Posts Tagged: "patents"

In yet another pathetic result of the U.S. government crashing the patent system, Amazon announces it is a patent infringement court. I guess we can call it the District of Amazon Federal Court (DAFC). They claim a cheaper, faster alternative to traditional patent lawsuits. Ring a bell?  The last time I heard that we got the PTAB. This irony is judiciously served. First, Amazon used the patent system to differentiate themselves from their competitors with the one-click patent, thus gaining market share. Then the U.S. government crashed the patent system so that no small inventor or startup could challenge Amazon with improved technologies. With no challengers, Amazon monopolized.  

USPTO Director and Under Secretary of Commerce for Intellectual Property Andrei Iancu believes that “to a large extent … if they want to, the Federal Circuit can fix the problem” with patentable subject matter under Section 101. Speaking at the 27th Intellectual Property Law & Policy Conference at Fordham Law School on April 25, Mr. Iancu said the interpretation of Section 101 is “the most important issue of substantive patent law currently.” He added: “This issue must be addressed now in the United States.” The USPTO Director said there is consensus that the state of the law is unworkable: “Recent case law has created significant confusion in this regard.” But he added: “If you look at the Supreme Court cases by themselves, those cases are not the ones necessarily that have caused the problem. In the way those cases have been interpreted in the lower courts or at the USPTO itself, we have deviated from the core message of the Supreme Court to some extent.”

In yesterday’s article, we introduced our patent-trends study (performed in a collaboration between Kilpatrick Townsend and GreyB Services) and provided high-level data across industries. Today’s article pertains to the Internet of Things (IoT) industry. With the prevalence of WiFi, cellular modems and devices configured for short-range connections, IoT systems are becoming all the more ubiquitous and exciting. No matter how powerful and sophisticated a single device is, its efficiency and usefulness will very often remain capped if it cannot “talk” to other devices. Only through these communications can the device gain a more comprehensive view (e.g., corresponding to where users are, what computations or controls may be helpful, what computations or actions other devices are already performing or coordinating). Thus, we can begin to start thinking about specifications (e.g., efficiency, speed, memory, accuracy) of a device and instead think about specifications of a system. This presents a large number of important use cases.

Recently, I met with a potential client to discuss key points that developers and management should keep in mind in taking the first steps to begin developing a patent portfolio. One aspect of the presentation was public disclosures that began the one-year grace period for filing for patent protection. As I was preparing examples, a practical concern emerged; specifically, whether storing source code in a third-party code repository amounted to a public disclosure or a printed publication. My research revealed that there are certain instances where uploading source code to a third-party repository amounted to a public disclosure or a printed publication, but there were precautions that developers and companies could take to prevent the inadvertent public disclosure of their code.

On April 15, U.S. District Judge William Conley of the Western District of Wisconsin issued an opinion and order in Raytheon Company v. Cray, Inc. granting summary judgment of non-infringement to defendant Cray on two supercomputer patents that had been asserted by Raytheon. The order is the likely conclusion to a case that became an important part of the debate on proper venue in patent cases after the U.S. Supreme Court’s decision in TC Heartland, and aspects of how this case played out after venue was transferred point to the importance of that particular decision on U.S. patent litigation.

High prescription drug prices and their impact on costs borne by the government in Medicaid, Medicare Part D and other federal programs, is a front burner topic in Washington. The President has committed to reducing the price of prescription drugs, and pressured drug companies to hold the line. The Department of Health and Human Services (HHS) has proposed two regulatory initiatives—price disclosure in drug advertising and foreclosing rebates from manufacturers to pharmacy benefits managers (PBMs)—aimed at pushing prices down. Some Democrats have urged more sweeping actions, such as having the government negotiate Medicare drug pricing as a single buyer or regulating drug prices by reference to an international index based on government-negotiated drug prices abroad. These proposals cannot solve the drug pricing problem. The Administration’s proposals merely tweak the status quo and put no effective restraint on new drug prices. Jawboning by the Executive has had a minimal impact. Disclosure of manufacturers’ list prices, unless accompanied by numerous and inherently confusing caveats highlighting the difference between those prices and the co-pay an insured consumer must bear at retail, is potentially misleading and, in any event, has no direct impact on prices. Eliminating rebates, as HHS’s rulemaking acknowledged, will inevitably raise health insurance costs now partly paid for by rebates while manufacturers’ pricing power remains unabated. The Democrats’ call for government power buying or price regulation would impact drug prices but also require politically sensitive government determinations about the “worth” of prescription drugs to patients—a significant step on the road to government-allocated health care. 

