Tuesday, February 24, 2009

"No Risk For Me" Ex Parte Reexamination Sinks Motion to Stay in ED Tex

Affinity Labs of Texas, LLC v. Dice Electronics, LLC, 9-08-cv-00163 (TXED February 20, 2009, Order).

Plaintiff Affinity filed suit against the defendants on a patent directed toward systems and methods for connecting a portable audio player to an automobile sound system. This case was one of three companion cases involving the same patent. After a request for ex parte reexamination was accepted at the PTO, the defendants filed a joint motion to stay.

To get perspective on the timeline, the relevant events are as follows:

Jan. 29, 2008: patent issues.

Aug. 25, 2008: Affinity Labs files suit against Defendants.

Sept. 30 - Nov. 10, 2008: Defendants make a total of four applications for extension of time to file their Answers.

Nov. 7, 2008: attorney files a request for ex parte reexamination of the patent with the PTO on behalf of Dice Electronics, LLC.

Dec. 9, 2008: The PTO grants the request and orders reexamination of all thirty five claims of the patent.

Jan. 12, 2009: Defendants move to stay the litigation in light of the pending reexamination.

Judge Clark, ruling on the motion, had this to say:

The parties exchanged Initial Mandatory Disclosures on January 21, 2009. Affinity Labs disclosed its asserted claims, Infringement Contentions, and associated documents on February 2, 2009, and Defendants are required to disclose their Invalidity Contentions and associated documents by March 20, 2009. As discussed in more detail below, much of the discovery essential to the case has already occurred.

In denying the parties’ previous request to extend these deadlines, the court noted that despite requesting and receiving several extensions of their time to answer, “Defendants are again seeking to delay the proceedings by six weeks.” Doc. # 43 at p. 1. The theme of delay is also present in the request for ex parte reexamination, which was not made until more than two months after Affinity Labs filed suit.

The filing of a request for ex parte reexamination by only one of the twenty-four Defendants in these three cases raises a strong inference of gamesmanship. Congress’s intent when it established the inter partes reexamination procedure as part of the American Inventors Protection Act of 1999 was to “‘make reexamination a viable, less-costly alternative to patent litigation by giving third-party requesters the option of inter-partes reexamination procedures’ in which they are ‘afforded an expanded, although still limited, role in the reexamination process.’” Cooper Techs. Co. v. Dudas, 536 F.3d 1330, 1332 (Fed. Cir. 2008) (quoting Senator Orrin Hatch, 145 Cong. Rec. S13259 (Oct. 27, 1999)). No Defendant in this case has taken advantage of Congress’s hard work in offering this option. Rather, one Defendant has reached back in history to the non-binding “no risk for me” ex parte reexamination process, allowing all Defendant to lay behind the log, hoping for favorable developments with the passage of time. Instead of streamlining the process, Defendants’ choice guarantees the imposition of additional costs on Affinity Labs, and indicates a lack of desire to resolve the issues in the case in a timely manner.

* * *

It would be naive to believe that counsel for at least some of the Defendants are not coordinating mutually beneficial defense strategies. No Defendant has been confident enough to ask the PTO for a binding inter partes reexamination. All are waiting to let [reexamination counsel], on behalf of Defendant Dice Electronics, LLC, take a shot at defeating Affinity Labs. Of course, if things do not go well at the PTO, each Defendant in turn can file a request for ex parte reexamination. Defendants could then still assert the same and similar claims in this court. This is underscored by the fact that, when asked whether they were willing to be bound by the result if Affinity Labs succeeds in the ex parte reexamination, Defendants made it clear that they were not.

Based on these and other consideration, the motion for staying the case was denied.

While I'm not sure what may have happened during earlier conferences/proceedings, Judge Clark, as the saying goes, was a "skilletful of rattlesnakes" towards the defendants. It was especially interesting that "defense coordination" was such an issue - is that not to be expected when a plaintiff files suit against 24 defendents?

