December 31, 2007
So Nice of You to Call
After shelling out to settle patent suits from Verizon, Sprint and AT&T, Vonage gracefully settles for a cross-license with Nortel; a pleasant way to end the year.
Rear View 2007
2007 was a raucous year for patents. The high courts and patent office shuffled the deck chairs like madmen. Patents sleazed and slimed in the hallowed halls of the whores of Congress. Business as usual as a few patents went big bang for the buck, while others crashed on the shoals of a new artificial reef called KSR.
December 29, 2007
Packing Heat, Not Light
Sen. Patrick Leahy [D-VT] and Sen. Orrin Hatch [R-UT] were kissing each other's ass on the Senate floor December 18. The comity is affecting, but these guys are dangerous goons, given to impulsive action: "urgent need to modernize our patent laws," they quiver. The real urgent need is not to screw inventors into the ground to pacify serial patent infringers.
December 27, 2007
A patent embodies a simple concept of private property, that of invention. Those opposed to the concept rage against it in vicarious ways, to weaken its power, as the concept itself endures. Ironically, current USPTO management tries to shuck its core responsibility of patent examination, by contriving elaborate rules and justifications to render its sloth less odious. The patent office's self-destruction has cheering supporters.
December 26, 2007
Hyperphase sued Google for infringing four patents with Google's AutoLink and AdSense technologies. AutoLink, part of Google Toolbar, adds links to a web page. AdSense puts context-sensitive ads on web pages. The district court granted summary judgment of non-infringement on a narrow claim construction; overturned, because a nominal claim reference to one can be plural.
December 25, 2007
Online auction house eBay and satellite virtual bank PayPal dodged errant bullets shot by Netcraft: 6,351,739 and 6,976,008. The claims go to "an Internet billing method." Summary judgment of non-infringement was granted because the claims required "providing a communications link through equipment of the third party;" in other words, an Internet service provider (ISP). eBay and Paypal don't do that.
December 23, 2007
Proposed Patent Reform and the Market for Ideas
Back in September, Dennis Crouch published a good summary of the patent reform legislation. In an earlier post, I described how the Internet, by reducing the transaction costs associated with identifying valid patented technology, is facilitating an emerging market for ideas. Patent reform legislation obviously has the potential to either promote or destroy this emerging market. Here are a few thoughts on how the specific proposals for patent reform would affect the emerging market for ideas.
December 22, 2007
Flexsys slammed Sinorgchem at the ITC, winning a limited exclusion order. Sinorgchem appealed. The CAFC instructed the ITC on claim construction.
December 21, 2007
USPTO management is pushing rule-crack on examiners, who are smoking it. Rule-crack: crystallized infractions homeopathically processed so that they don't even exist in CFR form. Before rampant rule-crack ingestion, the majority of examiners were randomly competent at best. Engendering curmudgeonly denial of due process, rule-crack is spawning egregious intellectual property theft.
December 20, 2007
4,976,388 claims a shoulder strap with a bit of give. John Wleklinski, dba Comfort Strapp, sued Targus for infringement. Targus got a summary judgment of non-infringement, its strap not meeting two claim limitations; easily upheld on appeal in a non-precedential decision.
December 19, 2007
Have a Cigar
Insisting on injunctive relief for patent infringement by eBay for its "Buy it now" feature, MercExchange is like a pit bull with rags for brains. After last year's overturning the CAFC practice of granting injunctions "automatic like a dog," the Supreme Court decision in eBay v. MercExchange sewed a new garment out of old cloth, updating "the traditional four-factor test" for granting injunctions: (1) are you screwed without an injunction?; (2) what do you mean, money's not enough? (the prostitution test); (3) considering both sides, who's seriously damaged one way or the other?; (4) are consumers screwed by an injunction?. Back in deliverance district court after giving MercExchange $30 million in eBay bucks, the judge had MercExchange squeal like a pig.
Patent enforcer TPL Group and Patriot Scientific, holding microprocessor patents, witnessed the ritual of bended knee and open wallet by Matsushita/Panasonic, Toshiba, JVC, and NEC. Trial was docketed for next month in the Eastern District of Texas.
