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The ObvIPat Blog

The USPTO Glossary Pilot Program

by Orlando Lopez

On March 24, 2014 the USPTO announced a Glossary Pilot Program following one of the White House’s recommendations aimed at improving clarity and increasing the quality of patents. In view of our last blog post, the Glossary Pilot Program provides an opportunity for Applicants in some of the USPTO Technology Centers to expedite examination of their applications. The program applies to the Technology Centers of 2100, 2400, 2600 and the Business Methods area of Technology Center 3600, and is aimed at software applications.

The Applicant provides a petition to make special under the pilot program and a formal glossary section, defining terms used in the claims, as part of the patent application. No fee is required. The aim is to make it easier for the Examiner to understand and interpret the claims, and as a reward for doing that, the Applicant gets a fast turnaround. The program starts on June 2, 2014.

We look forward to the result of this pilot program since it can lead to higher quality patents and a fast pass through the Patent Office. The fast pass through the Patent Office is important for start-ups and young companies, which are the drivers of the economy.

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Watch out USPTO, JPO is Coming!

by Orlando Lopez

The Japanese government has announced an initiative to reduce patent examination time from 2.5 years to about 14 months. When they achieve 14 months examination time, the Japanese Patent Office (JPO) will provide the shortest examination period in the world. This is part of the initiative to make Japan the world leader in intellectual property, an initiative which is being driven by the Prime Minister.

The push to achieve the shortest examination time was announced by the Ministry of Economy, Trade and Industry. The driving force behind the effort to shorten the examination time is to provide applicants the ability to launch businesses and recover investments faster. We had referred to this before as the Patent Stimulus Package.

The Japanese initiative package should be compared to the U.S. initiative to provide more transparency in ownership of patents and to attack the so-called patent trolls. In view of the fact that new jobs are created by new business, and that young, high-tech companies outpace the rest of the private sector in job creation, the Japanese Patent Stimulus Package appears to have a better chance of stimulating the economy.

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Patent Trolls: The View From Above the Bridge and the View From Below the Bridge

by Orlando Lopez

Non-practicing entities (NPEs), also know as “patent assertion entities” (PAEs) or “patent trolls,” have received much attention recently with two bills in Congress, statements by the President, a Vermont law to curb trolls, and even an NPR program on the evil effects of patent trolls.

I understand why. My first view of patent trolls came from my colleague Renato de Luna.  Renato was the IP counsel at a high-tech company and spent a fair amount of his time defending against lawsuits from NPEs. One of the NPEs contacted the company’s board of directors and the customers. One patent in question was for a microprocessor, and almost all high-tech products use microprocessors. This particular patent had survived re-examination at the USPTO (the United States Patent and Trademark Office). Fending off the patent trolls consumed energy and resources that could have been used in a productive manner. At that point, I had no love lost for patent trolls. That is the view from above the bridge.

However, recently I got a glimpse of the view from below the bridge. Several of my clients and co-licensees of my clients, startup companies that had built patent portfolios but did not experience commercial success, decided to monetize their large intangible asset, their patent portfolio. As I had found out in the licensing experience early in my patent law career, “carrot licensing” (where you entice a potential licensee to take a license), is significantly harder and less likely to succeed than “stick licensing” (where you find them infringing and bring them to the table to license). In stick licensing, you have to be willing and ready to sue for infringement. But patent infringement is an expensive game – $2 million to play. Startups, even successful ones, do not have the entry ante. That is where NPEs come in. In the situations I experienced, the NPEs did their due diligence – they looked at the patents critically to determine that there was likelihood of success in a suit. I am sure that those sued, even if the tactics are not onerous, are not happy about it – the suit takes resources away from other efforts. Nevertheless, the NPEs provided an avenue for inventors to assert their patent rights to exclude others from making or using the invention.

Why is it important to provide avenues for entrepreneurs to assert their patents? The 2008 Berkeley Patent Study found that one reason that entrepreneurs gave for not patenting was the expense of asserting patents. However, patents provide a barrier-to-entry for competitors, and barriers-to-entry are one of the factors that investors consider. An increased likelihood of investments translates into an increased likelihood of forming a startup company. When we consider that more than half of all jobs are created by small businesses, an increased likelihood of forming a startup company translates into job creation.

Startup companies cannot afford lobbying, and most entrepreneurs (unless they are repeat entrepreneurs) are not large donors to presidential campaigns. However, it should be ensured that when trolls are reigned in, we do not throw the baby out with the bath water.

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Slow Down, You Are Going Too Fast! The CAFC Again Remands Hulu Back to the District Court

by Orlando Lopez

After the Supreme Court granted certiorari, vacated and remanded ULTRAMERCIAL, INC. v. HULU, LLC, the District Court dismissed, without interpreting (construing) the claims, for failure to state a claim for which relief can be granted (in response to a 12 b(6) motion). The District Court accepted the argument presented by Ultramercial in their motion that Hulu’s patent, the ’545 patent, did not claim patent-eligible subject matter and did not require Hulu to file an answer to Ultramercial’s motion. The Court of Appeals for the Federal Circuit (CAFC) reversed and remanded Hulu back to the District Court.

The decision of the CAFC is based on the dependency of the patent eligibility analysis (the 35 USC 101 analysis) on factual issues. However the second pass on Hulu (which could be called “Hulu Hulu” at the risk of sounding like a college song from one of the many universities I attended) is interesting because it comes on the heels of CLS v. Alice. This second Hulu CAFC opinion provides a good discussion by the panel (Judges Rader, Lourie and O’Malley) on the analysis of patent  ineligibility. Judge Rader summarizes the analysis as the determination of whether the claim, taken as a whole, includes meaningful limitations restricting the claimed invention to an application rather than preempting the use of the abstract idea by others and for other applications.

After the plurality of decisions in CLS v. Alice, we will need to collect opinions like this from other panels in order to arrive at a view of the approach to determination of patent eligibility by the CAFC. As opinions on patentable subject matter from other panels are available, we will comment in future posts.

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