Thursday, May 25, 2006

A Docketing Request

As you may have noticed, the writer behind this blog has also written various IP practice books. One of them is Patent Application Practice.
Dennis Crouch and I are presently preparing the next update for PAP. One cotribution of mine to this effort is to take another look at the docketing section of the book with a view to updating and possibly expanding it. For that reason, I'd appreciate your help.
If you have a docketing memo - a description instructing your staff member in the intricacies of docketing all the various sorts of documents received from the PTO and keeping the attorneys informed to prevent a case going abandoned - I'd very much appreciate a copy of it, especially if it has proven suscessful in getting a case revived at the PTO. You can email a copy of it to me at onejehawes@aol.com. If there are limitations concerning its use by us, please let me know. Thank you. (JH)

Harmonizing US Patent Laws - a proposal

For decades those interested in the US patent system have been discussing “harmonizing” our IP laws. For a review of these discussions, see for example Janice M. Muller, Introduction to Patent Law (2nd Ed.) or Donald S. Chisum, “Reforming Patent Law Reform,” 4 John Marshall Review of Int. Prop. Law 336 (2005).
Initially, what “harmonizing” meant was adjusting US technology patent laws to parallel the technology patent laws of other economically developed countries by eliminating first inventor rights and granting patents to the first to apply. (In other words, eliminating interferences.) Over the years since its initial proposal, harmonizing has come to be supported by the Intellectual Property Owners Assn., the American Intellectual Property Law Assn. (AIPLA) and many large businesses. Major opposition always has come from the inventor and small business communities. Some argue that harmonization will in fact benefit these opponents – see Robert Armitage’s forward to, and former PTO Commissioner Gerald Mossinghoff’s working paper, “Small Entities and the ‘First to Invent’ Patent System” published by the Washington Legal Fdn. in 2005.
The Patent Act of 2005 proposed legislation (H.R. 2795, S. 1020) “harmonizing” patent laws by changing all sorts of US patent rights to switch from our present first to invent system to a first to file system (of course), eliminate the best mode requirement, adjust the duty of candor, provide for certain post-grant proceedings, require consideration of third party submissions of prior art, and various other things. An excellent survey of all this should start with Matt Buchanan’s “The Patent Reform Library” posted on his blog promotetheprogress.com/archives/2005/06/the_ptp_patent_1.html – the POP blog.
Why stop there, though? Why not also harmonize our various patent laws with one another? Indeed, why not harmonize all our IP laws?

US IP rights –
IP laws of national scope include the patent laws (35 USC), trademark laws (15 USC §1050 et seq.) and copyright laws (17 USC). While the requirements set forth by each to establish the IP rights they govern are different, the rights they confer are much the same. With one exception: technology patents.
Specifically, trademark rights require a federal court to evaluate the likelihood of confusion between the registered and challenged marks to establish trademark infringement. A violation of copyright rights requires a showing of copying, which in turn requires a showing of access and substantial similarity, to establish the infringement. Design patent rights require the patent holder to prove a substantial similarity between the patented ornamental design and the ornamental design of the accused product to establish infringement. Plant patents require a showing that the patented plant has been asexually propagated, sold or used to be infringed. Only technology patents require something different.

Two Approaches to Technology Patent Rights –
Early on US technology patent laws required the patent owner to establish that the accused technology was substantially the same as that set forth in the patent; the patent covered the technology “constructed and operating substantially as herein set forth and described” (eg US pat. 1,000) or “as and for the purposes set forth” (eg US pat. 100,000).
Then, in the late nineteenth century US patent laws were changed to adopt a meets and bounds definition of the invention, much like real property rights are defined. The patentee had to define (claim) in the patent the exact meets and bounds of the invention. Infringement was established by showing that the accused technology came within any part of the meets and bounds of the patent. All this is discussed in many texts; see for example Patent Litigation: Procedure and Tactics by Lester Horowitz and Ethan Horowitz.
Some countries use this meets and bounds approach to define the scope of the invention protected by the patent. Other countries, like Germany, use an inventive step, gist or heart of the invention as illuminated by the disclosure and drawings, approach to defining the invention. In other words, they define the invention’s bullseye, while US practice defines the outer boundary of the invention target.
These differing ways of defining the invention lead to radically different infringement litigation scopes, costs and uncertainties. Largely because of the money involved in both defending and asserting a patent, US companies have questioned the value of US technology patent rights. Indeed, many groups have come to assert that the US patent system is now in a state of crisis. See for example the AIPLA’s response to NSA’s report “A Patent System for the 21st Century” (this and many other relevant references are cited in the POP blog).

