Philip Brooks' Patent Infringement Updates

Affordable Patent Litigation and the Burdon Plan

The following is excerpted from an April 27, 2009 post at PatLit:

The Burdon Plan, first launched on the IPKat weblog on 5 November last year, has been the subject of a good deal of discussion and further thought since then ...[including] critical response from Taylor Wessing's Gareth Morgan and Richard Price... In the following article, Michael Burdon develops his proposals in the light of the many responses he has received.  He writes:

"The purpose of this note is to provide some additional comments on the ideas outlined in my earlier note, especially taking into account numerous communications and discussions I have had since its original publication, including discussions with industry bodies and professional organisations, such as the IPLA. I also appreciate that the Plan would require a change of rules in the light of Nichia v Argos and Knight v Beyond.

The main assumption in my paper was that there was a substantial body of patent litigation which did not occur in the UK because companies could not afford it. This assumption is supported by my discussions. The problem of lack of access to justice lies not only with patent owners being unable to enforce their rights but also with companies which are forced to change their R&D and/or take licences when they do not consider the relevant patent to be valid but cannot afford to challenge it.

Read the full post here as well as explore the full blog which launched on September 29, 2008.  This weblog is dedicated to everything and anything to do with patent litigation, whether it be:

• infringement issues
• appeals against refusal to register
• revocation, cancellation and amendment of existing patents
• ownership and transactional disputes
• discovery/disclosure
• privilege and professional ethics
• evidence and expert witnesses

Dealing With Mad Patent Disease

Rick Merritt writes in the April 20, 2009 cover story of EE Times:

The industry has a bad case of mad patent disease.  The patent reform bill working its way through Congress could ease some symptoms, but it won't eradicate the scourge.

On the other hand, the engineers who develop patentable technologies in the first place could help find the cure for mad patent disease -- but first they need to understand its epidemiology.

"Mad" in this case stands for mutually assured destruction, the Cold War-era philosophy that justified nuclear proliferation.  This skewed strategy, lampooned in the movie "Doctor Strangelove," has become integral to how the electronics industry handles intellectual property.

How to recognize and treat mad patent disease:

THE SYMPTOMS

1. Companies file too many, low-quality patents

2. Trolls, operating companies aggressively buy and assert patents

3. Companies license patents without reviewing them
4. Companies encourage engineers not to read patents
5. Applications provide too little or too much prior art

THE TREATMENTS

1. Patent Reform Act of 2009

2. Engineering activism
3. Better corporate compensation for patent work
4. Fix patent office
5. Make licensing simpler

Read the full article here (subscription required).

Significant Changes Coming to Senate Patent Reform Bill

This is excerpted from Gene Quinn's March 26, 2009 post at IPWatchdog:

The Senate Judiciary Committee did hold a meeting this morning discussing several appointments pending before the Committee and pending patent reform legislation.  The meeting was quite brief, lasting less than 30 minutes, presumably because there is an important mark-up meeting regarding the Budget.  According to Senator Leahy, the Chairman of the Senate Judiciary Committee, Senators will once again meet regarding patent reform on Tuesday, March 31, 2009.

There were several minor, technical amendments made to the patent reform bill during the Executive Meeting today, but no major or significant changes were made.  There will be news coming out of this meeting though, particularly Senator Leahy promising that there will be a patent bill this year, and soon.  Senator Specter explaining that Senators are very close to a compromise and the changes may be “very significant,” Senator Hatch explaining that it will be impossible for everyone to be happy and, most importantly perhaps, Senator Feinstein explaining that as long as the bill favors only high-tech companies it has no chance of passing the full Senate. It is significant to note that Senators Specter and Feinstein seem to be on the same page, and Senator Hatch seemed somewhat upset and put off by the fact that consensus is desired, which could signal that high-tech will not be getting their wish list after all.

Read the full post here including a partial transcript of the Senator's comments.

