USPTO ANNOUNCES NEW REEXAMINATION UNIT AT THE USPTO: The U.S. Department of Commerce’s United States Patent and Trademark Office (USPTO) has implemented new processes for handling reexamination proceedings to improve timeliness and quality. Patent reexamination is a valuable, low-cost alternative to litigation for determining the patentability of the claims in an issued patent. Requests for the USPTO to reexamine a patent can be made as long as written evidence is presented that raises a substantial new question of patentability.

The USPTO’s goal is that reexaminations that have been pending with an examiner more than two years now will be resolved by October 1, 2005.

In addition, all future reexamination proceedings will be completed within a specific timeframe, which is expected to be less than two years.

In March 2005 there were over 420 reexaminations that had been pending more than two years and that number would have grown to over 600 by the end of September 2005. Today, fewer than 360 cases remain, with nearly half in the final stages. To ensure the quality of these proceedings, all reexamination decisions now require a thorough review by a panel of supervisors and senior patent examiners.

Reexaminations where an initial decision has been made will remain with the examiner originally assigned to the reexamination. All other reexaminations will be reassigned to a newly formed central reexamination unit.

Prior to the new initiative, reexamination cases were assigned to examiners according to technology. Under the new initiative, 20 highly skilled primary examiners who have a full understanding of reexamination practice and relevant case law will concentrate solely on reexamination.

The 20-examiner unit began operation earlier this week and all new requests for reexamination will be assigned to them. Using skilled examiners assigned to a single unit will enhance the quality and reduce the time of reexaminations by allowing the USPTO to monitor more effectively the reexamination operations.

SOME TIPS FOR COMMENTATORS TO KEEP CALM WHEN READING PATENT APPLICATIONS: After perusing through some technical journals and magazines recently, it would seem that many of the commentators (usually the open-source types) enjoy the sport of perusing patent publications via the USPTO web site, spotting a few applications with really broad claims, hope that the patent belongs to a Microsoft, Amazon, Google, etc. - and then roll the application into a cylinder with which the commentator beats the readers over the head with.

The latest example is Google's patent application for embedding advertisements into syndicated RSS and Atom feeds ("Embedding advertisements in syndicated content" - US Pub 20050165615) . This technology is apparently related to Google's efforts (at least since April of this year) to provide contextual ads for feeds. Of course, Google isn't the only one interested in this - companies like Pheedo and Kanoodle have been doing it for a while as well.

The problem here is that, when you read the claims in Google's application, you either begin laughing, or crying, depending on your circumstances and/or disposition:

Claim 1. A method of generating information including targeted ads, the method comprising:

receiving information in a syndicated format;

receiving a first targeted ad from an automated ad server system;

combining the first targeted ad with the received information to generate a set of response information which is also in a syndicated format.

Ridiculous, right? (Never mind that "and" was not inserted before the last limitation as is required in proper claim formatting).

Well, not really.

Just about every practitioner knows that when you are entering prosecution, you claim the subject matter as broad as you possibly can. Think of it as a bargain for the sale of a good: when you make your initial offer for sale, you don't start out negotiating with a price you think may be "fair" - you ask for the highest possible price that someone would reasonably pay. In all likelihood, a potential purchaser would respond to your offer with a lowball counter-offer, you come back with a lower price, and so on, until a final purchase price can be agreed upon, if at all.

Same thing goes for patent applications (at least in an ideal world): Applicant claims the most basic features (i.e., the broadest) of a core technology, while the Examiner uses the prior art to force the applicant to add additional limitations into the claim language. Ultimately, (remember, I'm still in the ideal world here) a reasonable compromise is made, and the application issues as a patent with circumspect features added into the claims.

Of course I know that mistakes are made, examiners don't properly search or analyze the prior art, and bad patents are ultimately issued. But contrary to some of the commentators out there, I don't believe this to be happening as often as people like to think (not in an egregious way, anyways).

Which brings me to my tips:

Tip #1: Expect the application to have a first set of claims that are on the border of the "laugh test." It's not the applicants job to initially limit the claims - that's what the Examiner is charged with doing.

Tip #2: Just because they are asking for it, doesn't mean they will get it.

Tip #3: If you really want to be productive, don't just say "here's another patent on something we've been doing for years," and leave it at that - if it's that obvious, find the documentation that supports your assertion and post it on your site. You will be astounded at how popular you will quickly become.

USPTO PLACED IN "ARRESTING" POSITION: According to conversations with USPTO people, as well as a USPTO Weekly e-mail distribution, the arrest of a patent examiner is not a new thing. A "small number" of people (my sources tell me 3 examiners) were arrested previously while at work for "embezzeling" from the USPTO.

According to the USPTO Weekly, City of Alexandria police have arrested employees (not necessarily examiners) with outstanding criminal warrants for activities unrelated to the USPTO. They have also arrested employees accused of defrauding the government by the Department of Commerce's Office of the Inspector General (OIG). The Federal Protective Service arrested those accused of theft from USPTO employees.

No USPTO employee has made an arrest. Representatives from USPTO's Office of Security are alerted that an arrest will take place just as the law-enforcement officials arrive at our buildings. A representative from USPTO's Office of Security typically accompanies the officers.

A more interesting question raised was why have USPTO employees accused of a crime been arrested at work? According to the Weekly, law-enforcement agencies decide where to make arrests. Evidently, for criminal charges stemming from alleged wrongdoing at work, the workplace has been the venue for arrest. But for whatever reason, criminal charges stemming from alleged wrongdoing outside the Office, some law enforcement officials have made a decision to arrest USPTO employees at work as well.

Maybe it's the "new office smell" in the recently-built Alexandria offices . . .

WIPO ANNOUNCES NEW WEB PORTAL FOR PATENTS: WIPO launched a new portal on its website in mid-July for patent-related information and services concerning the international patent filing system (Patent Cooperation Treaty (PCT) System) at www.wipo.int/patentscope/.

The new portal centralizes all WIPO’s patent and PCT-related activities to provide users with better services. Existing information on PCT filing, electronic filing and other patent-related
resources is available through this new portal as well as new sections on patent data and statistics. The patent data section provides access, through an enhanced PCT Electronic Gazette, to the complete collection of published PCT International Applications – now more than a million – from 1978 to the present day in image format and with fully searchable description and claim texts for applications filed as from July 1998.

According to WIPO, the portal will form the basis for new services that will be made available in the coming months, such as an online file inspection system for applicants and the general public, tutorials and other resources for patent information retrieval.