Read the opinion here (link) (via Docket Navigator)

Short Note On "Top Patent Blogs"

“There are no grades of vanity, there are only grades of ability in concealing it”

-- Mark Twain

While these lists pop up from time-to-time, the IP Watchdog recently compiled a list of the "top 25 patent blogs." The list places yours truly at number 13:



Certainly a respectable number, but not one to inspire vanity. When I went to verify the ranking on Technorati, I discovered that the rank in the "top blog" listing was considerably different from what Technorati was showing me:























Apparently, my ranking (84,457) was cut in half for the listing. When I checked the other blogs, the numbers were different too (although not to this degree). What does this mean? I don't know. While I track readership like any other blog or website, anyone who blogs in a highly specialized area (i.e., you're not competing with Drudge or Gizmodo) knows that, after a certain point, the rankings become fuzzy. And depending on the rank methodology used, the rankings can become distorted.


I don't usually make hay out of such issues, but given that the list has been widely distributed, I thought I'd set the record straight (at least to the readers of this blog).

Monday, February 23, 2009

3rd Time's The Charm? Obama Prepares to Nominate Commerce Secretary

Reports are coming out that President Obama's likely pick for Commerce Secretary will be former Washington Gov. Gary Locke. Locke was the first Chinese-American governor when he served two terms in the Washington statehouse from 1997 to 2005. Since leaving office he's been working for the Seattle-based law firm Davis Wright Tremaine on issues involving China, energy and governmental relations. He argues that global engagement is a way to improve China's human rights record and deal with piracy of intellectual property.

Read more here.

Friday, February 20, 2009

What Will Become of the "Check 21" Patent Reform Provision?

A 271 Blog reader brought up an interesting point regarding patent reform and the banking system. Recently, Senate Minority Whip Jon Kyl (R-AZ) introduced the latest Patent Reform Act (S3600), which includes a "Check 21" exception (sec. 13, page 80):

"With respect to the use by a financial institution of a check collection system that constitutes an infringement under subsection (a) or (b) of section 271, the provisions of sections 281, 283, 284, and 285 shall not apply against the financial institution with respect to such a check collection system."

Of course, there is no secret that this provision relates to patent litigation between DataTreasury and practically the entire banking industry.

But, given the current state of banking, will this provision be pitched as part of a "stimulus" effort on behalf of the ailing financial institutions? Certainly, pro-reform groups have recast their arguments in 2009 to focus more on the economic impact of NPE's. And if there was ever a time that Congress would seriously consider such a provision, that time is now.

While patent groups would understandably cry foul over the political expediency of approving a "Check 21" exception, taxpayers might validly argue that, should DataTreasury succeed, taxpayer bailout money would likely be used to settle the matter.

And to spice things up even further, there has been talk of nationalizing certain banks in light of the crisis (a.k.a. "the Swedish solution"). How would this affect the DataTreasury defendants?

Interesting times, indeed . . .

Thursday, February 19, 2009

Study Proposes Modifications to Patent Venue

Sidney Rosenzweig, a visiting fellow at the Progress and Freedom Foundation, published a paper yesterday addressing issues related to patent reform and the venue statutes. Specifically, Rosenzweig identifies numerous deficiencies in the House and Senate bills. Essentially, he argues that, while recent congressional proposals are meant to prevent plaintiff forum-shopping, the proposals are "vaguely written and contain substantial gaps that will ensure that some cases cannot be brought in any venue. The effect of the enactment of either bill will be to cause a tidal wave of venue-related disputes to drown the federal courts."

As a result, Rosenzweig proposes the following revision to 28 U.S.C. § 1400(b) to address the only concrete problem identified by Congress, "namely the lax standard for venue against corporate defendants":

Notwithstanding subsection 1391(c) of this title, any civil action for patent infringement may be brought against a corporation only in a judicial district--

(1) where the defendant has its principal place of business or where the defendant is incorporated;

(2) where the defendant has committed a substantial portion of the acts of infringement and has a regular and established physical facility that it controls;

(3) where any defendant has committed a substantial portion of the acts of infringement and has a regular and established physical facility that it controls, if there is no other district in which the action may be brought under subsections (1) or (2); or

(4) where any defendant has its principal place of business, where any defendant is incorporated, where any defendant may be found, or where any defendant has committed acts of infringement, if there is no other district in which the action may be brought under subsections (1), (2) or (3).


Read/download the entire (20 page) report here.

