Strategic IP Due Diligence

A great article for the entrepreneur on how to make an IP due diligence strategic.
Some pertinent points of the article:

1. "Assessing intellectual property alignment.
2. Assessing intellectual property strength.
3. Assessing competitive intellectual property.
4. Assessing intellectual asset management processes."

Update on Patenting Business Methods in The US

A decision has just been rendered in Bilsky. The U.S. Court of Appeals for the Federal Circuit in Washington, D.C., has finally upheld (9-3) a ruling made by the U.S. Patent and Trademark Office, which denied a patent for a method of hedging risk in commodities trading.
This decision deals with 35 U.S.C. § 101 (patentable subject matter).
Claim 1 of the patent application reads as follows:

"A method for managing the consumption risk costs of a commodity sold by a commodity provider at a fixed price comprising the steps of:

(a) initiating a series of transactions between said commodity provider and consumers of said commodity wherein said consumers purchase said commodity at a fixed rate based upon historical averages, said fixed rate corresponding to a risk position of said consumer;
(b) identifying market participants for said commodity having a counter-risk position to said consumers; and
(c) initiating a series of transactions between said commodity provider and said market participants at a second fixed rate such that said series of market participant transactions balances the risk position of said series of consumer transactions".

The Court has pointed out that:

"The Supreme Court, however, has enunciated a definitive test to determine whether a process claim is tailored narrowly enough to encompass only a particular application of a fundamental principle rather than to pre-empt the principle itself. A claimed process is surely patent-eligible under § 101 if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing."

and noted:

"We now turn to the facts of this case. As outlined above, the operative question before this court is whether Applicants' claim 1 satisfies the transformation branch of the machine-or-transformation test.
We hold that the Applicants' process as claimed does not transform any article to a different state or thing. Purported transformations or manipulations simply of public or private legal obligations or relationships, business risks, or other such abstractions cannot meet the test because they are not physical objects or substances, and they are not representative of physical objects or substances. Applicants' process at most incorporates only such ineligible transformations." (emphasis added)

This decision may therefore have a significant impact on the patentability of business methods in the US. The famous requirement under State Street that a method had to satisfy the "useful, concrete, and tangible result" test is now over and this may affect the validity of a lot of existing business method patents.

Links of Interest:

• Wall Street Journal article
• New York Times article
• Law.com article

IP and Chinese Companies

Great publication from the Boston Consulting Group (BCG) on China and IP. This publication goes through the 5 common phases of IP development i.e.:

"1. driving growth through exports;
2. climbing the value ladder;
3. paying the price;
4. getting serious about intellectual property; and
5. profiting from intellectual property."


The publication provides advices for Chinese companies willing to compete in the global marketplace.

Did You Know?

The cost of obtaining and maintaining a patent for a single invention in the 50+ major countries of the world cost more than 500,000$ over the 20-year life of the patent.

(source)

Should I Pay The Maintenance Fee?

A patent portfolio manager is now faced with tough decisions to make with the economic downturn. Huge resources have been spent on building the patent portfolio and now is (unfortunately) the time of doing a cleaning.

According to a presentation made by John H. Hornickel, a simple strategy plan can be used to take the difficult decision!

According to the "5-10-15 Maintenance Principle":

1. "Preserve all patentable inventions for at least 5 years."

2. "Preserve only product line patent protection past 10 years."

3. "Preserve only technology platform patent protection past 15 years."

High Commissioner for the Fight Against Infringement Victim Of Savings Policy

In Italy, the High Commissioner for the Fight Against Infringement has been a victim of a savings policy launched by the new Government in June 2008 to rationalize public finances.

This decision has attracted a lot of critics from various organizations and a petition has been filed by many organizations such as Confindustria and AIPPI Italy to appeal the decision.

The High Commissioner for the Fight Against Infringement was known to have a positive impact on the global fight against IP infringement in Italy.

Patent Subsidization in China

According to the Chinese Patent Office (SIPO), the government of the province of Guangdong will soon offer subsidies for domestic and foreign patent application. The province of Guangdong is one of the richest province of China.

