Philip Brooks' Patent Infringement Updates

Reinventing Patent Law

Steve Seidenberg writes in the February 2008 print issue of the ABA Journal that "the pendulum is swinging for a system that has long favored the rights of patent holders."  The following is excerpted from his article:

Stephen Comiskey thought he knew a good thing when he saw it. And plenty of others felt the same way. The 1998 decision by the U.S. Court of Appeals for the Federal Circuit in State Street Bank & Trust Co. v. Sig­nature Fi­nancial Group Inc., 149 F.3d 1368, had opened enormous new opportunities for astute entrepreneurs.

After the court ruled that processes could be pa­tented as long as they produced “useful, concrete and tangible result[s],” both individuals and companies deluged the U.S. Patent and Trademark Office with ap­plications for patents that would give them exclusive control over cer­tain methods for dealing with various business matters.

Comiskey, a general practice attorney in Washington, D.C., was one of the eager applicants. In late 1999, he filed an application to patent a method for using man­datory arbitration to resolve disputes relating to wills and contracts.

It seemed like a good idea at the time. But times have changed.

In September, a three-judge panel of the Federal Cir­cuit threw out many of the claims supporting Comis­key’s application, finding them to be unpatentable mental processes. The ruling in In re Comiskey, 499 F.3d 1365, is a defeat for not just one business method “inventor.” The decision appears to be a major retreat from the court’s position in State Street that significantly narrows the definition of what is patentable.

Moreover, many patent law experts say, the Comiskey ruling is part of a larger trend in which the Federal Cir­cuit, the U.S. Supreme Court, the PTO and Congress all have acted to scale back the rights of patent holders and applicants, while making it easier for existing pa­tents to be attacked.

What is clear, says Donald R. Ware, a patent litigator at the law firm of Foley Hoag in Boston, is that “the Supreme Court, Congress and the patent office are moving in a di­rec­tion that is unfavorable toward patentees. That is a big change.”

Read the full article here.

German Patent Database Available

Please see the German Patents website that is added today to the Tools section on the lower left banner.  This site offers a full text database of German patents from 1986 to the present classified by IPC.  The site is available in German only.

An Israeli Perspective on U.S. Patent Reform

The Jerusalem Post ran an opinion piece on February 20, 2008 denouncing the Patent Reform Act of 2007.  The article is by Bernard G. Frieder who "served in the cabinet office of the British government as a technology specialist and has advised private firms in the US and the UK. He is currently working with several emerging intellectual-property-based companies in Tel Aviv."  He writes:

The United States Senate is expected to vote soon on legislation, the Patent Reform Act of 2007, which would change America's patent system significantly.

Because inventors, research organizations and startup ventures around the world rely on US patents to protect the output of their labor, changing the US patent system has global repercussions.

Here in Israel especially, US patent reform will have a profound effect.

On a per-capita basis, Israel has the largest number of biotech start-ups and is a world leader in developing revolutionary medical devices. Israeli brainpower is behind "Voice-over Internet Protocol," instant messaging, flash disks, and much more.

US PATENT filings have facilitated and protected these breakthroughs. Specifically, the number of US patent applications filed by Israeli inventors has grown from 632 in 1990 to 3,617 in 2007 - an almost 600-percent increase. In fact, Israelis have more American patents, on a per-capita basis, than the citizens of any other country.

But the changes in US patent law now under consideration by Congress would drastically weaken current protections. This is deeply problematic for Israeli start-ups and suppliers of venture capital, who rely on the US patent system.

THE PROPOSED changes would greatly increase the costs of securing a basic US patent and expand filing requirements and processing time, thereby reducing a patent's term of protection.

Also, a US patent would no longer be a secure asset since its validity could be challenged during the course of its effective life. There would be no closure.

Calculation and allocation of damages would likewise be altered in ways that reduce compensation for those whose patents are violated.

US patent reform is a global issue, and Israelis - individuals, associations, and government alike - ignore the bill's implications at our peril. We should be doing all we can to make US lawmakers aware of our concerns.

Thanks to the reader who alerted me to this article.  Read the full article here.

WRG Webinar on Bankruptcy and Intellectual Property

World Research Group is hosting a webinar titled, "Bankruptcy and Intellectual Property: Protecting Your Rights in Uncertain Times" on March 28, 2008.  Robert Eisenbach (who also writes In the Red®: The Business Bankruptcy Blog) and Richard Kanowitz of Cooley Godward Kronish LLP will lead the webinar.

Overview

Intellectual Property has become a vital corporate asset. Protecting these assets in a bankruptcy is crucial to both Licensors and Licensees. When a Licensee files bankruptcy, a Licensor frequently wants to prevent its licenses from being transferred to possible competitors or other third parties, while the Licensee needs to preserve IP licenses as a means of emerging stronger from bankruptcy and boosting its prospective acquisition value. A bankruptcy filing by a Licensor raises other issues, including to what extent Licensees may retain their license rights.