EBAY TURNS TO THE SUPREME COURT FOR HELP ON INJUNCTIONS DURING APPEAL: eBay has petitioned the U.S. Supreme Court to hear an appeal on whether eBay and other companies held liable for patent infringement should be routinely subject to injunctions while such cases are on appeal.

eBay and its Half.com subsidiary urged the Supreme Court to consider the matter, saying the stakes go beyond the interest of patent infringement defendants.

eBay alleges that their case presents "an important question of federal patent law with significant implications for the nation's economy." The petition argues that permanent injunctions exact too high a price from defendants, where an enjoined defendant is faced with 3 tough options: redesign its product or the product's functionality to eliminate reliance on the patent, negotiate a license on possibly onerous terms, or cease production or use altogether.

Coincidentally, the issue of patent infringement injunctions is currently before the U.S. Congress as it seeks to draft patent reform legislation. Computer technology companies like eBay, which perpetually face the possibility they might be infringing myriad patents in the course of their business, want Congress to clarify existing rules they say give district court judges discretion (35 U.S.C. section 283) in deciding whether to issue injunctions while patent cases wend their way through the appeals process.

"The Federal Circuit has decided to ignore this rule," eBay wrote.

[Blogger Note - the Federal Circuit left open the possibility of a permanent injunction during the MercExchange appeal]

In an interesting twist, the pharmaceuticals industry, wants to uphold the recent federal circuit court decisions (the same one eBay is appealing) which say injunctions against patent infringers should be standard during appeal except in extraordinary circumstances. Pharmaceuticals and biotech companies tend to face fewer patents in the course of developing a particular product.

FIRST-TO-FILE PITCHED TO CONGRESS: Yesterday, Gerald Mossinghoff (former USPTO Commissioner) and Marshal Phelps (Microsoft's deputy general counsel for IP) provided written testimony to the U.S. Senate Judiciary IP Subcommittee, arguing that harmonizing America's patent system with laws in the rest of the world is a top priority. And in light of the fact that the U.S. is the only country that uses a "first to invent" system instead of "first to file," many of the institutional businesses claim this causes complications when adopting a global patent strategy.

The idea of switching the U.S. system to "first to file" received a conditional endorsement from a group of higher education associations, including the Association of American Universities (AAU).

"The harmonization and clarity brought by a first-inventor-to-file process would provide significant benefits to the U.S. patent system, as well as to universities," said University of Rochester Provost Charles Phelps, who spoke on behalf of the AAU, the American Council on Education, the Association of American Medical Colleges, and the Council on Governmental Relations. He said if the U.S. does make the switch, the university research community would want to retain several key aspects of the current legal system that gives researchers flexibility in how they can commercialize their discoveries.

Personally, I'm not sure if I'm completely sold on "first-to-file". There's no question that that it's easier logistically - either you filed first, or not - and it would be nice to be in-step with the rest of the world in this regard. And I don't buy the fact that small entities can't "react" as quickly as the large companies. In many cases, smaller companies are quicker to file core patents, and typically have less bureaucracy to stand in the way.

However, I think the practical effect of this on the PTO could be a potential nightmare. For one, first-to-file would almost certainly smother any existing improvements to patent quality. Also, it would be easy to see a "second flood" of patents by applicants over-compensating for the uncertainty of a new system, and filing scores of half-baked applications in the fear that, should they delay filing by just one day, someone else may patent the subject matter. If you thought the USPTO is currently overwhelmed, you haven't seen anything yet when first-to-file walks through the door . . .

USPTO QUIETLY INSTITUTING "THIRD SET OF EYES" REVIEW: Patent supervisors in May informed examiners that the USPTO was immediately instituting a "third-pair-of-eyes" review of all allowances, due to an unacceptably high error rate in allowed applications corps-wide so far this year. Supervisors also told employees that if examiners show more than 31 additional patentability errors before the end of the fiscal year, the USPTO will fail to meet its own error goal. The agency issued no written notice of this change and informed only some art units, not all.

USPTO EXAMINER ARRESTED FOR TIMESHEET INFRACTIONS: In a seemingly bizarre story, the Patent Office Professional Association (POPA) is reporting that a patent examiner was handcuffed and arrested at the USPTO June 2 for the charge that he allegedly did "embezzle funds by submitting false hours of employment, such funds belonging to the U.S. Government and having a value of $200 or more," according to the arrest warrant. This marks the first time in known USPTO history that an employee has been arrested and criminally charged by local police for a workplace time or attendance infraction.

The USPTO is alleging that the embezzlement took place between February and September 2004. The agency first discussed the problem at an investigatory interview with the employee in January 2005. The agency has not clarified why it waited many, many months after these problems began to begin addressing them. Unexplained is the total absence of progressive discipline, which is the usual course for employee infractions.

The USPTO is basing its case on the ID card-in, card-out time records it keeps on employees at its new Carlyle campus.

At the investigatory interview the USPTO suggested that if the employee paid back the time, it would take that into consideration when determining consequences. The employee was working 10 hours per pay period of voluntary overtime specifically to that end. Two weeks after the investigatory meeting, two Office of the Inspector General (OIG) representatives visited the employee.

Though the examiner requested his right to consult with union counsel, the OIG reps denied that request, which is considered a gross violation of his statutory rights according to Supreme Court case law. At that meeting, the OIG reps stated that the examiner had to sign papers confirming that he was absent for specific hours. The employee and the union received no copies of those papers.

On June 2, the examiner's supervisor told the examiner that someone wanted to talk to him at the guard's desk. When he went down, OIG special agents handcuffed him and immediately turned him over to Alexandria police, who charged him with a felony, took him to jail, and released him on bail. He is awaiting trial. While POPA does not condone employees claiming pay for work not done, the union is dismayed at the extreme action taken by the agency.

UPDATE: From the Just an Examiner Blog, an Examiner posts additional information on the situation - according to the post, the fraud was quite massive in scale, and the action was taken by the IG office, which is not part of the PTO and does not answer to PTO management.

BOSTON HERALD GOES OVERBOARD ON PATENTS: An editorial, published in Sunday's Boston Herald, claims that the US patent system is a "mess." The problem? Bad patents.

Now, I'm not going to defend some of these patents, such as Smucker's attempt at patenting a peanut butter and jelly sandwich on crustless bread with the edges crimped together (which, incidentally, was subsequently invalidated by the USPTO). Also, to the Herald's credit, they didn't blindly cite the "one-click patent," like every other article has done, as an example of a patenting system run amok. However, the editorial is overly cynical, and is almost disingenous in its analysis of current problems at the USPTO.

For one, the editorial suggests that the USPTO has somehow "rigged" the system to rubber-stamp applications in a subversive effort to collect fees from applicants:

In 1982, the U.S. Patent and Trademark Office was told to cover its costs from the fees it takes in with applications and for maintaining patents in force (now about $1 billion a year). About 10 years ago, it started coming under pressure to produce revenue for the Treasury above its own needs.