Design and Plant Patent Litigation –
Every year at least a few design patent cases are reported. Having litigated some myself years ago, and having talked with a few attorneys who have more recently litigated design patent rights, it appears that the average design patent litigation currently costs in the mid-six figure range. Judges seem willing to accept the PTO’s determination that the design merits a patent. The litigation therefore usually focuses on the similarity between the patented and accused designs. Defendants often assert that certain features (especially those most notable) of the patented design are well-known or are dictated by non-aesthetic considerations (eg they are functional) and must be eliminated from the substantial similarity analysis, but the extent to which judges do this is unclear. Our federal judiciary often seems to be willing to reach a seat of the pants, looks the same to me, sort of decision. And the CAFC seems to be willing to go along with such trial court evaluations if couched in the language of both an overall similarity to the ordinary observer and appropriating the ornamental novelty which distinguishes the patented design from the prior art. Read Corp. v. Portec, 970 F.2d 816 (CAFC 1992).
While I have no first hand experience, I expect plant patent litigation to be about the same in scope and cost as design patent litigation. At least the few recent decisions in this area would so indicate to me. See for example Imazio Nursery Inc. v. Dania Greenhouses, 69 F.3d 1560 (CAFC 1995).

Technology Patent Litigation -
To litigate US technology patents is an entirely different matter.
First, the patent owner must go through all sorts of pre-litigation matters. It must recheck the initial inventorship determination and re-evaluate all known prior art, including any that may have been cited in any related foreign patent application. It must review the adequacy of the US patent’s disclosure and chart the infringement of the patent’s claims by the target infringer’s technology. Many cases require a lot more than just this. See for example the Horowitz book previously cited.
If all these pre-filing efforts confirm that litigation is warranted, then after the case is filed and the defendant served, a great deal still must be done to prepare the case for trial. Among these matters are a Markman hearing to determine the meaning and scope of the patent’s claims, and discovery of the accused infringer’s technology related to the patent and knowledge of the patent being litigated. While this is going on the defendant undoubtedly is conducting its own discovery related to inventorship, disclosure adequacy, prior art, claim meaning and scope and many other things. Eventually a settlement will be reached or the case tried. Whatever the trial court decides, very likely there will be at least one cycle of appeals, and maybe more. All this can and has taken a decade or more to reach a final conclusion.
From the AIPLA’s 2005 economic survey, litigating a complex technology patent costs, on average, $4.5 million. And that’s just the average, and just through trial. This cost has been growing at about 10% per year in recent years. (For comparison, the AIPLA Survey reports that litigating a high value trademark will cost about $1.25 million through trial, and a high value copyright about $1 million.) The number of patent lawsuits grew by 80% between 1994 and 2004. Companies have reported spending 32% more on outside IP litigation counsel in 2003 than 2002, compared to a 1% increase for non-IP counsel.
No wonder, then, that many experienced patent owners now think the US patent system to be in crisis.

Harmonizing Technology Patent Laws –
What if technology patent rights were harmonized with the rights conferred by design and plant patents? What might be the result?
Specifically, what if the presence of the invention in a technology patent was defined as the technology substantially as set forth in the specification? Or, if a more focused definition were desired, what if it was set forth in a claim, or set of claims, in which first the area of technology was generally stated, then the invention was defined by a set of clauses preceded by something like “the invention being characterized by . . .” followed by a listing the distinguishing characteristics of the invention, and maybe even concluding with something like “substantially as and for the purposes set forth herein?” In other words, what if the US gave up its meets and bounds approach to invention definition for a bullseye approach?
We used to do it this way for technology inventions. We still do it this way for design patents, trademarks and copyrights. In at least these areas of IP rights we let the trial court evaluate the substantiality of the copying, if any – we let the trial judge, using equitable guidelines, decide whether or not the asserted right has been violated. The Germans and others do it this way for their technology inventions.
What might be the result of such a change? I expect a bullseye approach to defining the invention in US technology patents would considerably simplify technology patent litigation, bringing it more into line with other IP litigation for example in time, scope and cost. Competitors would focus on the invention, rather than on the meets and bounds. Judges would focus on reaching a just and equitable result in technology patent litigation, just as they now do for design patents and other IP rights. Much of the complexity of patent litigation would cease. Indeed, this simple change in invention definition could carry our patent system a long way from its present crisis mode to the harmonized, “best practices” objective of the PTO’s 21st Century Strategic Plan.

