Support For Expanded Review Of Business Method Patents.

While there are several anti-patent troll bills pending in Congress, the STOP Act seems to be gaining the greatest traction. It would make the U.S. Patent and Trademark Office’s Transitional Business Method Program permanent and expand it to other industries.

The new post-grant review procedures under the America Invents Act allow a third party to challenge a patent’s invalidity on a number of grounds, including prior art, lack of enablement, lack of novelty, or inadequate written description. Post-grant review allows parties to raise a number of new challenges that were previously reserved for litigation.

Under the proposed legislation, the definition of “covered business methods” would be expanded to include “an enterprise” or “a product.” The STOP Act, sponsored by Reps. Darrell Issa and Judy Chu, closely mirrors Senate legislation introduced by Sen. Chuck Schumer this spring.

In a letter to leaders of the judiciary committees of both the House and Senate, nearly 50 major U.S. companies, including Morgan Stanley, Google, Wal-Mart and Dell, expressed support for the legislation as a way to combat abusive patent litigation by patent-assertion entities (PAEs).

As the companies explain, “Too often, abusive PAE litigation exploits low-quality business method patents.
The vague and sweeping scope of many business method claims covering straightforward, commonsense steps has led to an explosion of patent claims against processes used every day in common technologies by thousands of businesses and millions of Americans.”

“Expanding an existing Patent Office program, the Covered Business Method (CBM) Program, beyond its current limitation of ‘financial services’ business method patents to all business method patents would accomplish this goal. An expanded CBM Program would enable the Patent Office to reconsider the validity of issued business method patents and provide a targeted “surgical strike” against the worst of these frequently abused patents. And it would increase certainty for innovators actually bringing new products to market, who now face an increasing threat of extortive demands based on low-quality patents,” the letter further argues.

How Can I Help?

I will be closely tracking the status of this legislation and all other patent reform initiatives currently pending in Congress. For additional information about how the proposed changes may impact you or your company, I encourage you to contact me for a free 30 minute consultation at nvantreeck@usip.com or call TOLL FREE at 1-855-UR IDEAS (1-855-874-3327) and ask for Norman.

– Ex astris, scientia –

I am and avid amateur astronomer and intellectual property attorney in Pasadena, California and I am a Rising Star as rated by Super Lawyers Magazine.  As a former Chief Petty Officer in the U.S. Navy, I am a proud member of the Armed Service Committee of the Los Angeles County Bar Association working to aid all active duty and veterans in our communities. Connect with me on Google +

Norman

Vermont Takes Unprecedented Approach to “Patent Trolls”

The state of Vermont is fighting back against what it calls “unfair business practices” by non-practicing entities. The state passed a law against asserting false patent claims and filed a lawsuit against one so-called patent troll.

 

The new state law, entitled “Bad Faith Assertions of Patent Infringements,” is intended to distinguish between abusive and valid patent infringement claims. The statute includes a private right of action and also allows the state attorney general to enforce violations.

 

Factors that indicate a bad faith patent assertion include failing to identify the patent(s)-at-issue, the patent owner, and exactly how the recipient’s behavior violates the patent; demanding too quick a response or too costly licensing fees; and asserting deceptive or meritless allegations. Meanwhile, factors that suggest a valid patent infringement claim include commercializing the patented invention; being either the original inventor or an educational institution; and successfully enforcing the patent in court.

 

Vermont is also now the first state to file a lawsuit against a non-practicing entity (an NPE). The attorney general’s lawsuit alleges that MPHJ Technology Investments violated state consumer protection laws (not the newly passed law) by threatening to initiate patent infringement lawsuits against small Vermont businesses that did not pay licensing fees.

 

The lawsuit specifically claims that the NPE failed to conduct due diligence to confirm the businesses were infringing prior to sending the demand letters.

 

According to the complaint, the letters were also deceptive because the licensing fees suggested by the NPE of $900-$1200 per employee are higher than those normally charged. The lawsuit seeks an injunction and up to $10,000 in penalties per violation.

 

Given the novel nature of Vermont’s law and the suit, the patent community will be closely monitoring the legal developments surrounding both. It is unclear if the state’s foray into patent law, which is traditionally the jurisdiction of the federal government, will survive judicial scrutiny.

How Can I Help?

If you, or someone you know, need any help with Intellectual Property issues, from filing a patent, trademark or copyright, or just need advice regarding how best to protect your inventions, ideas or your brand, please contact me for a free 30 minute consultation at nvantreeck@usip.com or call TOLL FREE at 1-855-UR IDEAS (1-855-874-3327) and ask for Norman.

– Ex astris, scientia –

I am and avid amateur astronomer and intellectual property attorney in Pasadena, California and I am a Rising Star as rated by Super Lawyers Magazine.  As a former Chief Petty Officer in the U.S. Navy, I am a proud member of the Armed Service Committee of the Los Angeles County Bar Association working to aid all active duty and veterans in our communities. Connect with me on Google +

Norman

New Report Finds NPEs Filed Majority of Patent Cases in 2012

Patent infringement litigation by non-practicing entitles (NPEs), also referred to as “patent trolls,” continues to rise dramatically.

