Wednesday, December 28, 2011

Twelve Year Old Science & Eight Year Old Patents

There is a meme in the patent world that says, "patent trolls stifle innovation."  Just listen to the drum beat of the digital dialog on the subject and you'll hear the patent cognoscenti bemoaning the evils of the NPE.  The message is spreading across the patentsphere and is fast becoming urban legend.  Trolls hurt innovation so they hurt the economy.

James Bessen, Jennifer Ford, and Michael J. Meurer of Boston University School of Law published a paper titled, “The Private and Social Costs of Patent Trolls”  on the topic of patent trolls in November 2011.  The authors state, “NPE lawsuits are associated with half a trillion dollars of lost wealth to defendants from 1990 through 2010. During the last four years the lost wealth has averaged over $80 billion per year."

This piece of information has made its way around the Internet landing at many serious business publications like the Wall Street Journal and lots of influential tech blogs including many that have just recently learned how to spell patent.

"The Private and Social Costs of Patent Trolls" is a good paper with lots of compelling discussion on the negative impact of patent litigation brought by non-practicing entities.  The financial arguments are sound, the numbers are good and supportable.  Mr. Bessen presented his paper at the USPTO Patent Statistics conference in November, and he makes a very compelling case about the economic and social impact of NPE lawsuits and their impact on the organizations defending themselves against them.  (I refuse to use the victim term here.  You'll see why below.)

There is another important fact buried in the paper.  It states:

"The mean NPE law suit occurs eight years after the patent is granted."  

Consider what this means.  The average patent's pendency runs around 36 months. (It was slightly lower in the timeframe of the author's study but let's use 36 months for illustrative purposes.)  There are plenty of patents in NPE litigation that were based on provisional applications so add another 12 months.  Twelve years works either way - with or without a provisional when you consider how prior art is looked at.  We are up to around four years of application pendency before the patent is granted.  Now add eight years before one of the evil trolls takes action.  So we now have a patent based on 12 year old science and technology.  So, when an NPE litigates, the inventions are 12 years old.  More than half way through their patent term.

NPEs are litigating patents with 12 year old technology.

The patent has been in the public domain for eight years before the NPE files suit.  Eight years.  Eight years that it's been on every free patent searching tool, eight years it's been in the tools for the patent cognoscenti, eight years that the patent examiners have had it as a source of prior art and as a consideration on the novelty of new patents that follow it.

NPEs enforce patents that has been in the public domain for eight years.

 If the inventor decided to file a PCT, the patent application was published internationally, and if it was after 2001, domestically in the US.  It may also have been translated into other languages - usually one of the trilateral languages - French, German, Japanese - but there are some in Korean and other languages.  The patents litigated by NPEs have been out there in other languages.

Multiple versions of these patents for the invention have been disclosed for the granted patent used by the patent troll to litigate eight years after the patent grant date.

What do we learn from this?

Patent troll is really a pejorative term for guys who really know how to dig through the vast store of patent dreck to find valuable patents.  (Investors in non-correlated assets take note.)

Patent trolls watch the market and find patents that are enforceable and that were largely ignored by their product producing business counterpart, the practicing entity because they have been making products covered by the patents.  (Note to self, do freedom to operate search before finalizing the product.)

When the big voices of science and technology and their proxies start whining about how patent trolls are stifling innovation, what they are really saying is patent trolls do better research and have better tactics for finding valuable patents where the practicing entity has either decided not to get a license before building products or have decided to not to look at all.

How are patent trolls stifling innovation when they are dealing with 12 year old technology that has been public for around 8 years?

Please advise.

Monday, December 26, 2011

USPTO Algoritm Challenge

The USPTO Innovation Challenge is off and running.  The world's leading intellectual property office has issued a challenge for top coders to solve one of their big examiner challenges - matching the drawings that are part of a patent application with the text within the body of the patent's specification so that they can be displayed an analyzed side by side (or some other preferred embodiment thereof.)  This helps the examiner review the patent application in light of the drawings and vice versa.

Aside from the strange set of rules about who can play - among them that coders work in teams of two and may be assigned to work together rather than letting teams of folks who know each other (or know patents) work together, the contest has some very strange rules with respect to intellectual property.

This group of coders is being encouraged to build a new algorithm.  Did USPTO chose the term algorithm to try to get around patentability issues by letting them claim that this is an algorithm not subject to patentability?  Have they decided to enter into the software patent conundrum?  Did they do any of that pesky freedom to operate stuff when they created their contest?

"The Contest is designed to encourage the development of software (“Algorithm”) that solves the stated computational problem, and also to study the effectiveness of teams in solving algorithmic problems. In this contest all participants will compete in teams of two working together over the course of one month to develop their solutions and deliver an algorithm that can automatically identify and locate specific elements within patent documents drawings pages. Code submissions will automatically be scored based on their accuracy in solving the problem based on manually labeled test data. This experimental contest format is part of TopCoder’s ongoing partnership with the Harvard-NASA Tournament lab to better understand how tournaments contests can be used to solve complex computational problems."

