Tag Archives: Intellectual property

Supreme Court Rules Against Patent Trolls (Again): What Does This Mean For Your Firm or Clients?

Patent Trolls beware. There’s a Supreme Court-backed knight crossing your bridge, wielding a powerful verdict.

On Thursday, in a unanimous decision in Alice Corp. vs. CLS Bank International, the Supreme Court ruled that ideas are not patentable just because they are performed on a computer. Although the ruling still leaves plenty of ambiguity in the patentability of software, it is one step closer in the recent anti-NPE movement.

Non-practicing entities, or NPEs, have been on the minds of high-tech business owners and the lawyers representing them for decades.

Today, however, the trial court invalidated Alice’s patents, stating they were just concepts, not patentable ideas.

“Viewed as a whole,” wrote Justice Thomas wrote (via New York Times), “petitioner’s method claims simply recite the concept of intermediated settlement as performed by a generic computer.”

“[The methods neither] improve the functioning of the computer [nor] effect an improvement in any other technology or technical field.”

In the recent past, the court was weary of hampering innovation by restricting patenting requirements. Long advocates for protecting intellectual property of both the individual and businesses, courts worry that reigning in patent trolls means restraining creativity and invention.

What do intellectual property experts think?

Dana Rao, Vice President, Intellectual Property and Litigation, Adobe, wrote to Forbes:

“The Supreme Court added another nail in the coffin of patent trolls with a decision that reinforces the common-sense belief that patents can’t be granted for abstract ideas that have been around forever. Importantly, they made a critical distinction between those abstract patents and valid software patents that improve a technological process,” said Rao.

“This ruling supports true innovators while helping rein in the abuse of the system by the patent trolls. We’re pleased to see the judiciary acting where Congress would not. But we still need Congress to act, as only they can meaningfully change the economic incentives that are driving the abuse of the patent litigation system.”

If that happens, patent litigators—like patent trolls—might also find themselves without a job.

According to Bruce Wexler, partner at Paul Hastings, who wrote to Daniel Fisher at Forbes, patent lawyers shouldn’t fret quite yet. In fact, maybe the Supreme Court’s ruling just made their job easier.

“Chief Judge Archer’s dissent in In re Alappat some 20 years ago is now the majority rule,” writes Wexler.

“The mere recitation of some structure ‎in a patent claim is not the dispositive test for patent eligibility. Patent law demands more. The invention must reside in the application of an idea. While this can raise grey areas, the argument cannot simply be about whether or not structure appears in a patent claim.”

If anything, the Supreme Court ruling is one more reason innovators should contact patent experts about what is, and is not, patentable. Law firm managers should keep their clients apprised of changes in patent law. Between the America Invents Act and recent rulings against NPEs, intellectual property practice areas will have their hands full.

If you haven’t done it already, consider alerting implicated clients of recent court decisions affecting their operations. A monthly newsletter to clients helps assure them you’re there and cross-sell your services.

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David Beats Goliath In Patent Troll Lawsuit

Is there any hope for small start-up companies involved in patent troll litigation? Underdog company Newegg seems to think so. With a recent win against mega-giant Alcatel-Lucent, Newegg gives hope to the little guy facing large legal power in patent disputes.

“It is truly, truly tragic how the mighty have fallen,” says Chief Legal Officer Lee Cheng about the Alcatel-Lucent corporate trolling activity to ars technica.

In 2011, Alcatel-Lucent looked like it was dominating the e-commerce market. Not in market share, but in market power—the kind of muscle that beats its way to the top. After suing eight major retailers, as well as Intuit, Alcatel-Lucent had settled each suit, one by one.

Even though Kmart, QVC, Lands’ End, Zappos, Sears, and Amazon all eventually folded, Newegg (and Overstock.com) held out.

“It’s an operating company that happens to hold a patent,” said Cheng to ars. “But it does nothing at all to bring the benefit of that patent to society.”

On principle, Newegg pursued the case, and won. First at trial in Texas, then last Friday in Federal Circuit court appeal via summary affirmance. It took the judges just three days to uphold the Texas trial ruling.

Apparently Alcatel-Lucent was not earning $12 million from Newegg for nothing.

“These are the Bell Labs patents,” Cheng explains. “This company was once the pride of American innovation, a company that has roots going back to Alexander Graham Bell. And it ended up selling off its patents for a few bucks. What Alcatel-Lucent did was really offensive.”

Offensive in the strategy sense, as well as the moral stance.

Cheng refuses to let Alcatel-Lucent off the hook. He continues (via ars):

“They systematically sent thousands of letters out saying, ‘Hey, we own 27,000 patents, and here are some patents we think you infringe.’ They had a whole licensing group whose job was to monetize these patents, by threatening litigation and in some cases litigating. It didn’t actually matter if you did your own analysis and got back to them and said, ‘Hey guys, we actually think we don’t infringe.’ The response was something to the effect of, well, we have 27,000 patents—and you probably infringe something, so give us a licensing fee.”