For one, the USPTO wasn't "told" to cover its costs - it was actively seeking a fee-based system (the commissioner at the time, Gerald Mossignhoff, has openly talked about this on numerous occasions). The idea was that, if the USPTO went to a fee-for-use regime, the Office could more actively control the management of patent applications, and wouldn't have to go hat-in-hand to Congress to compete with thousands of other interests seeking tax dollars. However, the subsequent "pressure" felt at the USPTO over fees was due to the fact that Congress started dipping its hand into the USPTO till and diverted hundreds of millions of dollars that applicants paid for the examination of their applications.

Also, this statement really bugged me:

Examiners are considered productive if they approve applications. A rejection produces no continuing maintenance fees.

I know of no USPTO policy that remotely encourages Examiners to allow patents simply for the sake of issuing patents. Examiners are just as "productive" if they reject all the applications they examine. For those of us that prosecute extensively before the USPTO, there is the annoying phenomenon of patent "churning" - where certain Examiners reject applications in an attempt to provoke RCE's, which the Examiners also receive counts for. Even in cases where applications are putatively in condition for allowance, a few examiners will maintain a final rejection to force the applicant to file an RCE (count 1), whereupon the Examiner subsequently issues a Notice of Allowance (count 2).

Finally this:

Harvard Business School Professor Josh Lerner testified to a House subcommittee on intellectual property that all parties have an incentive to ``invest in abusing the system,'' for inventors are ``induced to make marginal applications by the likelihood of success'' - 85 percent of 350,000 annual applications will be approved. Holders of the many marginal patents can then use them to force others to pay royalties they shouldn't have to, or even to stay out of the field.

I'm assuming here that the term "marginal" is being used as a substitute for "obvious." But obvious as compared to what? It seems that you can take just about any recently-issued patent (that was filed 3-5 years ago) and place it in front of a person skilled in that art, and they will likely tell you "oh, we've been doing that for ages! I can't believe they got a patent on that!" If one scours the Slashdot message boards, for every issued patent, there is someone claiming to have practiced the same subject matter at least 10 years before the filing date. But once you ask for documents or other similar evidence of conception or reduction to practice, the story usually changes. I don't doubt the sincerity of people (rightfully) questioning the validity of some of these patents, but I think that some people's perceptions are a tad askew with the reality surrounding some of today's issued patents.

And the 85% allowance rate? Where did that statistic come from? I've seen it as low as 60%, and as high as 90%, but there have been different methodologies for establishing allowance rates for patents per year, and most of them fall well below the 85% rate cited in the editorial. I'd be curious to see which study produced that number . . .

PROFESSIONAL INVENTOR'S ALLIANCE FIRES SHOT OVER FIRST-TO-FILE: the Professional Inventors Alliance USA has launched an aggressive lobbying campaign to ensure the recently drafted "Patent Reform Act of 2005" never makes it to the House Floor for a vote. The U.S. Senate has scheduled a Hearing for the bill on Tuesday, July 26 and the House of Representatives has scheduled a Markup on Thursday, July 28.

The big problem according to the group is the controversial provision that would replace the United State's current first-to-invent standard with the European first-to-file model. According to the group, a first-to-file provision would seriously undermine the ability of small entities to compete with large entities in terms of patent protection. Also, several legal experts questioned whether a first-inventor-to-file system would be constitutional in light of the Constitution's requirement that Congress reward "inventors."

IS IT ALWAYS MONDAY MORNING AT THE USPTO? Shiny new headquarters in Alexandria, a 10-story atrium, and perks such as fitness and child-development centers don't seem to be enough nowadays to keep employees happy at the USPTO. Observers are noting that a troubling exodus of patent examiners from the agency is currently underway.

Some attribute the exodus to a culture of poor employee/ manager relations that a recent Government Accountability Office report highlights. Others say the problems are deeper and won't be fixed without restructuring the agency and the standards for awarding patents.

"I don't think I've ever seen a time when, in a concentrated two- or three-week period, I've heard about as many people either having left or planning to leave as I have now," said Ronald Stern, president of the Patent Office Professional Association, the union representing patent examiners.

Stern said that strained employee/manager relations at USPTO stem from managers who "don't respect the input and advice they get from their employees." A related cause is patent examiners' discontent with what they say are unreasonable production quotas that examiners must work overtime to meet. "This is a legal sweatshop here," Stern said. "The truth is we could do a better job with more time."

Jason Schultz, a staff attorney at the Electronic Frontier Foundation who specializes in intellectual property issues, said the GAO report officially confirmed what he already knew about USPTO and its patent examiners.

"The incredible surge of patent applications, especially in the software and Internet business method arena, is just crushing them, and the management problems are rising to the surface with greater visibility for those reasons," Schultz said. Under current rules, "where anything under the sun is patentable, it puts an unbelievable amount of pressure on the patent office," he added.

The agency's recent automation projects have been helpful but have not eliminated the greater time demands associated with complex technical patents, Stern said. "Some of the software that has been developed is not the friendliest," he said. "Hopefully, that will be changed."

THE NEW PATENT GOLD RUSH: While in the late 90's to early 2000's a lot of people were interested in simply getting patents to establish a portfolio, now it seems people are back to obtaining patents, except they appear to be more focused on what they can actually do with the patent once they obtain it. Also, some of the broadest patents obtained during the original "boom" days were collecting dust since "the bust," and more and more companies are keen on snatching up these patents on the cheap.

According to CNET, Companies such as Forgent Networks and Intellectual Ventures, an incubator company co-founded by former Microsoft Chief Technology Officer Nathan Myhrvold, are rapidly expanding their patent portfolios, both by buying patents and coming up with ideas that can be broadly licensed. One of the latest entrants in the intellectual-property field is Applied Minds, a company funded by the Silicon Valley venture capital firm Kleiner, Perkins, Caufield & Byers. Applied Minds comes up with product ideas and then works with established companies to bring them to market.

Kent Richardson, who is the vice president of intellectual property at Rambus, an intellectual-property company thinks that patent work is no longer a defensive insurance policy, but is part of the product offering. And depending on the circumstances and the clout of the players involved, the stakes can be astronomically high.

For example, when Forgent reviewed its portfolio and came across U.S. Patent No. 4,698,672, which it obtained when it acquired Compression Labs in 1997. The patent purportedly gave Austin, Texas-based Forgent the rights to the JPEG method for compressing digital video images.

