Wednesday Whiskers

Miracles do happen, it seems. Despite several hurdles and a legislative calendar that was drowning in debt-related issues, the long-awaited US patent reform legislation passed the Senate vote on Monday. The Leahy-Smith America Invents Act (AIA) was passed unamended by the US Senate with a 89-9 vote (see previous AmeriKat and IPKat posts here). Once signed into law by President Obama, the bill will introduce several changes to the US patent system including harmonizing its first-to-invent system to a first-to-file system and ending fee diversion. AIA has been criticized by many as being overly burdensome to small independent inventors, will increase the number of provisional applications being made to the USPTO and would allow the Appropriations Committee to unduly control the fees generated by the USPTO. USPTO Director David Kappos heralded the passage of the bill, claiming that it will "...drive down the backlog of patent applications, and expedite the issuance of high quality patents - all without adding a dime to the deficit." Director Kappos proceeded to then walk on water.... Joking aside, the AmeriKat is excited about this new act and will be back on Sunday to report on the fall-out and commentary surrounding its passage.



The Rolls Building is nearing its opening day. For those IP litigators, like this Kat, the new £300 million Rolls Building will soon become a home-away-from-home as the Patents Court moves from the resplendent Royal Courts of Justice to its new home. You needn't spend long in the RCJ chambers and filing offices to hear comments about the new building - a mixture of views mostly punctuated by comments of how small the court rooms are, how some are being dragged across to Fetter Lane kicking and screaming and how no one will know where anything is [cue wandering judges and barristers looking for their lost court rooms, Merpel remarks cattily]. Then there is the elevator problem - only 3 public lifts (i.e. fitting only one clerk with the first set of disclosure bundles for your standard Chancery case - promises of e-filing be damned). The AmeriKat is more worried that, as with many new buildings, the air conditioning system will be out of control and set on a level that only pacing barristers can endure. There are rumors floating around about who will be the first IP case to grace the Rolls Building, but no concrete word until the doors first open this fall. The IPKat says that whoever gets there first should give the rest of us tips about managing the new building - flaws, free wi-fi, and all!


8+3 =11 big problems for HathiTurst, a partnership of research libraries and universities, including the University of Michigan . On Monday, the 11 strong contingent of authors' groups and individual authors including the Authors Guild filed a copyright infringement suit in the Southern District of New York against the libraries and universities claiming that their initiative to digitize millions of books without authorization constituted copyright infringement and posting the books online. The claim also objects to the partnership self-designating works as "orphan works" and thus self-permitting the digitization and use of those works. So far 9.5 million books and journals have already been digitized with around 30% of those works being in the public domain. The twist in the story is that the executive director of the partnership, John Wilkin, stated that the digitized works were provided by Google. IPKat readers will remember that last March, Judge Denny Chin rejected the proposed settlement in the Google Books litigation (more here) in a similar dispute. A hearing is schedule for tomorrow in the Google Books case.


On Tuesday, IPR2, better known as the EU-China Project for the Protection of Intellectual Property Rights, between the European Commission, EPO, OHIM and the Ambassador of the People's Republic of China to the EU formally came to a close. The closing ceremony of IPR2 comes at the end of a four-year 16 million Euro joint project. Under IPR2 European and Chinese officials, judges, legislators, experts and academics implemented technical assistance and training activities across China. The parties have agreed to continue their cooperation [what else would you expect?, says Merpel] Would you like to see the what 4 years and 16 million Euros can get you? Well you can't, at least not yet... But while the database is being built, there is a collection of a hodge-podge of documents from the project here.

Many of the IPKat's beloved readers will be in or journeying to Baveno, Italy for this year's annual MARQUES conference (Kat Jeremy is currently stalking the Italian venue.) Today's MARQUES conference agenda, for those Kats and readers who are not so lucky to travel to Italy this week, is premised on "Reality Checks" - reality check on costs, reality check on trends and reality checks on function. The last check is a topic being discussed after lunch entitled "Reality Function" and is promoted as an "update on legal analysis on the trade mark function." For those attendees whose brain activity does not decrescendo following a hearty pasta and foccacia lunch, please let the Kat know what panel suggest is "the trade mark function" in European trade mark law.

