Archive for the ‘Patent’ Category

Busy, Busy, Busy

Saturday, June 28th, 2014

Supreme CourtThe Supreme Court has had a busy time of it in June stirring the patent pot, with decisions in three cases and arguments in a fourth. The general rule is that whenever the Supreme Court decides a patent case, the law is left in worse shape than it was before. The recent decisions are no exception. This month, we’ll take a look at Limelight v Akamai, decided June 2, 2014.

In Limelight, the Court considered “inducement of infringement.” Inducement of infringement occurs when one person causes, or induces, another person to infringe a patent. Where the patent is to a method of doing something, the inducement rule for many years has been that (a) one person must induce another person to infringe the patent, and (b) the other person must actually perform all of the steps of the method and thus infringe the patent. The person who caused someone else to infringe is liable for infringement, just is the person who actually infringed.

This rule worked fine when things were made from steel and wood, but has been a problem for Internet-implemented inventions that can be performed over a computer network by different people in different locations and even different countries.

The stage is set for Limelight and Akamai.

MIT owned patents relating to storage and retrieval of content over the Internet. MIT licensed the patents to Akamai, which runs a service utilizing the MIT patent to store and retrieve content. The patent (and the Akamai service) involves storing large files on servers located in different locations, and, hopefully, near the user who wants access to the file. Local storage of the large files allowed faster access by the user. One of the steps of the patent is that Akamai ‘tags’ which of a customer’s files are to be stored in the local servers.

Limelight operates a competing service that is just like Akamai’s service, but with one important difference – Limelight does not ‘tag’ the files. Instead, Limelight’s customers tag their own files, using advice and assistance from Limelight. Because Limelight does not tag the files, no one person performs all of the steps of the patent and there is no one that Akamai can sue for direct infringement. Because no one person performs all of the steps of the patent, under the old rule Limelight cannot be liable for inducement of infringement. Akamai has no remedy. Seems unfair, doesn’t it?

The Federal Circuit Court of Appeals thought so. It decided that the old rule did not work in the information age and that Limelight’s actions in copying Akamai’s business but avoiding the patent should not be tolerated and that Limelight should be liable for inducement of infringement.

The Supreme Court reversed and reinstated the old rule, seeing no reason to change. As a result of the Supreme Court’s decision, Akamai is without remedy and Internet copyists are free to cut a step from a method patent, instruct someone else to perform the missing step, and avoid patent infringement altogether. The value of Internet inventions, or in fact any method patent that can be performed by different people, has just dropped.

–Robert Yarbrough, Esq.

Employer’s To-Do List: Get Invention Assignments from All Employees

Friday, May 30th, 2014

Do your employees create new inventions, products or designs?¬† Have all of your employees assigned all company inventions to the company?¬† If not, then the company does not own the invention, even if the invention was created on company time and with company resources and in the course of the employee’s work for the company.

That’s the takeaway from ¬†Peregrine Semiconductor v RF Micro Devices (S.D. Cal. 2014).

Peregrine developed new products and obtained patents for those products.  Peregrine sued RF Micro Devices for infringement of the patents.  During the course of the litigation, the parties learned that a former Peregrine employee should have been named as an inventor on the patents, but was not.  Peregrine usually obtained assignments of patent rights from all employees, but could find no such assignment from the former employee and the former employee had no recollection of signing such an assignment to Peregrine.  Instead, the former employee subsequently assigned his patent rights to RF Micro Devices, the accused infringer.

Peregrine now finds itself in the embarrassing position of co-owning the invention with RF Micro Devices,.

The case includes a discussion of the ‘hired to invent’ doctrine, in which a person is employed to solve a particular problem.¬† Under Federal common law; that is, law made by judges in their decisions, an invention created by a person hired to solve a particular problem is owned by the employer even if the inventor did not sign an assignment.¬† In the Peregrine situation, the former employee had performed several different functions for the company during the course of his employment and was not hired to solve a particular problem. He was not ‘hired to invent’ and Peregrine did not own his rights to the invention.

The result was that a preliminary injunction against RF Micro Devices was denied.

The bottom line?  Make absolutely sure that every employee has signed an agreement assigning patent rights to all company inventions to the company. The agreement can be in the employment agreement and can apply to inventions that the employee has not yet created.

– Robert Yarbrough, Esq.