In the last three years, the company has received more than $100 million in fees from Adobe Systems, Macromedia and others. A pending lawsuit against dozens of defendants, including Dell, and pending licensing deals could boost total royalties from the patent to $1 billion. Last week, Forgent filed a lawsuit against 15 more companies, saying it has the right to collect royalties on digital video recorders, or DVRs.

Acacia Research (a favorite of this blog) has collected more than 120 patents, signed hundreds of technology-licensing agreements and filed several lawsuits on patents relating to, among other ideas, electronic bar codes, credit card fraud, video-on-demand services and chips for setting parental controls on TV use.

Another example is Picture Marketing Inc., which claims to hold a patent for embedding photos in electronic messages sent for marketing purposes. The company plans to seek to collect royalties from companies that send (or have been sending) advertising e-mails that contain pictures. The patent was obtained in the late 1990s.

Intergraph was a flailing workstation manufacturer when it filed an antitrust suit against Intel. After that failed, the company pursued claims that Intel chips infringed on Intergraph's Clipper processor patents, resulting in settlements and verdicts that have thus far totaled $675 million and royalties that will continue to 2009.

According to Nathan Myhrvold, the attitude toward patents was forged in part by the particular history of the tech industry, where the rewards often have gone not to inventors, but to the companies that exploited the inventions best. IBM invented the relational database, but Oracle commercialized it.

"In computing, there has been a strong sense that patents were not the fundamental secret of success of most of the big companies," Myhrvold said. "Now they view patents as this very weird, evil, bizarre thing."

WHAT'S WORSE - GLOBAL WARMING, OR PATENT HOLDING COMPANIES? According to this editorial/blog in ZDNet, it's the latter. Truth be told, I read this article twice, and I still don't have any idea what they're talking about. I mean, I get the not-so-subtle jabs at Myhrvold and Schwartz, but there must be a better way to communicate than this.

ANTI-SOFTWARE ACTIVIST AWARDED "MOST INFLUENTIAL" AWARD: Managing Intellectual Property Magazine, which boasts a large readership of "senior in-house counsel in multinational companies", has listed anti-software harpie Florian Mueller, the founder of NoSoftwarePatents.com, in its annual list of the 50 most powerful people involved in intellectual property.

The list also includes Wu Yi, the Chinese vice-premier; Francis Gurry, the deputy director-general of the World Intellectual Property Organization; Alain Pompidou, the president of the European Patent Office; EU Commissioner Charlie McCreevy; Marshall Phelps, the head of IP at Microsoft; and James Dyson, the inventor of the bagless vacuum cleaner.

I suppose being "powerful" doesn't mean you necessarily know what you're talking about. Mueller and his ilk have the ad hominem wing of the CII debate cornered with their incessant shrieking over the "evils" of software patents, and their duping of programmers into thinking that Bill Gates was going to help himself to their personal bank accounts should the CII get passed. Here are some notable quotes from Mr. Mueller:

"The logic of computer programs is a combination of mathematical and verbal expression, and it deserves the freedom of speech . . . [T]here are some who say that software is "engineered". In practice, software is written. A computer program consists of words, numbers, and mathematical symbols. In writing a computer program, no one should be restricted by patents that make it illegal to develop one's thoughts in any way. "

"Copyright protects authors but doesn't hurt any honest person. Patents, in contrast, are 20-year monopolies that the government grants on broad and general ideas. Patents are potential weapons against all of us."

"Cross-licensing deals show the absurdity of the patent system. Large companies give each other, i.e. their biggest competitors, full access to their entire patent portfolios, but still pretend that patents were necessary to protect innovation. Real protection is not cross-licensed. Could you imagine a book publisher allowing his biggest competitor to publish all of his books? It would be suicide. "

"Patent attorneys ask for unlimited patentability of almost everything. Anyone can figure out why that is so. The more things are patentable (including software), the more patents are applied for and the more patent litigations take place. The patent attorneys only look at their own benefit, not at the immense damage that the patent system causes to society. "

Genius . . . simply genius . . .

IS MARKMAN BRINGING BACK FORUM SHOPPING? (AKA "I'M LOOKING AT YOU E.D. TEX . . .") In Mayer's dissent in Phillips, it was pointed out that the Federal Circuit was created for the purpose of bringing consistency to the patent field. One of the problems the Federal Circuit was meant to address was the practice of forum-shopping, where patentees "shopped" their litigations to jurisdications that had reputations for being "pro-patent" (while defendants steered cases to jurisdictions having reputations for being "anti-patent"). By consolidating appellate review in the Federal Circuit, the theory was that more consistent pronouncements would follow in patent jurisprudence.

The opposition to forum-shopping is rooted in the notion that the law ought not be manipulable and that its application ought to be uniform. With commerce occurring routinely over multiple state borders, jurisdictional choices for plaintiffs are plentiful and the importance of consistency among forums becomes more important. Manipulating the administration of law thwarts the ideal of neutrality in a system whose objective is to create a level playing field for resolution of disputes. The ultimate result is unpredictability and inconsistency in the application of the law among the district courts. This instability erodes public confidence in the law and its enforcement and creates doubt about the fairness of the system (for more on forum-shopping in patent cases, including some interesting 2001 statistics, click here).

Since Markman and its progeny, claim contruction became a matter of law, which means that the Federal Circuit reviews lower court's claim interpretations de novo (i.e., without deference). However, since claim construction is such an important part in patent litigation, most cases will settle soon after claim construction, when each side, when they aren't fighting to the bitter end, will have a clearer vision of which legal theories (if any) remain valid, and which ones have been reinforced/compromized.

Since predicting the Federal Circuit's behavior is difficult (even with a clear record in the lower court), most parties will simply settle, rather than paying expensive legal fees to take a case through appeal on nothing more than an educated guess.

Enter the Eastern District of Texas, Marshall Division.

Jurisdictions such as the E.D. Virginia have been popular for their "rocket-docket" efficiency in processing cases (although not as much recently). While being quick, the E.D. Va. was generally known as being a no-nonsense jurisdiction, with no blatant leanings toward the "pro-patent" or "anti-patent" sides. However, I'm starting to question whether the same thing can be said about the E.D. Texas. In a recent conversation with fellow practitioners, someone pointed out that, over the last 5 years or so, the district has very rarely invalidated any of the patents asserted in court, and the court is a veritable darling of the patent holding companies that love to sue people there (even the personal injury attorneys are getting in on the action).

Does anyone have empirical studies done on patent cases in this jurisdiction? I know that patent cases have tripled over the last 2 years - there must be something here that's not being openly talked about. When you see "repeat customers" such as Acacia, Forgent DataTreasury, Intergraph, Tessera, etc. something must be up . . .