Agenda

The discussion will focus on:

• Bankruptcy’s effect on patent, copyright and trademark licenses;
• The latest court decisions impacting bankruptcy and IP rights ;
• Section 365(n) and its effect on foreign rights; and
• Protecting your Rights -- Strategies for both Licensors and Licensees.

WRG is extending a 20% discount off the $299 list price to readers of Philip Brooks' Patent Infringement Updates (reference the following discount code when registering: CQR334).  More information and registration details are available here.

Troll Tracker Outs Himself

Posted by Debra Cassens Weiss today, February 26, 2008, at the ABA Journal:

The anonymous author of the Patent Troll Tracker blog has revealed that he is Richard Frenkel, an intellectual property lawyer who is a director in Cisco Systems' IP group.

Frenkel said he decided to out himself after he received an e-mail threat from someone who threatened to go public with his identity, the Recorder reports. Many patent lawyers told the legal publication they considered the blog to be required reading.

Chicago lawyer Raymond Niro had recently increased his reward offer to $15,000 to anyone who could provide him with the Troll Tracker’s identity. So far, no one has stepped forward to claim the reward. "Whoever did it did it not for the purposes of making money but rather for the purposes of exposing him," he told the Recorder.

Niro had offered the bounty because Troll Tracker had criticized his firm for representing so-call “patent troll” clients that owned patents without making products. Frenkel said in a post revealing his identity that he started his blog because of the lack of information about trolls.

“When I started the blog, I did so mainly out of frustration,” Frankel wrote. “I was shocked to learn that a huge portion of the tech industry's patent disputes were with companies that were shells, with little cash and assets other than patents and a desire to litigate, and did not make and had never made any products. Yet when I would search the Internet for information about these putative licensors, I could find nothing.”

Frenkel is weighing whether to continue the blog. He said only his direct manager at Cisco, which holds more than 5,000 patents, knew of his anonymous blogging.

Niche Search Innovation

Richard Martin wrote an article in the February 11, 2008 print edition of Information Week titled, "The Search Market Fallout of Microsoft-Yahoo."

When tigers battle, mice get fat. That pseudo-Chinese proverb well describes one likely outcome of Microsoft (NSDQ: MSFT)'s $44 billion bid for Yahoo (NSDQ: YHOO), which would reduce the top three Web search providers to just two: Google (NSDQ: GOOG) and Micro-Hoo (or whatever the mashup of Yahoo and Microsoft's MSN Live search tool would be called).

Below, far below, these consolidating giants is a proliferation of search upstarts, some of them providing consumer-oriented Web searches and some providing highly specialized forms of enterprise search. The clash of the titans atop the search pyramid is opening up new opportunities for these smaller players while helping to enable a broad flourishing of innovation in information-access technology.

The question the article provoked in my mind was, "How will this innovation benefit patent infringement investigations?"

Take Silobreaker, which debuted its contextual search engine at last month's Demo conference. Silobreaker provides search results optimized for current events, with added-value elements including "context extraction" (how the person or topic fits in with other people, institutions, or categories), geographical mapping, trend tracking (graphing numbers of mentions in the world press), and relational mapping (tracing relations between entities or people). The engine draws content on global issues, science, technology, and business from about 10,000 news, blog, research, and multimedia sources.

Silobreaker is being introduced as a free Web tool, but CEO Kristofer Mansson sees opportunities for use by large companies and government agencies--including those in intelligence. Mats Bjore, the company's director of business development, comes out of the intelligence world: He helped set up intelligence efforts involving publicly available data for the Swedish Armed Forces.

I have just recently tried Silobreaker and it has some very interesting features that I believe maybe useful additions.  Has anyone spent time using Silobreaker?  What about some of the others mentioned in the article, such as, Attivio, ChaCha and Eyealike?  Please provide your input by adding a comment.  The full Information Week article is available here.

Obviousness Under Chinese Patent Law

A paper with this title was written by Santa Clara Law student Xin Ma for an Advanced IP Research class and was published by the Tech LawForum, sponsored by the High Tech Law Institute at Santa Clara Law School, on February 20, 2008.

Executive Summary

Current Chinese Patent Law requires “inventiveness,” a concept similar to the Unites States’ requirement that a patent’s subject matter be non-obvious. One difference between the two requirements is that the Chinese standard is lower, in that the definitions of prior art and “ordinary skill in the art” make it harder in China to invalidate a patent application. Also, there is no “motivation from market force” factor in Chinese Patent Law, nor indication that Chinese Patent Law will adopt such a factor in the future for the purpose of invalidating a patent for being obvious.

The gap between the Chinese Patent Law and the United States patent law will therefore widen after KSR v. Teleflex, unless the next amendment to the Chinese Patent Law, due 2008, adopts some significant changes.

Download the paper here.

$29 Billion Reasons to Litigate?