Bill To Ban “Reverse Payment” Settlements Introduced

David Fischer posted the following at his Antitrust Review blog:

Yesterday [February 3, 2009], Senators Kohl and Grassley introduced a bill “to prohibit brand-name drug manufacturers from using pay-off agreements to keep cheaper generic equivalents off the market.”  They titled their bill ”The Preserve Access to Affordable Generics Act” (S. 369).  It is similar as the “The Preserve Access to Affordable Generics Act” (S. 316) that was introduced in the last Congress.  That bill did not reach the Senate floor.

A comparison of the findings [sections of S. 316 and S. 369] appears to show that over the last two years 1) prescription drugs are now a lower percentage of national health care spending , 2) a significantly larger share of the prescription drugs prescribed are generics and they make up a significantly larger share of prescription drug expenditures , and 3) generic drugs cost even less now (as compared to their brand-name counterparts).

See the full post here.

According to The Library of Congress' Thomas system the latest major action: 2/3/2009 Referred to Senate committee. Status: Read twice and referred to the Committee on the Judiciary.

Damages Key to Patent Reform Debate

Rick Merritt writing on March 3, 2009 at EE Times states:

A heated debate over how courts determine damages in patent infringement cases could make or break the latest attempt to reform the U.S. patent system. All sides signaled they are willing to negotiate to get a bill passed, but it's unclear whether they can overcome their differences.
 
Five Democrats and four Republicans introduced the Patent Reform Act of 2009 in Congress Tuesday (March 3.). They will hold a one-day hearing broadcast over the Web on March 10.

Big computer and communications companies back the bill as a way to limit the number of patent infringement cases and damages they pay on them.

"We find ourselves in a situation with more patent infringement suits than ever before and each one costs as much as $4 million," said John Thompson, chief executive of software developer Symantec, another member of the coalition [Coalition on Patent Fairness].  
 
Opponents claim the mechanism called apportionment the new bill uses to determine damages won't work outside the computer and communications industries where hundreds of patents go into a single system.

Read the full article here.

Intellectual Property Will Become America's Main Source of Competitive Advantage in a 21st Century Global Economy

From BusinessWire on January 26, 2009:

Mark Blaxill and Ralph Eckardt, two experts on innovation and intellectual property strategy (IP), take that argument one step further: In a competitive global economy, IP rights are one of a company’s – indeed, a country’s – main source of competitive advantage.

Blaxill and Eckardt are the authors of the forthcoming book The Invisible Edge: Taking Your Strategy to the Next Level Using Intellectual Property (Portfolio, March 2009). Their latest white paper on innovation and intellectual property, “The Innovation Imperative”, argues that America’s most valuable asset is its innovation and IP reserves, and that these will likely become the main source of U.S. competitive and economic strength in the 21st Century. Importantly, the paper warns that these advantages are easily endangered by overzealous attempts to drive patent reform too far and misguided calls to weaken the rights of patent owners.

Back in the 1960s and 1970s, in the name of “competition,” regulators at the FTC forced some of America’s leading companies to open their patent portfolios to the world. According to Blaxill and Eckardt: “The result was a flood of goods from foreign companies – made with American know-how that was obtained essentially for free.”

• The emblematic case was the 1975 antitrust settlement with Xerox: The FTC consent decree forced Xerox to give away decades of innovations for free.
• The wholesale cooption and give-away of patent rights (nearly 50,000 patents) plunged American businesses into a competitiveness crisis – and exacerbated the nation’s economic woes – for more than a decade.
• Today’s “patent reform” movement risks another large-scale give-away of innovation assets just when America needs these resources most.

[The authors] recommend a national “innovation policy” that includes:

• Protecting the U.S. patent system and the renewable strategic reserves that it generates.

• Sustaining America’s terms of trade and defending the pricing of America’s invisible assets through regulation and legislation.

• Adapting the USPTO to the needs of the modern patent development process.

• Building talent locally through quality science and engineering education.

• Providing incentives for inventive talent to live and work in the U.S.

• Making science and engineering financially rewarding careers.

• Supporting returns on invisible asset investments.