It’s not just a message to patent trolls that companies are prepared to fight for their intellectual property; it’s also a message to attorneys that firms are capable of combatting these suits successfully. With just three days for summary judgment, patent troll suits can even be defeated within a reasonable timeframe.

For companies looking to legitimately protect their patents, Newegg’s experience is also a good lesson in boilerplate legal jargon. Sometimes it’s necessary to pay your lawyers to investigate individual patent disputes and customize letters to infringers. From small to large, companies are no longer afraid of legal threats to sue. In fact, many are looking for you to do just that.

Law firms and their corporate clients should work together on an IP strategy, where an offensive policy doesn’t have to be an offensive one.

Sometimes IP litigation seems more like slinging gunfights in the Wild West, as opposed to educated businessmen deliberating on the bench. For now, Newegg’s president in patent protection should keep bandits at bay.

-WB

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Change In U.S. Patent Requirements: Bane or Benefit To Law Firm Business?

Although the law doesn’t change until 2013, firms should consider rewriting their business strategy now.

In March, the U.S. will reconcile its previous patent system with the first-to-file system practiced by the rest of the world. Entrepreneurs can say goodbye to the first-to-invent method of protecting their intellectual property, and hello to the Leahy-Smith America Invents Act.

As a result, this Spring, American businessmen will be racing to the U.S. Patent and Trademark Office instead of the nearest law office to file their claims.

The race is seemingly to the benefit of corporations and the detriment of individuals. But, what does it mean for lawyers.

“In a race of established, well-funded businesses with defined intellectual property protection strategies (and patent attorneys in-house or working closely with the business) versus entrepreneurs that may not have any experience with the patent system and the funds to pursue robust patent strategies, the advantage clearly goes to the businesses,” claims Patrick Richards of Richards Patent Law PC in a recent article for Forbes.

Larger law firms or in-house counsel should be kept busy with new filings under this law for their ambitious corporate clients. This doesn’t preclude, however, attracting new business by offering affordable rates to navigate the new patent law for small businesses or individuals.

But, with this new streamlined and fast-tracked system, complicated and costly patent litigation is likely to decline.

In fact, some veteran entrepreneurs believe that the new law liberates individuals from seeking professional services. Because, for example, individuals will find the system easier to understand, they might also be motivated to file a patent on their own.

“In addition to aligning with international patent offices that are all on a first-to-file system, it is materially easier to operate. First-to-invent is just too hard to measure.  It is practically impossible to know if a prior invention is lurking that hasn’t yet been filed; as a result, a first-to-invent system inhibits investment in new technology areas,” says Chris Gladwin, founder and CEO of Cleversafe, also author to over 300 issued and pending patents relating to dispersed storage technology, according to Forbes.

With less cumbersome requirements for prior art searches, patent seekers may stop searching for intellectual property legal services, as well.

Despite these potentially ominous consequences within patent law, certain firms remain undeterred. Cisco Systems Inc., for one, is taking their strategy on the offensive.

The networking-equipment maker has drummed up new litigation by writing strongly worded legal claims against two patent troll companies.

Cisco’s current suit is against Chicago-based Innovatio IP Ventures LLC, which—unlike typical patent trolls—is targeting the customers of alleged patent infringers.

Cisco, based in San Jose, Calif., and co-plaintiffs Netgear Inc. and Motorola Solutions Inc., claim that Innovatio has sent 8,000 “threatening” letters to coffee chains, hotels, and other retailers using Wi-Fi equipment that includes the three companies’ technologies. The plaintiffs argue that the letters are “misleading, fraudulent and unlawful,” reports The Wall Street Journal.

Cisco’s lawsuit claims Innovatio’s actions amount to an extortion scheme and are therefore in violation of federal antiracketeering laws, reports The Wall Street Journal.

It turns out, when the going gets tough, the tough get going.

So, where does your law firm stand when it comes to the changes in patent filing requirements? And, how will your firm position its business strategy to attract (not dispel) new clientele?

-WB

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Remembering Columbus Day: Why Foreign Exchange And Outsourcing Legal Services Comes At A Cost

Can you imagine being on Christopher Columbus’s boat when he discovered the New World? To eat corn, potatoes, beans, hot peppers, tomatoes, avocados, cocoa, and turkeys for the first time?

Columbus Day is a federal holiday celebrating the discovery of the Americas by Christopher Columbus on October 12, 1492. But, it’s also a critical moment in history for free and open international trade.

Today, it’s often forgotten how the simple exchange of goods and services is responsible for supporting the U.S. economy.