DOTCOM FOODFIGHT! - It's been a while since we've seen a high-profile spat between dotcoms, and the recent spat between Cendant (which owns Orbitz, Avis, Budget, Days Inn, Travelodge, Ramada, Super 8), and Amazon seems to be shaping up to the the doozie of the year.

The on-off bickering between the two flared up on June 20, when Cendant filed suit in a Delaware court claiming that Amazon infringed its patent 6,782,370. The patent, granted last year, is entitled "System and Method for Providing Recommendation of Goods or Services Based on Recorded Purchasing History."

Amazon and its search subsidiary A9 responded two days later, claiming Cendant and subsidiaries infringed on Patents 5,715,399 ("Secure method and system for communicating a list of credit card numbers over a non-secure network", filed 1995); 6,629,079 ("Method and system for electronic commerce using multiple roles", granted 2003) and 6,029,141 ("Internet-based customer referral system" filed 1997).

Cendant has sought a jury trial, while Amazon is currently looking for a preliminary injunction, claioming it has suffered "irreparable injury and damages, in an amount not yet determined, for which plaintiffs are entitled to relief".

Oddly enough, Jeff Bezos, founder of Amazon, has attracted much press over the last 5 years, bemoaning the state of patents in the US. Particularly, he claims to dislike business method patents, although he apparently applied for 15 patents under his own name (8 of which were granted - two of which are asserted in the lawsuit). The always predictable, and always cranky crowd at Slashdot doesn't like this one bit.

NEW YORK LAW SCHOOL PROFESSOR PROPOSES PEER-REVIEW FOR PATENT APPLICATIONS: A proposal called "Peer to Patent" has been put forth by Beth Noveck, director of New York Law School's Institute for Information Law and Policy, to relieve the backlog of patents in the USPTO. Under the plan, the review process for patent applications would be turned over to tens or hundreds of thousands of experts in various fields who would collectively decide an application's fate via a massive rating system not unlike that of eBay.

The idea underlying the proposal is to allow patent applicants to benefit from the combined knowledge of field experts, ensuring that only the "worthiest" inventions get the 20-year grant of monopoly rights that come with an approved patent. By turning patent review over to field experts, applications will be evaluated by people who understand the issues rather than by an overburdened examiner who may have had to bone up quickly on a subject.

Under the plan, inventors who submit their work for peer review would be eligible for a 20-year patent. Inventors could also choose to use the existing system. However, in that case, patents would be granted for five years. Thus, Noveck argued, scientists would have an incentive to participate in the plan.

In addition, because the heart of Peer to Patent is a software system through which patent applications are filtered, Noveck hopes that it could be extended to include a bidding feature that would allow scientists to sell licenses for their patented inventions.

It's a good idea, although not a new one. But while it sounds good on paper, I doubt that this would ever get implemented in the real world. First, without regulation, the system would be very prone to error and potential fraud. And there are about a bazillion questions that wouold need to be answered before anyone in their right mind would participate in such a regime:

• Who determines who is an "expert" in a particular field, and what restrictions will there be for the number of individuals that could participate from a particular industry or corporation?
• What kind of accountability will there be for the "experts" reviewing applications (presumably, the participants will be earning their paychecks for their employers) - will there be a production quota?
• Will the review board institute a conflict check to make sure experts from Sun Microsystems aren't subterfuging applications from Microsoft and vice versa?
• What if an expert from a corporation determines an applicant "beat them to the punch" with regard to particular technology and now wants to sink the application - will there be criminal penalties for inequitable conduct?
• The experts aren't infallible - what mechanism would allow applicants to appeal decisions? Will the experts participate in reissues or reexaminations?

You get the point. I think a better place for this kind of system would be a fee-for-service review board for issued patents, similar to Bounty Quest (that's right - bring back Bounty Quest!). I still think its a good idea that was perhaps a little to far ahead of its time.

No one really cares if an "obvious" patent gets issued and is never enforced. It's when the demand letters start getting mailed (and subsequent complaints in district court) that begins the headache for many businesses. And if the litigation effort is premised on a lousy patent, people should have a place to turn to slap-back an over-zealous patentee.

(YAWN) PHILLIPS-AWH WHO? - Maybe it's me, but I can't remember the last time I was so underwhelmed by a Federal Circuit decision as the recently decided Phillips v. AWH Corp. case in the Federal Circuit. After months of bellyaching over what the Federal Circuit was going to do to claim construction, the final decision was nothing more than a re-heated version of Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576 (Fed. Cir. 1996) where the Federal Circuit expressed its preference to interpret claim language first by intrinsic evidence, i.e., the patent's claims, specification, and prosecution history. If the meaning of the patent's claims is not discernable from intrinsic evidence, then extrinsic evidence, including expert testimony, may be relied upon. Even then, expert testimony may be used only for an understanding of the claims, not to vary or contradict the claim language.

A high point in the decision for me was Mayer's dissent - he's been pounding the Markman decision ever since it came out, and has not relinquished any of his fire in opposing the case today. Some good lines from the dissent (it's long, but I think it's worth the read):

Now more than ever I am convinced of the futility, indeed the absurdity, of this court’s persistence in adhering to the falsehood that claim construction is a matter of law devoid of any factual component. Because any attempt to fashion a coherent standard under this regime is pointless, as illustrated by our many failed attempts to do so, I dissent.

This court was created for the purpose of bringing consistency to the patent field. Instead, we have taken this noble mandate, to reinvigorate the patent and introduce predictability to the field, and focused inappropriate power in this court. In our quest to elevate our importance, we have, however, disregarded our role as an appellate court; the resulting mayhem has seriously undermined the legitimacy of the process, if not the integrity of the institution.

In the name of uniformity, Cybor Corp. v. FAS Technologies, Inc., 138 F.3d 1448 (Fed. Cir. 1998) (en banc), held that claim construction does not involve subsidiary or underlying questions of fact and that we are, therefore, unbridled by either the expertise or efforts of the district court. What we have wrought, instead, is the substitution of a black box, as it so pejoratively has been said of the jury, with the black hole of this court. Out of this void we emit "legal" pronouncements by way of "interpretive necromancy"; these rulings resemble reality, if at all, only by chance. Regardless, and with a blind eye to the consequences, we continue to struggle under this irrational and reckless regime, trying every alternative—dictionaries first, dictionaries second, never dictionaries, etc., etc., etc.

Again today we vainly attempt to establish standards by which this court will interpret claims. But after proposing no fewer than seven questions, receiving more than thirty amici curiae briefs, and whipping the bar into a frenzy of expectation, we say nothing new, but merely restate what has become the practice over the last ten years—that we will decide cases according to whatever mode or method results in the outcome we desire, or at least allows us a seemingly plausible way out of the case. I am not surprised by this. Indeed, there can be no workable standards by which this court will interpret claims so long as we are blind to the factual component of the task.