Letter from AmeriKat: 8,000,000, 3, 1970s, 1, $3,340, #24 - US IP News in Numbers

For international travellers coming from the U.S., you will usually find yourself in one of the many Hudson News stores doting our nation's airports pacing the magazine rack for a selection of entertaining flight-fillers. The AmeriKat's favorite staples that are crammed into her already overstuffed Coach carryall, are The Economist, US Weekly (so bad, its good), National Geographic, Psychology Today, Rolling Stone and, front-seat pocket favorites - Time and Newsweek. These are usually the first magazines the AmeriKat starts devouring even before take-off and by the time the plane is taxing to the runway, she has made it to her favorite page - the page with that week's news expressed in numbers. Sadly the AmeriKat is busily stranded in London so the joy of airplane literature have escaped her this summer, but in a tribute to her favorite travel reading she has taken a glossy page out of US news magazines and has put this week's US IP news in figures. (picture, left - the AmeriKat snuggling under her airplane reading)

When IP news is a f(x) of n.....

8,000,000 - The number of patents issued by the USPTO on 16 August 2011 when it granted a patent to Second Sight Medical Products for a product called Argus II - a visual prosthesis apparatus that enhances visual perception for people who have become blind due to outer retinal degeneration. Argus II uses electrical retina stimulation to produce the visual perception of patterns of light. The Argus II is starting its clinical trials in the US and has obtained marketing approval in Europe. President and CEO of Second Sight, Robert Greenberg, stated that "This patent protection and significant federal support for innovation have already played key roles in creating nearly 100 US jobs at our company. Once the Argus II has FDA approval in the United States, we expect to create hundreds of more jobs over the next several years..." IP innovation and protection = economic stimulus, is plainly the message from the USPTO.

75 years - the number of years that it took the USPTO to reach 1 million granted patents in August 1911 when it issued to Francis H. Holton of Akron, Ohio a patent for his improvement in vehicle tires to make them more durable and puncture resistant.

6 years - the number of years that it took the USPTO to go from 7 million patents granted to 8 million patents. The 7 millionth patent was issued to John P. O'Brien for a strong, biodegradable polysaccharide fibers he invented for use in textile applications.

1 - The number of Abercrombie & Fitch articles of clothing the AmeriKat owns - which is far less than the cast of Jersey Shore. IPKat readers may have caught a glance at last week's story that frat-boy favorite apparel retailer, Abercrombie & Fitch, was reported to have offered to pay Michael "The Situation" Sorrentino of MTV reality show Jersey Shore to never where its clothes on air (see A&F press release here) as the "association is contrary to the aspirational nature of our brand, and may be distressing to many of our fans." Many are calling the press release a publicity stunt for a "slow day in August" right before the back-to-school buying begins. However, its interesting to note that a press release about an allegedly detrimental impact on brand reputation was created to increase just that - brand reputation....ahhh, the fickle world of brands!

$3,340 - The cost of the genetic test for breast cancer risk that was subject of Myriad Genetic's recent success in the US Court of Appeals for the Federal Circuit when the court upheld the company's patents on two human genes - BRCA1 and BRCA2 (picture, right - pink ribbon, (c) Science 2002). The sequencing of the genes tests for mutations that increase the risk of a woman getting breast and ovarian cancer. A recent New York Times article reports that despite its recent legal success some commentators are suggesting that the test has been surpassed by newer DNA sequencing techniques which are faster and cheaper. This, the article reports, may be a sign of trouble to come, notwithstanding that Myriad's main patents do not start expiring until 2014. However, Myriad has stated that the company has time to start adapting to the new technology before its patents expire and in the future will be relying more on trade secret protection than on patents. Myriad's CEO Peter D. Meldrum in January stated, in reply to a question about whether Myriad would begin enforcing their European patents, including for BCRA1 and BCRA2, against companies using the genes in tests, that "[i]f I had my druthers, I would not want to go into a new market in a heavy-handed fashion, trying to enforce patents." Instead, the company is reported to begin relying more on its "vastly superior information."

