools") are a way for companies who own patents that are essential to a specification to provide other companies with access to those patents to enable a broader market for products that implement the specification. The joint licensing programs help to integrate complementary technologies and reduce transaction costs for both licensors and licensees. They also remove uncertainty about the availability of patent licenses and their costs. Finally, they bring a measure of stability to patent licensing for a particular technology by reducing litigation risks and by establishing a market rate, thus making it easier for licensees to obtain licenses, and also allowing licensors who are interested in obtaining a reasonable return on their research investment to do so in a market-enabling and cost-effective manner.

One of the big players in this practice are companies like Via Licensing (a subsidiary of Dolby Laboratories) which provides patent licensing services for media technologies used around the world. Via Licensing offers to provide efficient access to foundational patents on which standards and markets are built.

Another is MPEG LA, which is a MPEG licensing agency. Some 24 different companies own the 650 worldwide essential patents for the MPEG-2 video standard for compressing digital information. Accordingly, assembling the necessary patent licenses could present a big roadblock -- negotiating licenses with 24 companies represents a lot of lawyer's fees. (The money could be better spent designing new products.) That's where a licensing agency comes in, acting as a middleman between the patent-holders and the equipment manufacturer. Approximately 800 manufacturers worldwide currently license MPEG-2 technology from MPEG LA, the largest (but not only) private patent licensing company, for patents used in set-top boxes, DVD players and television receivers and decoders, personal computers and DVD discs.

For an excellent overview of patent pooling and its effects, check out Carl Shapiro's article "Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard-Setting," posted on University of California at Berkeley's website.

USPTO REJECTS MERCEXCHANGE PATENT IN REEXAM: The U.S. Patent and Trademark Office has given a small boost to eBay Inc. in its legal fight with MercExchange Inc. by signaling that it may revoke a second patent owned by the small Virginia business.

In a filing posted on its Web site, the patent office said it found the latest patent to be invalid because its claimed inventions either were obvious or had been anticipated by other patents.
The decision could prove very helpful in eBay's attempt to challenge a $25 million patent infringement award won by MercExchange in 2003.

The patent office made a similar ruling in January involving another MercExchange patent. In both cases, the decisions by the patent office are preliminary, and any final rulings can be appealed inside the patent office as well as through the federal court system.

BOSCH UPS ITS PATENT ACTIVITY: Researchers and developers at Bosch made a record number (2,791) of patent applications in 2004 (2003: 2,748). Bosch’s Automotive Technology division claims it registered more patent applications than any other company in the automotive industry.

In 2004, the key areas for patent applications were electronic system networking and driver assistance systems – two areas in which Bosch is intensively pushing technological progress. Across all divisions, the Bosch Group is ranked in third position at the European Patent Office for the number of applications lodged.

All in all, the Bosch Group once more raised spending for research and development above the average industry level to almost €3 billion in the past year. Of the total Bosch workforce of 242,500, more than 22,000 are active in research and development.

GLITCH ALERT: Blogger.com's been behaving rather poorly over the last day, and some posts have been inexplicably deleted - I'm working on this problem and hoping to have everything running smoothly relatively soon.

IMMERSION NIPS SONY FOR $91 MIL: (MacWorld) The U.S. District Court for the Northern District of California ordered Sony Computer Entertainment Inc. (SCEI) to pay Immersion Corp. US$90.7 million for patent infringement of touch feedback technology used in PlayStation games consoles, said court documents. Immersion's touch feedback technology has been supported in Mac OS X since 2002.

The court also ordered a halt to U.S. sales of infringing PlayStation-brand consoles and 47 software titles as part of a patent-infringement lawsuit but put the order on-hold pending an appeal.

The rulings from the U.S. District Court for the Northern District of California on Thursday are the results of a lawsuit filed in 2002 by San Jose-based Immersion against SCEI, Sony Computer Entertainment America Inc. and Microsoft Corp.

In the suit Immersion alleged that the three defendants had infringed on its patents covering haptic -- or touch -- feedback. Microsoft licensed Immersion's technology in 2003 but Sony decided to fight on. Immersion's haptic technology is used in game controllers manufactured by other companies.

In the rulings, U.S. District Court Judge Claudia Wilken ordered SCEI and its U.S. unit to pay US$82 million for infringement of U.S. patents 6,424,333 and 6,275,213 and an interest payment of $8.7 million. The court denied a counter-claim from SCEI for a declaration of non-infringement, said the judgment.

The court also enjoined SCEI from manufacturing, using, selling and/or importing into the U.S. infringing PlayStation consoles, Dualshock controllers and 47 games that were found to infringe one or both of the patents.

However, this injunction was put on hold in response to a counter-motion from SCEI. The court said it stayed the order after consideration of SCEI's chances of winning an appeal against the injunction, damage to SCEI and Immersion that such a stay would cause and also the public interest, said the judgment. Sony was also ordered to pay a license for products already in the marketplace and those subsequently sold.

GETTING SOME CHEESE ON THAT WHOPPER: A jury in California on Thursday ordered Toshiba Corp. and one of its U.S. subsidiaries to pay an additional US$84 million in damages to Lexar Media Inc.

The award covers punitive damages and comes a day after the same jury ordered Toshiba to pay US$381.4 million in damages for breach of fiduciary duty and theft of trade secrets. This brings the total damages awarded to Lexar by the jury to $465.4 million, although the actual amount to be paid will be determined by the judge at a later date.

Lexar said it believes the total amount as it stands represents the largest IP (intellectual property) verdict in California history and the third-largest IP verdict in the U.S.
Toshiba responded in a statement by saying the jury's verdicts were "in error" and that it plans to pursue "all available legal avenues to correct it." The Tokyo company said that it does not plan to revise its financial projections for fiscal 2004 because of the awards.

Based on the jury's findings, Lexar said it intends to ask for an injunction that bars Toshiba products found to include the Lexar technology from sale in the U.S., it said. These include NAND flash memory chips and memory cards that incorporate the chips.

An additional claim of unfair competition based on the California Business and Professions Code will be decided by the court in a hearing currently scheduled for April 13, Lexar said. An additional case against Toshiba filed at the U.S. District Court for the Northern District of California and covering patent infringement also remains to be heard.

IS THE PRESS GETTING ANTI-SOFTWARE-PATENT-HAPPY? Alas, another spat has broken out between Microsoft and the Public Patent Foundation/the Software Freedom Law Center. The brouhaha broke Tuesday, after it was reported that Microsoft's patent USP 6,101,499, filed in 1998 and issued in 2000, has "more than a passing similarity" to IPv6, one of the backbones of the Internet.