December 18, 2007
As Vonage is learning, VoIP is an acronym for "voice over intellectual property." After acquiring Digital Packet Licensing last year, which had its own patent assertion going against Nortel Networks, Vonage unwisely let it continue. Slow on the uptake from its expensive losses to Verizon, Sprint-Nextel and AT&T, Vonage now faces a counterclaim from Nortel.
Citing Prior Art
In many instances, the proposed IDS rules will create a prior art search dilemma for patent prosecutors. The new rules require extensive analysis of cited art, reportage that characterizes the claims and thus invites prosecution estoppel, hence hampering enforcement potential, particularly applying the doctrine of equivalents. In a field crowded with art, to minimize cost while maximizing patentability under the new IDS rules, a crafty prior art strategy is imperative.
December 14, 2007
Unable to staff its way out of its pendency hole, USPTO management seeks to address the problem by limiting continuations and RCEs. Seeking to gratify a grotesque bias, Ayal Sharon & Yifan Liu set out to statistically validate that conclusion. Instead, they proved what many prosecutors already knew: examiners' refusal to grant deserved patents. The root of the problem is a culture now steeped in political fear of being considered slack by granting junk patents, inspired by a short-sighted and incompetent management responding to pressure from well-funded propagandists.
December 13, 2007
Randi Black's 7,152,606 covers a nipple cover, one that got good coverage from Eastern District of Texas Judge John Love's Markman hearing, adopting most of the language the plaintiff preferred on the crucial term "nipple cover." The defendants had argued for an unreasonably narrow construction.
Buy It Now
Judge Jerome Friedman of Eastern Virginia district court put the final tab of eBay infringing MercExchange's 5,845,265 with eBay's "Buy It Now" feature at $30 million. The case spawned a muddled SCOTUS ruling in May 2006 scotching the prospect for injunctions in many cases, to a nominal regime of payoff for infringement. Post-trial continuing infringement is not covered in the eBay case, and MercExchange hopes to squeeze more for it; while eBay likely appeals.
December 12, 2007
MPT successfully sued Marathon Labels and Polymeric Converting for patent infringement, and even got a permanent injunction, but an extra-territorial injunction that didn't withstand appeal.
What's the big IDeaS?
The Office of Management and Budget has approved the proposed Information Disclosure Statement (IDS) rule changes (full proposed rule). As poet Walt Whitman penned: "Do I contradict myself? Very well then, I contradict myself. I am large, I contain multitudes." But the USPTO isn't supposed to be poetic, or self-contradictory; it's supposed to grant valid patents. Worrying about decreasing pendency sets up an inherent self-contradiction, especially since the direct path to do so is closed: while management clings to denial as to cause, the agency admittedly suffers horrendous examiner turnover. So, the only way left to decrease pendency is to decrease examination time. Decreasing examination time necessarily increases the risk of granting patents badly: either erroneously granting junk patents, which the office used to regularly do, to not granting what should be valid patents, as the PTO has recently made its regular practice. Burden shifting to applicants is no substitute for impartial examination, and that's exactly the spirit of the proposed IDS rules.
December 11, 2007
Qualcomm was the product of the vision and determination of founder Irwin Jacobs. Jacobs furthered a technology derived from torpedo guidance systems used during World War II into a global wireless standard. Jacobs also forged a business model with patents at the core: manufacturing via outsourcing, Qualcomm became, in essence, a patent licensing company. Facing a relentless squeeze, resentment built among licensees and competitors, igniting courtroom warfare, with the Big Q lighting the match.
December 10, 2007
Can't Touch This
Mere days after Margaret J.A. Peterlin was appointed Deputy Director of the patent office, before she even had a chance to prove herself an incompetent nincompoop, she's attacked in court by a self-righteous goon squad of do-gooders who don't want to give her the chance to prove herself an incompetent nincompoop. But the government isn't to be held accountable, and so a district court judge shucked the matter because the law is "vague."
December 8, 2007
Patent Blog Troll
Anti-patent blogger Patent Troll Tracker (PTT), notoriously anonymous, has generated a lot of heat and little light in his spat with hugely successful patent litigator Ray Niro. PTT flatters himself that Niro put a $5,000 bounty out to identify him. Niro nails PTT with "I view these people [anonymous bloggers] as know-nothings, afraid to reveal their identity." Niro's missed opportunity was coining the term "patent blog troll," for patent bloggers who aren't patent practitioners. What special level of hell would Dante have reserved for the anonymous patent blog troll?
