Posts Tagged: "innovation"

Business method patents have recovered under the new 2019 Revised Patent Subject Matter Eligibility Guidance. As the graph above shows, allowances per office action (APOA) dropped from 17% before the 2014 Alice decision to 4% right after the Alice decision. APOA then increased to about 11% in 2017 when a new business method director, Tariq Hafiz was appointed. Tariq made a special point of encouraging examiners to allow cases if they genuinely felt the claims met the 101 guidelines set forth by the patent office. APOA rose to 17% in 2019 after the new 2019 Guidance came out in January. It is now back at its pre-Alice level of 17%. It’s still not easy to get a business method patent. An APOA of 17% implies that, on average, an applicant will have to respond to five rejections before getting an allowance. Nonetheless, it is now at least a realistic possibility to get a business method patent in a reasonable amount of cost and time.

This week in Other Barks & Bites: Chinese state political advisors suggest changes to the country’s copyright law, including stronger punitive measures for infringement; President Donald Trump bans Huawei telecommunications equipment from use on U.S. networks; Korean IP offices get ready to study inter-Korean IP cooperation; Huawei and Samsung reach a conclusion to their worldwide patent litigation; AbbVie okays a generic Humira treatment in 2023; Disney escapes Pirates of the Caribbean copyright suit unscathed; Guns N’ Roses files a trademark suit over a beer; Qualcomm enters into another worldwide patent license for 5G technology; and Procter & Gamble unveils its largest research and development center after $400 million upgrade to Ohio facility.

I am Emil Malak, CEO of VoIP-Pal.com Inc., and a named inventor on two U.S. patents–Mobile Gateway: US 8,630,234 & Electrostatic Desalinization and Water Purification: US 8,016,993. To date, our company owns 22 issued and or allowed patents, which we developed over the past 15 years. Against all odds, we have been 100% successful in defending eight Inter Partes Reviews (IPRs): four from Apple, three from AT&T, and one from Unified Patents. We are presently in litigation against Apple, Verizon, AT&T, Twitter and Amazon. My experience with Voip-Pal has made it painfully clear that the deck has been stacked against companies who own IP being used without license by large tech companies. The America Invents Act (AIA), orchestrated by Silicon Valley, was designed to destroy the very ladder they climbed to ascend to their lofty perch, and make certain that they could not be challenged.

Yesterday, we discussed patenting trends in the cleantech industry. Today, we turn to the mobile phone industry, which has matured with fewer reasons for frequent consumer upgrades while standards drive toward better efficiency and data rates to find even more uses for the platforms. The mobile phone industry has exploded over the last decade with nearly all U.S. consumers owning a smart phone. Additionally, many Internet of Things (IoT) devices have gained cellular modems, along with modern heavy equipment having a data connection for telemetry. The wireless standards have innovation that comes in waves, with 3G and 4G/LTE reaching maturation, while 5G has a solid upward trend. The supply chain for mobile phone manufacture has largely moved overseas and many brands have disappeared or moved overseas. Even though the two mobile operating systems are just over a decade old, we are seeing the pace of software innovation plateau with a couple million apps in the respective platform stores. The ubiquity of cellular data will bring the underlying technology to many different industries in the years to come, as the maturity of the industry allows the focus to move away from the platform itself.

Last week, the House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet, held an oversight hearing on the U.S. Patent and Trademark Office (USPTO) with Director Andre Iancu as the sole witness. A particular inquiry from Rep. Zoe Lofgren (D-CA) regarding the USPTO’s allegedly lax examination quality under 35 U.S.C. § 112 caught my attention. She remarked [at 1:33:30]:  “Theranos, the blood testing company whose founder is being investigated for fraud, was granted nearly 100 patents based on an invention that didn’t work; and it concerns me that a patent application for an invention that doesn’t work gets approved.”  She generally questioned examiners’ attention to Section 112 requirements. Rep. Lofgren’s statement was no doubt primed by information from the Electronic Frontier Foundation (EFF) in the Ars Technica blog post titled “Theranos: How a broken patent system sustained its decade-long deception.” In this article, the author, who was introduced as holding the “Mark Cuban Chair to Eliminate Stupid Patents” at EFF, declares with no evidence or proof, that the “USPTO generally does a terrible job of ensuring that applications meet the utility and enablement standards.” The article cited no study, identified no patent, nor any claim to any “invention that didn’t work.” This outrageous, baseless allegation is outright reckless and irresponsible.