Under the program:

• each granted domestic utility patent will be subsidized between 1,000 yuan (approx US145$) and 30,000 yuan (approx US4350$); and

• each utility patent granted by the United States, Japan and European counties will be subsidized with 30,000 yuan each.

China definitely cares about IP if domestic applicants get funding for generating IP titles.

Update on Patentability of Programs for Computers in Europe

The European Patent Office (EPO) has announced (link) that her president has referred a number of questions (see below) to the Enlarged Board of Appeal (EBoA) in relation to this subject. The purpose of the Enlarged Board of Appeal is to "ensure uniform application of the European Patent Convention (EPC)".

The full document is available there.

Here are the questions:"

1. Can a computer program only be excluded as a computer program as such if it is explicitly claimed as a computer program?
2. (A) Can a claim in the area of computer programs avoid exclusion under art. 52(2)(c) and (3) merely by explicitly mentioning the use of a computer or a computer-readable data storage medium?(B) If question 2(A) is answered in the negative, is a further technical effect necessary to avoid exclusion, said effect going beyond those effects inherent in the use of a computer or data storage medium to respectively execute or store a computer program?
3. (A) Must a claimed feature cause a technical effect on a physical entity in the real world in order to contribute to the technical character of the claim? (B) If Question 3(A) is answered in the positive, is it sufficient that the physical entity be an unspecified computer? (C) If question 3(A) is answered in the negative, can features contribute to the technical character of the claim if the only effects to which they contribute are independent of any particular hardware that may be used?
4. (A) Does the activity of programming a computer necessarily involve technical considerations? (B) If question 4(A) is answered in the positive, do all features resulting from programming this contribute to the technical character of a claim? (C) If question 4(A) is answered in the negative, can features resulting from programming contribute to the technical character of a claim only when they contribute to a further technical effect when the program is executed?"

The Financial Crisis At The Origin of New Patent Opportunities?

An article in Zee News (link) explores the "theory" that new opportunities may appear for Small and Medium Enterprises (SME) because of the current financial crisis.

The rationale behind is that because companies are going to cut in their expenses, Intellectual Property Rights are going to directly suffer. More precisely, patent renewal fees would be the first victims of the "cost-cutting exercise".

I personally do not believe that this theory will be observed at a large scale for many reasons. I believe that companies should definitely takes this "opportunity" to do the cost-cutting exercise, but that this exercise should be done very carefully. While some jurisdictions offer opportunities to revive a patent once it becomes abandoned, those opportunities do not exist in many jurisdictions and the Rembrandt may end up in a garbage truck because of a too quick decision.

The US Department of Justice Gives a Blessing To A Patent Pool

The RFID Consortium, a consortium of companies that own radio frequency identification (RFID) patents, has announced that the US Department of Justice has issued a positive Business Review Letter (link) relating to the Consortium's proposed licensing arrangement.

Selected extracts of the Letter:

• "The Consortium's pool appears reasonably likely to yield some tangible cost savings by limiting the threat of hold up and royalty stacking and by lowering transaction costs. " (emphasis added)


• "Lowering Transaction Costs. The pool likely will reduce transaction costs for both licensors and licensees. Its efforts to identify patents essential to the practice of the Gen-2 standard and to disseminate this information offers savings in search costs to licensees."(emphasis added)


• "Similarly, the pool likely will reduce costs for licensors. Members would no longer face the expensive and time-consuming tasks of searching out manufacturers who are using those members' intellectual property, or negotiating individual licenses. Instead, they would reap the cost savings of centralized licensing and would realize an immediate return on their intellectual property."

Other extract originating from the conclusion of the Letter:

• "Based on the information and assurances you have provided, the Consortium's proposed pooling arrangement appears reasonably likely to yield efficiencies. It includes safeguards reasonably tailored to minimize the risk of harm to competition by producers of products compliant with the Gen-2 standard or by technology holders and to minimize the risk of dampening innovation incentives. Therefore, the Department has no present intention to take antitrust enforcement action against the conduct you have described."

NB: The licensing agreement will be managed by Via Licensing.

New Lane At The Patent Prosecution Highway (PPH)

A Patent Prosecution Highway (PPH) pilot program has been announced between the United States Patent and Trademark Office (USPTO) and the Danish Patent and Trademark Office (DKPTO).