What is IPv6 you may ask? Well, IPv6 is short for "Internet Protocol Version 6". IPv6 is the "next generation" protocol designed by the IETF to replace the current version Internet Protocol, IP Version 4 ("IPv4"). Most of today's internet uses IPv4, which is now nearly twenty years old. IPv4 has been remarkably resilient in spite of its age, but it is beginning to have problems. Most importantly, there is a growing shortage of IPv4 addresses, which are needed by all new machines added to the Internet.

IPv6 fixes a number of problems in IPv4, such as the limited number of available IPv4 addresses. It also adds many improvements to IPv4 in areas such as routing and network autoconfiguration. IPv6 is expected to gradually replace IPv4, with the two coexisting for a number of years during a transition period.

IPv6 includes a transition mechanism which is designed to allow users to adopt and deploy IPv6 in a highly diffuse fashion and to provide direct interoperability between IPv4 and IPv6 hosts. The transition to a new version of the Internet Protocol is designed to be incremental, with few or no critical interdependencies. The IPv6 transition allows the users to upgrade their hosts to IPv6, and the network operators to deploy IPv6 in routers, with very little coordination between the two.

- Now, getting back to the Microsoft patent. Claim 1 recites:

1. In a host that has been connected to a network that does not have an IP address server and is not connected with any network having an IP address server, a method for automatically generating an IP address for the host, without another component of the network being required to transmit, to the host over the network, an IP address of said other component, the method comprising the steps of:

without the host having received over the network any IP address of another component of the network, selecting a valid network identifying value as a network identifying portion of the IP address for the host;

without the host having received over the network said any IP address of another component of the network, generating a host identifying portion of the IP address for the host based on information available to the host;

and testing the generated IP address for the host for conflicting usage by another host on the network and determining that no conflicting usage of the generated IP address exists.

In other words, the invention automatically generate an IP address for a host without manual intervention or without resort to an IP address server, and allows hosts to connect to an IP network in a relatively simple fashion. In general, the system determines the absence of a network IP address server, such as a DHCP server, automatically generates an IP address, tests the IP address to determine uniqueness, and periodically determines if an IP address server subsequently becomes available on the IP network. Accordingly, the method may be used in a network that has or does not have an IP address server.

So how does this relate to IPv6? Nobody knows yet. But that hasn't stopped the press from reporting this development as some massive "patent grab" by Microsoft to crush its smaller competitors (e.g., here, here, here, and here for starters). Certainly one can impart features of the claim to the IPv6 standard, but no one has identified the particular protocols that are threatened by the patent.

In fact, some of the Slashdot chatter raises questions whether the patent is relevant to IPv6 at all:

(comment 1) This is a patent on link-local address autoconfiguration for IPv4 (not as the article misleadingly says IPv6). Many Linux, Mac OS and Windows machines use this feature, but none of them need it to use the IPv4 or IPv6 Internet, in fact it's a fallback for when Internet service is not available.

(comment 2) Now that bears pretty much zero similarity to IPv6, which is among others: expanding address space over IPv4 while being somewhat backwards compatible for a transition period, improved IP packet modularity for less overhead, new hierarchical infrastructure for improved routing support, built-in IPSec, improved quality-of-service (QoS) support, improved support for ad hoc networking, and improved support for extensibility . . . Can someone clarify the huge similarities here to me that makes this big news?

(comment 3) While this patent is not quite brilliant, it's not ipv6, this is a patent on the "automatic addressing" function in windows ME, 2k, xp, etc, where if your network card has link, but can't find a dhcp server the system auto-assigns an address from like a 169 or something subnet that MS owns.This patent has absolutely nothing to do with ipv6 further, I believe MS was the first to do anything like this, even now they are (unless maybe apple does it now too... but I don't think they do either). Anyway I've never seen the feature actually be useful, mostly it is an annoyance, but it's not ipv6

So why all the hubbub? Well, first and foremost, it's Microsoft. Second, it was well-known that Microsoft participated in the early IPv6 meetings, and at least some of the named inventors were in attendance (Rambus anyone?). Accordingly, there are legitimate questions being raised whether all of the prior art known by Microsoft was properly disclosed to the USPTO.

But it seems to me that this situation is being blown out of proportion. If anyone can enlighten me further on this, I would appreciate hearing from them.

WHOPPER OF THE DAY: Toshiba and a subsidiary were ordered Wednesday to pay Fremont-based Lexar Media more than $380 million in damages for pursuing a flash-memory development deal with Lexar while secretly planning to team up with a rival. A Santa Clara County jury found Toshiba liable for a breach of fiduciary duty and theft of trade secrets related to the memory technology used in digital cameras, music players and other gadgets. Starting today, the panel will consider punitive damages. The company also has a separate patent lawsuit in federal court that it said could result in additional damages.

ARE NONPROFITS BECOMING THE OPEN-SOURCE MOVEMENT FOR BUSINESS METHOD PATENTS? The Nonprofit Innovation Alliance (NIA) has announced that four of the nation's most prominent nonprofits - United Way of America, the American Diabetes Association, Network for Good and Electronic Frontier Foundation - have joined the growing movement against business method patents to help promote ongoing access by America's nonprofit organizations to innovative technology.

As nonprofits recognize the threat posed by business method patent abuse, there is growing support for collective action to protect technology access for America's charities," said Shabbir Safdar, Acting Secretary of the Nonprofit Innovation Alliance. "The fact that the United Way of America, American Diabetes Association, Network for Good and Electronic Frontier Foundation have pledged their support for the NIA sends a strong message: business method patents are bad for the nonprofit sector and should be eliminated."

These four organizations have pledged support for the NIA's goals because they believe that nonprofits are best served if technology vendors and service providers help declare the nonprofit industry as a "business method patent-free zone."

- This is nonsense squared. Patents will always be bad for alleged infringers - that's the whole point. This is the same sentiment being expressed by many on the fringe of the open-source community - "I can't be bothered with the esoterics of patents and patent law, thus any claims made by patentees in my area of business are invalid ab initio." The fact that a fledgling enterprise (patently speaking) is lacking in sophistication should not serve as a basis for denying others their right to protect technology as they see fit.

The main problem for non-profit organizations is that they are exposed to the risks of developing technology via patent infringement, without effectively being able to exploit the rewards in return. Sure, the United Way can file for patents, and even obtain some significant protection, but what do they do with that patent once it issues? Sue other non-profits? Sue their own benefactors?

Now, I'm not taking away from many of the valid arguments regarding the abuse of the patent system, but throwing the baby out with the bathwater is not the answer. These organizations have massive lobbying networks throughout Capitol Hill; why not propose a more favorable tax incentive for licensing (as opposed to donating) patents and other intellectual property? If they want to be more nasty about it, why not use the NIA (or some other consortium of non-profit organizations) to aggressively deal with patent and other IP issues through reexamination efforts?