If we persist in deciding the subsidiary factual components of claim construction without deference, there is no reason why litigants should be required to parade their evidence before the district courts or for district courts to waste time and resources evaluating such evidence. It is excessive to require parties, who "have already been forced to concentrate their energies and resources on persuading the trial judge that their account of the facts is the correct one," to "persuade three more judges at the appellate level." Anderson, 470 U.S. at 575. If the proceedings before the district court are merely a "tryout on the road," id. (quoting Wainwright v. Sykes, 433 U.S. 72, 90 (1977)), as they are under our current regimen, it is wasteful to require such proceedings at all. Instead, all patent cases could be filed in this court; we would determine whether claim construction is necessary, and, if so, the meaning of the claims. Those few cases in which claim construction is not dispositive can be remanded to the district court for trial. In this way, we would at least eliminate the time and expense of the charade currently played out before the district court.

Eloquent words can mask much mischief. The court’s opinion today is akin to rearranging the deck chairs on the Titanic—the orchestra is playing as if nothing is amiss, but the ship is still heading for Davey Jones’ locker.

Classic.

USPTO ANNOUNCES A POTENTIAL THIRD WAY TO ADDRESS EXAMINER REJECTIONS: Under the current USPTO practice, every applicant whose claims have been twice rejected may (1) appeal the examiner's decision to the Board of Patent Appeals and Interferences, or (2) file an RCE and continue prosecution.

When pursing an appeal, the applicant first files a notice of appeal, accompanied by the appropriate fee. A new pilot program, announced yesterday offers applicants an opportunity to request a review of identified matters on appeal using an "appeal conference" prior to the filing of an appeal brief. The goals of the program are (1) to identify the presence or absence of clearly improper rejections based upon error(s) in facts, or (2) to identify the omission or presence of essential elements required to establish a prima facie rejection.

If the applicant feels the rejections of record are clearly not proper and are without basis, then filing this request may result in a panel decision that eliminates the need to file an appeal brief. This should be based upon a clear legal or factual deficiency in the rejections rather than an interpretation of the claims or prior art teachings. The latter is more appropriate for the traditional appeal process currently employed by applicants.

A panel of examiners (including the examiner of record) will considerthe merits of each ground of rejection for which appeal has been requestedand will issue a written decision as to the status of the application.

- Covered in Dennis Crouch's Patently-O blog, as well as I-P Updates.

HATS OFF TO ANDY REINHARDT - In a deliciously scathing article in BusinessWeek, correspondent Andy Reinhardt tears apar the EU Parliment's decision to scrap the Computer Implemented Inventions (CII) as politicking gone amok, and describing the decision-making process as nonsense squared:

The sad truth is that everybody lost. Europe still has no clear solution to handling one of the most strategic and vexing issues of the Information Age: In what circumstances and on what terms should software innovations be patentable?

Many Europeans had hoped legislators would find an approach that avoided the worst excess of the U.S. system while affording appropriate protection to European innovators. Instead, the process was hijacked by interest groups whose intransigence and ideology scuppered intelligent compromise.

The biggest hypocrisy is that everyone claimed to be acting in the interest of innovation and small businesses. Now, with no new rules to go by, businesses large and small don't know what will happen to software patents they've already been granted by national authorities or the European Patent Office -- and which, in some cases, they have already used as the basis for global cross-license deals.

But the most vociferous opponents were backers of open-source software, for whom patents are anathema to their philosophy and business model. They issued fiery manifestos proclaiming software patents "a danger to democracy" and a threat to Europe's position as a hotbed of open-source software development.

Europe is back to square one, only worse. While the rival camps have bickered, the European Patent Office and its national counterparts have issued tens of thousands of software patents.

With little legislative guidance, and assuming that some sort of Europewide rules eventually would come into effect, they granted patent protection to ideas as diverse and far-reaching as a technique for audio compression that includes the MP3 format, a technology for video-on-demand transmission of live events, and a scheme for adding tabs to Web pages. Clearly, it's in the interest of society and the technology sector that such broad, and likely indefensible, patents not be enforced.

What's frustrating is that Europe was really onto something in questioning the value of software patents. As the evidence from the U.S. and other countries with liberal patent regimes suggests, patents can be a Pandora's Box -- one whose contents choke software innovation by miring programmers in endless legal battles.

What of the small European businesses and innovators that patent opponents wanted to protect? They must now hire lawyers and pay fees to file patent claims in 25 different countries to gain protection just within the EU. Their enforcement costs could skyrocket. And they're no better protected against counterclaims by U.S. or Asian rivals holding patents in those places than they were before.

The outcome in Europe entrenches a system that, like many national laws on the Continent, is increasingly out of step with global realities. The people who killed smart patent rules may have had noble intentions. But instead of scoring a hit for the little guy, they've actually put their compatriots at a disadvantage on the global stage. That hardly looks like progress.

WHY SHOULD YOUR UNIVERSITY PATENT INVENTIONS? Well, in a word, money. I'm not exactly sure why academia is so averse, even hostile at times, to patents - personally, I think it's the "pinkish hue" (if you catch my drift) that permeates university culture.

However, there a plenty of universities that "get it." Take the University of California, for example. The 10-campus UC system, which produced 424 patents last year, has generated more inventions than any other U.S. university each of the past 11 years.

UC's 6,600 active patents earned the university more than $93 million in the 2003-04 fiscal year. The patent process, which often takes five years or more, is not nearly as lucrative for faculty, but it helps keep their research practical and timely.

From 2002-03, here is a list of the most profitable patents generated at UC:

1. Hepatitis B vaccine - UC San Francisco $20,602,000
2. Aneurysm treatment - UC Los Angeles $7,375,000
3. Camarosa strawberry - UC Davis $3,043,000
4. Skin-cooling device - UC Irvine $2,936,000
5. Interstitial cystitis therapy - UC San Diego $2,920,000
6. Fluorescent conjugate probes - UC Berkeley $1,462,000
7. Yeast expression vector - UC San Francisco $1,301,000
8. Liposome storage method - UC Davis $1,212,000
9. Feline AIDS virus diagnostic - UC Davis $1,008,000
10. Learning-disabled aids - UC San Francisco $1,006,000

REAL ESTATE AGENTS BEWARE! As this blog has pointed out earlier, one unique feature of patent holding company litigation is that they like to start enforcement efforts by focusing on end-users first to build-up their litigation coffers. Streaming media websites, credit-card processing companies and even commodity market traders have felt the sting of holding companies when they go on the rampage.

