ARE LEGAL FINANCING COMPANIES ENCOURAGING TROLLING? One of the reasons that patent litigation has increased dramatically over the last 5 years is that patentees have begun to really appreciate the importance (and power) of their patent portfolios. Companies that formerly viewed patents as supplements to their main product lines have now turned patents into a main financial staple through licensing and enforcement. Holding companies rely exclusively on patents to provide profits for the business.
However, enforcing patents is an expensive process. Previously, smaller entities were not financially capable to take an infringement action to trial. In such cases, patentees turned to a small cadre of lawyers and law firms that developed effective ways to represent patentees on contingency or other alternate billing arrangements.
But contingency cases are huge risks. For every multi-million dollar judgment that makes the headlines, there are at least 10 other cases that either provide marginal returns to the patentee or are complete disasters. Most of the larger firms are very reticent to take on smaller patentees for this exact reason - without some kind of guarantee that billable time will be compensated, the risk of representing a new client on contingency is too great.
Enter legal financing corporations.
Such companies, like Oasis Legal Finance, have begun to bridge the gap between smaller patentees and law firms that wouldn't normally consider taking them as clients. They are part of the growing business of financing commercial lawsuits, such as patent and contract disputes. Under a typical arrangement, if the litigant wins, the financing company gets a return on its loan of 20 to 50 percent, plus sometimes a percent of the final judgment. But since the loan is non- recourse, if the case is lost, the plaintiff doesn't have to pay back the money.
As a side note, the legal finance industry has been criticized as a form of predatory lending, because financing costs are so high. In an effort to raise standards and improve their image, industry players such as Oasis Legal Finance and LawCash organized a trade group earlier this year called the American Legal Finance Association.
To take a case, the potential damages in a case must be substantial -- generally more than $500,000 -- and the defendant must be big enough or have good enough insurance to pay out. Obviously, the facts of the case also must be strong enough for an investment. Under a typical contingency arrangement, the litigant doesn't have to pay the lawyer unless the litigant wins. But expenses like expert witnesses, deposition transcripts and travel often have to come out of a litigant's pocket.
One recent example of such financing is the case of Solomon Technologies, Inc. who brought suit against Toyota Motor Corporation, Toyota Motor Sales U.S.A. Inc. and Toyota Motor Manufacturing North America in the United States District Court for the Middle District of Florida, Tampa Division, on September 12, 2005, claiming infringement of a number of claims in Solomon's patent number 5,067,932, primarily relating to Toyota's use of the technology in its Prius and Highlander Hybrid vehicles.
It is likely that more of these arrangements will be made once patentees, law firms and financing companies become more sophisticated in handling such transactions. In a way, these arrangements will, in effect, validate claims of patent infringement once they are filed, since the case will be vetted by multiple sets of eyes prior to moving forward. A result of this may be that settlements will come more quickly, since larger companies can't necessarily engage in "ground 'n pound" tactics against smaller plaintiffs. And if this becomes routine for a particular company or industry, you can bet that they will become easy targets, especially for "emerging" holding companies.
Wednesday, November 30, 2005
ARE LEGAL FINANCING COMPANIES ENCOURAGING TROLLING? One of the reasons that patent litigation has increased dramatically over the last 5 years is that patentees have begun to really appreciate the importance (and power) of their patent portfolios. Companies that formerly viewed patents as supplements to their main product lines have now turned patents into a main financial staple through licensing and enforcement. Holding companies rely exclusively on patents to provide profits for the business.
Tuesday, November 29, 2005
IS OSDL TRYING TO CREATE A "BOUNTYQUEST-LITE?" Open Source Development Labs (OSDL), a global consortium dedicated to accelerating the adoption of Linux, recently announced the OSDL patent commons project designed to provide a central location where software patents and patent pledges will be housed for the benefit of the open source development community and industry.
While these patent pledges will do little to deter claims of patent infringement on open-source, OSDL is apparently taking a step further by preparing an expansion of the project's scope to include information on the website that might be used to overturn questionable software patents. OSDL is combining forces with the Public Patent Foundation, the Electronic Frontier Foundation 's Patent Busting Project and other groups, to provide easier access to companies seeking invalidating prior art.
Although there are no specific details yet, this is a great idea in principle. By openly publishing prior art (especially the non-patent variety), this action will do exponentially more to deter aggressive patentees than the simple act of sharing patents. Nothing scares a patentee more than the knowledge that invalidating prior art is being distributed among potential defendants.
For those of you that remember, BountyQuest used to be a Web-based service that connected those who seek prior art to invalidate a patent, with those who might be able to find it (the service went kaput around 2002). Typically, "posters" (i.e., people or companies who want to invalidate a patent) posted a bounty on a problematic patent. Posters usually listed the patent number and a description of the art they want to invalidate. "Bounty Hunters" who registered with BountyQuest for free could submit anything in the public domain that they think describes the same technology. The first Hunter to submit prior art that meets the Poster’s criteria wins the bounty.
One of the problems with BountyQuest was that BountyQuest’s stated policy was to award bounties only when a single piece of prior art fulfills the Poster’s requirements. Members of the community objected to this policy, stating that the requirement was not realistic. A single piece of art can invalidate a patent for lack of novelty, but the policy completely ignores questions of obviousness. In fact, it is quite rare when a single piece of art invalidates all of a patent’s claims. Accordingly, Hunters quickly recognized that they would receive no payment for submitting art, even though the art would be of great use to the Poster while not meeting the exact criteria of the posting. Subsequently, the project fizzled out.
It will be interesting to see what kind of system the OSDL will come up with. Having companies like IBM, Novell, Red Hat, Philips Electronics and Sony in your corner could certainly open up a wealth of technical documents that the public could access.
Posted by Two-Seventy-One Patent Blog at 8:12 AM
Monday, November 28, 2005
VoIP E911 DEADLINE QUICKLY APPROACHING: The Federal Communications Commission (FCC) order requiring full VOIP E911 service takes effect at midnight tonight.
To comply with the order, PSTN-connected VoIP providers must be able to connect the 911 calls from their customers to a local emergency operator. This entails an interconnection arrangement with a given market's local exchange carrier in order to connect with the PSAPs, or public safety access points. The VOIP provider must also be able to provide emergency operators with a subscriber's call-back number and location information, in case that caller becomes unable to talk.
In terms of enforcement, the FCC's E911 order prescribes fines of up to $11,000 per day per non-compliant subscriber line.