WHY IT ISN'T ALWAYS GOOD TO TALK TO THE PRESS ABOUT YOUR INVENTIVE ACTIVITY: Tony Redekas and his son Gary, have developed a device that modifies ladders, allowing them to remain stable and upright no matter how uneven the ground below it is.

The Redekas are not alone in their invention; several other leveling devices exist for ladders of various types. While the two men acknowledge that their device is not alone in the market, they vigorously assert that it is the best."You started seeing levelers all the time," Tony and Gary Redekas said. "Basically they were all the same idea: two legs with holes." The two inventors describe this design as inherently faulty.

A leveler which works through a series of holes with a peg basically has just a series of settings, Gary Redekas explained. The device could not accommodate a need for any height which did not match one of these settings.

Having designed their ladder leveler to use a turned clamp, rather than a series of holes, the two men believe that they have solved this shortcoming.

- Now for the kicker:

According to Gary Redekas he and his dad designed their device about five years ago, needing only a month to create the simple design which they use.

"We worked on it years ago, but we didn’t do anything with it for a long time," Gary Redekas said. "We let it sit for several years without doing anything with it."

Last May, the two men say, they applied for and received a provisional patent. This protection, which lasts for one year, allows them to search for a manufacturer for their device.

- Now I understand that individual inventors and small start-ups need to generate "buzz" about their new products to attract VC money or to develop a manufacturing base, but are they being advised by an attorney? It would appear that they are not. First, as you probably already noticed, there is no such thing as a "provisional patent," but only a "provisional application," and the only "protection" received by the provisional application is that against prior art that can be asserted against the application after its filing date. You can't enforce a provisional application.

And why are they publicly disclosing matters related to conception and reduction to practice? Announcing to the world that you conceived of the invention well over a year before the filing date of the provisional application is just plain foolish. In fact, that quote could very well serve to undermine any non-provisional applications that spawn from the provisional. Seeing a quote like that would send any patent litigator into a gleeful frenzy of invalidity arguments and discovery motions (I can't imagine that quote helping very much when it is brought to a judge's attention or blown up in 1000 point font in front of a jury).

Thus the lesson of the day: if you're pursuing patent protection, anything you say can and will be used against you.

SCIENCE-SPECIFIC SEARCH ENGINE SCIRUS ANNOUNCES THE ADDITION OF 13 MIL PATENTS : Elsevier today announced that its free science-specific search engine, Scirus, has now indexed 13 million patents.

Patents indexed in Scirus include those from the United States Patent and Trademark Office (USPTO), the European Patent Office (EPO), the Japanese Patent Office (JPO) and the Patent Cooperation Treaty (PCT) of the World Intellectual Property Organization (WIPO) . By making patents available through its index, Scirus has expanded its service to include these new information sources.

Scirus is touting itself as being the "go-to" tool for finding relevant scientific and academic information on the Web. Scirus is recognizing the value of patent information to the scientific community to assist in building upon previous research and technology.

The patent index data included in Scirus was obtained via an alliance with LexisNexis. Patents are loaded in Scirus in close cooperation with LexisNexis, using Scirus' technology for indexing scientific information.

Scirus' users can search for patents with the same fielded search capabilities. This includes the ability to search the index by title, abstract, author, date and affiliation. Users who require more in-depth patent searches are directed to specialized patent search tools offered through LexisNexis.

The patents indexed in Scirus have been selected on the criteria of being either scientific in nature or relevant to the scientific community based upon categorization used by patent offices. Every patent search result found on Scirus provides a link to the full text at the appropriate patent office or to EPO's Esp@cenet.

IBM SETTLES WITH COMPUWARE FOR 400 MILLION: IBM Corp. has reached a settlement agreement with software developer Compuware Corp., which sued IBM in 2002 for an alleged litany of violations including copyright infringement, antitrust law abuses and unfair competitive acts. Under the deal's terms, IBM will spend US$400 million over the next four years on Compuware software and services, the two companies recently announced.

Compuware's initial complaint in March 2002 charged IBM with using Compuware source code in IBM's File Manager and Fault Analyzer tools; illegally tying customer purchases of mainframe software tools to purchases of other key IBM software products; steering its services customers to its own products without fair competition; and denying rival vendors necessary technical information on IBM hardware and software. The trial on the case began in February in the District Court for the Eastern District of Michigan, near Compuware's Detroit headquarters.

Compuware's allegations set of a web of litigation between the two companies. IBM countersued Compuware in the Michigan court alleging violations of six IBM patents, and followed up in January 2004 with another patent-infringement lawsuit against Compuware, this time in New York's Southern District Court. Those lawsuits will cease as a result of Tuesday's deal, which settles all outstanding litigation between the companies.

WHEN GREAT IDEAS ARE SIMPLY NOT ENOUGH: The tech industry is famous for billion-dollar ideas. But the rewards don't always to go to the inventor. This article from ZDNet gives some examples why some of the most important technologies of the past 50 years -- the transistor, the relational database and the microprocessor -- weren't the slam dunks for their creators that many people might have thought.

Some inventors lost their lead through a lack of insight. Corporate politics sometimes plays a role. More often, the delay of payback is simply the result of poor timing--a reasonable strategy at the wrong time. Take the microdrive at the heart of many of today's MP3 players, for instance. It was invented long before the world was ready for something like the iPod.

Other notable examples of inventions gone wrong and opportunities missed:

• The transistor - In 1947, scientists at AT&T's Bell Labs created the world's first silicon transistor. Three of its scientists would later win the Nobel Prize in physics for the invention. Bell Labs obtained a patent for the device, but the invention was licensed to, among others, IBM, Texas Instruments and the forerunner of Sony. The goal was to avoid antitrust problems with the U.S. government. (In a 1956 consent decree, AT&T agreed to license the transistor freely.)
• Xerox PARC - Xerox has been flayed mercilessly for allowing concepts such as the desktop PC, Ethernet networking, the laser printer and the mouse--all invented at its famed Palo Alto Research Center, or PARC--to get exploited by others. The photocopier giant is now trying to stay afloat in a world going paperless. Still, PARC did help launch the careers of a number of people: James Clark, Alan Kay, Robert Metcalf and Lawrence Tesler, among others.
• DOS - Microsoft got into operating systems by chance, but this story starts with IBM. For its first PC, IBM initially considered using the C/PM system from Digital Research. Because Digital Research wouldn't sign a nondisclosure agreeent, IBM asked Microsoft, then developing applications for IBM, for MS-DOS. MS-DOS, however, was actually based on QDOS, an operating system created by Tim Paterson of Seattle Computer Products. Microsoft bought QDOS from SCP (which didn't know about the IBM deal) for $50,000.
• Relational Database Software - young IBM engineer named Edgar Codd defined the concept and structure of the relational database back in the '60s and '70s. Codd's revolutionary idea was to organize data into tables of rows and columns, and to relate that data to other tables. His work produced the blueprint for how to build a relational database, as well as the foundation for what would become SQL, or Structured Query Language, a standard way to access data. At the time, however, the technology didn't mesh with IBM's corporate strategy. The company was heavily invested in an older database model. The result: IBM didn't market a product based on Codd's ideas until 1978--one year after a young entrepreneur named Larry Ellison founded Oracle. Ellison's company went on to become the leader in relational database software, a $13.5 billion market that Oracle leads to this day.

