The Center for Internet and Society at Stanford Law School is a leader in the study of the law and policy around the Internet and other emerging technologies.
How accurate is the Patent and Trademark Office? Can its examiners tell good patents from bad?
Emeritus Stanford Computer Science Professor Gio Wiederhold provides in the January 2011 issue of Communications of the ACM (1) (the monthly journal of the professional society for Computer Scientists) an article titled Follow the Intellectual Property. The theme of his paper is that the offshoring of IP (actually domiciling the IP for sheltering royalty purposes in an off-shore tax haven such as the Cayman Islands) works to the disadvantage of US employees. Profits sheltered are not repatriated, but instead are used to seed and hire other offshore developments for the patent owners.
In reviewing the statistical tea leaves of IP litigation trends for 2010, one aspect that now stands out is the number of cases involving auctioned patents. There are 15 such cases asserting 20 auctioned patents. Some of the highlights of these 15 cases are:
• US 6,526,219 for “Picture-based video indexing system” had a projected auction price of $250,000, but ended up sold for $700,000. InMotion Imagery Technologies, LLC asserted this patent in three cases in the Eastern District of Texas.
When Patent Office Director Michelle Lee gave that speech, Theranos appeared to be one of the most impressive companies in Silicon Valley. But later that year, the public learned that Holmes hadn’t “proven” anything. Whistleblowers told The Wall Street Journal that Theranos wasn’t even using its own devices for most of its blood testing. Holmes had apparently spent more than a decade building a company based on unrealistic or outright false claims about its revolutionary technology.
The general rule in patent law is that each country has its own patent system. If you want damages for sales in the United States, you need a U.S. patent. If you want damages for sales in New Zealand, you need to get a New Zealand patent, and so on. A case currently before the U.S. Supreme Court threatens to disrupt this system by allowing worldwide damages for infringement of U.S. patents.
If trolls don’t face consequences for asserting invalid software patents, then they will continue to shake down productive companies. That is why EFF has filed an amicus brief [PDF] urging the court to uphold fee awards against patent trolls (and their lawyers) when they assert software patents that are clearly invalid under the Supreme Court’s decision in Alice v.
This month’s stupid patent, like many stupid patents before it, simply claims the idea of using a computer for basic calculations. U.S. Patent No. 6,817,863 (the ’863 patent) is titled “Computer program, method, and system for monitoring nutrition content of consumables and for facilitating menu planning.” It claims the process of using a computer to track nutrition information like calorie or vitamin intake. It is difficult to think of a more basic and trivial use for a computer.
In a ruling this week that will cheer up patent trolls, the Supreme Court said patent owners can lie in wait for years before suing. This will allow trolls to sit around while others independently develop and build technology. The troll can then jump out from under the bridge and demand payment for work it had nothing to do with.
Plenty of businesses rely on third-party payers: parents often pay for college; insurance companies pay most health care bills. Reaching out to potential third-party payers is hardly a new or revolutionary business practice. But someone should tell the Patent Office. Earlier this year, it issued US Patent No. 9,026,468 to Securus Technologies, a company that provides telephone services to prisoners.
Imagine if the inventor of the Segway claimed to own "any thing that moves in response to human commands." Or if the inventor of the telegraph applied for a patent covering any use of electric current for communication. Absurdly overbroad claims like these would not be allowed, right? Unfortunately, the Patent Office does not do a good job of policing overly broad claims. August's Stupid Patent of the Month, U.S. Patent No.
This is the third in a series of articles focusing on the experimental economics of intellectual property. In earlier work, we have experimentally studied the ways in which creators assign monetary value to the things that they create. That research has suggested that creators are subject to a systematic bias that leads them to overvalue their work.
"Despite the many lawsuits filed by Shipping & Transit, a court has never ruled on the validity of the company’s patent claims, said Daniel Nazer, a senior staff attorney at the Electronic Frontier Foundation, a nonprofit that works on intellectual property issues. But Shipping & Transit’s business model took a hit after multiple courts ordered it to pay attorneys fees and questioned the company’s motives in bringing the patent lawsuits."