Most VoIP providers currently offer E911 services, but in some cases, the E911 services are not directly connected to the "traditional" 911 system. While VoIP providers have attempted to hard-wire their connections to 911, many have found complete compliance to be extremely difficult within the original four-month timeframe allotted by the FCC.
It will be interesting to see how this will mesh with the 20-or-so issued patents on VoIP E911 protocols, and some 50+ patent applications which I'm sure are causing headaches for VoIP telecom providers. It's bad enough to implement new features in a particular technology under normal conditions; I can't imagine the scrambling that is undoubtedly taking place to implement these features under the relatively short timelines provided by the government (the U.S. Court of Appeals for the D.C. Circuit this week denied an emergency motion for a partial stay of the FCC´s E911 order requiring Voice over IP service providers to provide E911).
Posted by Two-Seventy-One Patent Blog at 3:15 PM
SUPREME COURT PATENT CASES BEGIN TO HEAT UP: In a surprising move, the Supreme Court announced that it will grant EBay's petition for certiorari and review whether the U.S. Court of Appeals for the Federal Circuit erred in setting forth a general rule in patent cases that a district court must, absent exceptional circumstances, issue a permanent injunction after a finding of infringement. In effect, eBay is asking the court to say that injunctive relief in successful patent infringement cases will be decided on a case-by-case basis, and not by default (which has been the law since 1908).
While this is a significant development, EBay has apparently engaged in triage and abandoned its claim that they did not willfully infringe. According to MercExchange, if the Court decides against the automatic granting of a permanent injunction, this will mean that the court will agree to supervise all future payments for infringement throughout the life of the patent, which runs to 2015.
Also, a lot of buzz is being generated over Illinois Tool Works v. Independent Ink, which is scheduled for oral argument on Tuesday. The court will determine whether Illinois Tool Works violated antitrust laws under the Sherman Act by forcing consumers of its patented ink jet printer to buy a specific type of printer ink for use with its printer (a practice known as "tying").
According to Shaheen Pasha from CNN, for consumers the case boils down to a central question: If you buy a company's patented printer, should you also have to buy that company's ink ... even if there is a compatible and cheaper ink available from a small aftermarket supplier? And if you have to do it for printer ink, do you also have to do it for other supplies tied to a bigger product?
For major patent holders (and their investors), there is an equally straightforward counter-question: Shouldn't a company that has invested time and money into developing a patented printer have the right to protect the quality of its technology – as well as its profits – by requiring a user to only buy its brand of ink?
This promises to be an action-packed year for the Supreme Court, which is on pace to hear the largest number of patent cases in a single year . . .
Posted by Two-Seventy-One Patent Blog at 2:55 PM
TIME TO RETHINK SOFTWARE APPARATUS/SYSTEM CLAIMS? In the wake of IPXL Holdings, LLC v. Amazon.com, where the Federal Circuit held that mixing method and system claims results in invalidity, the USPTO Board of Patent Appeals and Interferences (BPAI) followed suit by recently releasing a similar (but non-precedential) decision in Ex Parte Moore.
The case revolved around a patent application filed by Xerox dealing with backlash reduction in printers by stopping a substrate (i.e., paper) short of a printing position, then slowly advancing the drive system to move the substrate to the printing position. A stepper motor drives a driven roller via a gear train, and stops the substrate a predetermined number of steps shy of the printing position. The stepper motor is then advanced by the predetermined number of steps, taking up backlash and moving the substrate to the printing position. A controller (i.e., processor) coupled to sensors assists in moving the motor.
The problematic claim was claim 24, which recited:
24. A backlash reduction apparatus comprising:
a drive motor operable in increments;
a drive train driven by the drive motor;
at least one substrate transport mechanism connected to the drive train and driven by the drive motor therethrough;
a controller . . . the backlash reduction apparatus executing a method comprising: advancing a substrate to a point short of a final intended position; and finally advancing the substrate to the final intended position, thereby taking up backlash in a substrate transport system.
The BPAI rejected the claim under 35 U.S.C. 112, second paragraph as indefinite for failing to specify whether an apparatus or method was being claimed. Also, the claim was rejected under 35 U.S.C. 101 for encompassing two statutory categories (apparatus and method).
Again, the problem here is not so much with the decision, as it is with the implications such rejections have for software patents. Obviously, the applicants will amend the claims to remove the words "executing a method comprising," and to massage the rest of the language to comport with the structural recitations in the claim (see, e.g. claim 9 in the application).
As was pointed out previously on this blog, it appears that a door has been cracked open to challenge software patents on this principle. Just about every apparatus or system that relies on processors and software for novelty will inherently mix method steps within a recited apparatus or system structure. And while this case and IPXL Holdings appear to be more clear-cut instances of incorrect claim format, there doesn't seem to be a "bright line" where functional claiming (which is allowed) can be transformed into a "method" claim that could render a claim invalid. In a business where we must explain how conduct should be adjusted to comply with the rules of patent law, things are beginning to move in a manner where at some point (especially in claim construction), it will become increasingly difficult to tell exactly where the line is at any given time.
Posted by Two-Seventy-One Patent Blog at 8:36 AM
Wednesday, November 23, 2005
USPTO REPORTS RECORD AMOUNT OF PATENT APPLICATIONS RECEIVED IN FY '05: In 2005, the USPTO received the most patent and trademark applications it has every received in one year, according to the agency’s Performance and Accountability Report released last week.
Last year the agency received 406,302 patent applications and 323,501 applications for trademark registration, according to the 156-page report.
The USPTO granted 165,485 patents, including 151,079 utility (inventions), 13,395 design, and 816 plant patents. Since 1790, more than seven million U.S. patents have been granted.
U.S. resident inventors received 85,238 U.S. patents in FY 2005.
California resident inventors received the highest share (23 percent, 19,928 patents), followed by New York (7 percent, 5,631 patents), Texas (7 percent, 5,660 patents), Michigan (5 percent, 3,907 patents), and Massachusetts (4 percent, 3,443 patents).
Posted by Two-Seventy-One Patent Blog at 8:21 AM
HAPPY THANKSGIVING! As we prepare to enjoy a snowy Thanksgiving in Chicago, I wanted to wish everyone a happy Thanksgiving. Also, for those of you that haven't tried it yet, Alton Brown's recipe for cooking turkey is quite simply the best turkey recipe in existence (I think it's even better than deep-fried turkey). I always go on a campaign this time every year promoting this recipe, so I thought I'd share it here. You won't be disappointed.