This week in Other Barks & Bites, governments and intellectual property offices around the world celebrate World IP Day; the U.S. Trade Representative releases its most recent Notorious Markets List; TiVo subsidiary Rovi files another patent suit against licensing holdout Comcast; Amazon ramps up program for connecting sellers with lawyers for patent infringement issues; the USPTO seeks public comments on gathering data for SUCCESS Act study; music industry groups submit letter to Copyright Office regarding Mechanical Licensing Collective membership; and weak China data center sales sends Intel stock tumbling by 7.5 percent.

April 22 was the deadline for filing amicus briefs with the Court of Appeals for the Federal Circuit in Athena Diagnostics’ petition for an en banc rehearing by the court. The petition comes after a 2-1 panel decision in early February affirmed a district court’s ruling that patent claims covering methods of diagnosing myasthenia gravis (MG), an autoimmune disorder that causes weakness in skeletal muscles, were directed toward laws of nature and were thus unpatentable subject matter under 35 U.S.C. § 101. In an invitation to file briefs with the Federal Circuit in this case, Knowles IP Strategies Founder Sherry Knowles and AddyHart Partner Meredith Addy discussed the need for amici to hold the Federal Circuit accountable regarding its duty to apply a strict statutory construction of the literal language of Section 101 to ensure that patent eligibility cases are decided in a way that is consistent with Constitutional statutes. Knowles and Addy filed a brief on behalf of Freenome Holdings and Achillon Pharmaceuticals (discussed below). Theirs and other briefs that have now been filed raise concerns about the inability to patent life-saving diagnostic methods that are found ineligible under Section 101 using the Alice/Mayo framework simply because the invention or discovery involves monitoring natural processes.

On March 21, Personalized Media Communications, LLC (PMC), owner of 98 patents covering networked equipment technologies, filed patent lawsuits in the Eastern District of Texas against major tech firms Netflix, Google, and Akamai. The lawsuits claim that the defendants infringed upon intellectual property that covers a major part of the adaptive streaming capabilities for each of the three businesses. In the lawsuits, PMC is asserting claims from six patents it has earned between 2010 and 2017, each titled Signal Processing Apparatus and Methods.

As was recently reported by IPWatchdog Founder Gene Quinn, it has come to light that information made public by the California State Bar shows that Matthew Robert Clements, formerly an administrative patent judge (APJ) at the Patent Trial and Appeal Board (PTAB) has been hired as an attorney by consumer tech giant Apple Inc. Prior to his work as a PTAB APJ, Clements was a patent attorney at Ropes & Gray and he represented Apple as counsel in patent infringement matters, where Apple was a defendant. While at the PTAB, Clements served on APJ panels in a few dozen cases brought by Apple, a situation that raises questions of ethics and that brought to light other matters, such as a lack of any code of judicial conduct for PTAB APJs despite their importance in adjudicating U.S. property rights, which can be worth billions of dollars. We’ve previously reported on statistics showing the outcome of PTAB trials petitioned by Apple where Clements served as an APJ, noting that the mixture of those ingredients resulted in nothing short of a lethal cocktail for patents and their owners. With Clements’ departure from the PTAB now upon us, we wanted to revisit his career statistics at the PTAB using Lex Machina’s data analytics tools to see how the new Apple hire ruled in cases involving his current employer.

The Framework rolled out by Congress last week to fix Section 101 law in the United States will not improve the current 101 disaster. It codifies current exceptions and even adds an entirely new exception specifically intended to protect big tech monopolies. Congress is pitifully unserious about restoring our innovation engine. For more than 200 years, the U.S. patent system was the primary engine propelling the United States to lead the world in virtually every new technology. But over the last 15 years, activists in Congress, the courts and the administration pulverized this engine to benefit a few huge multinationals in exchange for political donations and favors. Today, the patent system is a complete failure causing technologies critical to our economy, job creation, global technological lead, and national security to flee the U.S. and go to China. In a brutal political irony, the Communist Chinese have a better property rights system than we do here in the U.S.