Coalition for Patent Fairness Launches New Site, Blog

Ramping up for the 2009+ patent reform efforts, the Coalition for Patent Fairness (CPF) has revamped its website and refocused its message on patent reform, claiming a more economic-based rationale for supporting reform:

"Deficiencies in our patent system are holding our economy back by dampening innovation and job creation. Congress needs to pass a bipartisan and comprehensive patent reform bill to modernize and reduce uncertainty in the current system by addressing the backlog of patent applications in the patent office, ensuring only proper patents are being granted, and creating an environment where small, medium and large companies can innovate and create jobs. Our revised website will communicate that message and serve as a source of information for policy makers, business leaders, consumers and journalists interested in patent reform."

Also the CPF has launched a blog titled "Better Mouse Trap," dedicated to "following the debate over patent reform in the 111th Congress." The blog claims to "find the latest news and information and the latest reports of activities of the Coalition for Patent Fairness – a group of small, medium and large businesses and trade associations dedicated to supporting innovation and job creation through the modernization and reform of the US patent system."

Visit CPF's new website (link)

Read "Better Mouse Trap Blog" (link)

Wednesday, February 18, 2009

Business Method Patents - Down, But Not Out (At Least Not Yet)

Transamerica Life Insurance Company et al v. Lincoln National Life Insurance Company, N.D. IA (1-06-cv-00110)

Lincoln accused Transamerica and others of infringing U.S. Patent 7,089,201, titled "Method and apparatus for providing retirement income benefits." One of the claims recited in the preamble "a computerized method for administering a variable annuity plan having a guaranteed minimum payment feature associated with a systematic withdrawal program, and for periodically determining an amount of a scheduled payment to be made to the owner under the plan."

On February 13, the jury returned a verdict in favor of Lincoln, finding the patent valid and infringed - a reasonable royalty of $13,098,349 was assessed against Transamerica.

Read the verdict form here (from Docket Navigator).

NOTE: It appears that Bilski was not decided in time for this case. Presumably, Transamerca will appeal and/or negotiate a settlement based on the opinion.

Thomson Reuters Issues 2009 Patent Focus Report

Each year, Thomson Reuters issues an annual report on patenting issues at the world’s major issuing authorities, to "take a look at the stories behind the statistics." This year's report has some interesting findings, especially in China.

CHINA

One of the big stories for 2008 was the emergence of Huawei Technologies Co Ltd, a telecom company based in Shenzhen, as the top PCT filer (1,737), placing it ahead of Panasonic (1,729) and Philips (1,551). Overall, Chinese companies accounted for 6,089 applications via the PCT, a rise of over 11 per cent on the previous year.

SIPO received 716,377 patent applications between January and the end of November 2008, 613,922 of which came from Chinese entities. However, the vast majority of applications received by SIPO relate to non-examined utility model and design patent applications. Invention patent applications, which are examined, came in at 255,797 for the first 11 months of 2008.

With regard to litigation, the report states that "[t]here are now thought to be more patent disputes in China each year than in the United States, and although most patent litigation in China is between local businesses, foreign companies are increasingly involved in disputes. In 2005, for example, 268 non-Chinese companies were involved in Chinese patent litigation, a jump of over 75 per cent on the 2004 figure."

EUROPE

According to its most recent annual report, the EPO received 140,700 applications during 2007, up just over 3 per cent on the year before. By contrast, the number of patents granted fell from 62,800 in 2006 to 54,700. This equates to an allowance rate of around 51 per cent. In 2004, 59 per cent of examined patent applications were granted. As with the other two offices of the Trilateral Authorities (the Japan Patent Office and the US Patent and Trademark Office), statistically it is harder to get a patent from the EPO than it has ever been before.

JAPAN

In October 2008, the JPO introduced a trial of what it termed “a super accelerated examination” system. The JPO currently gets around 8,500 annual applications under its accelerated program and expects that around 15 per cent of these will become applications under the super accelerated scheme.

According to the JPO’s annual report, the total number of applications submitted to the office fell during 2007 to stand at 396,291. This is the second year in a row in which applications declined and they now stand at their lowest level since the mid-1990s. The grant rate at the office rose very slightly, to stand at 48.9 per cent as compared to 48.5 per cent in 2006.