Posted by Two-Seventy-One Patent Blog at 8:02 AM
Tuesday, November 22, 2005
DING DONG! THE FEDERAL CIRCUIT STRIKES AGAIN: Yesterday, the Federal Circuit released the opinion for IPXL Holdings, LLC v. Amazon.com, in which it was decided (among other things), that claiming both a system and the method for using that system renders a claim invalid under 35 U.S.C. 112, paragraph 2. While this concept has been generally known for a long time, its application has not been actively invoked in the courts. In fact, this issue was one of first impression in the Federal Circuit.
But when one reads the decision, and the context in which the court made its ruling, you can't help but get cold sweats thinking about the numerous ways that claims can now be invalidated, especially those pertaining to software. What's even worse, the court spent only TWO paragraphs explaining its rationale for invalidating the claim, and basically relied on Landis and the MPEP for support. For a matter of first impression, you'd think the court would provide a little more guidance for patentees and practitioners, but this was not the case. In essence, they placed a flaming bag of you-know-what at the doorstep of the patent bar, rang the doorbell, and ran away.
The offending claim of US patent 6,149,055 read as follows (the emphasis was included in the court's opinion):
25. The system of claim 2 wherein the predicted transaction information comprises both a transaction type and transaction parameters associated with that transaction type, and the user uses the input means to either change the predicted transaction information or accept the displayed transaction type and transaction parameters.
And this is what the court ruled:
Thus, it is unclear whether infringement of claim 25 occurs when one creates a system that allows the user to change the predicted transaction information or accept the displayed transaction, or whether infringement occurs when the user actually uses the input means to change transaction information or uses the input means to accept a displayed transaction. Because claim 25 recites both a system and the method for using that system, it does not apprise a person of ordinary skill in the art of its scope, and it is invalid under section 112, paragraph 2.
And that was it. Now clearly the patentee had intermingled a method step into a system claim. However, functional steps are essential when claiming matters such as software. Just about every software system includes (1) some kind of processor and (2) some kind of memory; the novelty is always based in the steps performed in the software, sometimes even with user input.
I can only guess that the claim was invalidated because it affirmatively claimed the user performing the step. However, you can't tell this from reading the decision. For example, would the claim have been valid if the claim recited:
The system of claim 2 wherein the predicted transaction information comprises both a transaction type and transaction parameters associated with that transaction type, wherein the input means either changes the predicted transaction information or enables acceptance of the displayed transaction type and transaction parameters?
Again, the decision doesn't say. And if the claim would be valid, is the Federal Circuit invoking a form-over-substance requirement on such claims?
Furthermore, the scant legal authority that the court relied on only included cases that predated State Street (the most recent decision was one from the BPAI, Ex Parte Lyell, decided in 1990). And a more interesting note is that such 112(2) rejections are closely related to non-statutory rejections under 35 U.S.C. 101:
Such claims [claiming both apparatus and method steps] should also be rejected under 35 U.S.C. 101 based on the theory that the claim is directed to neither a "process" nor a "machine," but rather embraces or overlaps two different statutory classes of invention set forth in 35 U.S.C. 101 which is drafted so as to set forth the statutory classes of invention in the alternative only.
See MPEP 2173.05(p). However, this theory of non-statutory matter was significantly whittled down after State Street. Has 112 failed to keep up?
What a mess.
Just for kicks, I decided to look up Amazon's notorious one-click patent (US Patent 5,960,411) to see what goodies i could find (after all, the IPXL Holdings decision was based on the one-click system - what's good for the goose . . .). Here is what I found in claim 6:
Under IPXL Holdings, this claim should be toast. Then again, so should about half of all the e-commerce and software patents currently in existence that have this type of claiming format.
6. A client system for ordering an item comprising:
an identifier that identifies a customer;
a display component for displaying information identifying the item;
a single-action ordering component that in response to performance of only a single action, sends a request to a server system to order the identified item, the request including the identifier so that the server system can locate additional information needed to complete the order and so that the server system can fulfill the generated order to complete purchase of the item; and
a shopping cart ordering component that in response to performance of an add-to-shopping-cart action, sends a request to the server system to add the item to a shopping cart.
So, when is the petition for rehearing en banc being filed?
Posted by Two-Seventy-One Patent Blog at 9:31 AM
Monday, November 21, 2005
ABOUT THE PHILLIPS V. AWH PETITION: As was predicted, AWH has petitioned the Supreme Court to review the landmark case regarding claim interpretation and to challenge the de novo review of claim construction on appeal. Dennis Crouch from Patently-O has provided a nice summary of AWH's petition here.
You can imagine my surprise when Dennis e-mailed me last Thursday to inform me that AWH was citing a thesis paper I wrote in their petition to the Supreme Court. Since Dennis posted on this topic, I've received some e-mails from readers inquiring about the content of this paper (and one reader facetiously asked if they cited my Real Men of Genius post).
Well, the paper is a somewhat-comprehensive study (47 pages, 341 footnotes) of Federal Circuit decision-making in the context of patent cases. The paper piggy-backs off of previous work done by William Rooklidge and Matthew Weil that outlined problems in the Federal Circuit and its apparent proclivity to encroach on the province of the fact-finder in ruling on patent cases. Coined "judicial hyperactivity" (not to be confused with "judicial activism"), this phenomena can be identified when an appellate court "usurps elements of the decision-making process that are supposed to be the province of the lower courts, administrative bodies or even litigants." And while the Federal Circuit has always been sporadically accused of exceeding its judicial authority, recent commentary is suggesting that the instances of the Federal Circuit exceeding its appellate authority are on the rise.
This problem is compounded by Markman, and the fact that most cases become ripe for Summary Judgment once the Markman ruling is entered. There aren't any uniform procedures or rules on approaches to claim construction, and the Federal Circuit has had no problems reviewing decisions of district courts regardless of when the construction actually took place. While the Federal Circuit historically refused to consider interlocutory review of claim construction, it has become clear that post-construction summary judgment has become an accepted equivalent for litigants. As Judge Newman once remarked, "there isn't a lawyer or district court in the nation who hasn't figured out that all they have to do is turn the claim construction into summary judgment." In certain cases it would even be proper for the court to render a decision on the summary judgment, even if evidence extrinsic to the record has not been completely developed yet.
I still have some copies of the thesis if anyone is interested. Just e-mail me and I'll be happy to send you a copy in the mail.
