Archive for May, 2010

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Gravatar Iconby Mark Malek

The United States Supreme Court recently heard the case of In re Bilski in which the court was asked to make a determination of what is and what is not patentable subject matter.  For more information on the original holding by the Federal Circuit, please check out our previous post.  For some information on the oral arguments at the U.S. Supreme Court, please check out our Bilski Part Duex post.  The Bilski patent application was rejected by the PTO for failing to meet the requirements of 35 U.S.C. § 101, i.e., the PTO held that the invention was not directed to patentable subject matter.

MalekSupCt2

Me at the Supreme Court.  (I'm the shorter one.)

Oral arguments in the case were held in early November 2009.  We all expected a ruling already, but there has not been one yet.  I suspect that a ruling is coming out soon.  As a side note, I was at the US Supreme Court at the beginning of the month, and they read two opinions.  Just to tell you how much of a geek I am, I got really excited thinking that one of the opinions might be Bilski.  No such luck.

The opinion might come out here in the next week or two, so I just want to get my prediction on the record.  In short, the court will hold that the subject matter of Bilski’s patent application is not patentable.  The reasons why they find it unpatentable, of course, is what the patent world will be waiting for.  The implications for many different industries can be huge.  Although I realize that this has some implications in the pharmaceutical industry, my main focus is software.  When the Supreme Court gets through with this case, will software still be patentable?  Will they uphold the rule of law set forth by the Federal Circuit (machine or transformation test)?  Will there be a new test that the Supreme Court enters that will have an effect on the way we have drafted our claims for the past couple of years?

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Gravatar Iconby Mark Malek

Professor Dennis Crouch of Patently-O recently posted an article about the difficulties in collecting royalties pursuant to a patent licensing agreement.  In his post, Professor Crouch referenced a report by Invotex, which noted that 86% of licensees misreported their royalties to their licensor.  This, unfortunately, is not surprising, and is part of the reason why the process of entering into a patent (or any IP) licensing agreement can be so time consuming.

The Invotex report sets forth some of the very issues that a patent licensing attorney tries to avoid when entering into a licensing agreement on behalf of a client that is the licensor.  Often times, however, the negotiation process does not allow for the “tight” agreement that the licensor’s attorney wants.  Instead, licensing agreements can often be open to interpretation.

Some of the royalty reporting errors indicated in the Invotex report include questionable license interpretation, underreported sales, disallowed deductions, underreported sublicenses, and math errors.  There are, of course, ways to avoid these various debacles in the contracts.

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Gravatar Iconby Mark Malek

In parts I and II of this series, we discussed the importance of setting up an IP holding company where all of your IP is held.  We also provided some pretty good examples of the kinds of things that could happen if your IP is not properly titled in your IP holding company, or if you comingle your IP holding company with other assets.  That leads us to this post – a brief overview of the requirements that MUST be followed in order to properly protect your IP and shield it from other liabilities.

As we recommended in our previous post, you should set up an LLC that has the purpose of holding your IP and licensing the IP for use by others.  This can actually be a rather simple process here in Florida.  The website for the Florida Department of State Division of Corporations is sunbiz.org.  The filing forms for setting up your LLC are available for printing or, if you have an account set up already, you can simply electronically file the forms.  As noted, this can be a simple process, but one that is somewhat easy to do improperly as well. When all else fails, seek the advice of an attorney.

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