Posts Tagged ‘patents’

Ex Parte Reexamination and NPEs – Speaking Softly, Big Stick!

Wednesday, 08 August, 2012 08:54 Written by Dan Pierron 1 Comment
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As recently detailed by Gene Quinn at IPWatchdog.com, Sony has partnered with Article One in order to better defend itself against what it calls “low quality patent assertions.”  Gene gives an excellent description of the services provided by Article One.  However, no matter how excellent  a research firm may be in combing through patent and non-patent literature, when an alleged infringer has their damning reference in hand, the question remains, what now?

 

Non-Practicing Entities (or NPEs for those into the whole brevity thing) have been the target of much derision and venom, with some being more deserving than others.  While not debating the merits, or lack thereof, of NPEs, the fact remains that they are asserting patents that are presumed valid, they have the right to do so, and they are (for the time being) not going away.  A neighbor of mine recently recounted his own encounter with a cease-and-desist letter, and how, after paying a settlement, had a bad taste left in his mouth.  However, being the owner of a small company, settlement was the only viable option for him.  By and large, patent litigation is simply not an option for start-up business owners like my friend.  The immediate demand for cash associated with defending against such a charge is simply out of the question by no fewer than one order of magnitude.

I freely admit that this is armchair (well, couch) business owner-ing, and my chutzpah might be diminished if I were making the decision, but I think ex parte reexamination, coupled with a search firm such as Article One, may be the answer for someone with the will to fight, but not necessarily the means to litigate.  I can quite clearly imagine a scenario where, after receiving a C&D, a search firm is retained and digs up prior art casting doubt on the validity of the asserted patent.  Suddenly, the pursuer becomes the pursued.  The last thing an NPE wants is to have to defend their patent’s validity, at least until they are playing ball with heavy hitters.  Even then, this strategy appears to have gained favor.  And the fee for ex parte reexamination, currently $2,520, while by no means cheap, pales in comparison to the expense of litigation, and after accounting for the risk of the patent’s validity being maintained, may very well be a good option for a feisty target of an NPE.

Mostly, I think ex parte reexamination offers a third option to litigating and capitulating.  It’s a way for the not-so-big guy to assert himself without breaking the bank.  It offers the chance to stand up and fight for what he believes is right in an otherwise grim situation.

Software Patents – A Question That Will Never Be Answered

Wednesday, 01 August, 2012 08:46 Written by Dan Pierron 0 Comments
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In a recent post on PatentlyO.com, patent law guru Dennis Crouch detailed two recent decisions from the CAFC, Bancorp Services, L.L.C. v. Sun Life Assur. Co. of Canada and CLS Bank Intern. v. Alice Corp. Pty. Ltd.  Each case involved a patent having its validity challenged under 35 U.S.C. 101 as being directed to unpatentable subject matter, namely software.  Mr. Crouch excerpted a portion of Bancorp, reposted below, which helps illuminate the trend of thinking apparently being adopted by our venerable interpreters of the Patent Law:

In CLS, we reversed the district court and held that method, system, and medium claims directed to a specific application of exchanging obligations between parties using a computer were patent eligible under § 101. In faulting the district court for “ignoring claim limitations in order to abstract a process down to a fundamental truth,” we explained that the asserted claims in CLS were patent eligible because “it [wa]s difficult to conclude that the computer limitations … d[id] not play a significant part in the performance of the invention or that the claims [we]re not limited to a very specific application of the [inventive] concept.” Here, in contrast, the district court evaluated the limitations of the claims as a whole before concluding that they were invalid under § 101. As we explained above, the computer limitations do not play a “significant part” in the performance of the claimed invention. And unlike in CLS, the claims here are not directed to a “very specific application” of the inventive concept; as noted, Bancorp seeks to broadly claim the unpatentable abstract concept of managing a stable value protected life insurance policy.