The patent system is premised on requiring public disclosure of inventions - you get to enjoy your monopoly, as long as the rest of us can see and build upon your scientific step for the betterment of society (as long as the use is non-infringing during the limited time you are enjoying your monopoly). Trade secrets, however, are all about keeping information out of the public domain for an indefinite time. Should information, such as the information Myriad has about which of the thousands of mutations in the two genes raise the risk of getting cancer, be kept out of the public domain? If companies with valuable medical information are relying on trade secrets rather than patents, this could have serious impact on the progress of science (Copyright Clause) and in this case, medical research. If this begins to be a trend, are we to blame failings in our patent systems and protections or the desire of companies to maintain a monopoly on proprietary information and technology for as long as possible? Or is this just the same question? Are there public policy arguments for demanding that such information be disclosed, and if so, how does that square with the Anglo-American philosophy of commoditizing property (and IP)for financial gain? Is it only right that a company should use whatever legal means it has to protect its investment and research, regardless of any public policy or ethical considerations? Similiar questions are posed by the New York Times article and by Dan Vorhaus in his blog the Genomics Law Report.

$353 million - the amount of money reported to have been generated by the breast cancer test which accounted for Myriad's $402 million revenue in the year ending June 2011.

3 - The number of grape growers that have successfully claimed that the US government can be joined to a patent invalidity claim. The three Californian grape growers have claimed that a California trade group, The California Table Grape Commission, licensed invalid patents from the US Department of Agriculture(USDA). The USDA owned three patents issued under the Plant Variety Protection Act for grapevines that produce table grapes - Sweet Scarlet, Scarlet Royal and Autumn King. The USDA licensed its rights in the three patents to the California Table Grape Commission, a California state agency. The Commission was established to promote the state's table-grape industry and is funded by a tax levied on each box of table grapes produced in California. The Commission sublicences the patents and under the licences is entitled to retain 60% of the royalties with the remaining 40% going to the USDA. The Commission authorized three nurseries to serve as the exclusive distributors of the patented varieties. The ultimate growers of the grapes have to sign a "Domestic Grower License Agreement" which requires the growers to pay a royalty, prohibits the growers from propagating the plants, and permits the Commission to order the destruction of the purchased plants if the Commission believes the growers are violating the license.

Three grape growers, who purchased the grapevines covered by the patents signed the licence agreement and paid the licensing fee. They then brought a claim for declaratory judgment challenging the patents for invalidity for lack of novelty and that the Sweet Scarlet (picture, left) patent is unenforceable because of alleged inequitable conduct during prosecution at the USPTO. The US Court of Appeals for the Federal Circuit issued a decision last Wednesday that the Administrative Procedures Act ("APA")enables the 3 grape growers to "pursue equitable relief against the USDA on its patent law claims." The 3-judge panel ruled that the USDA could be joined as a party to the claim because the licensing agreement between the USDA and the Commission did no transfer all the rights in the patents, as such the USDA was a necessary and proper party to the grape grower's patents claims. Judge William Bryson, giving the opinion of the Court, held that an amendment to section 702 of the APA "recognizes a right of judicial review for 'agency action'" in that it waives "sovereign immunity for actions seeking relief other than money damages against federal agencies, officers, or employees" - such as the equitable relief sought by the grape growers in their dedicatory judgment for patent invalidity. As such, the grape growers could join the USDA in their action. Allegedly invalid patents are also curse for the US government it seems....

#24 - The ranking given to Girl Talk's album, Feed the Animals, by Rolling Stone in 2008. Girl Talk, the one man band of Gregg Gillis, a former biomedical engineer turned musician, is known for weaving hundreds of samples of recorded music and sounds into frenetic tracks which he releases for free or a la Radiohead model. A recent article in the Huffington Post this week explains why Gillis uses this model when he releases his work under the Illegal Art label. Also this week, EMI won a partial victory in a copyright lawsuit against online music storage site MP3tunes who was found liable for contributory infringement when it failed to remove unauthorized songs from its website after being put on notice. District Judge William Pauley however refused to rule on whether MP3tunes employees were liable for copyright infringement in downloading 171 songs.