UNITED STATES

The allowance rates continue to fall - the number of patent grants for 2008 fell to below 50 per cent of applications examined, to stand at 47.3 per cent. This compares to 54 per cent in fiscal year 2007 and 72 per cent in 2000. Statistically, it is now harder to obtain patent protection from the USPTO than it is either from the JPO or EPO.

Read the complete report here (link)

Tuesday, February 17, 2009

Joff Wild Speaks With Dudas at IAM

Joff Wild, editor of IAM Magazine and author of the IAM blog is providing a preview of his interview with former USPTO Director Jon Dudas. As expected, Dudas claims to have "no regrets" over his 6-year tenure, stating that "[d]ifferent industries and different sectors always have different priorities, and that is where disagreements occur.”

Some notable quotes:

On the continuation rule changes

"We were very interested in what the user community had to say and there was a long discussion period; as a result dramatic changes were made to the package . . . Policy changes have to occur in order to make the system more efficient – and these rules change proposals came almost directly from the examining corps, which was worried that people were gaming the system.”

On patent quality

"We always had the same way of measuring quality and that was to ask if the patents we were granting were new, useful and non-obvious. The numbers we got indicated that under these criteria quality actually increased dramatically . . . I don’t know how to argue with people who say that quality has gone down because the numbers just do not support this.”

On the PTO Director having "real world" patent experience:

“Why don’t they ever say the Director should have examination experience? The one thing I was really aware of when I started was that I lacked this background and it was something I had to understand, but no-one ever seems to think this is an issue . . . You have to think of all constituencies – applicants, the public at large, the examiner corps, Congress, the administration, foreign patent offices and so on. I imagine that any group you ask would want the person in charge to have a background like theirs, but it’s just not possible.”

Read part 1 of the interview here.

Thursday, February 12, 2009

Friday Shorts - Deferred Examination, Gregg Withdraws, NEW ITC Blog

Post Mortem at the PTO Deferred Examination Roundtable: Today, the PTO held their roundtable discussion on deferred examination. Tech companies voiced lukewarm support, manufacturers/biotech said "nice idea, but who needs it?", and the PTO claims they have “huge, huge challenges in examining the applications coming through the door” and that, other than deferred examination, no one has come up with any better ideas.

Intellectual Property Watch has the detailed rundown on today's meeting here.

- See comments from Patently-O here.

- Comments from the Patent Docs (link)

Gregg Withdraws As Commerce Pick: Senator Judd Gregg has now claimed that he "made a mistake" by throwing his hat into the ring for commerce secretary. He cited the stimulus package, direction of the census and an inability to be "100 percent with the team" as driving his decision to drop out a week after his selection. Gregg has become the second Commerce Department nominee in two months to withdraw from consideration. (Washington Post)

New ITC Blog: The law firm of Oblon, Spivak, McClelland, Maier & Neustadt, has officially launched the ITC 337 Law Blog (www.itcblog.com), to "serve as a forum on matters involving intellectual property disputes before the International Trade Commission (ITC)." The blog is run by Barry Herman, Thomas Fisher, and Eric Schweibenz - Welcome!

Software Patents at the UK IPO

While the USPTO marches to find consistency on patentable subject matter, I found this practice notice from the UK IPO dated December 8, 2008, dealing with computer programs in light of the recent Symbian decision (link). At first glance, this appears to be a more rational test than the "tied to a particular machine" analysis used at the BPAI under the post-Bilski era:

4. The Symbian judgment (especially paragraphs 54-56) provides an insight into what constitutes a technical contribution; in other words, a contribution that is more than solely a computer program. An important factor is what the program does as a matter of practical reality.

5. The Intellectual Property Office has previously recognised that an invention which either solves a technical problem external to the computer or solves "a technical problem within the computer" is not excluded. What Symbian has now shown is that improving the operation of a computer by solving a problem arising from the way the computer was programmed - for example, a tendency to crash due to conflicting library program calls - can also be regarded as solving "a technical problem within the computer" if it leads to a more reliable computer. Thus, a program that results in a computer running faster or more reliably may be considered to provide a technical contribution even if the invention solely addresses a problem in the programming.