Posted by Two-Seventy-One Patent Blog at 10:17 AM
APPLE, iPODS, AND PATENTS OH MY! Ever since Apple's iPod patent applications were found to have similarities with co-pending multimedia software applications filed by Microsoft, some journalists started to wonder whether a showdown was in the works between the two computer giants.
When Creative Technology announced that they received patents on "iPod-related" features, one couldn't help but speculate if Creative was preparing to have a go at Apple.
Now say hello to Illinois-based Premiere International, who decided to file suit against Apple earlier this month in - guess where - Texas. The lawsuit alleges that Apple is infringing US patents 6,243,725 and 6,763,345. The '345 patent is a continuation of the '725 patent, which was originally filed in May 21, 1997. The patents deal with building an inventory of audio or audio/visual works, such as music videos. A plurality of works can be collected together in a list for establishing a play or a presentation sequence, and the list can be visually displayed and edited. A plurality of lists can also be stored for subsequent retrieval.
The patents are of the "old-school" variety: lots of claims (210 between the both of them), with each set of independent claims having slightly different variations from the others. This used to be standard operating procedure during the State Street days (1998-2000), where practitioners weren't exactly sure if the State Street ruling would be overturned. As a result, patent practitioners drafted every concievable variation of claimed elements as a way to ensure that at least some part of the patent would be valid if the Federal Circuit or Supreme Court had a change of mind.
Anyways, from a prior art standpoint, the patents listed a variety of screen-shots from Windows Media Player and other CD Players (including CD Player 2.0 for Windows and MS-DOS). This should gum up the works a bit for grabbing the more "obvious" prior art sources.
And some of the claims are quite broad - check out claim 16 from the '725 patent:
It seems that this story will not end with Apple . . .
16. A system for building a plurality of play lists having entries selected from an inventory which can be obtained at least in part, from different sources, the system comprising:
a data base for storing a plurality of user created pre-stored play lists;
a play list editing system having a graphical display and a plurality of instructions which enables a user to simultaneously display portions of an inventory of the stored items and portions of a selected play list including editing instructions enabling a user to select a displayed inventory item and to insert it into the displayed portion of the list thereby creating a modified list and additional instructions for storing the modified list in the data base and for subsequently displaying a plurality of pre-stored lists, each of which can be selected for execution.
Posted by Two-Seventy-One Patent Blog at 8:24 AM
Wednesday, November 16, 2005
FROM HELL'S HEART, PUBPAT STABS AT THEE! Well, it seems that at the twighlight of Forgent's enforcement effort on their JPEG patent (US 4,698,672), the Public Patent Foundation ("Pubpat") has put an onion in the ointment by filing a reexamination request with the USPTO. For those that may not be familiar with the organization, Pubpat is a not-for-profit legal services organization that "represents the public's interests against the harms caused by the patent system, particularly the harms caused by wrongly issued patents and unsound patent policy." PUBPAT provides the general public and specific persons or entities otherwise deprived of access to the system governing patents with representation, advocacy and education.
The most interesting part of this move by Pubpat is that Forgent's JPEG patent will expire at the end of October, 2006. By filing this reexam request, Forgent's pending litigations could be open to motions to stay proceedings, based on the outcome of the reexam. And if Forgent has to amend their claims during the proceeding (which, statistically speaking, is a likely outcome), Forgent will have to re-start all of their litigation based on the amended claims. Also, the multitude of companies that previously settled with Forgent will be motivated to review the infringement claims to see if an escape hatch has opened for them.
The other interesting fact is that this appears to be the first challenge to the JPEG patent via reexamination. Considering the history that Forgent has with the industry, and the numerous individuals that claimed to have invalidating art, it's almost shocking that someone didn't pull the reexamination trigger earlier.
The reexamination request (which can be viewed here) cites another Forgent patent (i.e., Compression Labs), US Patent 4,541,012, as invalidating art under 102(b). The reexamination request also insinuates inequitable conduct, noting that Forgent obviously knew about the patent (along with at least 5 other Forgent patents), and yet failed to cite any of them as relevant art under its Rule 56 obligations.
Most likely, the USPTO will grant the reexamination request in the next few months. And once they do, the Forgent patent should join the ranks of NTP, Eolas, and Microsoft's FAT patent as one of the most closely watched reexaminations in the Office.
Posted by Two-Seventy-One Patent Blog at 8:03 AM
Tuesday, November 15, 2005
PATENT COMMONS: OPEN FOR BUSINESS - Open Source Development Labs Inc. (OSDL) has launched its online patent commons reference library today. The library, which consists of five interlinked databases, is intended to give users a searchable database to boost confidence in using open-source software in light of the possibility of patent litigation.
The free library contains information about patents and technology pledges. It details patent commitments from companies and individuals who wish to retain ownership of their patents, but pledge either not to assert particular patents or not to assert patents against software implementations based on specific technical standards.
Users can search via the names of the contributors that have given patent pledges and covenants (i.e., CA, IBM, Intel Corp., Novell Inc., Red Hat Inc. and Sun Microsystems Inc.) Formerly known as Computer Associates International Inc., CA announced that it's changing its name on Sunday.
A second database provides searching for commitment types as indicated by different symbols, whether they're open-source software patents or open standards. A third database allows searching on the patents themselves, and a fourth database provides searching on standards and technologies such as the Linux kernel, OpenDocument and a number of Web services. The final database, which may not be ready today, enables users to search on other legal solutions such as open-source licenses and indemnification programs
Posted by Two-Seventy-One Patent Blog at 9:17 AM
Monday, November 14, 2005
RIM DECIDES TO SQUASH THE BERRIES: RIM announced this afternoon that they will be aggressively suing companies that affix "berry" to their products or services. In the last four months, RIM has sued two companies seen as allegedly capitalizing on RIM's goodwill: on Nov. 10, it sued the software company BackOffice Associates, whose technology division is called "Cranberry." It is also suing toymaker Sakar International Inc., which sells organizers with the names StrawBerry, BlueBerry, GreyBerry, GrapeBerry and GooseBerry.
According to RIM, the similarly-named products are ``clearly intended to trade on the substantial goodwill that RIM has developed in its BlackBerry'' name, the suit against BackOffice contends.
Sakar International makes hand-held organizers for children that, according to the suit, some reports have described as resembling the BlackBerry. As a result of the suit against it filed in August, Sakar has pledged to change the names of its Cyber Gear toys to remove the berries. Both trademark-infringement lawsuits were filed in Dallas.
No word was given on the fate of FrankenBerry and BooBerry . . .
