Posts Tagged: "independent inventor"

On the afternoon of Wednesday, April 3, the Senate Committee on the Judiciary’s Subcommittee on Intellectual Property held a hearing titled Trailblazers and Lost Einsteins: Women Inventors and the Future of American Innovation. The day’s discussion on the U.S. Patent and Trademark’s recent report on gender disparity in patenting rates covered much of the same ground as the House Intellectual Property Subcommittee’s hearing on the same topic from the previous week, although a new witness panel was able to provide some fresh perspective on the issues. However, there were arguably some instances where the witnesses either supported or acquiesced to policies that damage the patenting prospects for at least some female inventors.

Patents are often referred to as monopolies. But that is a fundamental misunderstanding of how patents work to enhance competition. The truth is that a patent is a natural anti-monopoly. In a functioning patent system, inventions become investible assets when they are patented, and the value of the invention increases as market demand increases. Because of the direct relationship between market demand and patent value, a patented invention can attract enough investment to compete with entrenched incumbents in the market for the invention. This effect introduces new competitors into the market who are protected against incumbents for a long enough period that they can survive after the patent expires. Thus, patents act to increase competition by introducing new competitors into the market and thereby create competitive markets. But perhaps even more important, some inventions deliver a strong dose of creative destruction to monopolistic incumbents who did not innovate fast enough, causing those companies to fail and clearing the market of dead weight, thus opening the market to innovative new companies. Patents are the ultimate anti-monopoly in a free market. But for this to work, the market must function undisturbed by crony laws and regulations. A patent must be a presumed valid “exclusive Right.”

This week in Other Barks & Bites: a trio of U.S. Senators introduce a bill for countries and municipal governments that want to register trademarks; Williams-Sonoma and Amazon go to court in trademark case over rights to resell merchandise; Apple wins a ruling that ends a seven-year long dispute over the iPad trademark; Prenda Law attorney at the center of a copyright settlement mill scheme could receive a prison term of 12.5 years; the Kardashians avoid an adverse ruling in a trademark case over the Khroma cosmetic line; the World Intellectual Property Organization unveils new AI-powered tools for trademark searches; and Poland’s ruling conservative party indicates freedom of speech concerns over the new EU copyright reforms.

Today, April 3, the Senate Subcommittee on Intellectual Property held a hearing titled Trailblazers and Lost Einsteins: Women Inventors and the Future of American Innovation—a topic that also was considered last Wednesday by the House Committee on the Judiciary’s Subcommittee on Courts, Intellectual Property, and the Internet in their first hearing of the term. The House hearing was titled, Lost Einsteins: Lack of Diversity in Patent Inventorship and the Impact on America’s Innovation Economy and, like today’s Senate hearing, focused on a recent report on female inventorship released by the U.S. Patent and Trademark Office (USPTO) and featured testimony on how to improve rates of female inventorship from a collection of women in fields having strong ties to the U.S. patent system. Susie Armstrong, Senior Vice President of Engineering for Qualcomm, Inc., said that, for companies like hers that were trying to take the lead in 5G mobile networks and other areas of innovation, more great tech minds from underrepresented communities were needed. An inventor herself who helped create single packet data communications that allowed cell phones to access the Internet for the first time, Armstrong said that Qualcomm had produced educational initiatives like the Thinkabit Lab, which partners with school districts and libraries to encourage students to innovate in the Internet of Things (IoT) sector.

There is little doubt that the way intellectual property is viewed and protected has transformed over the last 12 years, at least in the eyes of those who strategically appreciate both the importance and limitations of rights available today. Once upon a time, corporations would seek to patent as much innovation as possible, working to obtain gargantuan patent portfolios. These gargantuan patent portfolios often provided protection in numbers, and not necessarily in quality. But with the Supreme Court becoming more interested in patents since 2007, and with decisions in KSR, Bilski, Myriad, Mayo and Alice, many of these gigantic portfolios were reduced to rubble. There were several very large technology companies that led the charge both in the courts and on Capitol Hill to change U.S. patent laws in a way that many believed would weaken patent rights and ultimately the patent grant itself. These companies enjoyed tremendous success, and today, U.S. patent laws simply do not look anything like they did a mere 12 years ago. This became indisputably clear last year when the U.S. Supreme Court decided Oil States and said that a patent is merely a government franchise, which shocked many observers.