Conclusion –
Let’s expand the discussion of “harmonizing” US patent laws to include a consideration of changing a meets and bounds style of invention definition to a characterized by (or substantially as shown and described by, for example) style of invention definition.
If it turned the presently outrageous nature of technology patent litigation into something more akin to design patent litigation, I expect many patent owners, and even many accused infringers, would welcome it. Judges might too. What do you think? (JH)

Monday, May 15, 2006

Dirty Tricks at the PTO

I’ve just been shocked to my core, and made thankful once again that I am retired. How do you that are not retired deal with this kind of outrageous crap?
Thanks to the diggings and publicity of Bill Heinze, Steve Nipper and Hal Wagner, it seems that a whole cartload of higher officials at the PTO and Dept. of Commerce (DC) are without even the most basic of ethics. Specifically, in early January while the NTP v. RIM litigation and the related patent re-examinsations were in full swing and making the news almost daily, in response to a request by RIM the following officials were involved in preparing for an ex parte meeting with RIM at the PTO on Jan. 4:
Deputy Sec. DC Under Sec. DC Acting Gen. Counsel DC
Director PTO Deputy Dir. PTO Gen. Counsel PTO
Deputy Gen. Counsel PTO Deputy Gen Counsel and Sol., PTO
And others, including “possibly” representatives from DOJ
It is unbelievable to this old litigator and patent atty. that NONE of this group thought to question the propriety of the meeting or to invite NTP to the meeting. Instead, they met ex parte with RIM’s President and some of its attorneys to discuss (again, judging from the briefing documents obtained by FOIA requests) the status of the re-examinations and the NTP v. RIM litigation history. Whatever was decided – or even if NOTHING was decided - at this meeting, having it clearly violated all sorts of PTO and litigation ethics rules and prohibitions, including 37 CFR 1.955 and the FRCivP.
To me, this seems akin to the dirty tricks of the Nixon era. Either we are a nation ruled by officials, or by laws. If the latter, then officials who so clearly violate our laws should and MUST be held to account for their actions. I hope Congress sees fit to do so. If you agree, please write your Senators or Congressional Representatives.

Tuesday, May 02, 2006

Values of IP

What do you think the most valuable IP right is? Are patent rights the most valuable, or are trademark rights, or copyrights?
My guess is that most patent attorneys think patents are the most valuable of IP rights. Well, let’s look at some data.

Patents –
The ploymerase chain reaction, a technique for amplifying genetic material, was invented by Dr. Kary Mullis in 1983. His employer, Cetus Corp., received the patent; Dr. Mullis was awarded the Nobel Prize. In 1992 Cetus sold its PCR patent portfolio to Hoffman LaRoche for about $700 million.
Recently RIM settled for $612.5 million a lawsuit in which the plaintiff, NTP, asserted that RIM’s BlackBerry personal data system infringed an NTP patent. In view of that, the NTP patent might be said to be worth $1 billion.
These two data points represent, I believe, the top zone of patent value.

Copyrights –
What’s the top zone for copyright values? George Lucas’ Star Wars “franchise,” which includes all the Star Wars related products and spin-offs, has been estimated by Forbes to have a value of about $20 billion.
J.K. Rowlings’ Harry Potter series and related products has been projected to have a value of about $12 billion. So this $12 to $20 billion range is probably a fairly representative estimate of the top zone of values for copyrights today.

Trademarks –
What might some of the best known trademarks be worth?
How about the Microsoft trademark? Last year Microsoft earned more than $12 billion on almost $40 billion in revenues. Of course, a considerable amount of this income and earnings is attributable to the Windows programs and to technical quality. But other software companies have programs of similar quality. Let’s say that one-third of Microsoft’s 31% profit on sales was attributable to its trademark. The company’s shareholder equity last year was a bit more than $48 billion; the stock market valued Microsoft at $284 billion. If a third of the valuation above shareholders’ equity was attributable to the trademark, then the Microsoft mark would have a value of about $75 billion.
How about Johnson & Johnson - what’s the value of the J&J mark? Using an approach similar to the Microsoft valuation analysis, J&J’s profit was about 20% on revenues of about $50 billion, which might be said to be about twice that of its market segment. The excess of its market value over shareholders’ equity last year was about $142 billion; half of that would be $71 billion, which as a ballpark figure would be the value of its J&J trademark.
As a third example of a company in a competitive market with strong earnings, consider Cisco Systems. Its profit last year was about 23% of revenues, which again might be said to be in the neighborhood of twice the average for its market segment. Its market value exceeded its shareholders’ equity by about $110 billion, giving its Cisco mark a value of $55 billion.
So it would seem that marks of highly successful companies might be said to have a value of $50 billion or more.