In the case of law, outsourcing legal services to India has been a popular win-win solution allowing American legal services providers to lower costs and their Indian counterparts to reap a portion of the industry’s revenue. By 2014, India’s legal outsourcing firms are expected to surpass $1 billion, which is an increase of 38 percent from 2008, Valuenotes, consulting firm in Pune, India, estimates (via NYT).

Needless to say, both sides profit monetarily from this arrangement.

Nevertheless, just like small pox in the New World, sometimes the benefits of trade have drawbacks, as well.

Take, for example, a decision by the 2nd U.S. Circuit Court of Appeals against the company Glenwood, who operates a Connecticut-based medical billing business. Glenwood outsourced its operations to India, but instead of lowering costs and increasing revenue, the company alleges three former Indian employees used proprietary trade information to start competing companies in India and California (via Law.com).

To make matters worse, according to the suit, these new companies now serve some of Glenwood’s former clients (via Law.com).

However, the Court of Appeals ruled that the three alleged offenders in India could not be brought to court in Connecticut because the companies do not provide services for clients in the state. In sum, the court made it clear that U.S. law does not apply to business disputes overseas.

“In the face of an increasingly interconnected global economy and unbelievable advances in technology, the U.S. courts are going to resist any trend that leads to universal jurisdiction over commercial disputes,” said Attorney W. Glen Pierson, a partner at Wallingford-based Loughlin Fitzgerald, about the suit, according to Law.com.

“It’s unfair for any party that outsources to get the benefits of outsourcing while avoiding the risk of having to litigate whatever claims they may have overseas.”

Indian law already forbids foreign lawyers from practicing on Indian soil. So, if there’s further risk in terms of intellectual-property theft or increased competition by bringing your business abroad, suddenly the advantages to outsourcing legal services comes into question.

In a recession, firms nationwide are looking to cut costs, but is outsourcing to India worth the risk of client poaching?

In every decision about money, there are always hidden social and economic consequences to consider. Does the cost of hiring a few additional paralegals or an attorney outweigh the cost of losing a client, for example?

When managing a law firm, success is not always measured by the bottom line. Keeping services local or in-house can sometimes be an appropriate method for protecting your firm’s confidential information and legal strategies.

-WB

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Do Patent Trolls Discourage Innovation?

Lawyers tend to roll their eyes whenever a patent dispute is mentioned.

The process is lengthy, backlogged, tendious, and it seems no company can escape the claws of litigation. Motorola, Nokia, HTC, Apple, Google, Research In Motion (RIM), and Samsung are all currently involved in one or more patent lawsuits relating to their smartphones, according to John Tothill at Computing.co.uk.

Congress, itself, is entangled in the mess that is patent law, approving a complete overhaul of the system. Patents will soon be awarded based on a “first to file” rather than “first to invent” basis.

Proponents of this change, under the America Invents Act, argue that the bill will reconcile the U.S. patent system with patent legislation of other nations in Europe, as well as Japan. This would streamline the patent process for companies aiming to file patents in multiple countries.

But, are these patent laws and regulations preserving the true spirit of patent application in the first place? Maybe not if Google has its way.

Patents are intended to encourage innovation and invention. This way, a profit can be made on developing a good idea before giving free access to the rest of the business world.

So what happens when media mogul, Google, agrees to purchase Motorola Mobility for the use and legal access to its patents?

According to some, Google purchased Motorola Mobility soley to acquire its patents. It begs the question, should large monopolist companies be able to purchase good ideas just because they can afford to?

“It may be said that so-called “patent trolls”, or non-practising entities, which hold patents but do not themselves innovate or produce products, hinder the realisation of innovative products. However, again it may be debated whether the existence of such patent trolls discourages innovation,” writes John Tothill at Computing.co.uk.

Google’s acquisition of Motorola Mobility sends a message.

Technology startups and other companies should innovate and acquire their own patents. But knowing the caveat that, these days, large companies are trolling for savvy investments. And whether through litigation or purchase, one thing is clear: patents seem to be swiftly changing hands.

It’s a good time to be a small company with big (legally-backed) ideas.

-WB

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Set Up Strong Social Media Policies, Now!

Have you ever stopped to wonder why Social Media-related cases hardly ever wind up in court?  Because, notes Digital workplace blogger Christopher Leh (“Workplace Blog”), with all the shifting rules and applications, it’s hard to keep up.  Besides, “nobody wants to be made an example of”—this, the wry observation of lawyer and blogger Bradley Shear.

So, thinking ahead, what are some of the ways in which you can protect your client or your firm?  You need to implement a multi-layered, foolproof social media policy, and you need to enforce it.


Along those lines, Leh details a variety of legal schools-of-thought from which to approach this “inoculation” against possible litigation.