Artificial Intelligence (AI) patents have made a strong comeback under the new 2019 Revised Patent Subject Matter Eligibility Guidance. As the first graph above shows, allowances per office action have gone from an average of 15% before the guidance to 38% after the guidance. The increase occurred almost immediately after examiners were trained on the new guidance in January. For AI inventors concerned about the impact of the old Alice guidelines on the examination of AI-related applications, it looks like more hopeful times are ahead. The situation is grimmer for finance patents. The new guidance has not had any significant effect on allowances per office action. I reviewed a number of recent office actions under the new guidelines to see where the problem might be. It appears that most examiners in the finance art units 3691 to 3697 consider any improvement to a computer implemented financial process to be nothing more than an abstract idea. It doesn’t matter how novel or sophisticated the algorithms might be. The Patent Trial and Appeal Board has been backing up this examiner perspective, with the affirmance rate for related appeals being more than 90%.

This week on Capitol Hill, the House IP Subcommittee convenes its first hearing of the 116th Congress to discuss a recent report from the U.S. Patent and Trademark Office on female inventors, and various other House subcommittees will convene hearings to discuss 2020 budget requests for the National Science Foundation, NASA and the Department of Defense. In the Senate, there are hearings scheduled to look at government oversight of electronic health records as well as cybersecurity issues related to small businesses. In the middle of the week, the Information Technology & Innovation Foundation will host events that will explore proactive strikes by companies against cyber attackers, as well as how immigration issues are affecting STEM fields. The week closes out with a Brookings Institution event looking at consumer data privacy issues and policy reactions from around the world.

On Monday, March 18, 2019, the Patent Trial and Appeal Board (PTAB) designated three decisions as precedential. Two of the three decisions—K40 Electronics LLC v. Escort Inc. (“K40 Electronics”),[AIA, live testimony at oral argument] and DePuy Synthes Products Inc. v. Medidea LLC (“DePuy Synthes Prods”) [AIA, live testimony at oral argument]—explained the limited circumstances in which live testimony may be allowed during PTAB proceedings. The third decision, Amazon.com Inc. v. Uniloc Luxembourg SA (“Amazon.com”) [AIA § 316(d), grounds that can be raised against substitute claims], affirmed that the PTAB has the authority to consider whether substitute claims are patentable on more grounds than just novelty and non-obviousness. The recent designations not only provide guidance to prospective litigants in PTAB proceedings, but develop the scope of PTAB litigation as a viable alternative to district court litigation.

Apple made headlines with its recent decision to close its stores in Frisco and my home town of Plano, Texas. The rumor is that Apple was afraid of the dreaded “patent troll.” However, Apple is not afraid of patent trolls. They are afraid of inventors. Whenever you hear the term patent troll, think of inventors. Inventors like my friend Bob Short, who solved an important technical problem in 1998 with his invention—a protocol that encrypts real-time audio and video transmissions. Apple wanted his technology for their FaceTime app, so they took it. Bob’s company, VirnetX, has spent six years trying to stop them and make them pay. Meanwhile Apple, Google, and other tech titans have spread propaganda and paid lawyers, academics, lobbyists, and politicians to destroy the U.S. patent system.

Since the 2014 Supreme Court decision in Alice v. CLS Bank International, patent claims including software have faced a much higher barrier for receiving patents than any other field of invention. This has also infected specialized software, such as artificial intelligence (AI), which is both distressing and sad. It also explains why Chinese AI start-ups are receiving more funding than U.S. AI start-ups, a fact that should be sending a shockwave through Capitol Hill. Since Alice, patent examiners have presumptively classified software claims that can be implemented on a general computer as covering nothing more than an abstract idea, which means they are ineligible subject matter under 35 U.S.C. § 101. To overcome this rejection, applicants must show why their claimed invention is something more than just a mere abstract idea.  Ironically, what constitutes something more is itself an abstract idea, and even what is an abstract idea is itself an abstract idea. In something straight from out of the Monty Python version of patent eligibility, these key terms – something more and abstract idea – have not been defined by the Supreme Court or the Federal Circuit. As a result, most applications with software are routinely denied, which is understandable when frontline decision makers (i.e., patent examiners) are left without objective guidance. Subjectivity prevails.