I received a copy of the white paper in the mail from a former BCG colleague of the authors,  Bill Matassoni.  To receive your own copy of “The Innovation Imperative” white paper or The Invisible Edge: Taking Your Strategy to the Next Level Using Intellectual Property (Portfolio, March 2009) and supporting materials, or to schedule a conversation with one of the authors, please contact Adria Greenberg at Sommerfield Communications, Inc. (212) 255-8386 or adria@sommerfield.com. 

China Mulls National Security Scrutiny for Patent Applications

The following is excerpted from a December 22, 2008 article appearing at China View:

Chinese inventors who wish to apply patents for their innovations in foreign countries must first go through government scrutinies to find out if such innovations should be made national secrets, according to a draft amendment to the country's patent law.

The Standing Committee of the National People's Congress (NPC), China's top legislature, discussed some proposed amendments on the 23 year-old Patent Law Monday at the opening session of its bimonthly meeting.

The draft amendment says innovations that have not be subject to security scrutinies will not be granted Chinese patents, and that those who leaked national secrets by failing to apply for the scrutinies will be punished according to the law.

Read the full article here.

Oral Arguments Completed in PTO v. GSK, Tafas

Gene Quinn of IPWatchdog "attended the oral arguments this morning at the United States Court of Appeals for the Federal Circuit regarding the matter of the United States Patent & Trademark Office v. Tafas, the appeal of the claims and continuations rules promulgated by the USPTO back in August of 2007, which were preliminarily enjoined and ultimately permanently enjoined by Judge Cacheris of the United States District Court for the Eastern District of Virginia."

In summary Gene writes:

It is hard to imagine that GlaxoSmithKline and Dr. Tafas could have drawn a better three judge panel than they did for this appeal of Judge Cacheris’ ruling.  The judges assigned to the panel hearing the case were Judges Rader, Bryson and Prost, who took turns laying it on the government USPTO General Counsel Toupin.  It is hard to imagine based on the barrage of questions thrown at Toupin that this panel is going to do anything other than affirm Judge Cacheris’ decision and rule that the claims and continuations rules were beyond the authority of the Patent Office and cannot be implemented.

Read the full detailed post here.

Patent Application Backlog Exceeds 1.2 Million

Gene Quinn writing a post titled, "How to Fix the USPTO" on November 21, 2008 at his IPWatchdog blog states:

The United States Patent & Trademark Office has just released the 2008 Performance and Accountability Report, which is the annual report explaining the activities of the Office during fiscal year 2008.  While so much of the report is a self congratulating look back at what the Dudas Administration believes it effectively achieved over the past year, the report should be anything but self congratulating given the dire situation that the US Patent System faces moving forward.  As of the end of Fiscal Year 2008 there are 1,208,076 patent applications still pending at the Patent Office.  At the end of Fiscal Year 1997 the number of pending applications left over was only 275,295, so over the last 11 years there has been a  439% increase in the number of pending applications left over that could not be resolved.  That is alarming.  Each year since 1997 this number has gone up, first going over the 1 million mark in 2006.

See Gene's proposal for a solution here.

Russian IP Laws and Commercialization

The American Bar Association (ABA) Section of International Law and the ABA Center for Continuing Legal Education are sponsoring the above titled teleconference on October 1, 2008.

Intellectual property rights and technology transfers are a part of many business investments and transactions in Russia. The rules in these areas changed significantly on January 1, 2008 when the existing IP laws were repealed and the new and controversial Part IV of the Civil Code came into force. This program will discuss how those changes came about, review Russia’s trademark, copyright, patent and trade secret laws, and discuss practical issues in licensing and commercialization. There will also be a discussion of the enforcement of IP rights by the Russian courts with examples from actual cases. Investment in Russia has been increasing based on improvements in economic and political stability. Join the program and learn how the IP sector is doing.

Faculty

• Vladimir Biriulin, Partner, Gorodissky & Partners

• Paul Jones, Jones & Co., Toronto, Canada

• Peter B. Maggs, Law Professor, College of Law of the University of Illinois at Urbana-Champaign

• Vladislav Zabrodin, Managing Partner, Capital Legal Services, International, L.L.C.

Read here to learn more and register.