 Judging from the above, the determination as to whether a claim is directed to patentable subject matter turns on whether it might be difficult to conclude the computer limitation plays a significant part in the performance of the invention.  A nebulous standard to be sure.  If only it were the case that a second qualifying determination provided more concrete guidance, but we are left with that the claim must be “a very specific application” of an inventive concept.
In my own experience, 101 rejections related to software require recitation of a computer with at least one of two types of qualification: specific function or specific form.  Examples have included computers configured to include a user interface that can be manipulated by a user, mobile telephones (having both form and function requirements), and computerized devices configured to communicate across a network.  Examiners appear to have been emboldened by promulgated USPTO guidance, based upon recent case law, to issue more and more 101 rejections on grounds similar to the issues presented in the cases above. Moreover, given the impossibility of getting clarification from the bench, those in the trenches are dealing with the fallout of seemingly arbitrary and capricious decisions making distinctions that are difficult to extrapolate beyond the specific facts of that case.  Perhaps the CAFC is falling prey to its own line of thought; its decisions appear to not be playing a significant part in answering the big questions of the day.

Blurring the Lines Between Copyright and Patent

Friday, 20 July, 2012 05:00 Written by Mark Malek 5 Comments
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By: Mark R. Malek

A couple of weeks ago, I wrote an article about overenforcement of copyrights.  In that particular article, I gave the example of a software copyright case (at least it was filed in Federal Court as a software copyright case) where the attorney was trying to argue everything but copyright.  Of course, he lost.

In that case, the attorney continuously argued that since my client’s software performed the same function, it must have infringed the copyright on his client’s software.  He could not have been further from correct, as was evident in the summary judgment that was awarded in favor of my client.  In short, copyright does not protect function.  Copyright, by definition, provides the author of an original work various rights to exploit that work and to prevent others from exploiting the original work without authorization for a fixed period of time (yes, I will write about the “fixed” period of time and how it magically extends every so often). I expect to receive several comments from the copyright abolitionists that I have been arguing with lately.  To see my previous articles on trying to figure out the arguments of the copyright abolitionists, click here and here.  Don’t worry, I’ll get back to proving why the copyright abolitionists cannot articulate an argument that makes any sense whatsoever soon.

Back to the issue at hand – why did this attorney so blur the lines between patents and copyrights? Short answer – there was likely a competence issue.  Another possibility, however, is that both copyright and patents can be used to protect software.  Copyrights, however, only protect the authorship and artistic expression that is the result of software, whereas patents protect the function that the software carries out.  For example, the actual lines of code used to write the software are copyrightable, and the expression of the software on the screen, e.g., a website design and layout, is also copyrightable.

The function that the software carries out, however, is not copyrightable.  Instead, that is protectable by patents.  Although this is a simplistic example, software that provides a function of linking several users together so that they can purchase and sell items in an on-line setting (eBay) may be patentable.  In other words, an application directed to patentable subject matter could be written that protects the function of an on-line auction system.  The issue there, however, is that something so broad would never in a million years be allowed.  There is so much software out there, and so many people that are developing software that the amount of prior art is tremendous.  That is why folks who are embarking on the software patent process need to understand that such patent applications are extraordinarily expensive and, if allowable, will only cover limited scope.  Gone are the days of preposterously broad software patents.  I believe that is one of the advantages of software patents – it is not as though a patent will be allowed for something as broad as an on-line auction site.  Instead, a patent that could possibly be allowed on software would need to include several details and be narrowly tailored to the specific unique and non-obvious function that the software carries out.

Therefore, to unblur the lines between copyrights and patents, just remember one simple rule.  Under no circumstance is function protectable using copyright.