NO-SOFTWARE-PATENTS.COM NEEDS YOUR MONEY: Showing that principles are nice, but cash is king, Florian Mueller, the guy who put together NoSoftwarePatents.com, has started a lobbying initiative, to get support from "closed source" companies in the $50 million-in-revenues and above class. For those "in the know," NoSoftwarePatents.com is Mr. Mueller's effort to stop all types of software patenting in the European Union (bet you couldn't guess from the title, eh?).

INFINEON AND RAMBUS SETTLE: Technology licensing company Rambus Inc. is announcing that it settled a patent dispute with Infineon Technologies AG and entered into a licensing deal with the German chipmaker.

Under the licensing deal, Infineon will pay Rambus $5.9 million each quarter starting in November and continuing through 2007. After 2007, Infineon may make additional payments up to $100 million, but only if Los Altos, Calif.-based Rambus enters into certain licensing agreements with other computer memory manufacturers. Infineon also has the option of acquiring other Rambus licenses under a "most-favored customer" status.

Munich-based Infineon granted to Rambus a fully paid perpetual license for memory interfaces. The companies said they agreed to dismiss all pending litigation and have released each other from all existing legal claims.

USPTO Spring 2005 Business Methods Partnership Meeting: As part of the March 2000 business method action plan, the United States Patent and Trademark Office (USPTO) announces the Spring 2005 business methods customer partnership meeting to be hosted by the director and managers of the Business Methods workgroup. Members of the public are invited to attend the partnership meeting. The partnership meeting is an opportunity for an informal discussion on topics such as public pair, quality initiatives, determination of statutory subject matter, and other topics specific to business methods. While public attendees will have the opportunity to provide their individual input, group consensus advice will not be sought.

DATES AND LOCATION: The partnership meeting will be held on Wednesday May 4, 2005, from 1:00 P.M.-5:00 P.M. at the USPTO MADISON AUDITORIUM, Concourse Level, Madison Building, 600 Dulany Street, Alexandria, VA 22313.

Requests for Attendance at the Partnership MeetingRequests for attendance will be honored on a first-come, first-served basis according to the time and date of receipt of each request. In order to ensure a broad cross- section of attendees, the USPTO reserves the right to limit the number of attendees from any single organization or law firm. Therefore, organizations and law firms must designate their official representatives. Individuals will be notified of accepted requests for attendance by the USPTO no later than one week prior to the date of the meeting. Non-accepted requesters will also be notified by the USPTO. No one will be permitted to attend without an accepted request.

Requests for attendance at the partnership meeting should be submitted to the attention of Joe Thomas via facsimile at (703) 746-5897, or by electronic mail through the Internet to joseph.thomas@uspto.gov. Requests for attendance must include the attendee's name, affiliation, title, mailing address, and telephone number. Facsimile number and Internet mail address, if available, should also be provided. Requests must be received by April 20, 2005.

FOR FURTHER INFORMATION, PLEASE CONTACT: Joseph Thomas by telephone at (703) 305-9588 (in addition to the facsimile numbers and e-mail addresses given above).

USPTO Releases List of Top 10 Universities Receiving Most Patents in 2004: The Department of Commerce’s United States Patent and Trademark Office (USPTO) today announced the top 10 U.S. universities receiving the most patents during calendar year 2004. Listed below are the 10 universities receiving the most patents for inventions in 2004, along with their 2003 ranking. The University of California tops the list for the 11th consecutive year.


Rank in 2004* N0. of Patents in 2004* U.S. University* (Rank in 2003)
1 424 University of California (1)
2 135 California Institute of Technology (2)
3 132 Massachusetts Institute of Technology (3)
4 101 University of Texas (4)
5 94 Johns Hopkins University (7)
6 75 Stanford University (5)
7 67 University of Michigan (8)
8 64 University of Wisconsin (6)
9 58 University of Illinois (20)
10 52 Columbia University (9)

*The listed patent counts are preliminary counts that are subject to correction. The final listing of patent counts for U.S. universities in 2004 should be available in late December of 2005.

IS THIS LACHES OR ESTOPPEL (OR BOTH)? I noticed an interesting fact in an article describing the current legal woes of FindWhat.com. The company is currently embroiled in a patent lawsuit filed by Overture, now a part of Yahoo Inc (they certainly seem more aggressive nowadays, don't they?). The case is expected to go to trial next month.

Overture filed suit against FindWhat.com in 2002 in U.S. District Court in Los Angeles, contending FindWhat.com violated Overture's patent covering its pay-per-click bidding technology.

FindWhat.com, of course, is fighting back. It has filed its own suit, saying Overture's patent was obtained improperly and is invalid.

What was interesting is that the article mentioned that FindWhat.com first received a letter from Overture in 1989 about its patent. I wonder which patent they're referring to, since the information regarding the current suit lists only 1 patent that was filed in 1999 (typo perhaps?). Anyways, assuming there's another, earlier patent, that is over 15 years in delaying action according to my calculations. What was Overture doing during this time?

Under the doctrine of Laches (a French word meaning slackness or negligence - a "sin of omission"), a patent lawsuit may be seriously hampered if there is an unexcused failure of a patentee to take action in a timely manner against a patent infringer. The reason for this policy is that excessive delay may put the defendant at a disadvantage: key witnesses may be no longer available, documents disappear, and memories fade. When laches is found, the patentee is barred from collecting damages accruing prior to the filing of the suit, but is still able to obtain an injunction barring the defendant from further infringement of the patents-in-suit.

Once the laches defense has been raised by the defendant, the plaintiff may still offer evidence that the delay either was reasonable or not prejudicial to the defendant. Ultimately, the burden of proving laches rests with the defendant, who must prove that there was an unreasonable delay in bringing suit and that this delay prejudiced the defense. However, a rebuttable presumption of laches arises when the patentee waits more than six years from the time when he or she discovered (or reasonably should have discovered) the infringement to file a lawsuit.

Estoppel, on the other hand, arises when an action of a patentee causes an accused infringer to believe that the patentee has abandoned any claim against him or will not take action. It may result when the patentee threatens to take action and then fails to follow up.

Estoppel is based on the reasonable reliance of the accused on the patentee's action. For example, the infringer considers the case closed and makes further investments into the ongoing business.