Duncan Bucknell of IP Thinktank Blog wrote in his post yesterday, February 20, 2008:

The most successful IP strategies in the pharma industry are often aggressive.  They have to be.

US $29 Billion in drugs come off patent this year - however that's the innovators' current markets - these products will all have multiple generic suppliers on patent expiry, and so with price competition, the actual markets will be much smaller.

The fruits go to those companies who don't wait for patent expiry before launching, and instead develop non-infringement or invalidity strategies.  High risk, but high reward.

Read the full post here.  Also take a look at Mr. Bucknell's most recent Global Week in Review.  A "selection of top intellectual property news breaking in the blogsphere and Internet."

Waves of Changes in Chinese Patent Law and Regulations

The final section of a four-week series appeared in ChinaBio Today on January 31, 2008. The article was prepared by Charles C. Liu, PhD, JD, Partner, Director of US Practice, Unitalen Attorneys at Law, and Jeanne J. Liu. It was originally published in China Intellectual Property, 20:44-51 (2007).

The fourth section states, in part:

INTRODUCTION

The Chinese Patent Law, since its enactment on March 12, 1984 (effective April 1, 1985) was previously revised on September 4, 1992 (effective January 1, 1993) and on August 25, 2000 (effective July 1, 2001). The draft of the third revision of the Patent Law (“Patent Law (Draft Revision 2006)”) is expected to be finalized in 2008 after the current 2000 version has been effective for eight years.

The draft of the third revision was released for comments on July 31, 2006 by the State Intellectual Property Office (“SIPO”) and was further revised and submitted as a draft for review to the Judicial Committee of the State Council on December 27, 2006. It should be pointed out that the SIPO released its revised administrative guidelines, i.e., the Patent Examination Guidelines (“Examination Guidelines (Revised 2006)”) on July 1, 2006. Also, a revision of the Implementing Rules of the Patent Law (“Patent Rules”) is expected to follow this revision of the Patent Law. Task forces were set up earlier this year to conduct research and to prepare an initial draft for the third revision of the Patent Rules.

PATENT MISUSE AND UNFAITHFUL PROCEEDINGS

To protect the legitimate interests of the public, the Patent Law (Draft Revision 2006) adopts provisions on prior art defense and malicious prosecution. For the prior art defense, the draft states that in a judicial or administrative proceeding for patent infringement if the defendant can forward sufficient evidence showing that the patented subject matter falls within the scope of the prior art, the defendant’s conduct shall be held as not constituting infringement.

The draft further provides that where a patent owner knew that his patented art belongs to a prior art, but nevertheless unfaithfully brought an action against another party in an administrative or judicial proceeding for patent infringement, the patent owner will be held liable to the alleged infringer for damages caused by the unfaithful accusation.

Addressing the issue of unfaithful proceedings, the draft also provides that if a patent owner, through his conduct, expression or silence, caused another party who practices the patented invention to reasonably believe that the patent owner was not and would not claim the patent rights, but the patent owner later brought an action against the other party before a court or patent administration, the patent owner’s claim will be deemed as against the principle of faithfulness and honesty. Thus, the patent owner will be held to have no right for compensation for the period prior to the date of the action and not have the right to ask the court or patent administration to order the other party to cease practicing the invention.

Access the four-part series here.

Counsel Corp. Subsidiary, C2 Global, Settles Lawsuit Against AT&T

A Counsel Corporation press release appearing today, February 19, 2008, at Marketwire states, in part:

Counsel Corporation ("Counsel") (TSX:CXS) is pleased to announce that its 92%-owned subsidiary, C2 Global Technologies Inc. ("C2")(OTCBB:COBT), has settled its patent infringement litigation against AT&T by entering into a Settlement and License Agreement. The terms of the Agreement are confidential.

The AT&T license represents a breakthrough as it is the first license that C2 has negotiated for the '373 Patent. C2 intends to aggressively pursue licenses from other entities that are using its patented technology, which includes corresponding patents in Australia, Canada, China and Europe.

In June 2006, C2 Communications Technologies Inc., a wholly-owned subsidiary of C2, filed a patent infringement lawsuit against AT&T, Inc., Verizon Communications, Inc., Qwest Communications International, Inc., Bellsouth Corporation, Sprint Nextel Corporation, Global Crossing Limited, and Level 3 Communications, Inc. The complaint was filed in the Marshall Division of the United States District Court for the Eastern District of Texas and alleges that the defendants' services and systems utilizing Voice over Internet Protocol ("VoIP") infringe C2 Communications' U.S. Patent No. 6,243,373, (the "'373 Patent") entitled "Method and Apparatus for Implementing a Computer Network/Internet Telephone System". The complaint seeks an injunction, monetary damages and costs. In June 2007, the complaint against Bellsouth Corporation was dismissed without prejudice. A trial date of August 4, 2008 has been set for the lawsuit.

Read the full press release here.