1970s - The decade when late sportscaster Myron Cope coined the term "The Terrible Towel" (watch the story here). The Terrible Towel, a yellow and black cloth which is swung about in the air by the Pittsburgh Steeler's (an American football team) fans is the subject of a trade mark infringement suit. The lawsuit brought by the Steelers and Allegheny Valley School (who owns the trade mark and is where Cope's autistic son lived) against Eugene Berry Enterprise alleges that that company filed a trade mark application in May for THE TERRIBLE TOWEL and has been selling shirts with the mark. Eugene Berry Enterprise has been asked to withdraw its application.

Letter from AmeriKat: America Invents Act Remix

The AmeriKat taking what would
be the first of many Kleenexes this
week (picture by prettyinprint reporduced
here under CC licence)

Summer - a time meant for lounging on Scottish wool blankets nibbling on sandwiches flanked by the grounds of a National Trust property. Or for traipsing down some tree-lined avenue with branded bags of summer sales goodies swinging from one's arm. Or for skipping out of work into the summer night to drink Pimms with friends. It is not meant, submits the AmeriKat, to be inundated with torrential rain (cue view outside) or to be suffering from a summer cold (cue view inside). The AmeriKat is currently, and embarrassingly for a Kat, barking like a dog (shudder) as she is battling a bout of bronchitis that has seen her boringly bedridden for the past 48 hours. Those who know her know its a feat to get her to rest and keeping to form, she has kept her mind active by reading the latest US IP reports and listening to hours of Senate and House debates on patent reform on C-SPAN. Exciting times...

Race to Obama - America Invents Act clears House hurdle

The oracle that is USPTO Director David Kappos predicted earlier this spring that he was "off-the-charts optimistic" that the House would pass similar patent reform legislation to the Senate's earlier success of S.23. Sure enough, on 23 June 2011, the House of Representatives passed HR 1249 - the Leahy-Smith America Invents Act (AIA) -with a bipartisan vote of 407 to 117. The bills are substantially similar, but with some important differences (see below). Given there are differences, the two bills will now have to be negotiated and reconciled in a House and Senate conference committee before it goes to the Senate vote and finds it way before President Obama for signing into law.

Both patent reform bills introduce, for the first time in 60 years, a considerable overhaul of US patent law. The biggest change to US patent law is the transition from a first-to-invent system towards a first-inventor-to file (FITF) system whereby each patent application would be allocated an “effective filing date” (the FITF provisions in HR. 1249 and S.23 are substantively identical). Like in the EU, the application’s novelty and obviousness is then judged on the prior art available before the effective filing date of the patent, but with a one year grace period still remaining in effect in respect of the inventor’s own disclosures (see controversy re grace periods and the AIA here and as debated in the House here).

But, as previously reported by this Kat and others, the introduction of FITF was not without vocal opposition in both Houses. Democratic Senator Dianne Feinstein's proposed Amendment No. 133 to S.23, which sought to remove the "first-to-file" provision given its arguable burden on a small independent inventors, went on to be voted down 87-13 by the Senate. During the House debates of the same provision in HR 1249, Constitutional arguments were bounded about claiming that "first-to-file" violated the Constitution as it rewards the winner of the race to the USPTO's doors rather the actual "inventor". Arguments against this opposition were that the availability of applications such as pre-issue disclosure, post-grant review and inter-partes review would rebalance any alleged burden that the first-to-file paradigm could create (even if these same measures are argued to increase the USPTO's patent backlog). (picture, above left - former Attorney-General Michael Mukasey)