IBM used to be known as a supreme hardball player, even fending off a Justice Department antitrust suit. In present time, its increasing reliance on services has been an impetus to soften its public image. Its public patent stance is similar, recently espousing eschewing business method patents, which are subject to especial derision by the software companies that IBM has for its client base, as they are generally a threat. IBM terms such patents "soft," while continuing pursuit of that ilk deemed most significant. The anti-patent puttyheads may be fooled by IBM's feints, but make no mistake: IBM is still a hardball player. This week it filed against Taiwan-based ASUS, makers of excellent computer equipment, particularly motherboards, at the ITC, whose only remedy to offer is injunctive relief.
December 7, 2007
Fulbright & Jaworski has released its fourth annual survey of companies getting pipped and waltzing others in that toe-tapping polka affectionately known as litigation. In the patent department, F&J finds infringement claims rising like yeasty bread, with the big boys flinging more dough as well as being more frequently flung upon. Speaking of dough, the cost of the attending the polka parlor is worry number one, not the prospect of injunctive relief. Yet spend to dance they do.
Kamil Idris, WIPO director general for the past decade, agreed to step down, after a typographical error in his birth date and some mix-up about his educational degrees caused an uproar. Idris will get a full year's salary of over $300,000 and full pension benefits. In related news, WIPO is changing its name to WIMPO, and, in Japanese, CHIMPO.
December 6, 2007
Over the next few years, the pharmaceutical business will hit a wall. Some of the top-selling drugs in industry history will become history as patent protections expire, allowing generics to rush in at much-lower prices. Generic competition is expected to wipe $67 billion from top companies' annual U.S. sales between 2007 and 2012 as more than three dozen drugs lose patent protection. That is roughly half of the companies' combined 2007 U.S. sales.
December 5, 2007
In a losing battle for priority, Harold Garner showed the USPTO as a curmudgeonly weasel that doesn't abide by its own rules. Constructively, what today's appeals court decision reminds is that swearing back requires independent corroborating evidence showing prior reduction to practice, convincingly demonstrating that the claimed invention "worked for its intended purpose" at the claimed pre-filing priority date.
Patent Plasma Sensibility Spasm
In but a single example of an endless stream, Samsung and Matsushita, the world's largest plasma screen manufacturers, suffered a litigation meltdown: settling their dispute over their respective plasma screen patents. Fortunately for the companies respective lawyers, the two companies continue to bash each other over semiconductor and memory patents.
December 4, 2007
The United States' best known racketeering syndicate turns its green eye of jealousy towards patents: the IRS wants to know of any transactions under the aegis of a tax-related patent. As David Boundy at Cantor Fitzgerald wondered: "20%-off-sales at Sears of dishwashers covered by patents could become transactions that have to be reported to the IRS. Has the entire executive branch taken leave of its senses?" Who said there was ever any sense to take leave of?
December 3, 2007
Patent rube Viet D. Dinh in the right-wing American Spectator sucks corporate fumes for air as he goes gung ho for the sorriest patent legislation since 1793.
An example of the litigation abuse engendered by the current system is the rise of "patent trolls," speculators who acquire and sue bona fide patentees but neither contribute to or otherwise expand the marketplace of ideas nor increase or improve consumers' choices. These speculators profit at the direct expense of consumers and risk-taking inventors and investors.
Wrong. Many inventors must rely upon patent enforcement firms, as they do not have the resources to practice their inventions, and infringing corporations more often than not refuse to negotiate patent licenses, relying upon their overwhelming financial resources to crush inventors in legal costs. Besides, patents are a commodity (that's why they are called "intellectual property"), subject to free trade; only a fascist would want it otherwise.
December 2, 2007
Edward "Rusty" Rose III stuffed his piggy bank, starting in the 1970s, shorting stocks. In 1989, Rusty and a rascal named George "Dubya" Bush, along with other investors, bought a controlling stake in the Texas Rangers baseball team. Oh yeah, Rusty's bankrolled King George along the way. Rusty kept shorting, acquiring a whiff of taint by shorting Terayon Communication Systems, then publicly bad-mouthing the company so as to make his prophesy bet self-fulfilling. Randy Rusty then decided to try his hand at the "sport of kings."