Posted by Two-Seventy-One Patent Blog at 3:54 PM
AMAZON PUSHES BUSINESS-METHOD PATENTS INTO THE LIMELIGHT: The news headlines have been abuzz over the weekend when Internet News reported on Friday that Amazon.com received 3 e-commerce patents on user reviews and collaborative user networks. Jeff Bezos, who is also a founder of Amazon.com, is listed as an inventor in the '850 patent:
US Patent 6,963,848, filed March 2, 2000 titled "Methods and system of obtaining consumer reviews".
1. A method of encouraging customers to provide reviews of purchased items, the method comprising:
receiving over a network an order from a first customer for an item purchased from an electronic catalog;
estimating by what date the first customer will have at least initially evaluated the item based at least on the item type;
initiating an electronic transmission, based at least in part on the estimated date, to the first customer on or after the estimated date of a message requesting the first customer to provide a review of the item to thereby encourage the first customer to provide at least one review, wherein the message includes a link to an electronic review form and activation of the link by the first customer causes the review form to be presented to the first customer;
receiving the review from the first customer electronically via the review form;
individually presenting the first customer review in a group of reviews to a second customer interested in the item; and
based at least in part on the first customer's review, using a collaborative filtering process to automatically generate personalized recommendations for the first customer of other items.
US Patent 6,963,867, filed on March 31, 2003, titled "Search query processing to provide category-ranked presentation of search results" (assigned to A9):
1. A computer-implemented method of assisting users in locating items that are arranged within a database system by category, the method comprising:
monitoring user actions performed with respect to specific items in the database system to generate user activity data;
calculating item scores for specific items in the database system, wherein an item score for an item is dependent upon the user activity data associated with that item, and wherein calculating the item scores comprises automatically giving greater weight to user activity data associated with a most recent time period than to user activity data associated with earlier time periods;
receiving a search query specified by a user;
identifying, within each of multiple categories of the database system, items that are responsive to the search query ("responsive items");
for each of the multiple categories, calculating a respective category score based at least in-part on the item scores of responsive items in that category; and
determining an order in which to present the multiple categories to the user such that the order is dependent upon the category scores.
US Patent 6,963,850, filed on August 19, 1999, titled "Computer services for assisting users in locating and evaluating items in an electronic catalog based on actions performed by members of specific user communities":
1. A method of assisting users in selecting items from an electronic catalog of items, the catalog accessible to users of an online sales system that provides services for allowing users to purchase items from the catalog, the method comprising:
providing a database which contains information about a plurality of user communities, wherein different communities represent different subsets of users
of the sales system;
tracking, via computer, online purchases of items from the sales system by the users to generate purchase history data, and storing the purchase history data in a computer memory;
processing, via computer, at least the purchase history data to identify at least one item which, based on actions of both members and non-members of a selected community of said plurality of user communities, has a popularity level that is substantially greater within the selected community than outside the selected community; and
electronically notifying users that the at least one item is popular within
the selected community to assist users in selecting items from the electronic
The '850 and '848 generally cover “purchase circles,” that are arranged as community recommendation systems, where purchasers are encouraged to post reviews and ranking search results across multiple categories. Within those communities—which could be based on as little as the same domain name in the member’s email address or the city of their billing address—Amazon’s patent covers technology for generating lists of the most popular items and telling other community members about them.
According to Amazon, only the purchase circle technology is currently in use, said Amazon spokesperson Craig Berman. He would not comment on Amazon’s plans to pursue the patents.
Since thes patents were filed, reviews have risen to the forefront of many sites, with user recommendations playing a key part of the emerging local search and advertising market.
To see the fireworks over at Slashdot, click here.
Posted by Two-Seventy-One Patent Blog at 8:40 AM
FEDS TAKE STAKE IN BLACKBERRY LITIGATION: The U.S. government has inserted itself into RIM's high-stakes patent fight with NTP, saying it wants to make sure federal workers won't be cut off from mobile access to their e-mail, should NTP prevail.
The Justice Department filed a "statement of interest" last week to explain how the U.S. government, with as many as 200,000 BlackBerry users, could be harmed if an injunction gets issued against Research In Motion Ltd. to stop selling the device and accompanying e-mail service.
NTP has promised several times in the past that they would not extend the injunction to any government or emergency personnel in the United States. However, RIM is claiming that there does not appear to be a simple manner in which RIM can identify which users of BlackBerries are part of the federal government, and which are not.
Posted by Two-Seventy-One Patent Blog at 8:17 AM
Friday, November 11, 2005
SURPRISE, SURPRISE - USPTO IS LOOKING AT THE POSSIBILITY OF HIKING FEES AGAIN - It is interesting that, hot on the heels of Congress making gestures to eliminate fee diversion, the Congressional Quarterly is reporting that fee increases are being considered to "generate more revenue" for the USPTO.
The bill (H.R. 2791), sponsored by Judiciary Chairman F. James Sensenbrenner Jr., R-Wis., is intended to provide more resources for an agency that lawmakers say is underfunded, overworked and staggering under a backlog of nearly 500,000 pending patent applications.
Citing delays and patent quality, the bill would make permanent a new patent application fee
schedule enacted late last year. The increased revenue is intended to enable the patent agency to hire an additional 2,900 examiners and move to full electronic processing of applications. While not providing any further details, the bill would require the patent office to rebate to applicants any revenue from fees that exceeds the agency's appropriation.
As I suspected, the issue of patent examination quality is becoming a classic "your money or your life" situation with the USPTO. Knowing that businesses are concerned over such issues, the USPTO has parlayed these concerns into a quest to grab more money without providing accountability in return. USPTO management currently has no meaningful way of actually punishing shoddy work product (unless it gets really bad). Accordingly, the USPTO turns to the classic governmental cure-all (i.e. more money) to proclaim that without more funding, we are all doomed to a future of sub-standard patents . . .