But when USPTO and/or the winner of the challenge try to actually implement the software on a computer with non-transitory storage where there is definitely going to be a transformation between the submitted drawings and the new presentation they will be in the infringement ball park  big time.

A cursory look at patents in this area resulted in a starter list of over 16,000 enforceable patents that deal with image extraction, content interpretation, compression/decompression, text matching, entity relationship matching, etc.  (By the way we are experts in digital imaging, database, text processing, OCR, entity extraction and the image based workflow software arena and have done plenty of work with patents in this domain - so we know where to look for this stuff.)  Did they consider the potential for infringement on the part of the unsuspecting coders?  Did they even both to look at US patents to see if the technology to do this exists?  (It does.)

This ought to be very interesting.  I'm sure some of the top patent assertion entities will be standing by to assist the inventors and patent holders whose patents are being infringed in getting a swift resolution to the matter.


As a refresher, let us consider the rules in the Manual of Patent Examination Procedures regarding patent infringement.  Clearly USPTO understands infringement of a patent.But for those of you who need a refresher, here you go.

5 U.S.C. 271 Infringement of patent.

(a) Except as otherwise provided in this title, whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States, or imports into the United States any patented invention during the term of the patent therefor, infringes the patent.
(b) Whoever actively induces infringement of a patent shall be liable as an infringer.
(c) Whoever offers to sell or sells within the United States or imports into the United States a component of a patented machine, manufacture, combination, or composition, or a material or apparatus for use in practicing a patented process, constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use, shall be liable as a contributory infringer.
(d) No patent owner otherwise entitled to relief for infringement or contributory infringement of a patent shall be denied relief or deemed guilty of misuse or illegal extension of the patent right by reason of his having done one or more of the following: (1) derived revenue from acts which if performed by another without his consent would constitute contributory infringement of the patent; (2) licensed or authorized another to perform acts which if performed without his consent would constitute contributory infringement of the patent; (3) sought to enforce his patent rights against infringement or contributory infringement; (4) refused to license or use any rights to the patent; or (5) conditioned the license of any rights to the patent or the sale of the patented product on the acquisition of a license to rights in another patent or purchase of a separate product, unless, in view of the circumstances, the patent owner has market power in the relevant market for the patent or patented product on which the license or sale is conditioned.

Sunday, December 25, 2011

Merry Christmas Redux

In the spirit of the season we send holiday greetings to all of our friends and colleagues.  The prosecution of last year's claim continues.  Feel free to infringe.
Holiday Greetings from Frosty the Article Holding Figurine.

We claim a method of communicating holiday greetings comprising a representational snowman like figure offered in combination with a social expression communication associated with an occasion, holiday, or event; delivered via a communication network wherein the communication network comprises a computer connected to a telecommunications device that facilitates exchange of greetings via the Internet through posts on a weblog, a weblog being a web-based journal that contains periodic posts usually in reverse chronological order.

Frosty the Article Holding Figurine with his preferred embodiment article, the jacket, casually thrown over his shoulder and the inscrutable yet determined look on the upper orbital section of the facial structure is no ordinary a snowman shaped object, he is a figurine of action. He strikes a dashing pose with his top hat-like structure affixed to the upper portion of the preferred embodiment snowman-like shape. The representational human visage let's us know this article holding figurine is no victim of the politically correct as represented by the corn-cob pipe like smoking apparatus clinched in dual elliptical indents designed to represent a notional mouth. In the preferred embodiment he is on the way to a festive holiday gathering to join his other patented figurine, ornamental, and decorative cohorts including the snowman shaped Christmas tree, in celebration of the holiday season.

In the preferred embodiment, all of us at Coronado Group wish you a Merry Christmas, a Happy New Year, and a bright and shiny holiday season.

Saturday, December 24, 2011

Christmas Quotes No. 12 - The End!!

On Trade Secrets:

"It doesn’t count as a trade secret if it’s left out in the open. The law would say one cannot put the burden on someone who happens on the information inadvertently ... You can’t sue someone for overhearing what you say in a crowded elevator."

Susan J. Kohlmann, Partner at Jenner & Block LLP, NYTimes October 23, 2011.

Friday, December 23, 2011

On Innovation - Quote No. 11

"Innovation--the essence of innovation--is you don't know what you're going to build, what it's going to be called, how much it's going to cost."

Michael Bloomberg, August 2011, Fast Company Magazine

Thursday, December 22, 2011

On Innovation - Quote No. 10

"If I listened to my customers I would have invented a faster horse."