The National Institute of Standards and Technology recently indicated in its “Return on Investment Initiative draft green paper” that it would issue regulations effectively ending attempts to misuse march-in rights to assert government price controls over successfully commercialized federally-funded inventions. Such an announcement was bound to elicit a reaction. That it came in The Washington Post shouldn’t be a surprise. The paper’s April 18 article, “A rare deterrent to limitless drug price increases may die under Trump” gives coverage to both sides, but the takeaway is that something nefarious is underway: “As drug prices have soared, lawmakers and patient advocates have pushed the federal government to deploy for the first time a powerful deterrent: a legal provision that allows it to suspend a drugmaker’s patent and license someone else to produce the drug. Now, responding to industry alarm over those demands, the Trump administration is proposing to strictly limit the little-known power,” said the article. There’s a reason why this “little-known power” has never been used—it doesn’t exist.

Capitol Hill remains quiet this week as both the U.S. House of Representatives and Senate enter a second straight week of work periods. Technology and innovation events continue, however, at the many policy think tanks residing in Washington, D.C. Monday starts with a discussion on U.S.-China relations at the Brookings Institution, while a pair of events at the Cato Institute look at whether human ingenuity can improve resource availability in the face of a growing world population and the effects of artificial intelligence (AI) on the future of work. In the middle of the week, the Center for Strategic and International Studies hosts two events exploring threats to the government’s software supply chain, as well as counterspace threats faced by the U.S. The week wraps up on Friday with a Consortium for Science, Policy and Outcomes event that explores the positive effect that creative play can have on business innovation.

The year 2017 proved to be a difficult one for the territory of Puerto Rico. Even before Hurricane Maria hit in September of that year, the island was in trouble. By the end of year, the economy was predicted to shrink back to levels not seen since 2000, the average household income was a mere $19,350, one-half that of Mississippi, the poorest state in the nation. Meanwhile, the cost of living in San Juan, Puerto Rico’s capital, was 11.6% higher than in an average U.S. metropolitan area. The government was already dealing with $74 billion in bond debt and another $49 billion in unfunded pension obligations, with U.S. banks taking at least $1 billion to manage its bond sales. In the fall of 2017, after Maria hit head on as a Category 4 hurricane that caused catastrophic damage, the second blow to Puerto Rico was brewing—this time in Washington. The Republicans, being in control of the House, Senate, and the White House, drafted a tax reform bill that proposed the biggest change to the tax code in 30 years. Within that tax bill was a provision that was predicted to decimate what is left of Puerto Rico’s remaining economy. The tax bill proposed, and ultimately the President signed into law, a provision that levies a 12.5% tax on profits derived from foreign-owned intellectual property. This hits Puerto Rico in two ways. First, Puerto Rico has a complicated taxation relationship with the United States. Its citizens do not pay federal income taxes, although they do pay into Social Security. However, when it comes to taxation, the IRS considers Puerto Rico to be a foreign country. Thus, any profits derived from intellectual property in Puerto Rico would be considered foreign profits subject to the excise tax. The second problem is that Puerto Rico derives a great deal of its revenue from the manufacturing of prescription drugs, representing the very profits from intellectual property contemplated in the law. According to the U.S. Bureau of Labor Statistics, pharmaceuticals account for 72% of Puerto Rico’s 2017 exports, which was valued at $11.5 billion.

As of now, ten states have legalized recreational cannabis. Twenty-one other states allow medicinal use of cannabis, many of which are expected to legalize recreational cannabis in the near future. Investors have sunk an estimated $10 billion into cannabis-related businesses in 2018, an amount that is expected to reach $16 billion this year. The fast spreading legalization of cannabis presents a unique opportunity for entrepreneurs, businesses and investors to get in on the “ground floor” of this growing market. California, as the largest single market for legalized Cannabis in North America, has attracted outsized attention from potential investors, who also see the state’s legalization as a trend setter for other states. However, would be investors in the California cannabis market often find themselves in a maze of complicated and changing licensing rules and regulations, banking challenges and uncertainties, choice of the appropriate business structure, and protection of potential intellectual property (IP).