In fact, NPEs filed 56 percent of all patent suits, according to a new report by Lex Machina Inc. and the University of California Hastings College of the Law. By comparison, patent trolls filed only 24 percent of patent infringement litigation in 2007.

The new study expanded on the group’s prior research regarding what it calls “patent monetization entities.” The latest report examined 13,000 cases from 2007-2008 and 2011-2012.

Below are several noteworthy findings detailed in the report:

• The number of defendants sued by NPEs decreased slightly from 2011 to 2012, which “may suggest that changes in the joinder rules from the America Invents Act had at least some initial success in pushing patent monetization entities not to cast the net so broadly.”

• Of the parties who filed the greatest number of patent litigations in the years studied, 9 out of 10 are patent monetization entities and only one is an operating company.

• Mechanisms for notifying the public when patents have been asserted in litigation are woefully inadequate. Despite federal requirements, the system was not operative for more than two-thirds of the patents asserted, which “puts small companies at a disadvantage because they cannot easily tell if a patent has been asserted and what territory is being claimed by the patent holder.”

• The newest patents issued are the most frequently asserted in litigation, which “could be an indication that parties are increasingly filing for patents for the primary purpose of assertion.”

This latest report provides new insight into a growing patent trend. NPEs have been a hot topic recently, prompting attention from Congress, the Federal Trade Commission, the U.S. Department of Justice and even the President.

How Can I Help?

If you, or someone you know, need any help with Intellectual Property issues, from filing a patent, trademark or copyright, or just need advice regarding how best to protect your inventions, ideas or your brand, please contact me for a free 30 minute consultation at nvantreeck@usip.com or call TOLL FREE at 1-855-UR IDEAS (1-855-874-3327) and ask for Norman.

– Ex astris, scientia –

I am and avid amateur astronomer and intellectual property attorney in Pasadena, California and I am a Rising Star as rated by Super Lawyers Magazine.  As a former Chief Petty Officer in the U.S. Navy, I am a proud member of the Armed Service Committee of the Los Angeles County Bar Association working to aid all active duty and veterans in our communities. Connect with me on Google +

Norman

Microsoft supports End Anonymous Patents Act

In a strange twist, Microsoft has thrown its support for a recently introduced bill titled “End Anonymous Patents Act,” introduced by House of Representatives member Ted Deutch (D-Fla.)

The act, if passed, would supposedly solve a problem regarding the recordation of patents in the U.S. Patent and Trademark Office.  Currently, recording the owner of a patent is voluntary.

Microsoft’s general counsel stated that:

Some patent owners take advantage of this obscurity to try to hide what they own for tactical advantage in licensing negotiations or to avoid complying with patent licensing commitments.

This is rather ironic considering that Microsoft has used anonymous patents for years to threaten both the Open Source community and now anyone producing an Android device.

To show it is serious, Microsoft launched its own web based Patent Tracker that allows anyone to quickly view and search through all of the patents that the company currently holds.

However, Microsoft has refused to divulge what patents it owns that “scare” handset makers in to licensing Microsoft’s portfolio, or those patents that it has licensed to other companies.

Currently, Microsoft makes more money from patent licenses on Android phones that it has made in total for its own brand of phones.  They are in fact becoming one of the world’s largest patent licensing entities, and in many cases, a non-practicing entity (or patent troll by some definitions).

This apparent transparency about face, is nothing more that smoke and mirrors, and is not the solution to the problem.

In fact, Microsoft can easily skirt the new bill by transferring their patents to patent assertion entities (i.e trolls) to attack their competitors.

Microsoft has strong ties with Intellectual Ventures, Rockstar and MOSAID, three of the world’s largest patent trolls.  When Microsoft transfers its patents to these trolls, Microsoft is no longer identified as the  “owner” of the patent.  So the recordation required by the new law does nothing to protect other companies from a shakedown and does not list Microsoft as the recorded owner.  Very convenient.

For example, Microsoft transferred more than 2,000 wireless patents from Nokia to MOSAID in 2011. Microsoft’s new “transparent” patent trackinging software will not show these patents because they don’t technically own the patents or control MOSAID.  However, Microsoft will benefit from the transfer because they and Nokia still maintain the ability to reclaim control over the patents transferred if MOSAID fails to satisfy preset revenue targets.

But don’t think Microsoft is alone in this endeavor.  In a similar fashion, Rockstar Consortium, Inc,formed by Microsoft, Apple, Ericsson and others, is now one of the largest patent trolls in the world, with more than 4,000 patents acquired the collapse and bankruptcy of Nortel.

A better bill to put before Congress would require companies to disclosure not only patent ownership, but patent royalties recieved from a particular patent (i.e. A companies patent “interest”) and a stiff penalties to companies that participate in patent privateering.  But with all the large companies that have become patent trolls themselves (while crying about the bad effects that patent trolls have on the economy), there isn’t any real change on the horizon.