USPTO Director Andrei Iancu participated in a fireside chat, titled “The Crossroads of Technology and Innovation,” hosted by the Consumer Technology Association (CTA) at its sixth annual Innovation Policy Day on Tuesday, March 12 at SXSW in Austin, Texas. Sitting with Director Iancu was host Michael Hayes, Sr. Manager of Government Affairs for the CTA. The chat was quite short and briefly touched on topics such as celebrating the 10 millionth-issued patent, the preparedness of the patent system for the future, artificial intelligence and patent eligibility, and the availability of patenting for all peoples. Then, in what some may consider to be an unscrupulous move, Hayes introduced the narrative of patent trolls.

On the afternoon of Wednesday, March 13, the Senate Judiciary Committee’s Subcommittee on Intellectual Property held an oversight hearing of the U.S. Patent and Trademark Office featuring testimony from and questioning of USPTO Director Andrei Iancu. While this hearing was relatively short by Congressional standards, the Senate IP Subcommittee explored recent changes instituted during Iancu’s tenure as USPTO Director and also got into the debate on pharmaceutical patents—a topic that has been front and center for both houses of Congress in recent weeks.

Representative Steve Stivers (R-OH) and Representative Bill Foster (D-IL) introduced the Support Technology & Research for Our Nation’s Growth and Economic Resilience (STRONGER) Patents Act, which would in part restore injunctive relief as a remedy for patent infringement, in the U.S. House of Representatives in March of last year. While there has been much talk about closed-door discussions taking place on Capitol Hill recently around fixing Section 101 law, the House has not yet re-introduced the STRONGER Patents Act, and has thus far been focused on other issues this term. But Rep. Stivers seems confident that the Act has a chance this term, and says that this could be the consensus legislation the House needs. Read below for more on Rep. Stivers’ thoughts about patent reform in the 116th Congress, where the America Invents Act went wrong, and how we ensure the U.S. patent system is restored to number one.

The Electronic Frontier Foundation (EFF) is at it again, this time with what they refer to as a Save Alice campaign. The EFF does not like the Revised Patent Eligibility Guidance published by the United States Patent and Trademark Office (USPTO) in January 2019 and is charging USPTO Director Andrei Iancu with attempting to subvert the United States Supreme Court and essentially ignore Alice v. CLS Bank. These assertions are bogus, and truthfully, they are hardly worth the consideration of thoughtful individuals interested in a meaningful dialogue about the state of the U.S. patent system. Director Iancu has issued guidance that strictly follows exactly what the Supreme Court ruled in Alice, period. Over the years patent examiners, Administrative Patent Judges, district courts, and the Federal Circuit have dramatically expanded Alice. It was admitted in Alice that the “invention” could be coded over a weekend by a second-year college student, which means it was extremely trivial and not innovative.

This week on Capitol Hill and in the Washington D.C. area, the Supreme Court grants cert in Iancu v. NantKwest; the U.S. House of Representatives will hold several hearings on important topics in technology, including electronic health records modernization for veterans, cybersecurity measures for voting systems and research on the nexus between energy and water. House committees will also explore ways to improve broadband access for small businesses and promote generic competition to reduce branded pharmaceutical prices. Drug pricing, which often involves a focus on patents, is the subject of a two-part hearing series in the U.S. Senate. Other Senate hearings this week will look at data breaches in the private sector and IP issues related to Chinese trade. The week is book-ended by a pair of events hosted by the Information Technology & Innovation Foundation, including a Thursday event that looks at the impact of the Bayh-Dole Act of 1980 and controversial calls to enforce certain provisions of the law to reduce drug prices.