6. It remains the case that whilst an invention involving a computer is undoubtedly "technical", in law the mere presence of conventional computing hardware does not of itself mean an invention makes a technical contribution and so avoids the computer program exclusion. This is in contrast to the practice of the European Patent Office, which the Court of Appeal rejected in Symbian.


Read the full notice here.

Wednesday, February 11, 2009

Another Bilski Decision From the BPAI

Ex Parte Nawathe et al., Appeal No. 2007-3360, February 9, 2009

The applicants claimed a system and method for representing a normalized eXtensible Markup Language (XML) data structure as fixed sets of tables in a relational database (RDB). The examiner rejected the claims under 35 U.S.C. §101 as being directed to non-statutory subject matter.

Claim 1 recited

1. A computerized method comprising:
inputting multiple extensible Markup Language (XML) documents;
creating a data representation of said multiple XML documents; and
reducing redundancy across said multiple XML documents via a fixed set of tables.
According to the BPAI,

[T]he recited method, while being computerized, is not tied to a particular machine for executing the claimed steps. We find that the computerized recitation purports to a general purpose processor (Fig. 2.), as opposed to a particular computer specifically programmed for executing the steps of the claimed method [271 Note: what's the difference?]. Next, while it can be argued that the creating step transforms the input XML documents into represented data (i.e. a different state), we find that the documents are not an article (i.e. physical entities). Rather, they are mere data that represent such entities. Similarly, while it can be argued that the redundancy reducing step transforms the XML documents into a smaller set of the documents, they are not an article being transformed.
However, a related apparatus claim recited

25. An apparatus comprising:
means for creating a graph based data structure representing multiple standard XML tree structures;
means for transforming said graph based data structure to a fixed set of tables; and
means for using said fixed set of tables.
Here, the BPAI found the language rendered statutory subject matter into the claim:

Appellants argue that the recited apparatus refers to the general purpose computer depicted in Figure 2. (App. Br. 33.) Further, Appellants submit that the different means recited in the claim correspond to the different modules in the computer for performing the recited functions. (Id. at 12.) We find that since the claim recites a physical apparatus with physical modules for transforming a data structure into a fixed set of tables, it is not a directed to an abstract idea. Therefore, Appellants have shown that the Examiner erred in finding that claim 25 is directed to an abstract idea. Thus, we will not sustain this rejection.

Apparently, the Board did not see fit to explain why a "computerized method" to a "general purpose computer" is nonstatutory, while an "apparatus" directed to the same general purpose computer is. The implication here is that, if the method claim recited the computer, the claims would be statutory. However, other BPAI precedent (Ex parte Gutta) states that this would not be enough.

Read the decision here (link)

Read the application here (link)

Tuesday, February 10, 2009

Letter to Obama from U.S. Manufacturers Questions Rationales For Patent Reform

Earlier today, the Manufacturing Alliance on Patent Policy, representing more than 130 US manufacturing companies, sent a joint letter to President Obama voicing concerns over patent reform legislation. More specifically, the letter states that, if 2009's patent reform efforts are a repeat of 2007-08, the legislation would "harm the competitiveness, investment and employment of [the manufacturing] sector." Furthermore, the letter pointedly notes that "the prosperity of a few companies within two industries should not come at the expense of a larger group of stakeholders."

A few highlights:

  • "[T]here is no explosion in patent litigation. In 1993, lawsuits were 1.45% of patents granted. In 2007, lawsuits were 1.48% of patents granted. The number fluctuates from year to year, but it has never indicated a system out of control. (Source: USPTO Annual Reports, Federal Judicial Statistics)"
  • "[T]here is no explosion in patent damage awards. Adjusting for inflation, the median annual patent damages award has actually dropped slightly over the last 13 years. In constant dollars, the median was $3.9 million from 1995 through 2000, and $3.8 million from 2001 through 2007. (Source: 2008 Patent Litigation Study, PriceWaterhouseCoopers.)"
  • "We view increased patent applications as a good thing, representing increased innovation that is crucial for American prosperity. It would be a terrible mistake to allow the increase in patent applications to become an excuse to undermine patent protections. Rather, Congress should take advantage of Americans’ growing desire to invent by ensuring that the U.S. Patent and Trademark Office ("USPTO") has the resources and management to handle the increased number of applications in a thorough and timely manner."
  • "We encourage policy makers to reject the call for drastic changes to the law of patent damages. Reducing penalties for intellectual property theft will only encourage more of the same, which will deal a severe blow to the motivation of American inventors to create more and greater innovations in the future."
Read the entire letter here (link)