Estoppel typically occurs when the patentee writes to the infringer, describing the alleged infringement and requesting that the infringer either "cease and desist" or take a license. The infringer then either ignores the letter or sends back the usual response that they aren't infringing, and they will consider the matter closed unless they hear back from the patentee. If the patentee then fails to follow up, the infringer - logically - considers the matter finished. As a consequence of estoppel, the plaintiff may be estopped, i.e. barred, from enforcing his patent against this particular defendant.

What's going on here?

IS THIS LACHES OR ESTOPPEL (OR BOTH)? I noticed an interesting fact in an article describing the current legal woes of FindWhat.com. The company is currently embroiled in a patent lawsuit filed by Overture, now a part of Yahoo Inc (they certainly seem more aggressive nowadays, don't they?). The case is expected to go to trial next month.

Overture filed suit against FindWhat.com in 2002 in U.S. District Court in Los Angeles, contending FindWhat.com violated Overture's patent covering its pay-per-click bidding technology.

FindWhat.com, of course, is fighting back. It has filed its own suit, saying Overture's patent was obtained improperly and is invalid.

What was interesting is that the article mentioned that FindWhat.com first received a letter from Overture in 1989 about its patent. I wonder which patent they're referring to, since the information regarding the current suit lists only 1 patent that was filed in 1999 (typo perhaps?). Anyways, assuming there's another, earlier patent, that is over 15 years in delaying action according to my calculations. What was Overture doing during this time?

Under the doctrine of Laches (a French word meaning slackness or negligence - a "sin of omission"), a patent lawsuit may be seriously hampered if there is an unexcused failure of a patentee to take action in a timely manner against a patent infringer. The reason for this policy is that excessive delay may put the defendant at a disadvantage: key witnesses may be no longer available, documents disappear, and memories fade. When laches is found, the patentee is barred from collecting damages accruing prior to the filing of the suit, but is still able to obtain an injunction barring the defendant from further infringement of the patents-in-suit.

Once the laches defense has been raised by the defendant, the plaintiff may still offer evidence that the delay either was reasonable or not prejudicial to the defendant. Ultimately, the burden of proving laches rests with the defendant, who must prove that there was an unreasonable delay in bringing suit and that this delay prejudiced the defense. However, a rebuttable presumption of laches arises when the patentee waits more than six years from the time when he or she discovered (or reasonably should have discovered) the infringement to file a lawsuit.

Estoppel, on the other hand, arises when an action of a patentee causes an accused infringer to believe that the patentee has abandoned any claim against him or will not take action. It may result when the patentee threatens to take action and then fails to follow up.

Estoppel is based on the reasonable reliance of the accused on the patentee's action. For example, the infringer considers the case closed and makes further investments into the ongoing business.

Estoppel typically occurs when the patentee writes to the infringer, describing the alleged infringement and requesting that the infringer either "cease and desist" or take a license. The infringer then either ignores the letter or sends back the usual response that they aren't infringing, and they will consider the matter closed unless they hear back from the patentee. If the patentee then fails to follow up, the infringer - logically - considers the matter finished. As a consequence of estoppel, the plaintiff may be estopped, i.e. barred, from enforcing his patent against this particular defendant.

What's going on here?

REPORT FOR INVENTORS BEING PUBLISHED: HJ Ventures is publishing a report for inventors and entrepreneurs to help them protect their patents and intellectual property. The report is a useful glossary of terms used in the patenting industry, and has rather detailed descriptions of each of the terms. This would be a useful tool and reference for a GC or other similarly situated executive that is relatively new to patents, and would like to get up-to-speed quickly on the lingo. While I think the glossary is a tad bit cumbersome to use, the report uses "real-world" language to describe many of the terms and procedures that I think is helpful.

RIM SETTLES BLACKBERRY SUIT: I was particularly happy to see this news, as I have become, as of yesterday, a full-fleged member of the "CrackBerry" masses (thank you - thank you - it's nice to be here), and God knows I wouldn't want anything as insignificant as a hundreds-of-millions-of-dollars patent lawsuit to encroach on my happiness.

Anyways, Research In Motion has agreed to pay $450 million to NTP to settle a patent suit against the BlackBerry maker. The company said Wednesday that the settlement included $137 million already held in escrow, while the remaining $313 million would be expensed in the fourth quarter, which ended Feb. 26.

Unfortunatley, from the academic side of things, we will have to wait another time to see what the Federal Circuit will hold on damages for certain infringing activity occurring abroad. In the RIM case, it was held in the lower court that the plain language of section 271(a) does not preclude infringement where a system is used within the United States even though a component of that system is physically located outside the United States. According to the Court, the test is not whether the infringement took place within the United States, but whether "control and beneficial use" of the infringing system was within the United States. Thus, in RIM's case, control of the system and RIM headquarters were in Canada. End users, however, were located in the U.S. At a minimum, control and beneficial use of the BlackBerry system was located in both the U.S. and Canada.

- See Dennis Crouch's analysis here and here

USPTO BEGINS "THE BATTLE OF THE BACKLOG": The U.S. Patent and Trademark Office has begun a hiring spree to reduce an expected backlog of 580,000 applications by the end of the year. The Office will hire close to 1,800 patent examiners over the next two years, increasing its current staff of 3,800 examiners by 47 percent.

The patent office processed 304,921 applications last year, 187,170 of which received approval for patent protection (that's 61%).

The hiring project is part of a five-year plan the patent office has implemented to cut down on the time businesses and inventors must wait for a patent. The average wait is about 2½ years from the time a request is filed. But patents for computer technology and biotechnology products are often more complicated and can take up to five years.

YAHOO VS. XFIRE LITIGATION UPDATE: Online gaming company Xfire has countersued Yahoo Inc. in a legal battle over instant-messaging patents.

Yahoo previously had sued Xfire, alleging that Xfire's online messenger service infringes a Yahoo patent on technology co-invented by Chris Kirmse, who subsequently went to work for Xfire.

Yahoo claimed that once at Xfire, Kirmse began to develop, test and offer an instant messenger product that violated the Yahoo patent. Among other things, Xfire's product lets a gamer see if other players identified as "friends" or "buddies" are playing an online game.

In its answer and countersuit filed in federal court in San Francisco, Xfire denied Yahoo's allegations and asked the court to dismiss Yahoo's complaint.

Xfire also filed its own charges, alleging that Yahoo's lawsuit was an attempt to drive Xfire out of business or to force Xfire to sell or license its technology to Yahoo for far less than fair market value to settle the litigation.

Xfire, which said that Yahoo never sent the company the customary "cease and desist" letter before filing its lawsuit, also is seeking unspecified damages resulting from Yahoo's alleged unfair business practices.