How Can I Help?

If you need help to patent an idea, or protect  yourself from a claim of patent infringement, or know someone that can use my help, please contact me for a free 30 minute consultation at nvantreeck@usip.com or call TOLL FREE at 1-855-UR IDEAS (1-855-874-3327) and ask for Norman.

– Ex astris, scientia –

I am and avid amateur astronomer and intellectual property attorney in Pasadena, California. As a former Chief Petty Officer in the U.S. Navy, I am a proud member of the Armed Service Committee of the Los Angeles County Bar Association working to aid all active duty and veterans in our communities. Connect with me on Google +

Norman

Trolls in the majority of cases.

At least 56 percent of all patent lawsuits are started by patent trolls, according to a new, comprehensive report by Lex Machina.

According to Colleen Chien of Santa Clara University, 61% of patent lawsuits in the U.S. in 2012 were brought by patent trolls.  The following graph from a recent presentation by Ms Chien shows an alarming trend.
Usually, patent lawsuits are between large companies such as the Oracle vs. Google and Apple vs. Samsung cases that I have reported on in this blog.
According to the Electronic Frontier Foundation, a “patent troll uses patents as legal weapons, instead of actually creating any new products or coming up with new ideas.”  In many cases the nonpracticing entity (NPE), or patent troll, purchases patents that are unused or patents where their owners are not financially able to bring suit for infringement.  Then, the NPE demands a licensing fee from other companies using something that “may” infringe a patent in their portfolio.  Most of the time, the cost for licensing the patent from the NPE is far less than the cost of a patent lawsuit.  A cash cow is born.

According to Lex Machina:

“Cases filed by monetizers [i.e. trolls] rarely proceed to trial, usually settling early in the case. 75 percent of terminated cases filed by monetizers ended in a settlement, as did 72 percent of terminated cases filed by operating companies. Less than 1 percent of monetizer cases were decided at or after trial, and less than 2 percent of monetizer cases were decided on summary judgment. Of the summary judgment cases, the authors did not find a single decision in which the monetizer prevailed. Of the trial determinations, monetizers won half of the time, though this represented only 0.3 percent of all terminated monetizer cases.”

How I Can Help

If your company, or someone you know, has recieved notice of a patent lawsuit filed against you, I can help you defend yourself from unwarranted legal action.   Please contact me for a free 30 minute consultation by sending me an email or call TOLL FREE at 1-855-UR IDEAS (1-855-874-3327) and ask for Norman.

– Ex astris, scientia –

I am and avid amateur astronomer and intellectual property attorney.  As a former Chief Petty Officer in the U.S. Navy, I am a proud member of the Armed Service Committee of the Los Angeles County Bar Association working to aid all active duty and veterans in our communities.  Connect with me on Google +

Norman

Are Patent Trolls Costing Tech Companies And Consumers?

I get asked a lot of questions about so called patent trolls.  The term brings to mind connotations of evil lurking where no one can see it and then springing out to catch people unawares.

So what is a patent troll?

One definition is that patent trolls are “non-practicing entities” (NPEs) that do not directly use the patents they own to produce goods, but rather license them to other companies that do. Critics call these NPEs “patent trolls” because they often acquire patent rights just so they can use them to extract licensing fees.  In fact some of these entities are traded on the open market.

So, is being a “patent troll” a bad idea or good business?  There are two sides (at least) to every story.

According to a study by the Boston University School of Law, patent trolls cost the country’s top tech companies an estimated $29 billion last year.  The  study contends that the rise in opportunistic patent litigation is stifling innovation and harming inventors.

On the other hand, almost every major company in existence could be considered a patent troll.  Every television that is sold must obtain licenses from patent owners or they cannot be sold.  Every smartphone, cellphone and tablet also pays major companies “royalties” for using their patented technology.

But these companies are not considered patent trolls.  The argument is that NPE’s shouldn’t be able to collect royalties on their patents.  But Kodak collected 92 million dollars for software it didn’t produce.  Microsoft is notoriously going after Linux distributions to collect royalties to insure that they don’t infringe on many, unidentified  patents in Microsoft’s portfolio.  Yet, these companies, and many others like them, aren’t identified as patent trolls.

No matter what side you are on, patent litigation is on the rise. Lawsuits have increased dramatically over the past several years, from $6.7 billion in 2005 to $12.6 billion in 2008 and more than $29.2 billion in 2011, according to the study.

How Can I Help?

If you need help to defend yourself from a patent lawsuit, or help to enforce your patent rights, or know someone that can use my help, please contact me for a free 30 minute consultation by sending me an email or call TOLL FREE at 1-855-UR IDEAS (1-855-874-3327) and ask for Norman.

– Ex astris, scientia –

I am and avid amateur astronomer and intellectual property attorney.  As a former Chief Petty Officer in the U.S. Navy, I am a proud member of the Armed Service Committee of the Los Angeles County Bar Association working to aid all active duty and veterans in our communities.  Connect with me on Google +

Norman