See also a related study, "The Likely Adverse Effects of an Apportionment-Centric System of Patent Damages" (link)

China Approaching 1M Domestic Patent Filings Per Year

The State Intellectual Property Office of China (SIPO) has published some year-end statistics, and the numbers are striking - based on an annualized projection of Chinese patent filings (SIPO only gives 11 months in the report), over 780,000 applications were filed in the year, of which 213,000 are utility model applications and 290,000 are design patent applications. Just as in previous years, China ranks first in the world for total patent filings.

What is most striking about these numbers is that foreign applicants (including the US, Japan, and the EU), account for only 14% of the total. In fact, the Guangdong Region (i.e., the Canton Province) filed more applications in SIPO than the US and Japan combined. Foreign utility model filings account for less than 1% of the total, and for design applications, account for less than 5%.

From SIPO:

-- Total Applications for Patents Received from Home and Abroad (link)

-- Total Grants for Patents Received from Home and Abroad (link)

-- See main SIPO statistics page here (link)

See also Cong Cao, UPI Asia.com, "Has China become a patent powerhouse?" (link)
Although since 2001 China has witnessed an average annual growth of 20 percent in invention, utility model, and design patent applications, and invention patent applications have grown 25 percent year-on-year, with domestic enterprises growing 30 percent annually, invention patents account for only one-third of the patent applications. Domestic inventors are still more likely to file applications for utility model and design patents, or patents for incremental improvements over existing ones.

Monday, February 09, 2009

Patent Reform 2009 Gets Underway

While rumblings persisted over the last two weeks, Congressional spokespersons and staffers have now come out publicly to confirm that (1) patent reform will be a "top priority" over the coming year, and (2) any resulting legislation will be on a "fast track."

What's in the legislation? No one knows yet, but it is being reported that Congress will be picking up where they left off in 2007-08:

Staffers for Judiciary Chairman Patrick Leahy and Sen. Orrin Hatch, R-Utah, have resumed negotiations on legislation that passed the committee 13-5 in 2007 but died after Leahy could not win Judiciary ranking member Arlen Specter's support to bring the bill to the floor last spring.

Rumors are that a draft bill is expected early in the first session of this Congress, with possible hearings scheduled for March or April.

In light of judicial activity over the last 16 months, some are beginning to question the urgency of the reform. According to Taraneh Maghame, chief patent counsel for Tessera Inc., the patent bar should "let the dust settle on the effectiveness of the recent cases because they went a long way to address the needs people had raised . . . [p]utting a whole layer of patent reform on top of that could have ramifications for the economy." Kevin Rivette, chair of the USPTO's advisory board believes that Congress should wait up to three years before tackling patent reform again.

See, EE Times, "Congress to again take up patent reform" (link).

See also Gene Quinn's IP Watchdog, "Patent Reform Reportedly Top Priority in Congress" (link)

Of course, others believe that major aspects of patent reform are best left for the courts, not Congress. On Friday, the Coalition for 21st Century Patent Reform, formally issued a paper (presented earlier at meetings of the AIPLA and ACPC) arguing that the fast pace of change in patent law made the courts more suitable for change.

The paper is titled "Reform of a Fast-Moving Target: The Development of Patent Law Since the 2004 National Academies Report", written by litigator William C. Rooklidge:
“[T]he patent law changes that have occurred since 2004 suggest that the courts—not the legislature—should be entrusted with many of the patent reform topics that have been considered. Side benefits of this division of labor likely include that a legislative package stripped of the contentious issues more suitable to resolution by the courts that might well find agreement, or at least enough agreement to be enacted.”

Read a copy of the report here. For a summary of the paper, click here.

Wednesday, February 04, 2009

Unlikely Duo Set Out to Set The Record Straight On NPEs and Patent Litigation

"When the cat and mouse agree, the grocer is ruined."