Henry Ford

Wednesday, December 21, 2011

Christmas Quotes No. 9

"Knowledge processes information to produce ideas, analysis, and skills that ideally should contribute to human progress and civilization."

Ahmed Abdel Latif

Tuesday, December 20, 2011

Quote No. 8

“Those who take the informational turn see information as the basic ingredient in building a mind.”

Frederick Adams

Monday, December 19, 2011

On Information - Quote No. 7

“As commonly used, …information is a very elastic term.  It is the stuff of communication.”

From Information is a Very Elastic Term, by R.V. L. Hartley, Transmission of Information, Bell Systems Technical Journal, July 1928.

Sunday, December 18, 2011

Christmas Quotes No. 6

"...The past is never the future.  But it’s easy to get caught up in the continuum."

Marc Benioff, CEO of on innovation.  August 8, 2011 Forbes

Saturday, December 17, 2011

The Quotes Continue - No. 5

.... the scientists complained of “what seems to us a rather chaotic growth in technical vocabulary.”

In a Letter to Nature, Spring 1953 as quoted by James Gleick in The Information

Friday, December 16, 2011

Quotes for Christmas No. 4

"In 1910 a Danish botanist, Wilhelm Johannsen, self-consciously invented the word gene.  He was at pains to correct the common mythology and thought a word might help."

By James Gleick, The Information.

As of today a search on the word "gene" in Google Patents yields 40,700 results.  It looks like the word stuck.  I'm sure there will be more later on Tuesday.

Thursday, December 15, 2011

My Quotes for Christmas No.3

Thomas Edison Patent
398774 - 1883
"Meme - a unit of cultural inheritance ideas evolve like genes do and their success is based on their ability to spread not on the benefit they provide their host."

By Richard Dawkins, The Selfish-Gene 1976

I generally hate the light bulb metaphor for good ideas but I'll use it just this once because this image comes from the originator not from an art director.

Wednesday, December 14, 2011

Quotes of Christmas Round 2

"My view is that people are creative animals and will figure out cleaver ways to use tools that the inventor never imagined."

Steve Jobs as quoted in Steve Jobs by Walter Isaacson.

Who knows what will come about when you give an innovative object to an innovative human.

Tuesday, December 13, 2011

Twelve Quotes of Christmas

I am a patent nerd. There. I've said it. It's out. I'm also an information nerd. Where is it? How do you find it? What does it mean? How do you make it useful? So this holiday season I bring you the twelve quotes of Christmas. For the next 12 days I bring you my favorite quotes about patents, information, and how the two converge. So here we go.

"If the inventory of ready-made words in our language determines which concepts you are able to understand, how would you ever learn anything new?"

By Guy Deutscher, Honorary Research Fellow, School of Languages, Linguistics, and Cultures at the University of Manchester.

See my earlier post on this one here.

Monday, December 12, 2011

Licensing Molecules

Molecule - a group of atoms bonded together, representing the smallest fundamental unit of a chemical compound that can take part in a chemical reaction.

Licensing - a permit from an authority to own or use something, do a particular thing, or carry on a trade.

Cognitive Dissonance - a discomfort caused by holding conflicting ideas simultaneously - like licensing molecules.

This isn't a patentability debate it's just plain old cognitive dissonance on the headline.

(Reata Pharma has interesting patents with tons of non-patent prior art and lots of drawings of molecules. - It's probably easier to just license them than to try to read the patents.)

Sunday, December 11, 2011

Looking for Assignees - Again

USPTO has issued a Request for Information on enhanced reporting of assignee information on patent and patent application ownership. The need for improved patent assignee data is compelling. If you are manufacturing a product and you figure out that you need a license to a piece of technology, a daunting task by itself, you should be able to at least find the real entity and the real people associated with the entity to see if you can get the license you need. At present, this is a challenge.

Take it from me, trolling the Secretary of State sites, Pacer, and countless other data sources to see who owns Obfuscation Patent Holdings, LLC of Nevada and its various subsidiaries, shell companies, and owners of record is a tiring pursuit. It's entertaining at times when you hit the jackpot and can figure out who owns the mysterious patent that keeps showing up in the cease and desist letters. Usually it's fruitless because hiding ownership of a patent is one of the easiest things you can do at USPTO. It's time for more transparency in patent assignee data and USPTO has provided an opportunity to provide your input on the subject.

Send in your comments, encourage full disclosure.

Sunday, December 4, 2011

The patentability of medical tests that provide insight into how the human body reacts to disease and the drugs designed to treat them is a contentious issue. The test developers want patent protection on the inventions that they claim resulted in their specific discoveries. The medical and access to medicine constituencies believe that these tests are not patentable because they involve both abstract ideas and laws of nature.

Today's Wall Street Journal article provides an interesting overview of the issues, the players, and the upcoming Supreme Court cases.