Xfire said it generated less than $750,000 in revenue in 2004.

Yahoo, one of the Web's marquee names, reported 2004 revenue of $2.6 billion, excluding fees paid to advertising partners.

YAHOO VS. XFIRE LITIGATION UPDATE: Online gaming company Xfire has countersued Yahoo Inc. in a legal battle over instant-messaging patents.

Yahoo previously had sued Xfire, alleging that Xfire's online messenger service infringes a Yahoo patent on technology co-invented by Chris Kirmse, who subsequently went to work for Xfire.

Yahoo claimed that once at Xfire, Kirmse began to develop, test and offer an instant messenger product that violated the Yahoo patent. Among other things, Xfire's product lets a gamer see if other players identified as "friends" or "buddies" are playing an online game.

In its answer and countersuit filed in federal court in San Francisco, Xfire denied Yahoo's allegations and asked the court to dismiss Yahoo's complaint.

Xfire also filed its own charges, alleging that Yahoo's lawsuit was an attempt to drive Xfire out of business or to force Xfire to sell or license its technology to Yahoo for far less than fair market value to settle the litigation.

Xfire, which said that Yahoo never sent the company the customary "cease and desist" letter before filing its lawsuit, also is seeking unspecified damages resulting from Yahoo's alleged unfair business practices.

Xfire said it generated less than $750,000 in revenue in 2004.

Yahoo, one of the Web's marquee names, reported 2004 revenue of $2.6 billion, excluding fees paid to advertising partners.

JAPAN TECH FIRMS REVAMPING INVENTION REWARD SYSTEMS: With scientists and engineers growing more assertive about receiving monetary compensation, Hitachi Ltd., Toshiba Corp. and other leading technology companies are moving to retool their remuneration systems for worker inventions.

Several high-profile court trials (most notably Nichia's Blue LED case) have placed a new urgency on firms to comply with the revised Patent Law taking effect in April, and to make their remuneration systems more transparent and more acceptable. Companies are looking to revamp their systems in an effort to hold on to researchers and create an environment that effectively promotes the development of excellent inventions.

Hitachi has already introduced several measures, including an arbitration committee to handle cases when workers are unhappy with their remuneration for inventions. To be more transparent, the firm discloses the basis for its calculations and announces which workers have received the most remuneration.

Toshiba is introducing similar measures. The company has put its invention reward calculation rules on its intranet, and starting next month it will introduce a system so that workers can protest if they believe that they have not received proper remuneration for inventions.

Asahi Glass Co. has also established a system to deal with inventors who are dissatisfied with their remuneration. It has revised its reward payment system as well. Starting with patents that generate license revenues this fiscal year, Asahi Glass will pay remuneration equal to 2.5% of the license revenues. Until now, the payout was only 0.25% to 1% of the license revenues. Matsushita Electric Industrial Co. and Sharp Corp. are also studying changes to their systems.

BURSTING MICROSOFT'S BUBBLE: Software giant Microsoft on Friday agreed to pay $60 million to Burst.com Inc. to settle a patent-infringement suit alleging it had stolen Burst's technology for sending video and sound over the Internet, the two companies announced.

Burst had charged that Microsoft had met with it over a two-year period and negotiated unsuccessfully for the rights to use Burst’s innovative technology. Burst also said in 2002, that Microsoft’s newly announced “Corona” product used technologies and trade secrets misappropriated from Burst.com. These proprietary technologies were protected by numerous U.S. and International patents (and patents pending).

The patent infringement case against Microsoft was due to be heard in Baltimore, Maryland yesterday.

Burst.com and Microsoft on Friday announced that Microsoft has taken a non-exclusive license to Burst’s international patent portfolio, for a one-time license fee of $60 million dollars. The license is for use only by Microsoft in its own product and does not include sub-licensing rights. The patent license also settles the outstanding litigation between both companies.

Richard Lang, Burst CEO, said that Burst intends to use the net proceeds from the license to Microsoft, after attorneys fees, in primarily 3 areas:

1. To payoff, or reserve for, its current and long term liabilities (approximately $2.8 million), which includes promissory notes (secured and unsecured), outstanding payables, debts to former employees of the company and all accrued salaries and bonuses.
2. To Reserve a sufficient amount of operating capital to launch a vigorous ongoing enforcement of its patent rights against all infringing parties, as well as pursuing software licensing and other avenues available to the Company to maximize the return to Burst shareholders.
3. Distribute a substantial portion of its funds through a cash dividend to its shareholders of record. The dividend per share and date of record will be announced at a subsequent date.

Burst said that when it is available, it will publish the settlement agreement and Microsoft patent license on its website, www.burst.com, except for any confidentiality provisions which may exist.

Get ready, because it looks like Burst is ready to spread out a whole lot of number two . . .

MICROSOFT REITERATES CALL FOR REFORM: Microsoft recently called for reform of the US patent system in a speech by Brad Smith to a speech to the American Enterprise Institute in Washington, DC. Ironically, Smith claimed that the long-term health of the system is threatened by a "flood of patent applications" as well as an "explosion of sometimes-abusive litigation." While Microsoft certainly has not been litigious on the plaintiff's side, being one of the top patent filers certainly throws water on the theory that filing gobs of patent applications presents a "problem" for Microsoft.

Nevertheless, Smith outlined proposals to reduce "abusive" patent litigation, create "more consistency among international patent systems [and] eliminate patent filing fees for individual inventors and small firms", and he also called for more consistent funding for the US Patent and Trademark Office leading to "more quality in the patent process".

Perhaps the most notorious patent dispute involving Redmond is its spat with Eolas regarding "a method of opening third party applications within a browser".

The case saw Microsoft slapped with a $565m penalty for allegedly infringing an Eolas patent. However, the US Court of Appeals last week sent the case back for a new trial. A delighted Redmond says it will "now be able to tell the jury the whole story of how this technology was developed and to present evidence that shows that Eolas did not invent this technology, and that it was developed by others"

CHINA'S INTERNATIONAL PATENT OUTPUT INCREASES: The number of patents filed under the PCT hit a new record last year with sharp increases from Japan, South Korea and China, a senior U.N. official said Wednesday.

Some 120,100 patents were filed last year under the Patent Cooperation Treaty, said Francis Gurry, deputy director general of the World Intellectual Property Organization.

Patent filings through WIPO have been rising steadily since the treaty system began in 1978, with a total 1 million applications since then. In 2003 there were 115,142 filings.

The most impressive growth, however, came from China, where patent filings rose 37.8 percent to 1,782. Although this represents just a tiny slice of total global applications - and of the 250,000 domestic patents filed in China last year - it is a clear sign that Chinese companies are going global, he said.

"The explanation is essentially that China's enterprises are now operating increasingly in export markets," said Gurry. "I'm sure that over the next five years the number will explode."