Provisional Patent Applications – File Early and Often

Wednesday, April 30th, 2014

USPTO Seal

A provisional patent application is a temporary application that provides patent-pending status for one year.  The provisional application can be a relatively low-cost way to preserve your patent rights while you develop your invention.  The protection offered by a provisional patent application is only as good as the information contained in the application and only addresses the invention as disclosed in the application.  The provisional application must include enough information in the specification (the narrative part of the application) and the drawings so that a person who is knowledgeable in the technical field of the invention can make and use the invention.

To have any continuing value, your provisional application must be followed within one year by a full U.S. non-provisional (utility) patent application.  If the invention is one for which you will seek international patent protection, your international patent application(s) also must be filed within one year of the provisional filing date.

If you develop improvements to your invention while your provisional application is pending, the improvements are not protected.   What to do? File another provisional application addressed to the improvements.

–Robert Yarbrough, Esq.

What Happened to Google Street View?

Sunday, March 30th, 2014

Street View Google Street View is the popular feature of Google Maps that allows you to see panoramic photographs of, well, pretty much anywhere with different orientations and magnifications.  The photographs are stitched together in software to allow the viewer to navigate through a virtual representation of the real world.  You may have seen the Google photography cars driving around with an array of cameras, taking pictures of your neighborhood.

If you look for Google Street View today, you will not find it.¬† Why?¬† We can’t say for sure, but it may have something to do with a decision by the Federal Circuit Court of Appeals in the case of Vederi v Google.

But we’re getting ahead of ourselves.¬† Back in the year 2000, Enrico Bernado and Luis Goncalves were Ph.D candidates at CalTech.¬† They attached cameras and a GPS device to Mr. Bernado’s car and drove around Pasadena taking photographs.They also developed software to stitch the photographs together, creating panoramic views and allowing a person to navigate through a virtual representation of the real landscape.¬† The results were available through the City of Pasadena’s website.

Drs. Bernado and Goncalves founded Vederi, LLC and were awarded four patents for their work.  Vederi sued Google for patent infringement for its Street View product.  The trial court found no infringement based its interpretation of the claims of the patents, but the Federal Circuit Court reversed and sent the case back to the trial court.  We suspect that Google believes that Street View infringes the patent claims as interpreted by the Federal Circuit and as a result took Street View off line.

Will we see Google Street View again?  Because a patent infringement lawsuit is a license negotiation by another name, we suspect so.

–Robert Yarbrough, Esq.

Ask Dr. Copyright …

Friday, February 28th, 2014

copyright question Dear Doc:

Last month, you promised that you’d continue your explanation of patents and copyrights with a rant about patents and trolls. So…? What, exactly, do you have against trolls, other than the fact that they live under bridges and threaten goats?

Signed,

Been Waiting a Month

Dear BWaM:

OK. So as not to disappoint, here goes!

The press has been overflowing for the past few years with breathless articles about evil “patent trolls”.¬† You see, back in the late 1990s semiconductor giant Intel was being sued for patent infringement by many patent owners. The company’s lawyer, Peter Detkin, called one of the lawyers representing the patent owners a “patent extortionist” in an article about the company, but others at Intel did not like that term. There was a contest, and Detkin, Anne Gundelfinger and Mark Davis somehow came up with “patent troll” as an alternative.

Remember the story of how the trolls hid under a bridge that they had not built, but demanded a toll from everyone who crossed?¬† Me neither. The original Norwegian folk tale is completely silent on who built the bridge, but it’s pretty clear that the goats had not done so, right? Goats lack opposable thumbs.¬† And as there is no other character in the story…but I digress. The troll term struck a chord, and came to mean a company that asserted patents on technology that they had not invented, seeking royalties. Such companies are clearly evil villains, because they don’t invent anything, and they sue other people using patents that they buy from inventors. Boo! Hiss! The media climbed on board, and there have been thousands of publications decrying the “rent seeking behavior” of the trolls. For a very entertaining overview, click here.

Fast forward to 2014, and you have bills in Congress and the President of these United States promising to do something to stop the trolls because they hurt innovation! But…do they really? Let’s think about this.

Suppose you passed a law that says that anyone who owns a piece of ground¬† and who built a building there could do only one of two things: occupy it himself, or occupy part of it, and rent the other part out. He can sell the building, but only to someone who will only occupy it – and never rent it out, because otherwise, the new owner would not be the one who built the building – he would only be seeking to collect rent.¬† He can’t move out and rent the entire building because then he would not be using what he had built, only seeking to collect rent. Oh, and the original owner would not be allowed to hire a manager by promising to pay a portion of the rent collected, and he can’t buy the building next door, since he didn’t build it. Forget real estate investment trusts that buy properties to build a portfolio – they don’t build things…they must be evil too.