Now add real-estate agents to that list.

A Philidelphia estate agent who describes herself as being in the top one per cent of all agents nationwide, has been named in a Federal lawsuit that accuses her of patent infringement by using a computer mapping system without acquiring a license to use the enabling technology.

The lawsuit was filed against Diane Sarkisian of Ambler, Pennsylvania and is believed to be the first of its kind. The suit naming Sarkisian was filed Tuesday in Federal District Court in Philadelphia. Lawyers for the patent owner, Real Estate Alliance, Ltd. (REAL), specifically noted that real estate agents throughout the country may be infringing the patent and subject to legal action.

U.S. Patent No. 5,032,989, titled "Real Estate Search and Location System and Method," was granted by the U.S. Patent and Trademark Office in 1991, at a time when the commercial use of the Internet was in its infancy. It covers a mapping system "for locating available real estate properties for sale, lease or rental using a database of available properties at a central location and remote stations which use a graphic interface," according to the document. The patent also includes a "drilldown" feature, under which specific areas can be displayed in greater detail.

Real estate agents use this method as a valuable tool to locate desirable residential properties every day as they work with their clients. (The National Association of Realtors claims more than 1.11 million members.) The lawsuit states Sarkisian has not obtained a license to use the underlying technology, and asks for unspecified royalties plus court costs.

REAL, for the time being has indicated that they are holding off suing potential defendants like, TRenD, the local multiple listing service, for patent infringement. However, lawyers for REAL said other real estate agents have been notified about their infringement of the company's patent as part of an ongoing process, and said additional civil lawsuits will be filed against agents across the United States who do not voluntarily obtain licenses.

The patent only has one independent claim (Claim 1), and it reads as follows:

Claim 1. A method using a computer for locating available real estate
properties comprising the steps of:

a) creating a database of the available real estate properties;
b) displaying a map of a desired geographic area;
c) selecting a first area having boundaries within the geographic area;
d) zooming in on the first area of the displayed map to about the boundaries of the first area to display a higher level of detail than the displayed map;
e) displaying the zoomed first area;
f) selecting a second area having boundaries within the zoomed first area;
g) displaying the second area and a plurality of points within the second area, each point representing the appropriate geographic location of an available real estate property; and
h) identifying available real estate properties within the database which
are located within the second area.

"YOU'RE GONNA NEED A BIGGER BOAT": Back in May, Broadcom filed two lawsuits against Qualcomm, accusing it of infringing 10 patents. Broadcom also filed an antitrust lawsuit against Qualcomm to boot, accusing Qualcomm of engaging in unfair licensing practices for its CDMA technology, resulting in higher-price cell phones in the U.S. Broadcom said it was filing the suit to prevent the same situation occurring in the developing third-generation cell phone market.

In response, Qualcomm, now accuses Broadcom of using technology covered by seven of its patents without permission. The lawsuit, filed in U.S. court in San Diego, accuses Broadcom of infringing six of Qualcomm's patents related to integrated circuits for use in Global System for Mobile Communications (GSM) phones and infringing a seventh patent related to semiconductor chips for Wi-Fi devices.

Qualcomm, in a statement, said the GSM-related infringements focus on features added to GSM capabilities that Qualcomm has pioneered in CDMA wireless devices.

Broadcom, in a statement, dismissed Qualcomm's lawsuit as a response to its May patent infringement suits.

This is shaping up to be a battle-royale on the scale of the old Texas Instruments/IBM/Wang litigations that scorched through the 80's - stay tuned . . .

BBC CREATES CODEC TO AVOID INFRINGEMENT: The BBC recently announced that it has decided to develop its own multimedia codec, called Dirac. This new format is fully open source, supports high-resolution video, and promises a twofold increase in compression compared with current MPEG standards at the same video quality. The final release is due before the end of the year, but experimental versions are available now. The VideoLAN project, for one, has built preliminary support for Dirac into the latest version of its open source VLC multimedia player, released in late June.

Why is the BBC doing this when all sorts of other codecs (MPEG, QuickTime, x264, DivX) are already available? In a word - patent infringement.

The BBC has concluded that multimedia remains a veritable minefield of patents. In fact, so many patents apply to the simple act of playing compressed video on a computer screen that it would be virtually impossible to develop any kind of multimedia application without an industry consortium such as the MPEG committee.

The way consortiums work is that the various patent holders join an industry group and agree to let their patents become part of that group's standards. In so doing, they agree to license their technologies under the blanket terms agreed on by the consortium. In the case of MPEG, that means "reasonable and nondiscriminatory" licensing terms. Anybody is free to license MPEG standards - nobody can be shut out - just as long as they pay the fees.

The BBC decided this was no good for open source projects, as well as the end-user. Thus, Dirac was born. BBC however, was mum whether any patent protection would be pursued with regard to Dirac.

MAYBE AMAZON'S TO BLAME FOR THE FAILED EU CII DIRECTIVE . . . Looking at much of the commentary regarding the EU smack-down of computer-implemented inventions, there is nary an article that doesn't drag out the old nag of Amazon's "one-click" patent, inject their personal (and usually non-professional) claim construction into the patent, and wave it like a dirty diaper in front EU legislators as a "see - this is what will happen if we allow software patents" message:

The FFII-UK and many others feared the that the passing of the bill would lead to Europe following the US and allowing business processes to be patented. This has led to online store Amazon patenting and protecting its one-click shopping system (BBC).

It is however bodies that represent smaller companies that have been most vocal in opposition of this directive. Many feel liberal patent laws would lead us down a road towards the US-style system which has in the past awarded patents for something as trivial as one-click shopping (PCPro UK).

Opponents of the law are concerned that the new directive will move Europe towards the US system of giving patents for Internet business models such as online bookseller Amazon's one-click shopping technique (EUObserver).

The proposal would not have extended patent protections as far as current U.S. law, which currently permits the patenting of business methods and computer programs, such as Amazon.com's famously patented One-Click ordering system (Designtechnica.com)

The bill would have stopped short of the U.S. system that allows patenting of business methods or computer programs such as Amazon.com Inc.'s "one-click" shopping technique, which gives consumers a quick system to buy goods on its Web site. (CBS News)

The anti-software-patent crowd appears to follow the same line of arguments: argue from principle; if you can't do that, argue from circumstance; if you can't do either, condemn the one-click patent . . .

DATATREASURY CORP. SETTLES WITH JP MORGAN: DataTreasury Corporation, a Long Island-based holding company previously covered in this blog, announced that they settled their patent-infringement lawsuit against banking giant JPMorgan Chase.