-- Iranian proverb
Today it was announced that Nathan Myhvold is teaming up with Professor Mark Lemley to conduct a two-year study on patent litigation, and further analyze the frequency and effect of non-practicing entity (NPE) litigation on the patent system. No matter what side of the debate your opinion falls, there is little doubt that the findings of the study will be one of the most anticipated events.

From today's press release:
"I tend to be an advocate of patent reform, while Nathan is generally more skeptical," Lemley said. "If we collaborate on a project together it will... be harder for critics to say that it has just one point of view."

Though an effort to pass patent reform legislation that would make it more difficult to file patent lawsuits stalled in Congress last year, the issue may yet be revisited on Capitol Hill.

Lemley said that he's seen estimates on the number of suits filed by non-practicing entities that range wildly, from 2% to 50% of all patent litigation. In addition, many struggle even to define what makes a so-called "patent troll" that acquires patents to use in court, and what makes a legitimate non-practicing entity.

"There is some gray area," Lemley said, "What do you do about an IP-holding subsidiary of a company?"

Intellectual Ventures executive editor Wayt Gibbs said that an impartial study of patent litigation is necessary. "This is very important to innovation policy," Gibbs said. "It shouldn't be subjected to guesses and debates by highly interested parties."

Gibbs said the study is focused on the years 2000 through 2007, and includes "data on every single patent case filed" in that period. The roughly two-year project is being undertaken by a number of different Intellectual Ventures employees alongside Lemley, and is expected to produce several papers.

- See: "Famed patent firm backs study on touchy subject" (link)

For more on recent activities of Intellectual Ventures,

- See "Microsoft's big brains spill into patent firm" (link)

See also "Venture firm picks up Transmeta chip patents" (link)

"Recession IP" - It's All On Sale!

From Yesterday's Chicago Tribune:

As firms streamline operations to save money amid the recession, a growing number are looking to generate cash by selling or licensing their dormant trademarks and patents. That's creating new demand for Chicago-based Ocean Tomo's intellectual property appraisals, auctions and other services.

"In the depressed economy, companies are re-evaluating their intellectual property portfolio," selling patents and trademarks they're not using, said James Malackowski, chief executive of the intellectual property merchant bank. "They're saying, 'If we don't need it, get rid of it.' "
Read "Intellectual Property Sales Grow in Down Market" (link)

Tuesday, February 03, 2009

"Crowdsourcing" Patent Peer Review

Andy Oram over at O'Reilly Media penned an interesting article, titled "Peer-to-Patent and Article One Drag the Reclusive Patent Onto the Thoroughfare," which compares and contrasts various peer review models for the patent process. The article focuses on the recent efforts of Article One and Peer-to-Patent to challenge issued patents. From the article:

[Article One] received 650 submissions of potential prior art during their first eight weeks, whereas Peer-to-Patent has received 270 during its first 18 months. And even though Article One has no sales force, several companies initiated contacts with it to sponsor studies. Since the days of Bounty Quest, the power of crowdsourcing has powerfully demonstrated itself.

Read the full article here (link)

While peer review appears to be a viable model in theory, certain issues will need to be addressed (e.g., inequitable conduct, litigants issuing subpoenas to get prior art "for free")before these models gain traction in the general patent community.

Obama Nominates Senator Judd Gregg (R-NH) For Sec. Commerce

It was officially announced today that President Barack Obama nominated Republican Sen. Judd Gregg to be Commerce secretary. If confirmed by the Senate, Gregg would be in charge of overseeing the USPTO and instrumental in setting patent policy.

Of course, now that it's official, let the dirt digging begin:

Gene Quinn, "Judd Gregg’s Columbia University Patent Past" (link) - "One thing is for certain though, Judd Gregg does not have a long history to review on patent matters, but the man who will be the boss of the next Director of the United States Patent and Trademark Office does have one thorny patent issue in his past, namely the misguided attempts by Columbia University to extend its patent protection on a multi-million dollar process. "

Also, it appears that Gregg was not always a fan of the DOC. CQ’s Jonathan Allen points out that Gregg voted twice in 1995 to abolish the department — once in the Budget Committee and once on the Senate floor. From CQ:

President Obama’s new candidate to run the Commerce Department voted in favor of abolishing the agency as a member of the Budget Committee and on the Senate floor in 1995.