 

Of Posner and Patents

Wednesday, 18 July, 2012 08:41 Written by Dan Pierron 0 Comments
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In an article for The Atlantic, Judge Richard Posner, who recently presided over and dismissed a patent infringement suit between Apple and Motorola and is generally regarded as one of the most influential judges of our time,  puts forth a number of arguments serving to indict the availability of patents in categories of technology, specifically those where the “cost of invention” is low.  Judge Posner appears to contend that, because a particular invention or improvement may be part of a broader plan of improvement, and the incremental cost of making said invention is small, making the case that the invention is worthy of patent protection is difficult.

While there may be merit to this argument, I believe it will give rise to results that should be avoided.  I do not believe the Judge Posner’s suggestion of industry-by-industry patent term lengths can be fairly implemented.  While some inventions within a particular industry require differing levels of expenditure to realize the invention, and while the frequency of greater expenditures necessary may be greater in particular industries, reducing patent term lengths in certain industries will chill investment in research on inventions in that industry that are projected to require greater expense in its development.
Moreover, difficulty will almost certainly arise in making the determination as to whether a patent application falls within oneof the term-shortened industry.  Almost certainly, so that the applicant/patentee may know the length of his patent term upon its issuance, the USPTO will have to be the responsible agency for making the classification.  As a patent attorney, I know that if my client’s application was categorized into a term-shortened industry, I would fight like hell to get it reclassified.  This would impose an additional burden on the USPTO, an agency which Judge Posner himself recognizes is underfunded and understaffed.

What’s more, the determination  of classification would quite possibly be a determination that could be put before the very courts Judge Posner contends “have difficulty understanding modern technology.”  Requiring such courts to make yet another decision that quite likely will fall to very subtle distinctions is only aggravating the problems surrounding patent litigation.

I agree with some of the potential solutions offered by Judge Posner, particularly special training for federal judges who volunteer to preside over patent litigation.  However, disadvantaging industries based on rapidity of innovation will, I fear, have the opposite effect than intended.

America Invents Act – Patent Office Funding

Wednesday, 13 June, 2012 09:03 Written by Dan Pierron 4 Comments
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Under-funding of the Patent Office, and its consequences,  is well-documented.

The situation boils down to Congress returns only a portion of the fees collected by the USPTO from applicants, patentees, and others through other processes such as reexaminaton.  Due to chronic under-funding, resulting in a reduced number of patent examiners, a backlog of patent application has grown for decades, causing an ever-increasing delay between submission of an application and a first response from the examiner.  While inefficiencies in the USPTO may partially reduce this delay, it is inescapable that more funds are needed to make a meaningful reduction in the pendency.

Congress comes to the rescue.  Right?

The answer to that question comes down to the subtle differences between the way the USPTO was funded pre- and post-AIA.  Pre-AIA, all the fees collected by the USPTO were directed into Congress’ general fund, with which it funds all programs that do not have special allocations already made.  From that enormous pot, Congress decides how much to dole out to various programs and agencies, including the USPTO.

 

Post-AIA, the fees collected by the USPTO can no longer be put into Congress’ general fund.  Instead, a
“Reserve Fund” is created in the Treasury Department, into which all fees that are collected that exceed the amount allotted to the USPTO by Congress (that part doesn’t change) for the fiscal year are deposited.

In my, and many others in the industry, opinion, this is a step in the right direction.  Although the funds are not immediately available for Patent Office use, no fee collected by the Office can be siphoned off to fund other government programs.  In a way, the new funding strategy self-insures the Patent Office against unexpected revenue shortfalls, either in the Office itself or for the entire government.  Congress can always reduce the amount of funds they allocate to the USPTO, but any reduction will not free up money to be used elsewhere.  This seems to keep Congress from shooting itself in the foot by continuing the practice of under-funding the USPTO.  The Government has recently exulted the benefits IP provides to the U.S. economy.  Conventional and popular political wisdom tells us “jobs = tax revenue,” so by removing barriers to acquisition of IP, i.e. long pendencies in examination, there is a likelihood that economic growth will result.  Preventing Congress from remedying near-term problems with solutions having long-term detrimental effects makes everyone, Congress and the public, all the better off.

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