Conclusion –
From the foregoing analysis, it would seem that trademarks clearly are the most valuable of IP rights.
One notable characteristic of trademarks is that their life is potentially infinite, while the lives of patents and copyrights are both limited by statute. So only trademarks continue to build value with use over the years.
Obviously the above is only a rough approximation of values. I’d welcome your comments about where it went off track, and what you think the most valuable IP right is.

Sunday, April 23, 2006

Your First Job

Since my posting about the risks of being a patent attorney prompted so many responses – or maybe I should say, stomped on so many toes - let me offer these observations in the hope of assuaging any still hurt feelings.
The basic point I wish to make in this note is that the first job any new attorney takes in the profession is critical, for it will largely determine how they are going to practice law for the rest of his or her career, and the enjoyment they will derive from that practice.
How can that be? Isn’t the practice of law the same everywhere in the US? Can’t I determine how I am going to deal with my clients and others independently of whoever first supervises me? Conceptually, of course the law is the law, and the practice of law is reflective of the attorney’s nature, not whomever he or she learned under. In reality, though, it seems to me that things are quite different.
Consider the practice of law in New York vs. in Los Angeles. (I happened to have practiced with, and against, firms in both cities, so I have first-hand experience here.) I found, and still find, that NY attorneys often are very combative, dispute everything, give nothing and are generally as unpleasant socially as they are professionally. On the other hand, LA attorneys, while just as competent as NY attorneys, usually are less combative (ie they can be persuaded), listen as well as dispute, are willing to negotiate without considering it akin to throwing in the towel, and are often pleasant socially even in the midst of a heated court battle or deposition.
This realization occurred to me one day during a deposition. My opposing attorney also had practiced on the east coast, although at the time we were both practicing with LA firms. During a break, one of us happened to mention how different the practice of law was in LA than in NY. The client / deponent couldn’t understand what we were talking about. He probably assumed that the practice of law was pretty much the same everywhere. So we agreed to show him by pretending to take up his deposition as if we were in NY. One of us asked a question and the other stated some off the wall objection. Redundant. Asked and answered. Irrelevant. Whatever. The other disagreed in a forceful manner with a rising voice. We both then rose up out of our chairs and started to almost shout at one another across the table, one saying how unfounded and ridiculous the question was, the other pointing out at the same time, and with at least equal force and volume, that he had just about had enough of these obstructionist tactics and was ready to take the whole matter before the judge for sanctions. The client was shocked. He had never heard such stuff (except maybe on TV, because it can be entertaining.) But that’s the way things are back east. In a nutshell: more entertaining but less accomplished.
If your first job is with a NY firm, or more generally an east coast firm, very likely you are going to be expected to reflect in your dealings with others the style of the firm, which I bet will be very much like the NY style I’ve described. You might later move to the midwest, or even to the west coast. But having learned this style of practice, very likely you will carry it with you throughout your career. And to a significant degree it will determine the satisfaction you derive from being an attorney. If it is reflective of your nature, then you will most likely enjoy the practice of law. On the other hand, if your nature is more like that of LA attorneys, you will not enjoy the practice of law with a NY style. And the reverse is true too. If argument is what attracts you to the law, then you will get a lot more satisfaction practicing on the east coast than on the west coast.
So, for those coming to the end of their law school days and looking forward to a career in the law, or just beginning their legal career, pay attention to the style of practice followed by your first employer, for very likely it will be your style for the rest of your legal career. (JH)

Friday, April 14, 2006


Maybe eventually I will figure out how to add references to other blogs in the sidebar area that seems to be intended for that sort of stuff. Until I do, here are the blogs I like and regularly refer to: 1. Patently-O, the very popular (and rightfully so) blog by Dennis Crouch about all sorts of IP topics; 2. The Invent Blog: Stephen M. Nippers' blog focusing on mainly patent topics; 3. Patent Baristas - bio/pharmaceutical patent news; 4. Promote the Progress, by J. Matthew Buchanan, covering mainly patent law and policy; 5. PHOISTA, a mysterious blog with mostly trademark topics; 6. Copybites, a copyright law blog by Cory Hojka; 7. Daily Dose of IP, by Mark Reichel about mostly patent matters; 8. I/P Updates by Bill Heinze posting notes of interest to IP attorneys; and 9. Technolawyer.com - publishing technical information for lawyers. If I've missed your favorites, post a comment giving them. If you know how to indent and align the numbered statements of this note, or get them into a sidebar, I admire you greatly. (JH) Stephen Nipper responded to this post with: Thanks for mentioning The Invent Blog in your list of blogs you read. Other IP blogs I enjoy:
Anything Under the Sun Made By Man
IP Counsel Blog
IP Funny -- Intellectual Property Humor
Just a Patent Examiner
Patent Prospector
Shape Blog
The Patent Librarian
(Now how did he get this word processing program to do that?)