The Federal Circuit recently affirmed a district court ruling finding patent infringement after holding that Actavis LLC, Actavis South Atlantic LLC, and Teva Pharmaceuticals USA, Inc. (collectively, “Actavis”) failed to prove by clear and convincing evidence that the claims asserted by Endo Pharmaceuticals and Mallinckrodt LLC (collectively, “Endo”) were invalid. See Endo Pharms., Inc. v. Actavis LLC, No. 2018-1054, 2019 U.S. App. LEXIS 13348 (Fed. Cir. May 3, 2019) (Before Wallach, Clevenger, and Stoll J.) (Opinion for the Court, Wallach, J.) (Dissenting opinion, Stoll, J.). However, the decision was not a unanimous one, with Judge Stoll authoring a dissent that would have reversed the district court. The patent at issue, U.S. Patent No 8,871,779 (the “‘779 patent”), is directed generally to compounds known as “morphinan alkaloids,” which are used for pain relief. More specifically, the ‘779 patent concerned processes for making “highly pure” morphinan products in the form of hydrochloride salts. Actavis claimed that the ‘779 patent was invalid, citing three key references as prior art. The first reference was a scientific article from 1957 by Ulrich Weiss (the “Weiss reference”) discussing a method for producing oxymorphone, a compound within the scope of the asserted claims. The second reference was U.S. Patent Application No. 2005/0222188 (the “Chapman reference”), which disclosed a purification process related to the asserted claims. Finally, the third reference was another article from 1967 by Henry Rapoport et al. (the “Rapoport reference”), which disclosed another purification process for oxycodone. The district court found that none of these references rendered the asserted claims obvious, and Actavis appealed.

In any market, pricing is where the rubber meets the road. As a buyer, you will not be taken seriously if you significantly underbid, yet you want to get a fair price. Conversely, if you are a seller who will not negotiate near the market price, it will be almost impossible to close a deal. We understand that patents are definitionally unique, have varying relative strengths and market applicability, and also that the demand for patents varies by technology area and many other factors. But when it comes down to it, you have to have a place to start. This is where average pricing statistics become useful. And to every seller who says: “My patents aren’t average, so average pricing should not apply to me,” we respond by saying: “We’ll accept that as true, you just have to show us why.” In the vast majority of cases, starting with the average price and moving up or down from there is an effective way to set a price for buyers and sellers. In 2018, the average price per asset shifted significantly: it fell by 30%, from $176,000 per asset to $123,000. The asking price per U.S.-issued patent also dropped by 30% from $251,000 to $176,000. If you are a seller and these were the only facts you had, it would look like it’s time to panic. But this is not the whole story. The drop was primarily due to an adjustment in the asking price for single-asset packages. For most package sizes, the asking price did not change at all. Figure 8 shows the asking prices per asset across packages of different sizes. In the 2017 market, there was a massive premium on single-asset packages. In 2018, the price for single-asset packages dropped by 56% and came more in line with the pricing for other package sizes. This drop in single-asset prices accounts for 48% of the overall drop in per-asset prices. The asking price in the 26-50 asset range also dropped significantly, while the price for 6-10 asset packages went up.

On May 12, Frederick Reinhart published an article titled “Knowledge Ecology International Letter Misleads on March-In Rights.” Reinhart is a past president of the Association of University Technology Managers (AUTM), and his views echo those expressed by many in the university technology transfer field, including a frustration that not everyone acknowledges and appreciates the considerable investments and risks undertaken by the for-profit companies that license patents to inventions funded by the federal government. Knowledge Ecology International (KEI) recognizes the importance of the private sector in bringing therapies to the market, even when federal funding of R&D has played a role, and also that robust returns on those investments have a positive impact on innovation.