Posted by Two-Seventy-One Patent Blog at 9:54 AM
UPCOMING PATENT SEMINARS: There are two upcoming events on patent prosecution and litigation worth attending in Seattle and Philadelphia:
2nd Annual Advanced Workshop on Managing Patent Prosecution and Litigation From the Inception of an Invention to Enforcement
November 16, 2005 - Seattle, Washington (Renaissance Seattle Hotel)
Topics covered in this workshop include:
- Invention process roles for in-house counsel
- Streamlining the patent application process
- Special issues related to software and biotechnology patents
- Maximizing the value of a patent portfolio
- Effectively dealing with discovery and preservation of evidence, and
- The key elements of litigation for in-house counsel, outside patent prosecution counsel, and outside litigation counsel
Advanced Workshop on the Best Opening Moves in Patent Disputes - Pre & Early Stage Patent Litigation: Srategies to put you in a winning position
December 7, 2005 - Philadelphia, Pennsylvania (Loews Philadelphia Hotel)
Topics covered in this workshop include:
- Strategies for responding to the warning letter
- Obtaining opinion of counsel letter and the impact of Knorr-Bremse
- Design-around strategies
- New procedures on reexamination
- How litigation strategies may be affected under new FTC proposals and proposed legislation in the House
- Updates on choice of forum issues
- Procedures to focus and resolve claim construction issues
- Planning strategies for selecting expert witnesses
- Managing litigation counsel for cost-efficient work
- When and how to use mediation to settle patent disputes
Posted by Two-Seventy-One Patent Blog at 8:29 AM
Thursday, November 10, 2005
HOLDING COMPANIES: THEY'RE NOT JUST FOR "CLOSED-SOURCE" ANY MORE - This morning, three of the world's biggest electronics companies - IBM, Sony and Philips - have joined forces with the two largest Linux software distributors to create a holding company for sharing Linux patents, royalty-free.
Called "The Open Invention Network" (OIN), the holding company is amassing patents pertaining to open source to create a centralized repository of "safe" patents in an effort to protect vendors and customers from patent royalty disputes resulting from freely shared Linux code. The company will be headed by Jerry Rosenthal, who is the former vice president of IBM's Intellectual Property and Licensing business.
The acquired patents will be available to any company, institution or individual that agrees not to assert its patents against the Linux OS or certain Linux-related applications. One of the more notable patent portfolios that were acquired by OIN are the B-to-B e-commerce patents that were purchased in a bankruptcy auction from Commerce One for $15.5 million by a Novell subsidiary ("JGR Acquisitions").
Allegedly, the holdings also include 500 of IBM's software patents pledged in January to open-source developers, as well as Sun's 1,670 Solaris patents pledged shortly thereafter. Last month, IBM announced additional pledges to the healthcare industry. In August, Open Source Development Labs (OSDL) launched its Patent Commons initiative that seeks to collect software licenses and patents pledged to the open-source community in a central repository. Today, OIN has become the centerpiece of that effort.
For me, these open-source pledges were always an "I-get-it-but-I-don't-get-it" situation. These pledges have been pretty heavy on the PR, and rather light on the actual details of the overall structure of this deal. It is apparent that some strings will remain attached to these patent pledges - there's no way these companies would invest tens of millions of dollars only to give these patents away with a hearty handshake.
The only explanation that makes sense at this point is that companies like IBM are relying on these pledges to entice open-source developers to hire them for R&D service contracts (although they don't actually say this in their press releases). After crunching some numbers, it would appear that the benefit of giving these patents away in return for contracts outweighs tbenefitfit obtained from monitoring and enforcing the patents. In fact, in the case of IBM, they are betting that this approach will be a significant source of revenue in the future. As this article from Brian Bergstein explains:
IBM sees that Engineering and Technical Services unit as an unheralded growth engine. Those R&D-consulting engineers are expected to haul about $1 billion in services contracts in 2005, just three years after the group's formation.
But executives say the group's real value is that it stimulates lucrative hardware sales -- especially in the chip division, which has bet heavily on providing high-end microprocessors for IBM machines and outside clients.
The highest-profile work by the E&TS unit, as it is called, is customizing the chips that will run next-generation video game consoles made by Microsoft Corp., Nintendo Co. and Sony Corp. E&TS also has a $100 million deal to develop military technology with Raytheon Co. and an alliance to do telecom research with Nortel Networks Corp., which has cut its own staff mightily in recent years.
The United Arab Emirates government is paying E&TS $125 million to develop automobile "black boxes" that monitor traffic and automate toll collection. The Pentagon relies on E&TS to ensure a domestic supply of top-tier chips for sensitive military electronics.
E&TS people say this is just the beginning of a push to extend the fruits of IBM's unparalleled research and development efforts -- which get nearly $6 billion a year in funding and make IBM the top U.S. patent holder -- into such fields as gaming, aerospace, defense and medical devices.
A very clever move, and possibly the first one I've seen that would seriously capitalize off of open-source formats (the Patent Prospector blog has some additional insight here). And if the joint-development agreements are written correctly, IBM could put its muscle behind further patenting by development partners (not to mention knock-out a chunk of IBM prior art under 35 U.S.C. 103(c)), who may not otherwise be keen on patenting their R&D.
Posted by Two-Seventy-One Patent Blog at 8:20 AM
Tuesday, November 08, 2005
IS QUALCOMM HAVING A "REARDEN STEEL" MOMENT? It seems that every time you turn these days, Qualcomm gets drawn into a new dispute over its CDMA/WCDMA patent portfolio. It has gotten to the point that 6 major companies (Ericsson, Nokia, Broadcom, NEC, Panasonic and Texas Instruments) have recently turned to the European Commission (EC) to claim that Qualcomm is "stifling" the phone chip trade by engaging in "anti-competitive conduct" by not licensing their technology in a "fair, reasonable and non-discriminatory" way, pursuant to the WCDMA standards, established previously by wireless companies.
The tension surrounding Qualcomm's patents has been building since earlier this year, with a growing number of wireless equipment makers becoming increasingly peeved at the market power and royalties that come with Qualcomm's near-monopoly grip on CDMA. Qualcomm collects a fee for almost every CDMA-based phone sold and a growing number of GSM-based handsets. Qualcomm is now claiming that next-generation versions of GSM have borrowed patented aspects of its CDMA portfolio to boost connection speeds, increase network efficiency and capacity, and facilitate multimedia services.
In May, wireless chipmaker Broadcom sued Qualcomm for infringement of patents for audio, video and data services and filed a complaint with the International Trade Commission alleging unfair trade practices. Two months later, Qualcomm returned the favor by suing Broadcom for infringement of patents relating to cell phone semiconductors.
Now that wireless equipment companies have decided to turn up the heat on Qualcomm by filing their complaint to the EC, Qualcomm has responded by filing a complaint for patent infringement against Nokia, who also happens to be one of Qualcomm's largest customers. A pretty bold move, if you ask me. The patents asserted against Nokia are the same ones that Qualcomm asserted against Broadcom in the earlier litigation. And judging from their previous behavior, there is a fair chance that more litigation is in the pipeline.