These include:

Equal Employment Law – Be careful to steer your employees clear of any practices which might be construed as harassment in any form, or in direct violation of The Americans with Disabilities Act, the Age Discrimination in Employment Act or the Genetic Information Non-discrimination Act.  Also be aware of the state laws which fall into this category; and

The Fair Credit Reporting Act – To illustrate how a company or firm might be placed in liability, Leh brings up a situation where a would-be employer refuses to hire an applicant after using a mobile phone to gather credit information on the candidate. If this is done without first asking the job candidate’s permission or providing the proper notification, it puts the business or firm in jeopardy.

The employer (or you) will already likely have workplace polices in place which touch on ethical practices, as well as to avoid discrimination, harassment, and retaliation and which define intellectual property, among other parameters.  A good social media policy should be in sync with such protocols.

You should also identify what sort of social media forum you are defining while setting up the policy. For instance, which practices relate to chat rooms, forums, bulletin boards, social network blogs (Facebook, Twitter, etc.), and which to the use of YouTube and text messaging. Be exhaustive and detailed.  Suggestion: if you’re not yet conversant with all the aspects of social media, don’t hesitate to ask a younger colleague to “catch you up”.

If you, the administrator (or the employer), are sponsoring certain types of social media, set out a “mission statement” with rules as to what you are hoping to have your employees accomplish. For instance, do you want them to funnel information, create excitement, pass on useful data and add value? Put this in writing.

Speak, also, to what you don’t want your employees to do, such as sharing trade secrets or confidential material.  Again, be explicit so as to not leave any room for doubt.   For an in-depth treatise of how to enhance the way your workplace uses social media technology, see the “Digital Workplace Blog” post.

-EM

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Looking To Avoid Trademark Or IP Lawsuits? Try Google First.

It’s hard to believe a person would ever eat a sandwich called the “triple bypass burger,” let alone fight over it. But, two lunch venues are doing just that, each declaring rights to the trademarked name. And, as unappetizing as the menu sounds, Heart Attack Grill is dead set on defending it.  

Simple, double, triple, and quadruple (beef) Bypass Burgers, Flatliner Fries (deep-fried in lard), Jolt Cola, and no-filter cigarettes are just a sampling of the indulgences the Heart Attack Grill offers. Located in Chandler, Arizona, the Heart Attack Grill was founded by Jon Basso in 2005. Basso relied on a controversial marketing scheme for the restaurant’s immediate success, serving “nutritional pornography,” and food “so bad for you it’s shocking.”[1]

On the other side the country, in New York City, 2nd Ave Deli offers an “Instant Heart Attack Sandwich,” which, for the kosher locale, means two large potato pancakes (called latkes) with a choice of corned beef, pastrami, turkey, or salami.[2]  

Despite the difference in deli meat, Basso issued a letter of warning to 2nd Ave Deli (or Uncle Abies) on March 29 that said, “We believe you copied Heart Attack Grill’s family of medically themed food items, including its ‘BYPASS’ trademarks.” The letter continued, “Although copying is the highest form of flattery, in the case of Uncle Abies, copying Heart Attack Grill’s trademarks is a violation of Federal Trademark Law.”  

On Monday, Uncle Abies filed a counter-suit, seeking a declaration of non-infringement and unspecified court and attorneys’ fees. Despite all the drama, you can’t help but wonder if these costs would have been incurred with proper (deli) due diligence.  

Under these circumstances, Uncle Abies would have benefited from searching the intellectual property (IP) rights—patents and trademarks—already registered with the court. The deli would have then discovered which sandwich names were glatt kosher and which not kosher.  

The United States Patent And Trademark Office (USPTO) does not require a person or business to search the USPTO database in advance of applying for a trademark. As a lawyer, however, it’s important to take note of the numerous IP repositories in existence that will help your current or future clients bypass infringement lawsuits. These tools include:

  1. Trademark Electronic Search System (TESS)
  2. Design Search Code 
  3. US Registration Certificates
  4. Public Search Facility
  5. Patent and Trademark Depository Library  (PTDL)
  6. Assignments on the Web (AOTW)

Google also offers a beta search system called Google Patents. With over seven million patents archived—including all appropriate abstracts, drawings, descriptions, and claims—Google has repackaged the USPTO’s IP information in an easy-to-read and downloadable form.  

Triple Bypass Burger was trademarked by Jon Basso in 2005 under Serial Number 78780876. Triple Bypass Sandwich was trademarked by Uncle Abies Deli Inc. in 2010 under Serial Number 85140776. Today, it will be for the court to decide, between the two, whose tuchas is on the line.

 

-WB

[1] http://www.popgive.com/2008/10/heart-attack-grill.html

[2] http://www.nydailynews.com/ny_local/2011/05/10/2011-05-10_heart_attack_grills_trademark_case_against_2nd_ave_deli_over_sandwich_name_is_ba.html

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