Tuesday, April 11, 2006

Know it all?

First, thank you to all the readers of this blog. And particularly, thank you for your comments and observations in response to my notes.
Second, I am surprised to see, by the number of comments, that you are most interested in non-IP stuff. With that in mind, let me propose this question:
Will there come a time when we know
everything about everything?

The Increase in Scientific Knowledge –
About two hundred years ago the sum total of scientific knowledge could be set forth in a cabinet-full collection of books. Or at least in a not very large library of books.
Now, according to Stephen Hawking, the increase in scientific knowledge is such that if all the new books reporting this increase were put on a shelf, the row would be growing at the rate of 90 mph! In other words, our understanding of at least the physical world and universe is exploding.
As a concrete example, consider our understanding of gravity. In Newton’s time we came to understand gravity as a force operating across vast distances, and could describe the action that force would exert between two objects in space, such as between the sun and a planet. Einstein revised that understanding, leading us to see gravity as a curvature of space-time, and pointing to many other of its attributes such as acting, not instantaneously as Newton thought, but across space at the speed of light, and also suggesting the existence of black holes, which was later confirmed. Now scientists are coming to see our universe as best described by superstring theory positing eleven dimensions. For more about all this see The Elegant Universe by Brian Greene.
Given, then, this increasingly refined scope and depth of scientific knowledge over time, is it reasonable to imagine that, at some point in the future, we will come to understand everything about everything?

The Nature of Knowledge –
If we assume that the scientific laws operating in our universe are finite in number, even though our universe might be infinite in its spatial extent, then it seems reasonable to me to consider that there will come a time when we understand everything about everything.
On the other hand, we might assume that the nature of our universe and the scientific principles it embodies is such that the more we come to understand, the more questions that understanding raises. This seems to many to be what has been happening in recent times. Which in turn suggests that ultimately the principles operating in our universe are infinite? If so, then we will never come to a complete understanding of everything.
Which assumption is right? Or, put differently -

Does the Nature of Knowledge Matter?
If the scientific laws operating in our universe are finite, then as we understand more and more about more and more, the rate of increase in our understanding can be expected to gradually slow as it asymptotically approaches a complete understanding of everything.
If, however, knowledge is potentially infinite, then the increase in our understanding over time will always accelerate.
How can we measure the increase in our understanding? The speed at which our library shelf of scientific books is growing might give a very rough estimate. I suppose that it may well be possible to develop some algorithm to filter the actual increase in knowledge from all the scientific information being published, and use the filtered residue to better estimate the rate of increase in our understanding. That in turn might tell us if scientific knowledge is finite or infinite.
Would the answer matter? I think so. If it turns out that scientific knowledge is finite, then there may well come a time when we can begin to see the nature and extent of all scientific knowledge, to anticipate the coming and ultimate understanding of everything. If scientific knowledge is infinite, then it may well be that each era will add so much to our understanding that it is always completely different than what was known previously. In this case, there would be no point to try and look at the sum total of scientific understanding at any time, for it would always give an incomplete and distorted view.

Some Tentative Conclusions -
Can we conclude from this that only if science is finite should we pursue our efforts to understand? I think so. For if the nature of scientific knowledge is infinite, then we will never be able to understand everything. The advances in understanding achieved during each era will produce a different but equally distorted increase in understanding, leading us over time to describe a spiral of confusion. That hardly seems to be a worthwhile endeavor unless all we ask of science is greater ease and comfort.
Can we conclude from all this that eventually we will come to understand everything about everything? That we will come to know it all? I hope so. For otherwise there hardly seems to be any point to rationality, to being able to understand. Is not understanding everything the final prize inherent in our innate yearning to understand?
What have I missed or overlooked in all this? I solicit your comments. JH

Tuesday, April 04, 2006

Every moment is unique, but . . .

On Wednesday of this week, at two minutes and three seconds after 1:00 in the morning, the time and date will be 01:02:03 04/05/06.That won't ever happen again.