So under this new law, what is a property worth? What incentive does the land-owner have to build his building if he has to live in it until he can sell it to someone who can only live in it? Easy – you’ve just reduced the value of almost every property in America by a huge amount. No one can be a real estate investor in the resale market. Period. So why would our country want to do the same thing to inventors, by limiting their ability to sell their patents? Because big companies that infringe patents are sick and tired of getting caught with their hands in the cookie jar, and can afford to create a fable and lots of press to convince us that their problem is actually our problem. Congress has taken their money that comes wrapped in that same fable, and the President knows a good story when he hears it.

It has been pointed out that it costs millions of dollars to defend against a patent infringement law suit, and that these suits take years to work their way through the courts. True. But the same is true of other high-stakes business litigation in many fields. It’s not only the “trolls” who suffer from our less than efficient court system: Apple and Samsung have been battling for many years, and there is no end in sight. Few call either of these companies patent trolls (some surely do), but that doesn’t stop anyone from complaining that these suits are harmful. It’s just strange that these same complainers seem to be perfectly happy to have and use the innovations that are supposed to be protected by patents, while never bothering to ask what the world would look like if nobody could raise capital by having effective patents in the first place. (For a great explanation, read William Rosen’s The Most Powerful Idea in the World)

As a registered patent attorney who has represented all kinds of inventors for more than thirty years (from garage inventors to the largest multinational corporations) and has been involved in patent licensing and sale for all of that time, the Doc can simply say that there is another, more honest definition of “patent troll” — one given by Professor R. Polk Wagner of the University of Pennsylvania School of Law, who said that a patent troll is simply anyone who would dare to sue ME for patent infringement.

So there you have it. The same old story: don’t believe everything you read on the Internet…World War I started that way.

To get the straight story on intellectual property issues, be sure to ask the attorneys at LW&H. For reasons that nobody can explain, they actually enjoy thinking about this stuff.

Until next month,

The Doc.

– Lawrence Husick, Esq.

State of the Union

Friday, January 31st, 2014

In his state of the union speech, President Obama said:¬† “And let’s pass a patent reform bill that allows our businesses to stay focused on innovation, not costly, needless litigation.”

Both houses of Congress are well on the way to enacting new patent legislation, in part as a  reaction to the bullying of small businesses by MPHJ Technologies through demand letters alleging patent infringement.

H.R. 3309, entitled ‘Innovation Act,’ was introduced in the Republican-controlled House of Representatives on October 23, 2013 and passed the House on December 5, 2013 with a majority vote of both parties.¬†¬† H.R. 3309 has now been referred to the Senate Judiciary Committee.¬† The stated purpose of H.R. 3309 is to curb abusive patent infringement litigation, particularly by ‘patent asserting entities’ that own patents but do not produce products.¬† H.R. 3309 includes several changes, but the one that is most eye-popping¬† is that the plaintiff must pay the defendant’s expenses including attorney’s fees if the court determines that infringement claims are not reasonably justified or are made in bad faith.

The cost-shifting provisions of H.R. 3309 are radical.¬† In the U.S., each party to litigation generally bears its own costs.¬† H.R. 3309 would adopt the standards of the Equal Access to Justice Act, 28 U.S.C.√ā¬ß2412(d)(1)(A), and apply those standards to private patent litigants.¬† The Equal Access to Justice Act applies to payment of costs and attorneys fees by the Federal government.¬†¬† In a civil suit by or against small businesses or individuals of limited means, the Federal government is liable for cost and attorneys fees UNLESS the government demonstrates that its position in the litigation was ‘substantially justified.’

H.R. 3309 would certainly avoid the defendant’s costs of patent infringement litigation, but it would also severely limit the value of inventions and patents.¬†¬† If H.R. 3309 becomes law, only the very brave, the very foolish, or the very rich will initiate patent infringement litigation.