Sen. Judd Gregg , R-N.H., whose nomination was expected to be announced Tuesday, also worked in the Senate to trim the department’s budget as head of the Commerce-Justice-Science Appropriations Subcommittee.

Also, From Senator Gregg's Website:

- Senator Gregg Introduces Measure to Create a Safe Process to Provide Lower-Cost, “Follow-On” Biological Medicines (link)

- Senator Judd Gregg Releases Revised BiopreparednessAct of 2005 (link)

Monday, February 02, 2009

Housecleaning: ED Tex. Declines Venue in 3 Patent Cases

Yesterday, Patently-O noted that the CAFC's TS Tech decision was beginning to have an impact on venue determinations in the ED Tex.

This morning's Docket Navigator Docket Report discloses that on January 29 and 30, the ED Tex. issued 3 orders declining venue in patent cases:

"Under the circumstances presented here, the convenience of witnesses and localized interests weigh in favor of transfer with the other factors neutral or weighing slightly in favor of transfer. . . . [T]here is little convenience to the parties for this case to remain in Texas, while there are several reasons why it would be more convenient for the parties to litigate this case in Oregon."
- Odom v. Microsoft Corporation, 6-08-cv-00331 (TXED January 30, Order).

"Plaintiff along with six of the seven named defendants have their principal places of business in California; the remaining defendant has its principal place of business in Washington. The original patent owner was also a California-based company. [Plaintiff] alleges direct infringement through the websites of the Defendants, none of which are located in this venue; most are located in California. It is likely that many witnesses for both [plaintiff] and Defendants reside in California and/or Washington, and that many documents related to this case are also located in California. The Court finds that the overall nature of this case, considering all of the involved parties, is
regional and would therefore be more conveniently handled by the Northern District of California."
- PartsRiver, Inc. v. Shopzilla, Inc., 2-07-cv-00440 (TXED January 30, 2009, Order).

"Plaintiff's first-filed patent infringement claim did not permit plaintiff to amend its complaint to seek a declaratory judgment concerning defendant's business torts claims that were previously filed in Missouri. "The original complaint involves claims for patent infringement of [plaintiff's] patent. The amended complaint, and the subject of the Missouri case, is for unfair competition and the Lanham Act based on [plaintiff's] alleged business conduct. The subject matter of these cases do not substantially overlap. The Missouri case, then, is the first filed case for the controversy regarding [plaintiff's] business conduct. [Plaintiff], therefore, violated the first to file rule when it amended its complaint in this action to add counts already asserted in the Missouri case."
- Catalina Marketing Corporation v. LDM Group, LLC, 2-07-cv-00477 (TXED January 29, 2009, Order)

See Also: The Metropolitan Corporate Counsel, "The Eastern District Of Texas - No Longer The Venue Of Choice?" (link) - discussion of TS Tech, including interview withe TS Tech's counsel.

New Statistics on Inter Partes Reexamination

Matthew A. Smith, adjunct professor at the George Washington University Law School, and Foley & Lardner attorney, has published the treatise "Inter Partes Reexamination," which provides an in-depth analysis of Inter Partes Reexamination practice before the United States Patent & Trademark Office.

The 270-page paper (w/ 1200+ footnotes) looks at practically every aspect of inter-partes reexamination, including filing of papers and service, briefing, timing, and appeal.

How successful are inter partes reexaminations?

Overall, all claims of a patent were rejected in just under 50% of cases. All independent claims were rejected in about 65% of cases. All independent claims were either rejected or amended in about 72% of cases. Some independent claims survived unscathed in about 30% of cases. All original independent claims were confirmed in 14% of cases.

And with regard to timing,
It is as yet difficult to estimate how long a fully contested inter partes reexamination will take, because no fully contested proceeding has concluded. It appears, however, that Office-level practice to a Right of Appeal Notice is taking on average at least two years, and more likely three years. If fully contested, appeals to the Board of Patent Appeals and Interferences and Court of Appeals for the Federal Circuit could take another three to four years. A fully contested proceeding, therefore, could consume six to seven years.

There is a lot of information in this paper, and is highly recommended for anyone dealing with inter-partes reexaminations.

Read/download a copy of the paper here (link)

Comments are solicited, which may be shared directly with Prof. Smith: msmith@foley.com

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