"Daniel Nazer, an EFF attorney, said that Shipping & Transit is part of a dying business model.
"Most of S&T's patents are expired, and defendants had managed to get fees in a couple of cases," he emailed Ars.
"Daniel Nazer, a senior staff attorney at the Electronic Frontier Foundation, said the duty of the USPTO director is to the public, not just patent owners, and "frankly, his speech doesn’t seem to reflect any awareness of that."
"Meanwhile, Daniel Nazer, an attorney with the Electronic Frontier Foundation, also applauded the occasion.
"It's a classic example of how an overbroad patent can frustrate innovation," he emailed Ars. "To the extent the industry faces other challenges because of a stigma against sex tech or adult products, those will remain. But at least startups in the space won't immediately get sued.""
"EFF senior staff attorney Daniel Nazer tells me in an email that “it’s a good thing this patent is expiring” and noted that the owner of the patent had filed a lawsuit against several small companies, “so it’s reasonable to conclude that it was actively deterring innovation in this space.”"
"But even when the U.S.P.T.O. granted patents to Raniere for his inventions (which they did for over 20), it shouldn’t necessarily be considered proof of brilliance, according to Daniel Nazer, attorney and Mark Cuban Chair to Eliminate Stupid Patents at the Electronic Frontier Foundation. Nazer said, “If your whole shtick is going around and convincing people that you’re this genius, then the patent system is a way to buttress that.
"Daniel Nazer, a staff attorney on the Electronic Frontier Foundation's intellectual property team, thinks Tinder's case faces many of the same pitfalls. "I think most utility patents in this space face the same problems," he says. (Utility patents protect new machines, processes, and other inventions).
"Nazer believes none of these patents should have been granted in the first place, having failed to overcome the basic legal requirements of being both original and non-obvious. A big part of the problem, he says, has to do with how the patent office works. “Patent examiners spend an average of only 18 hours reviewing each application,” he told me, “which is grossly inadequate.”"
"Supporters of the reviews, meanwhile, say they are a much-needed corrective for a system that has issued far too many low-quality patents. Patent office examiners spend an average of 18 hours reviewing each application, too little time to research all the evidence that might invalidate a claim, says Daniel Nazer at the Electronic Frontier Foundation."
""We get questions all the time about, 'Can you help me with my patent?' But we couldn't until we got certification," said Elizabeth Townsend Gard, a Tulane Law School faculty member and co-director of the Tulane Center for IP, Media & Culture.
Townsend Gard said in each of the past three years, her intellectual property class has done about 100 trademark searches for people.
CIS Affiliate Scholar Marvin Ammori will be participating in the panel "Can Our Patent System Support (or Survive) the DIY Movement?"
Widely recognized as a preeminent scholar of intellectual property law, Mark A. Lemley (BA '88) is an accomplished litigator—having litigated cases before the US Supreme Court, the California Supreme Court, and federal circuit courts—as well as a prolific writer with more than 100 published articles and six books. He has testified numerous times before Congress, the California legislature, the Federal Trade Commission, and the Antitrust Modernization Commission on patent, trade secret, antitrust, and constitutional law matters. He is also a partner and founder in the firm Durie Tangri LLP.
""Ideas, before you actually put them to work, are very vulnerable to stealing," said University of California, Hastings law professor Ben Depoorter. "We give protection to someone who can make good on that idea, and put it into a particular application, practice, expression, art form.
This week, David Levine interviews Daniel Nazer, a Staff Attorney on the Electronic Frontier Foundation’s intellectual property team, focusing on patent reform.
CIS Affiliate Scholar David Levine interviews Ron Epstein, CEO of EpicenterIP, on non-practicing entities/patent trolls/patent investors.
Defensive patenting---i.e., filing a patent specifically to avoid the threat of litigation---is a common strategy in the world of intellectual property for private companies focused on information technology. Free software and open source ("FOSS") projects, however, are historically wary of defensive patenting. Why is this? And what strategies might make defensive patenting more appealing to the FOSS community?