S. 1720 was introduced on November 18, 2013 by Democratic Sen. Patrick Leahey, Chairman of the Senate Judiciary Committee.¬† S. 1720 includes some of the procedural improvements of H.R. 3309, but excludes the cost-shifting provisions.¬†¬† S.1720 takes direct aim at the practices of MPHJ Technologies by adding that the Federal Trade Commission will police false or misleading demand letters.¬† We expect that Sen. Leahey’s version of the bill is the one that will advance from Sen. Leahey’s committee.

– Robert Yarbrough, Esq.

Inducing Patent Infringement: New Case May Reach the U.S. Supreme Court

Tuesday, December 31st, 2013

The ‘claims’ of a patent dictate the rights of the patent owner and define the property created by the patent.

Where the invention is something physical, such as a machine or a drug, it is relatively easy to show infringement – the patent owner must show that the infringer made, used, or sold the machine or drug that meets all of the elements of a claim.¬†¬† Alternatively, the infringer is liable if the patent owner can show that the infringer ‘induced;’ that is, caused, someone else to make, use or sell the machine or drug and that other person actually did make, use or sell the machine or drug.¬† The requirement that someone must actually make, use or sell the invention as claimed works well for patents to machines and drugs.

An injustice occurs when the claim addresses a method that can be performed by more than one person.  This situation is common for Internet inventions.  Consider the following (highly hypothetical) claim. A method of distributing content over the Internet comprising:

(a) uploading a video by a content provider to a server;

(b) modifying a website to instruct browsers to access the server to download the video.

In this hypothetical claim, the actions of two different persons can perform the two steps – the content provider and the person who modifies the website.¬†¬† If two different persons perform the two tasks, then the patent owner cannot produce any one person who performed both steps.¬† There is no one person who ‘directly’ infringed the patent claim.¬† As a result, if a copyist can split a patented method into pieces and have someone else perform another piece, then the copyist is not an infringer and the patent is unenforceable.

This situation has been a thorn in the side of Internet inventors.  The Court of Appeals of the Federal Circuit decided to do something about it in the case of Akamai Technologies v Limelight Networks.  In that case, the Federal Circuit concluded that Limelight Networks performed some of the steps of the patent claim and induced someone else to perform the remaining steps.  The Federal Circuit held that Limelight was liable for infringement even if no one person performed all of the steps of the patent claim.

The joy of Internet inventors was short lived.  Limelight asked the Supreme Court to hear an appeal and the Supreme Court asked the Federal government for advice on whether the Court should take the case.  On December 10, 2013 the Federal government filed its brief saying that the Court should hear the case and should overturn the result.  It now is likely that the Supreme Court will hear the appeal.   The Court likely will issue a decision in late 2014 or 2015.

– Robert Yarbrough, Esq.

PTO’s ‘After Final Consideration’ Pilot Program

Wednesday, November 27th, 2013

USPTO Seal By filing a patent application and paying the filing fee, you are entitled to two reviews by the patent examiner.¬† The examiner has a very short and strict time limit to review your application.¬† If the examiner does not meet that time limit, then he or she may not meet productivity goals and may be denied raises and promotions.¬† If the examiner does not meet productivity goals three times, then he or she is out of a job.¬† By the second rejection of your application, the examiner likely has reached the end of the time allotted and can afford to give your application no more time.¬† In the past, when you received a ‘final’ rejection; that is, when the PTO patent examiner rejected your application for the second time, you generally had three options.¬† You could:

(1) File amendments that placed the application in condition for allowance.  Such amendments generally are limited to accepting what the examiner has decided that he or she will allow.

(2) File a ‘request for continuing examination’ and pay an additional filing fee for two more reviews.¬† In addition to the extra cost, this option generally defers final resolution for another six to nine months.

(3) File an appeal to the Patent Trial and Appeal Board.  The cost for an appeal is at least several thousand dollars and average time to resolve an appeal is three years.

You now have a fourth, and highly attractive, option: you can ask for additional consideration under the ‘after final consideration’ pilot program.¬† The ‘after final consideration’ program gives the examiner extra time to review your application and hence makes the examiner willing to further consider your application.¬† That further consideration may include an interview with the examiner and amendments to the claims.¬† There is no filing fee to take advantage of the program and no additional delay.¬† What’s not to like?

– Robert Yarbrough, Esq.

Abusive Patent Enforcement – The States Step Up

Monday, September 30th, 2013

policeIn general, only the Federal government and Federal courts have jurisdiction over patent matters.   However, the Federal government does not have effective tools for protecting individuals and small businesses from abusive and unjustified bullying by patent owners.   A small business often cannot afford to defend against a threat of patent litigation and agrees to pay license fees, regardless of the merit of the claim.