The PPH pilot program will commence on November 3, 2008, for a period of one year ending on November 3, 2009. The trial period may be extended for up to an additional year if necessary.

The USPTO has a fully implemented PPH program with the Japan Patent Office (JPO) since January 4, 2008.

The USPTO has also commenced PPH pilot programs with:

1. the United Kingdom Intellectual Property Office (UK IPO),
2. the Canadian Intellectual Property Office (CIPO),
3. the Korean Intellectual Property Office (KIPO),
4. IP Australia (IPAU), and
5. the European Patent Office (EPO).

Can Patent Law Block Innovations?

According to The Economic Times, over 50000 innovations are blocked due to stringent patent laws in India. (link to the article).

Apparently improvements are not easily patentable in India and this is a great source of prejudice for the economy. Any other jurisdictions where patent laws are too stingent in the world?

Wal-Mart Is Sued by Nike

Nike Inc. (hereinafter Nike) has just filed a lawsuit against Wal-Mart Stores Inc. (hereinafter Wal-Mart) alleging that the retailer is selling shoes that infringe on Nike's patented designs.

More precisely, Nike argues that US design patents D498,914 and D499,248 are infringed by Wal-Mart.
The complaint has been filed in the U.S. District Court for the Northern District of Illinois. It is interesting to note that this lawsuit is brought just after a landmark case in design patent infringement.

To note:

• Nike does not sell its products in Wal-Mart since Nike believes that its brand would suffer if sold in discount chains;
• Nike has demanded a jury trial;
• Nike wants that the retailer stop selling the shoes and also seeks damages.

Update on Patenting Software Innovations in UK

An interesting patent decision in UK (link) where previously, patent law has complicated an innovation involving a computer program being awarded a patent. On October 8, 2008, a Court of Appeals ruling has overturned a refusal of the UK Intellectual Property Office to grant a patent entitled "Mapping dynamic link libraries in a computing device" to Symbian.
The Chartered Institute of Patent Attorneys has welcomed the decision and noted:
The High Court Judge, Mr Justice Patten, had observed that the UK-IPO's decision in the case illustrated the divide which existed between the UK-IPO and the EPO about how the patentability of inventions involving computer programs should be assessed.
The Court of Appeal refused permission to take the case to the House of Lords.

Intellectual Property And Recession

It is now clear that some major jurisdictions (notably the US) of the world economy are faced with a recession. The global financial crisis that is spreading over many countries may now contaminate the corresponding economy of a large number of other jurisdictions and at the worst push them also into a recession thus creating a global recession. This is a real (macro-economics) nightmare.
As global Intellectual property practitioners, we deal at another level but we need to provide advices that are taking into account those macro-economics issues.

I believe however that Intellectual property assets and their associated Intellectual property rights should be handled with care, even in such bad time, for many reasons:

1. Intellectual property assets may still be used to generate revenues even during an economic slowdown. In the US only, a great portion of the assets are Intellectual property assets. If corresponding Intellectual property rights are not properly managed those revenues may be lost.
2. An Intellectual property portfolio may still be efficiently managed. For instance, the economic situation may be a great excuse to clean up the portfolio of some non-productive elements.
3. In many instances, Intellectual property rights will have a lifetime that extends far beyond the duration of the recession. Failing to secure key Intellectual property rights now or keep/maintain Intellectual property rights may have serious consequences after the recession.
4. Intellectual property rights may be used as building blocks for creating new business structures or opportunities. Recession is a time where many restructurings happen.
5. Intellectual property rights may (still) be used to get financing. That might sound strange in a situation where access to credit becomes more and more limited, however Intellectual property rights may contribute as a determining factor for getting the financing sought.
6. The recession will force many individuals and corporations to innovate and Intellectual property rights will be a solution for securing the innovations.
7. The recession may push competitors into unfair business practices. Maintaining Intellectual property rights will ensure that enforcement of the rights is possible.
8. The recession may in theory affect less certain jurisdictions, Intellectual property rights could still be used advantageously in those lucky jurisdictions.