Last week, the House Committee on the Judiciary’s Subcommittee on Courts, Intellectual Property, and the Internet convened a hearing to perform oversight of the U.S. Patent and Trademark Office. USPTO Andrei Iancu fielded questions on Section 101 patent eligibility issues and fraudulent trademark application filings and, while several Representatives on the subcommittee noted Director Iancu’s procedural changes at the Patent Trial and Appeal Board (PTAB), much of the previous backlash to those changes seemed to have dissipated. In his opening statement, Representative Hank Johnson (D-GA), Chairman of the House IP Subcommittee, discussed the impact that issued patents have on small businesses, noting that the first patent granted to a startup results in the business both hiring an average of 16 employees and earning an average of $10.6 million in additional sales within five years. However, Johnson added that recent case law from the U.S. Supreme Court have resulted in major issues with patent eligibility under 35 U.S.C. § 101, threatening innovation in critical technology areas like medical diagnostics. He was also concerned by a rise in fraudulent trademark filings coming from China that can hurt American businesses trying to register legitimate marks.

Yesterday, we discussed patenting trends in artificial intelligence (AI). Today, we turn to the cleantech and green tech industries, which are changing many established industries in different sectors of the economy, as well as providing entirely new areas to innovate. Cleantech innovation is relatively steady in recent years after a growth spurt that started nearly a decade ago. Those early growth trends were likely driven by government stimulus funds that have disappeared along with the growing innovation trend.  The promise of a green revolution powered by cleantech may still be happening, but it simply is not a patent growth area in general except for a few areas explored below. Developing new products in this space takes years and there are many factors that interrupt this cycle to make product introduction difficult.

Is Congress really going to do anything useful with respect to lowering drug prices? When the question is presented that way the answer almost seems painfully obvious. Of course not. The question is just how bad they will mess things up, and will they destroy the incentive to innovate as they attempt to seek a very worthwhile solution for the problem of growing costs for healthcare. Unfortunately, the political climate in the United States has increasingly become more circus and circumspect than bold and visionary. It is better to do something entertaining and memorable that plays to the crowd than to go about the business of governing the country, not just for the moment, but for the future. And the political structures in place create outright gerrymandering that practically ensure the overwhelming percentage of Representatives have more to fear from a primary challenge than from a contender in the general election. It is no wonder nothing truly useful can get accomplished in Washington, DC.

Artificial intelligence (AI) has become a hot topic in both the tech and political spheres. This technology holds huge widespread potential, and strategic use of AI may well be a source of commercial and/or political power. For example, potential uses of AI may range from facilitating targeted and efficient drug development to controlling traffic lights (and thus reducing pollution and commute times), to developing life-like online personas. With all of the media attention that AI is receiving and with its widespread potential uses, how is a company to decide how fervently to pursue patents in this area and to weight their patent portfolios across different types of AI innovations?

Senators and Representatives Coons, Tillis, Collins, Johnson, and Stivers recently announced in a press release a proposed framework to fix patent eligibility law in the United States. If written as proposed in the draft framework, section 101 may do harm to the patent system. The senators and representatives are now soliciting feedback on the draft framework. They are likely to take additional action on the framework as soon as early this week. Please send the following text with any of your edits to [email protected].

Our last article in this series discussed patenting trends in the Therapeutics and Diagnostic Molecules Industry. Today, we turn to the blockchain industry, which is a foundational technology that is expected to revolutionize many different industries and not just digital currency. Blockchain patent filings are exploding, but we are still very early in the innovation cycle of this technology. Important to note about the data here: it is limited and especially thin, as this industry was just invented a decade ago, when there were just a handful of filings, and less than a thousand filings today. This is the only area in the greater study that was not long established, but the importance of blockchain is something that cannot be ignored in many industries. Although the most well-known application of blockchain is cryptocurrency, blockchain provides authenticity to any electronic transaction or contract in an open and trusted way. Blockchain underpins algorithmically protected currency but is expected to disrupt many other industries where algorithms can be trusted more than conventional mechanisms.

There will be debate on Capitol Hill this week around tech and innovation, as hearings get underway on Tuesday in the U.S. Senate on 5G networking issues related to national security and intellectual property, commercial space challenges, and the development of advanced rare earth element extraction technologies. On Wednesday, things heat up at the U.S. House of Representatives with Federal Communications Commission oversight, as well as wind and solar innovation efforts. The week closes on Thursday with hearings in both houses of Congress on weather forecasting innovation and technology. Elsewhere in Washington, DC, the Information Technology and Innovation Foundation kicks the week off on Monday by looking at efforts to reduce greenhouse gas emissions through innovation. On Wednesday, the Brookings Institution holds its inaugural conference looking at the intersection between technology and terrorism.