In the absence of Federal regulation, the states are filling the gap.

The State of Vermont, of all places, is the pioneer.  Vermont enacted a new state consumer protection law to shield its citizens from bad faith patent infringement claims.   The Vermont attorney general filed suit to enforce the new law against MPHJ Technology Investments LLC, which claims to own patents to the technology of scanning to e-mail.  MPHJ sent letters to thousands of small businesses, demanding licensing fees of $900 to $1200 per worker.   According to court filings by the Vermont attorney general, the demand letters include several false statements and MPHJ allegedly performed no investigation to determine whether the recipients of the letters were infringing the patents.  The litigation is ongoing.

Minnesota’s attorney general subsequently extracted an agreement from MPHJ not to send demand letters in that state unless the letters are first approved by the Minnesota attorney general.¬† This result appears to be a complete victory for Minnesota.

Nebraska’s attorney general followed the lead of Vermont and Minnesota, but in a ham-fisted manner, without a targeted law and without a defendant as unsympathetic as MPHJ.¬† Nebraska’s attorney general took aim not MPHJ, but at¬† its Texas-based lawyers, Farley Daniels LLP.¬†¬† Farley Daniels sent out patent infringement demand letters in Nebraska on behalf of a different client, Activision TV, which manufactures and sells flat panel displays.¬†¬† The Nebraska attorney general then sent a letter to Farley Daniels¬† ordering the law firm to stop patent enforcement in Nebraska

Farley Daniels promptly added the Nebraska attorney general as a defendant in a pending Nebraska patent infringement lawsuit by Activision TV.  The Federal judge ruled that Farley Daniels could continue to file and prosecute patent infringement cases in Nebraska.  The judge did not decide whether Farley Daniels could continue to send cease-and-desist letters.  The Nebraska attorney general subsequently acknowledged that his complaint is not with Activision TV, which appears to actually make and sell products.

Draft bills are under discussion in Congress to deal with the issue of abusive patent enforcement.   The draft bills would require patent owners to present much more information to defendants in the complaint.  In a provision that risks throwing out the  baby with the bathwater, the draft bill requires that the losing party in patent infringement litigation pay the attorneys fees of the prevailing party.   The legislation is being circulated for discussion, but is in a very early stage.

–Robert Yarbrough, Esq.

Beware of the On-Sale Bar

Friday, August 30th, 2013

police If you are a regular reader of this newsletter, then you know that a sale or offer for sale of your invention will terminate your patent rights unless you first file a patent application.   Did you know that the on-sale bar also applies to commercial sales of the invention to you, as from a contract manufacturer or prototype-maker?

Hamilton Beach recently learned to its sorrow that the on-sale bar applies not only to sales by the patent owner but also to purchases by the patent owner.  Hamilton Beach invented an improved slow cooker.  Hamilton Beach did not manufacture the slow cooker itself and instead negotiated with a foreign manufacturer.  The foreign manufacturer offered to sell the improved slow cooker to Hamilton Beach.  Hamilton Beach subsequently filed an application and obtained a patent for the improved slow cooker.  Hamilton Beach later sued Sunbeam for patent infringement.  Sunbeam argued that the Hamilton Beach patent was invalid because of the offer to sell the invention by the manufacturer to Hamilton Beach.

The U.S. Circuit Court for the Federal Circuit ruled that the offer by the manufacturer to sell the slow cookers to Hamilton Beach was an ‘offer of sale’ that tripped the ‘on sale’ bar and invalidated the patent.

Why is this decision important to small businesses and individual inventors?

The hidden risk of the Hamilton Beach decision lies in the production of prototypes.¬† The on-sale bar requires (a) a commercial sale or offer for sale of (b) an invention that is ready for patenting.¬† An estimate from, say, a machine shop to produce a prototype of an invention could be a commercial offer to sell the invention triggering the on-sale bar if the invention is ready for patenting.¬† An invention is ‘ready for patenting’ when (a) the inventor has a working prototype or (b) the invention is described in drawings or in written descriptions sufficient to allow a knowledgeable person to build and use the invention.

The only way sure way to avoid the on-sale bar is to not buy or sell the invention until after you file a patent application.  The Hamilton Beach case is yet another reason to file provisional patent applications early and often.

– Robert Yarbrough, Esq.