This will definitely be one of the more significant patent disputes in the wireless industry (this one could potentially dwarf the RIM/NTP dispute). In the end, odds are that everyone will eventually settle and move on, but for the time being, this dispute will provide plenty of drama for months to come.
And maybe it's me, but the situation in the EC reminded me of Rearden Steel's dispute with the government and other steel and manufacturing companies in Atlas Shrugged ( i.e., the "Anti-dog-eat-dog Rule" and the "Equalization of Opportunity Bill"). Is Qualcomm a modern day equivalent of Hank Rearden? Beats me, but in the meantime, the parallelisms are hard to ignore . . .
Posted by Two-Seventy-One Patent Blog at 9:38 AM
Monday, November 07, 2005
DATATREASURY SET TO INCREASE PRESSURE ON BANKING INDUSTRY AFTER NEW SETTLEMENT: In one of the more closely-watched patent litigations filed this year, DataTreasury Corporation announced today that France's Groupe Ingenico, a major player in point-of-sale electronic transaction terminals, has decided to settle in the matter, and that a licensing deal has been reached.
This lawsuit was one of several highly publicized suits DataTreasury filed in federal court against a variety of banks and payment-processing companies. The Ingenico settlement follows settlements with banking giant JPMorgan Chase, check-processing software provider NetDeposit, Inc., and RDM Corporation, a manufacturer of transaction terminals and check-image repositories. While settlement terms were not disclosed, it wouldn't be unreasonable to assume that the settlement was in the seven-to-eight-figure range.
Like other defendants, Ingenico was accused of infringing U.S. Patent Nos. 5,910,988 and 6,032,137, which were issued to DataTreasury 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."
After yet another significant settlement, Ed Hohn, who is the lead attorney for for DataTreasury, sounded pretty darn confident in his statement to the press:
Ingenico wound up folding its hand and admitting that it couldn't bust DataTreasury's patents--just like JPMorgan Chase. I am excited to see the Court
enter yet another Consent Judgment stating that these patents are valid and enforceable. Our trial team will now enforce this company's intellectual property rights by trying First Data Corporation, Wells Fargo, Bank of America, Citigroup and the rest of the defendants on the only real issues that remain--infringement, damages and willfulness damages. Let the trials begin!
I have to admit that I'm surprised how quickly the chips are falling in DataTreasury's favor. I've read through the patents, and they appear to be pretty solid (i.e., fairly well-written, with reasonable claims). However, even solid patents will have some chinks in the armor, because, after all, this is where most applicants tend to skimp on prior art searching due to obvious cost factors. Also, as I previously mentioned on this blog, these patents did not have any non-patent prior art cited against them, and both applications issued as patents after the first office action. That may not mean anything in the end, but that suggests to me that there is at least a possibility that non-patent prior art is floating about.
But the fact that these settlements are rolling in currently suggests that DataTreasury's patents may have some heft to them. Nevertheless, I am always cynical towards statements made in press releases, and I rarely trust them ("the louder a man speaks of his virtue, the tighter the grip should be on the wallet"). It's also possible that DataTreasury is offering cut-rate settlements to get some big names on the books to help browbeat others into settling as well. If I was being threatened by DataTreasury, I would definitely start browsing through tax filings or corporate reports to extrapolate the estimated monies received from these settlements.
Previous post on DataTreasury - 271 Patent Blog.
DataTreasury's settlement with JP Morgan - 271 Patent Blog.
Posted by Two-Seventy-One Patent Blog at 4:16 PM
Friday, November 04, 2005
FRIDAY FUNNY: I usually consider it bad form to make fun of pro se applicants at the USPTO (why kick someone when they're down?), but I couldn't resist posting on the claims in this patent application, and especially claim 4:
2. I claim any and all rights to the use of the Red Diamond Gaming Table
3. I claim that I am the sole inventor of the Red Diamond Game Table 4
4. I claim that there has never been a game like it
Posted by Two-Seventy-One Patent Blog at 4:29 PM
"WHAT YOU PATENT CAN AND WILL BE USED AGAINST YOU IN A COURT OF LAW" - What should serve as a lesson to entrepreneurs, Forterra Systems announced yesterday that a lawsuit was filed in the United States District Court for the Northern District of California against Palo Alto, Calif.-based Avatar Factory, and its founder Will Harvey, a noted gaming software developer. (Forterra Systems, Inc. v. Avatar Factory, etal., Case # 05-CV-4472).
The suit charges Avatar and Will Harvey with infringing a patent pertaining to instant messaging in a 3D virtual environment. While the press release doesn't list the patent, it would seem that the lawsuit is based off of US Patent 6,784,901, titled "Method, system and computer program product for the delivery of a chat message in a 3D multi-user environment."
The interesting thing about this lawsuit, is that Will Harvey a co-inventor in the '901 patent.
Harvey founded a company called There, which pioneered software offering virtual reality chat rooms over the Internet. Eventually, There changed its name to Forterra Systems, which currently owns the patent asserted in the lawsuit. During that time, Harvey left There and formed his new company, Avatar Factory. The suit alleges that a new virtual reality business at Avatar, which relies on virtual instant-messaging, infringes the patent for messaging in a 3D virtual environment developed and patented while Harvey was at There.
Byron Cooper, who represents Forterra, summed up the situation this way:
This case presents a recurring challenge in Silicon Valley regarding the ability of entrepreneurs to start a company and contribute intellectual property such as the patented technology in this case to attract investments, and later leave to start another venture that may infringe the intellectual property rights created during the earlier venture.This is similar to Yahoo's ongoing litigation with XFire, where a co-inventor left Yahoo to work at XFire, only to find himself staring down the barrel of his own patent. Who needs non-compete clauses in employment contracts when you have patents?
Posted by Two-Seventy-One Patent Blog at 9:03 AM
TOP IP JUDGES CALL FOR EU PATENT COURT: Europe’s top IP judges made an unusual move this week by kicking off a campaign to create a unified European patent court, following a top-level meeting of lawyers last month. The ‘judges’ resolution’, is to form the basis of a campaign to lobby European Union (EU) governments on the issue.
The proposed European Patent Court, would function as a unified court of first instance and a single appeal body for all cross-border patent disputes. The campaign attempts to pick up the pieces from the European Patent Litigation Agreement (EPLA), which established the original framework for litigation reform in 1999.