LET THE CLUCKING BEGIN! The press has been eagerly noting reactions from our EU friends since the EC adopted the software patent directive. And - surprise! - almost all of it is negative. And it's not your garden-variety negativity you'd get from a disgruntled advocate; it's more of a "get-out-the-tinfoil-hats-because-the-invasion-is-about-to-start" anger that has completely enveloped the more socialist elements in EU software circles:

"I do hope this is an error, and wishful thinking from the EC . . . If it is true then it is a very sad day for Europe and the World. The people responsible for this are criminals, the fact that it is white collar crime doesn't make it any better."

"With one hand they fine Microsoft £500m. With the other they give them the means to make £500bn," said Steve J, describing himself as a "soon to be poor software developer"

"Allowing software patents in Europe would basically allow the US to walk all over any European business." Chief technology officer Bill Franklin added: "OSS development is now going to be spearheaded in the third world."

"The sheer ignorance of using US patent protection and the word 'healthy' in the same sentence is repulsive," said Marcus Widerburg, "Seriously, I dont think anyone in the software industry with any insight would think [that the U.S. software industry is 'healthy']"

Horrors! But the most interesting thing I noted was a quote, highlighted by the staff at ZDNet.uk, analogizing algorithms to common tools used by skilled artisans:

Some readers explained their opposition so eloquently, it seems hard to believe the EU could ever support the directive: "Imagine a plumber not being able to use a clockwise turn with his spanner to tighten a leaky pipe due to the 'clockwise turn' being patented by a large international plumbing firm," said a systems engineer. "Or what about a carpenter not being able to hammer in a nail as 'hammering' had been patented by a large international carpentry firm. Make no mistake, when things as elementary as a progress bar can be patented, we ARE talking about this level of impact for small to medium business that are unable to afford to play the patent game. What's worse is that if this IS passed, any one piece of software may well cross over dozens of patented ideas."

Well, it's a valid concern in principle, but hardly a new sentiment that hasn't been addressed before, at least in the US courts. In Gottschalk v. Benson, Justice Dougles (hardly a cheerleader for software patents) rejected a BCD-to-binary conversion algorithm as patentable subject matter, stating that "[p]henomena of nature, though just discovered, mental processes, and abstract intellectual concepts are not patentable, as they are the basic tools of scientific and technological work." However, “[w]hile a scientific truth, or the mathematical expression of it, is not a patentable invention, a novel and useful structure created with the aid of knowledge of scientific truth may be.” Thus started the 30-year journey for US patent law to rationalize, and finally recognize, software patents as statutory subject matter.

Welcome to 1972, ladies and gentlemen . . .

USPTO UNVEILS 3 INITIATIVES TO IMPROVE PATENT PROCESS: The Director of the USPTO, Jonathan Dudas, announced a three-part initiative to improve the agency's processes for handling patent applications. The initiative was announced at a March 4 press briefing in Chicago.

(1) The first change to be implemented is a pre-appeal-brief conference to be held after an unsuccessful patent applicant has filed a notice of appeal, signaling their intent to challenge the examiner's rejection of the patent at the PTO's Board of Patent Appeals and Interferences. Before the applicant files a brief in the appeal, the PTO will convene a conference of three examiners--the examiner assigned to the application, that examiner's supervisor, and a senior examiner--who will review the file to decide whether to maintain the PTO position, or instead to allow the patent or reopen the application for further prosecution. Applicants will be required to request the conference in writing, identifying the rejections that they intend to challenge, and the reasons for those challenges. If the PTO decides not to contest the appeal, this intermediate reassessment of the case could spare the applicant the unnecessary expense of the appeal brief. For example, appeal briefs cost an average of $5,000 per case. The savings overall from the 9,000 appeals filed annually could amount to $30 million. Avoiding the need for briefing in complex appeals could produce even greater savings.

(2) The second component of the PTO's planned improvements is to "clean up" the backlog of pending ex parte patent reexamination cases. The agency will accomplish this goal by instituting a new panel review process, similar to the pre-appeal-brief conference, to consider each reexamination action on its merits. The panel, made up of senior and supervisory examiners as well as a reexamination specialist, will produce a "second office action" in each case that will be a final ruling on the merits.

(3) The third component is the search for prior art that is part of the patent reexamination process. To be an aide and improve the reliability of the patent search, the PTO will develop a "search template" for each of the more than 600 classes of patents in the PTO system. The references that comprise the search templates will be drawn from U.S. patents, foreign patents, and non-patent literature. The PTO hopes to produce the first templates for public comment by July. Such a search grid is already available in the business method patent Class 705. This augmented search tool will also assist the PTO in its hiring of contractors for the pilot outsourcing project underway for PTO searches, and it will let the other two trilateral patent office members--the European Patent Office and Japanese Patent Office--know what the PTO regards as relevant prior art.

ON TO THE EU PARLIMENT: (CNet) The EU Council has finally approved a proposal on software patents, despite opposition from numerous software developers and some European countries.

The European Council adopted the software patent directive on Monday, despite requests from Denmark, Poland and Portugal to reject the directive.

An EU Council representative said Monday morning that the Computer Implemented Inventions Directive had been adopted but was unable to give more details.

As it now stands, the directive would legalize software patents. Supporters say the directive would protect research and development investments by European companies. Opponents say it would stifle innovation.

Last week, it was reported that Denmark would attempt to have the directive listed as a B-item, rather than an A-item, allowing the text to be renegotiated.

The Luxembourg minister acknowledged that Denmark, Poland and Portugal would have preferred the directive to be listed as a B-item, according to Mueller. The directive now moves to the European Parliament, which can reject or amend the proposal, for a second reading.

NOT SO FAST! (ZDNet) The EU software patent directive was scheduled to be adopted next Monday, but a last-minute move by Denmark could now derail the process. Opponents of the Computer Implemented Inventions Directive are set to launch a last-minute intervention to try and prevent it being adopted by the European Council.

The directive, which many claim will allow the widespread software patenting in Europe, is scheduled to appear on the agenda of a meeting of competition ministers on Monday 7 March.
As an A-item, the directive had once again been expected to be approved without debate, but it emerged late on Friday that Denmark will attempt to have the directive listed as a B-item at a later meeting instead. This means the text of the directive could be renegotiated.

Denmark's representative at the meeting of ministers is compelled to ask for the change because of a vote by the Danish Parliament's EU committee that came out in favour of seeking to reopen discussions. Denmark's government is legally bound to adopt any parliamentary decisions regarding the EU.

Denmark's move could provoke a domino effect, encouraging other countries such as Poland and Spain -- who have concerns about the directive -- to also push for renegotiation.