The lawsuit was one of several related suits filed by DataTreasury in federal court in Texas. The settlement also applies to former defendants Bank One (now part of JPMorgan Chase & Co.) and in various forms to Viewpointe Archive Services (a check-image archive co-founded by JPMorgan Chase).

DataTreasury had accused JPMorgan Chase of infringing U.S. Patent Nos. 5,910,988 and 6,032,137, which were issued in 1999 and 2000 for image capture, centralized processing and electronic storage of document and check information. These patents describe a technology process capable of implementing the federally enacted Check Clearing for the 21st Century Act, popularly known as "Check 21." Terms of the licensing agreement are confidential, but they include "safe harbor" and "most favored licensee" protection for JPMorgan Chase.

The settlement comes on the heels of the Markman hearing held in March in the E.D. Texas (which, incidentally, rarely ever contrues claims against the patentee). While I haven't seen the Markman order, people can obtain copies by e-mailing Jacala@shipleyassociates.net.

And the fun doesn't stop there for DataTreasury - both patents have various continuations that branched off the '988 patent. Interestingly enough, both patents issued after the first office actions, and there was no non-patent literature cited in the search. Even more interesting is that, to date, there have been no reexaminations requested on the patents. As the Patent Office was ill-equipped at the time the application was filed (1997) to do an effective prior art search, it would seem to me that there would be something in the non-patent literature that would scale back the scope of these patents . . .

[CLICK] "FIRE!" - EU PARLIMENT KILLS "SOFTWARE" BILL - The European Parliament has defeated the CII patent directive in a landslide vote - 648 MEPs out of 680 voted today to reject the proposal.

Some of the stupidity the parliment is promoting:

- The legislation is not so much about "software" patents as it is about EU harmonization: the EPO currently allows software patents, but the various member countries all have different standards for what is patentable subject matter. Thus, you could feasibly get an EPO patent on an algorithm, only to have it invalidated in your own country. The hysteria over the EU "adopting a US-style system" is a bunch of hooey.

- Nobody really knows what is patentable any more in the EU. Many countries, including the EPO have conflicting rulings on what type of claimed subject matter is patentable. It is often the case that one patent application with a particular set of claims will be rejected, while another, with a seemingly identical disclosure, will be allowed. Most of the EU practitioners I talk to are pulling their hair out over this.

- If you think the EU hates the US now, wait until some of these companies try selling their software products in the US market (yes, even over the Internet). The best part is that, by the time EU companies expand overseas, they will be cash-laden enough to perk the ears of plaintiff's attorneys eager to jump all over them.

EU GETTING READY TO FALL DOWN AGAIN: No offense to my EU brethren, but the EU Parliment has proven itself to be as incompetent as it is worthless as far as patent law's concerned. European Union lawmakers have recently indicated that they are poised to shoot down the "software patent" bill in a crucial vote after four years of haggling and fierce lobbying by small and big technology companies. Members of the European Parliament are deadlocked over how to strike a balance between providing legal protection to software innovation and avoiding setting up barriers having the opposite effect.

And the protests - the protests!

Outside the parliament's hulking Strasbourg headquarters, demonstrators protested in the morning rain against broad patent protection for software while MEPs argued inside over the pros and cons of the bill.

The bill's rapporteur, former French prime minister Michel Rocard, said his work had not been pointless and that it would take 'decades' to draw up legislation on protecting software.

'The information revolution is at its birth,' he told journalists. 'We shall spend decades finding all the laws, regulations, habits and customs to deal with it,' he continued, adding that 'there is no surprise' that the bill was likely to fail.

Just where has Mssr. Rocard been hiding? Many smaller companies in the US are starting to see the benefits (some may say necessity) of a well-maintained portfolio, and are starting to patent their core technologies as a defense against marauding competitors, and to promote technological sharing among partners. While there are some warts, the US patent system vis-a-vis software is starting to mature into a more workable model, and is most certainly heading in a positive direction. And Rocard thinks he needs decades to figure out how this stuff works?

UPDATE: A wonderful article at TCS about the cast of characters opposing software patents - a bit political, but hey - legislation is a political process:

The people who run FFII are enemies of private property, the free-market and capitalism. Some of them are widely known to be neo-Marxists, such as Jozef Halbersztadt, a member of the FFII advisory board and patent examiner at Polish Patent Office. In Poland he is a kind of IT Ché Guevara. He publishes in such leftist magazines as Social Review and Political Critics.

In his writings he does not hide his revolutionary visions. "[Neo-liberalism] is creating by protection of so called intellectual property," Halbersztadt writes on the web portal Lewica.pl (Left). His idea for destroying "neo-liberalism" is to limit IP rights by blocking their legal protection. "Today not everything is blocked, but limiting private property makes society profit. Because of Linux, Microsoft's bosses do not sleep well," he argues.

NOKIA NOT TAKING IT SITTING DOWN: After a devastating arbitration ruling, Nokia is considering contesting an arbitration court's decision in a patent dispute with U.S. wireless technology firm InterDigital.

InterDigital said last week the decision by the International Court of Arbitration meant the world's biggest mobile phone maker would have to pay up to $252 million in royalty payments for technology it used during 2002-2006.

Nokia did not specify the size of royalty payments it would have to pay to InterDigital but said one of the three arbitrators had disagreed with the panel's final decision, opening the door to change the outcome.

INTERDIGITAL LAND BIG FISH NOKIA IN ARBITRATION: After having patent spats with Sony/Ericsson, Samsung and other companies over its portfolio of patented technologies covering 2G, 2.5G and 3G standards, InterDigital announced that the Arbitral Tribunal operating under the auspices of the International Court of Arbitration of the International Chamber of Commerce (ICC) has delivered its Final Award in the arbitration proceeding, where royalty rates were established for Nokia's sales of covered products for the period beginning January 1, 2002 through December 31, 2006 and reflect Nokia's leading market position.

The final tab? InerDigital pegs it at $232-252 million.

Based on the royalty rates established by the Tribunal, InterDigital estimates that Nokia's royalty obligations for covered infrastructure and handset sales from January 1, 2002 through December 31, 2003 will be approximately $112 million.

In addition, InterDigital estimates that royalty obligations for covered infrastructure and handset sales for the period January 1, 2004 through December 31, 2006 will be in the range of $120 million to $140 million depending upon whether Nokia avails itself of a prepayment option for the eighteen month period from July 1, 2005 through December 31, 2006.

Yow - that's big. There is however, the issue of Nokia's pending litigation in Delaware, where Nokia is trying to invalidate InterDigital's portfolio with regard to the 3G technology.

As far as I can tell, most of the challenges to InterDigital's portfolio to date have proved unsuccessful. Where art thou, USPTO reexamination?