The EPLA proposes a central European patent court, with local ‘sub-courts’ operating in eight major jurisdictions, including the UK, Germany and France. The initial agreement states that the majority of cases would be heard in English, but other languages would be considered as well (the Commission has been bogged down over the languages that patents are filed and heard under). The judges will now circulate the resolution to the governments of EU member states in an effort to put pressure on the Commission to support the EPLA.
Posted by Two-Seventy-One Patent Blog at 7:52 AM
Thursday, November 03, 2005
STORYLINE PATENT PUBLISHED IN USPTO: As was reported previously on this blog, a utility patent application was filed by Andrew Knight in November, 2003, claiming to be the first application to claim a fictional storyline. There was an initial buzz regarding this patent application, due to the apparent effort to extend patent protection to the liberal arts. However, there was limited information that was available to the public at the time, due to the fact that none of the patents were published yet.
That has now changed.
US Publication 20050244804, titled "Process of relaying a story having a unique plot" is now available for viewing by the general public. The U.S. Patent Office will publish subsequent storyline patent applications, also invented by Knight, on November 17 and December 8 and 22. Claim 1 of the '804 publication recites the following:
1. A process of relaying a story having a timeline and a unique plot involving characters, comprising:
indicating a character's desire at a first time in said timeline for at least one of the following:
a) to remain asleep or unconscious until a particular event occurs; and
b) to forget or be substantially unable to recall substantially all events during the time period from said first time until a particular event occurs;
indicating said character's substantial inability at a time after said occurrence of said particular event to recall substantially all events during the time period from said first time to said occurrence of said particular event; and
indicating that during said time period said character was an active
participant in a plurality of events.
Sounds a lot like Memento to me. Nevertheless, the case has not had an examination on the merits yet (it was docketed on 10/6 to art unit 3715). The USPTO has assigned the application to class 434, subclass 365, which deals with education and demonstration, and particularly with "Means for Demonstrating Apparatus, Product, or Surface Configuration, or for Displaying Educational Material or Student's Work."
Mr. Knight is staking a lot on these patents, and decided to issue a press release on the publication, and also reminded Hollywood that he was asserting his provisional patent rights (even though they are presumed at the time of publication):
Knight, a rocket engine inventor, registered patent agent, and graduate of MIT and Georgetown Law, will assert publication-based provisional patent rights against anyone whose activities may fall within the scope of his published claims, including all major motion picture manufacturers and distributors, book publishers and distributors, television studios and broadcasters, and movie theaters. According to the official Patent Office website, provisional rights “provide a patentee with the opportunity to obtain a reasonable royalty from a third party that infringes a published application claim provided actual notice is given to the third party by [the] applicant, and a patent issues from the application with a substantially identical claim.”
Let the fun begin . . .
UPDATE: More commentary about the storyline patent on Jackson Lenford's Right to Create Blog
Posted by Two-Seventy-One Patent Blog at 8:14 AM
Wednesday, November 02, 2005
WHAT'S NEXT FOR FORGENT? It would seem that after October 27, 2005, someone would have posted a website, ticking away the seconds before Forgent's US Patent 4,698,672 ("the JPEG patent") expires on October 27, 2006.
To date, this patent has produced a windfall for Forgent, bagging over $100 million in licensing fees for Forgent's coffers. But the party, for the most part, will end in 2006. Realizing this, Forgent has gone on a litigation binge, suing Apple, IBM, Google Inc., Microsoft Corp., TiVo Inc., Hewlett-Packard Co., Eastman Kodak Co., and many others (some 40 companies in all). Recently, RIM settled their patent dispute with Forgent over the JPEG patent.
But what happens on October 28, 2006? Forgent will undoubtedly milk the JPEG patent for a few more lawsuits, claiming past infringmement, but it is doubtful that they will be able to replicate the success they achieved with the '672 patent. Checking out their current portfolio published at the USPTO, it seems that they are banking on their DVR patents as their next source of revenue. These patents include:
US Patent 6,674,960
US Patent 6,480,584
US Patent 6,285,746
US Patent 6,181,784
Each of these patents are continuations that ultimately trace back to an application filed on May 21, 1991. Needless to say, the lawsuits have already started.
One thing that I noticed as odd was that Forgent continues to retain their outside counsel on contingency. Under their earlier arrangements, the law firms representing Forgent have taken 50% of collected revenues. Unde their new arrangement, outside counsel "only" take 43%. It makes me wonder what is preventing Forgent from turning to a conventional billing regime (i.e., billable hours).
Posted by Two-Seventy-One Patent Blog at 9:22 AM
REALITY CHECK FOR CHINA: After reading news articles published over the last year, one may conclude that it is only a matter of time before the technical juggernaut that is China will become the dominant innovative force in the world. Just about every business and law firm has been aggressively courting Chinese partnerships and seeking Chinese clients to become a part of this growing movement. And judging from China's recent performance, especially over the last 5 years, they seem well along their way.
However, according to an article written by Guy de Jonquieres from Financial Times, it may be premature to conclude that China's predicted dominance is destiny. While it is given that many of the cited statistics tell only part of the story, some of the extrapolations made from these statistics actually paint a misleading picture.
For one, China produces two-and-a half times more graduates each year than the US. But in proportion to its population, it produces barely half as many - and has only one-eighth as many engineers engaged in research and development. And when this fact is considered in relation to its huge development needs, the country may have too little skilled manpower, and not a glut.
Also, the country's sheer output of technical publications is not as relevent as the significance of the publications, as judged by the number of times the publications are cited by researchers elsewhere. Under this standard, China doesn't fare as well.
Furthermore, there's the issue of Intellectual Property - IP protection is still a very new concept in China, and there are few incentives for Chinese companies to invest subtantially in matters like patent protection. China's apparent awakening to intellectual property (and particularly the exponential increase in the filing of patents), has more to do with the fact that most of the filings are being done by government research centers, rather than privately-owned corporations. This is a potentially damaging policy - in Japan and South Korea, 60 per cent of patents held by government research centers remain unused. And to date, there is little that connects state-funded R&D to commercially successful products.
The article goes on to point out other issues that China must address if they are to continue their spectacular rise in the global market, including reforming VC funding and approaches taken by the government towards national security. But before any of these issues are addressed, no one is in a position to preordain China's dominance: "[i]n truth, the country's race to innovate is a giant experiment. We simply cannot know how it will turn out. Anyone who asserts otherwise deserves a sceptical hearing."
Posted by Two-Seventy-One Patent Blog at 8:20 AM