Google Is Using China For Testing Free Music Search and Download Services

Google has announced the launching of free music search and download services in China. This is a strategic move for Google who is facing there a tough competition from the popular local search engine Baidu. Google will work with a local website top100.cn to provide the free music (apparently over tens of thousands of songs).
Google has a stake in top100.cn and will share online advertising income with this company.
Interestingly, China is the first jurisdiction where free music is delivered by Google.

A Taboo In Europe (for patent practitioners)

In a recent trip in Paris I was able to appreciate how "taboo" is the London Agreement for my foreign associates there.

The situation is now the following:

-Countries requiring no translation are:
DE, FR, GB, CH/LI, MC, LU and IE.

-Countries requiring claim translation only are:
DK, LV, NL, SE, SI, IS and HR.

-Countries (still) requiring full text translation are:
AT, BE, BG, CY, CZ, EE, ES, FI, GR, HU, IT, LT, MT, NO, PL, PT, RO, SK and TR.

Why Should I File A Patent Application? 10 Reasons For The Entrepreneur

1. to try to obtain a monopoly (i.e. right to exclude the public) for the innovation that you have made;
2. to attract investors/increase investors’ confidence in your project;
3. to raise capital for your venture;
4. to be proactive with respect to your competition by showing them that you have a sound IP strategy;
5. to efficiently license your technology;
6. to increase margins on products incorporating the patented technology;
7. to give you the opportunity of efficiently selling the monopoly on the patented technology;
8. to increase your competitor R&D by forcing them to design around your patented technology;
9. to have a tool for cross-licensing to be used in order to solve a patent litigation for instance;
10. to increase public confidence in your product incorporating the patented technology;

And the bonus one is:

to give you the opportunity to sue your competitor for patent infringement if they happen to develop a product incorporating your patented technology.

Origin Of The 18-month Pre-Grant Publication

The Federation International des Conseils en Propriété Intellectuelle (FICPI) newsletter has an interesting section on the origin of the 18-month pre-grant publication.

• The first occurence of the pre-grant publication goes back to 1956 with a preliminary report by a patent law revision committee in the Netherlands suggesting that patent applications should be laid open to the public within 8 months after the initial searching had been completed.


• In the 1960s, portions of the Dutch proposal appear to have been referenced by patent law review committees in the Scandinavian countries which make reference to an 18 month pre-grant publication period in the Netherlands.


• The Netherlands was the first country to adopt an 18 month mandatory publication period in 1964.


• Denmark also followed with Finland, Norway, Sweden and Germany in 1968 and by France in 1969.


• The international publication provision of the Patent Cooperation Treaty (PCT), Article 21, was in the 1969 draft and was adopted at the Washington Conference in 1970.

In the United States, the 18 month pre-grant publication period is very recent (less than 10 years) and it is still possible to file a request for non-publication. However the request for non-publication must be rescinded if a corresponding patent application is filed in another country.

PCT E-Filing (Finally) Available At CIPO

The Canadian Intellectual Property Office (CIPO) has announced the launch of a tool for electronically filing Patent Cooperation Treaty (PCT) applications, available on the CIPO website as of September 29, 2008.

The PCT E-Filing initiative is of great advantage since it removes the need for a paper copy of the international application. The international application is prepared using World Intellectual Property Office's (WIPO) PCT-Safe. It is then signed using a digital certificate and it is then sent electronically to the Canadian Receiving Office.

It implies less processing on the Canadian Receiving Office side for handling the international application once it is received. Filing electronically Patent Cooperation Treaty (PCT) applications is not something new and many Receiving Offices have already implemented it.

Fit For Asia?

Kudos to the European Patent Office (EPO) for all the ressources available on its Website. There is at least one area where the EPO is very good and it is to provide extensive information on other jurisdictions as well as to compile a list of useful tools.

For Asia, I recommand the section Virtual helpdesk which is very useful for sophisticated patent practioners or entrepreneurs. Informations on China, Japan and Korea are provided there including:

• Pertinent data on those countries and information on patent procurement there;
• Tips & tricks for searching in databases;
• Information on number search and document retrieval;
• English machine translation;
• Information for obtaining legal status information; and
• Information for searching designs.

(BTW: The image above is a Chinese character which means "Patent", its reads: zhuānlì )