THE AFTERMATH OF INDEPENDENT INK v. ILLINOIS TOOL WORKS: The decision in this case, decided last month in the Federal Circuit, increased the risk of antitrust tying claims against patent holders who condition the purchase of a patented product on the purchase of an unpatented product. As summarized in Dennis Crouch's Patently-O Blog, Trident, a wholly-owned subsidiary of Illinois Tool Works, manufactures printheads and owns U.S. Patent No. 5,343,226 covering the technology. The ‘226 patent discloses an ink jet device and a supply system with a hand actuated peristaltic pump. Trident also manufactures ink for use with the patented printheads. Although the ink is not protected by any of Trident’s patents, their standard license agreements grant the right to “manufacture, use and sell… ink jet printing devices…” to other printer manufacturers only “when used in combination with ink and ink supply systems supplied by Trident.”

The Federal Circuit held that Illinois Tool's patent covering its printheads "presumptively defines the relevant market as the nationwide market for the patented product itself" and "creates a presumption of power within this market." The court further held that Illinois Tool failed to rebut the presumption because it did not present sufficient evidence (e.g., expert testimony) that the boundaries of the relevant market extended beyond its patented printhead. In doing so, the court specifically rejected the notion that a patent creates an irrebuttable presumption of market power.

So what's a patentee to do? Danielle Fitzpatrick provides three considerations for businesses that are considering tying non-patented products to their patented products:

1. The court indicated that the presumption arises "when the tying product is patented or copyrighted." Therefore, both patent holders and copyright holders should take stock of sales practices.
2. The decision makes it easier to bring an antitrust tying claim where a patent or copyright holder links the sale of patented and unpatented goods. This may result in more tying claims under Section 1 of the Sherman Act, although the litigation of those claims will likely not change significantly.
3. Presumption or not, all patent and copyright holders who condition the sale of a patented product on the sale of an unpatented product (or are considering doing so) should undertake at least a preliminary analysis of the relevant market. A decision to tie products or services to patent rights or patented products raises serious antitrust concerns and should always be carefully reviewed by antitrust counsel. Even if the patent holder does not enjoy market power, it must nevertheless weigh the risk of antitrust litigation (which is widely recognized as one of the most expensive and time-consuming types of litigation) against the benefits of the sales practice.

INFINEON - BACK IN THE SADDLE AGAIN: Shortly after disposing one of Rambus' infringement suits, Infineon now finds itself (along with Micron) defending a patent infringement suit brought by Tessera Technologies Inc., who is charging that the companies infringed upon Tessera's IP for packages used to house memory and other semiconductor devices.

The suit, filed in the U.S. District Court for the Eastern District of Texas, revolves around packages used for dynamic random access memory (DRAM) devices, confirmed Doug Norby, senior vice president and chief financial officer for Tessera.

Tessera settled a patent suit last November with Samsung Electronics Co. Ltd. of Korea involving multi-chip packages. Tessera ended up licensing its packaging IP to major semiconductor suppliers.

In the past, Tessera has also tangled with Texas Instruments Inc. and Sharp Electronics Corp. of Japan in packaging IP disputes.

• TiVo TRIES PLAYING THE PATENT CARD: In recent years, TiVo has been hounded by competitors, seeking to take a bite out of the innovative company's DVR technologies. The market has been speculating that TiVo is all but doomed to be sold to a media/electronics giant such as Sony and Time-Warner by year's end, due to the stiff competition.
  
  In response, TiVo has been rolling out some interesting new features for their services, and have been placing a greater emphasis on their patent portfolio as a possible precursor to becoming a licensing entity.
  
  However, as is often the case, convincing the market that your patent portfolio has significant value is a difficult and complicated process. Taking into consideration that TiVo's portfolio hasn't been seriously tested yet in the courts, many pundits have been left speculating just how powerful the patents really are. One research analyst commented:
  
  

  "It's hard for us as outsiders to look at how much value there is in the patents . . . everyone is thinking about this from the perspective of whether or not TiVo can license the patents or whether or not TiVo can effectively keep competitors at bay because of their intellectual property. We are all curious."

The PVRBlog took a quick look at one of TiVo's newest patents, and correctly noted that the patent bears an uncanny resemblance to a feature described in Microsoft's Windows Media Center. Is a showdown ahead? If so, it will be a doozie . . .

THE NEXT PUSH BEGINS - (Reuters) European Union President Luxembourg expects the bloc's ministers to approve a controversial draft law on patenting computer-based inventions on Monday, a Luxembourg official has said.

The decision would mark a victory for advocates of patenting some computer software, notably big firms such as Microsoft and Nokia, against many small companies, which fear the planned law would push them out of the market.

The ministers' approval of the draft law would send it to a second reading -- the phase in which it is more difficult for the sceptical EU Parliament to push through amendments.

FEDERAL CIRCUIT ORDERS NEW TRIAL IN EOLAS V. MICROSOFT CASE: Dennis Crouch of Patently-O gets the scoop on the decision by the Federal Circuit to order a new trial in the $500 million dollar blockbuster. The court found that the district court improperly granted judgment as a matter of law (JMOL) in Eolas’ favor on Microsoft’s anticipation and obviousness defenses and improperly rejected Microsoft’s inequitable conduct defense -- and thus vacated the district court’s decision and remanded for a new trial on these issues. The CAFC also affirmed the district court's claim construction and related jury instruction.

I'M NOT SURE WHAT TO SAY . . . (Use BugMeNot for subscription access) From constipation to cancer, diarrhea to diabetes, they offer to cure nearly everything -- with medicines made from cow urine. India's Hindu nationalists, who were ousted from power last May, have a new job: promoting cow products that many Indians believe have great therapeutic value.

A stall at the headquarters of the main opposition Bharatiya Janata Party showcases more than two dozen tonics, potions, pills and a line of cosmetics. The products are sold under the brand name Goratna, or "jewels of the cow."

The Goratna offerings use five key cow products -- butter, milk, curd, urine and dung. Purushottam Toshniwal, the general secretary of the cooperative that manufactures the cosmetics, said workers there followed a "solid scientific process" based on India's ancient herbal remedies, known as ayurveda.

The science and technology minister in the previous Hindu nationalist-led government pushed officials to file an application with the U.S. Patent Office for a patent on cow urine distillate. The patent was granted in 2002.

"Even in the United States, they now recognize the worth of cow urine," Toshniwal said.

umm, no they're not . . .

BLAMMO! JUDGE DISMISSES RAMBUS SUIT AGAINST INFINEON: In a case that was closely watched on this blog, Judge Robert Payne of the U.S. District Court in Richmond, Va., dismissed all of Rambus's remaining patent claims in the case, after it was found that Rambus' "misconduct" in handling documents and presenting evidence. The ruling came just before the claims were to be heard at trial.

Rambus, of course, vows appeal.