Posts Tagged: "patents"

It has come to my attention that earlier today in his e-mail newsletter Hal Wegner has once again attempted to take a cheap shot at yours truly. Yes, I know that truth and accuracy are not the hallmarks of Hal’s newsletter, and normally I do look the other way when I learn of cheap shots by Hal, which are a dime a dozen. When Hal challenges my business and makes blatantly inaccurate statements I do find it necessary to respond.

With the advent and rise of the Internet, digital property rights have become an increasingly hot-topic in the Board rooms and Executive Offices of major companies, particularly those in the hi-tech industry. Much like the information protected under intellectual property rights, digital products provide their creators with certain protections under the law. The problems and legal challenges facing major companies like Yahoo and Facebook will help better define the laws surrounding digital property rights, and likely present opportunities as well as a whole host of new legal questions.

Attendees agreed that it’s critical for companies to gain greater leverage to deter nuisance lawsuits and manage costs by reducing the cost of litigation defense. According to those surveyed this is accomplished, at least in part, through the use of joint defense groups (JDGs), where parties engage in shared co-counsel to reduce defense costs. JDGs have been used in approximately two-thirds of all NPE cases, and three-quarters of those surveyed reported working in some capacity with JDGs.

Today I attended the an event on Intellectual Property and the US Economy which was held in the Eisenhower Executive Office Building on the White House grounds. The purpose of the event was to unveil a study — Intellectual Property and the U.S. Economy: Industries in Focus — prepared by the Economics and Statistics Administration and the United States Patent and Trademark Office. The study found that intellectual property intensive industries support at least 40 million jobs in the United States and contribute more than $5 trillion dollars to U.S. gross domestic product (GDP). That is to say that 27.7% of all jobs in the U.S. were either directly or indirectly attributable to IP-intensive industries, and the amount contributed to the U.S. economy represents a staggering 34.8% of GDP.

Raymond P. Niro is patent litigator with tremendous experience and a reputation that is larger than life. To some he is a champion of independent inventors and small business community, frequent clients of his. To others he is nearly the definition of evil. It was as a consequence of a lawsuit one of his clients brought against Intel in 2001 that the term “patent troll” was coined. He has been trial counsel in literally hundreds of intellectual property cases, and since 1996, has won verdicts and settlements for his clients totaling more than $1 billion. On March 12, 2012, he went on the record for this exclusive interview.

Despite difficult economic conditions worldwide, international patent filings under the WIPO-administered Patent Cooperation Treaty (PCT) set a new record in 2011 with 181,900 applications – a growth of 10.7% when compared with 2010, and the fastest growth since 2005. China, Japan and the United States accounted for 82% of the total growth, and the Chinese telecommunications company ZTE Corporation was the largest filer of PCT applications in 2011. 2011 also saw the highest number of international trademark applications ever filed under WIPO’s Madrid System for the International Registration of Marks (“Madrid system”) with 42,270 applications, or a 6.5 % increase compared to 2010.

A conversation with Matthew Bryan, who is the Director of the PCT Legal Division at the World Intellectual Property Organization (WIPO) regarding what WIPO is doing to combat patent schemes that plague the industry. As you will see, these schemes are lucrative. In one case that Bryan tells us about, in which he was an expert witness, a court in Florida “found that in the 2 years of operating, FIPTR had received over 2.5 million dollars in payments from PCT users just in the State of Florida.” With that kind of money potential it is easy to see why the scams persist.

Prior user rights also implicate free rider problems with respect to a subsequent patent that an inventor obtains covering the subject matter of the secret prior user. At the point of publication the prior user no longer maintains a trade secret. At the point of issuance, the patentee and the prior user relatively co-exist with each other in the market. The patentee excludes others from the market except for the prior user. The prior user then enjoys the benefits and advantages associated with the patentee excluding others from operating in the market, while being free from liability to the patentee. In this regard, the prior user enjoys the period of time operating the technology in secret in addition to 20 years of excluding others provided by the competitor.

What’s troubling is that Hewlett Packard itself, the original startup headquartered in a garage, was one of the earliest and most-respected leaders of the 20th Century high-tech revolution that had its epicenter in Silicon Valley. It was William Hewlett who gave a 13-year-old Steve Jobs spare parts for a device Jobs was building — and a summer job as well. And it was Mr. Hewlett and his executive heirs who insisted that HP conscientiously patent its breakthrough innovations and fight against those that infringed those patents. HP today earns hundreds of millions of dollars annually by licensing its patent rights to others — according to IAM magazine, “at any one time, HP has about 150 licensing transactions in process.” And as the court dockets show, it certainly isn’t shy about filing suit against infringers who refuse to take a license.

So who is the villain in all of these wars responsible for again giving patents a bad rap? Well, the villain in not the ITC, USPTO or any U.S. government agency. Nor it is any country’s protectionist trade regime, or an “irreparably broken” U.S. or global patent system. No, the real villains here may very well be a handful of companies that willingly contributed patented technologies to various SSOs, championing their adoption and encouraging their use in a host of consumer electronics, and now claim (years later) that the very producers they encouraged to implement these standards should be barred from making, using or importing their products into the U.S. market.

In my experience, the passion to invent is stirred by two things: dissatisfaction with an existing product or service (i.e., too large, too slow, too expensive, too difficult to use), or a dream and desire to create something entirely new, a product or service that will augment humanity’s capability to reach farther, move faster, aggregate and analyze all sorts of data, or bring together pieces and form a whole that is greater than the sum of its parts. Over my career I have been a named inventor on 147 U.S. patents. Over my career I have developed a process for identifying consumer needs and creating unique, patentable solutions that are relevant in the marketplace. I call this the Eureka Method. The Eureka Method is a mental discipline that can be learned and practiced to help you produce a Eureka! moment.

The holiday patent du jour gives us the opportunity to explore the candy collecting aspects of trick-or-treating. More specifically, U.S. Patent No. 7,594,669 is for a portable container having wheels and a handle. What makes it worthy note on Halloween is that the container itself is either a pumpkin, witch, ghost, goblin, monster, vampire or werewolf. And yes, that is required in the broadest claim, claim 1. The pictures in the patent show a jack-o’-lantern version of the invention.

The truth is that Google bought a great deal more than patents when it acquired Motorola, though there are doubtless some real gems in the Motorola portfolio. As a relative newcomer to the wireless arena, the search giant in one bold move got its hands on the unmatched innovation experience of the longest-lived mobile phone company on earth. The technical acumen and product experience of those thousands of mobile software and hardware engineers will prove hugely valuable to Google as it seeks to dominate the $250 billion global market in smartphones, especially if it decides to become a handset maker as Motorola had been.

The canonical story of the lone genius inventor is largely a myth. Edison didn’t invent the light bulb; he found a bamboo fiber that worked better as a filament in the light bulb developed by Sawyer and Man, who in turn built on lighting work done by others. Bell filed for his telephone patent on the very same day as an independent inventor, Elisha Gray; the case ultimately went to the U.S. Supreme Court, which filled an entire volume of U.S. Reports resolving the question of whether Bell could have a patent despite the fact that he hadn’t actually gotten the invention to work at the time he filed. The Wright Brothers were the first to fly at Kitty Hawk, but their plane didn’t work very well, and was quickly surpassed by aircraft built by Glenn Curtis and others – planes that the Wrights delayed by over a decade with patent lawsuits.