Constitutionally, the proponents stated the FITF is consistent with the Constitutional requirement that patents be awarded to the inventor; a mere $110 filing fee for a provisional application, it is argued, allows any inventor, large or small, an inexpensive way to obtain an early priority date with a year to submit a formal patent application. Under the current system, however, an interference proceeding (where two inventors file their patents nearly simultaneously) could cost an inventor upwards to $500,000 - it was argued that such high legal costs act as a chilling mechanism on access to the patent system to inventors. Further, it was argued that FITF helps to ensure that US patent laws accomplish the goals in the Copyright Clause of the Constitution, i.e., by promoting the Progress of Science and Useful Arts (see former Attorney-General Mukasey's legal analysis and reasonsing here). Proponents of FITF also submitted that the patent filing system run by the Founding Fathers' generation in the 1790s, a first-inventor-to-register system, was similar to FITF and further argued the US courts did not even care about who was the "first to invent" until 1870 when the much criticized and expensive interference proceedings were introduced.

USPTO Director David Kappos previously stated that the US is already effectively running a first-to-file system because in 2007 there were only 7 interference applications of which only one was decided on priority of the invention. However, Representative Lamar Smith (R-TX) (picture, right), who introduced HR. 1249, stated that the first-to-invent system was

"outdated and dragged down by frivolous lawsuits and uncertainty regarding patent ownership."

Well...which is it? Will the introduction not result any any noticeable difference, a la Kappos, or will result in a more efficient, less contentious patent ownership procedure, a la Smith? Or is this FITF rhetoric irrelevant and the real reason for it's introduction is just to, dare she say the word... harmonize the US position with its international trading partners? (click here for Matt the Kat's post about Director Kappos's views on the matter)

Harmonization of US patent law was exactly what spirited Rep. Rohrabacher (R-CA) during the House debate into calling the legislation a "travesty", adding to the PTO backlog and "break[ing] the back of small inventors...and empower[ing] multinational and foreign corporations" (see his fiery speech at minute 37 including a citation to a Hoover Institution report damning the AIA). Representative Rohrabacher, writing about the AIA in Politico in March stated:

" We're told [the first-to-file system] is necessary to harmonize with Japanese and European patent law. But these systems were established by elitists and economic shoguns interested in corporate power, not individual rights . If patent law is to be harmonized - their system should be raised to our high standards, not ours eroded to conform to their weaker ones."

Ahhh....this fondly reminds the AmeriKat of this Lewis Black skit (warning: his name is Black, but his language gets a bit blue). But despite the fiery opposition, in which Rohrabacher was not alone, both Houses passed substantively identical first-to-file provisions. First-to-file is here to stay, it seems.

There are several other tweaks to language and addition of some provisions in HR 1249 but one of the bigger changes is that of the funding of the USPTO. S.23 included an amendment which ended the annoying fee diversion whereby the excess fees collected by the USPTO (excess in that it is more than what the USPTO was apportioned in funding by Congress) go back to the federal government where the monies can be invested for things other than the USPTO. Frustratingly, this amendment did not make it in tact to HR 1249 and instead the House "decided to water down [the] language" according to Senator Tom Coburn, the introducer of the fee diversion amendment in the Senate. Now, the excess funds, instead of being controlled by USPTO would, under section 22 of HR 1249, be controlled by the Appropriations Committee. Yikes...kiss that money good-bye! (picture, above, left - Senator Coburn)

For the non-US readers, the Appropriations Committee basically controls the purse of the US government. He who controls the pursue, has the power. And he who hath the power, well...does not necessarily always do what is best. Senator Coburn has more damning things to say about the Appropriations Committee (click here for his press release urging the Senate to oppose Congress's version). Director Kappos, as an unelected member of the executive branch of the government, more coolly stated that

"We are encouraged by the statements of so many Members of Congress calling for the USPTO to have full access to its fees when fee collections exceed Congress' annual appropriation for USPTO. Full funding of the USPTO is necessary for the USPTO to successfully implement the legislation and to more effectively perform its core mission."

The Wall Street Journal reports that despite the further compromise that the bill needs before President Obama sees it, the White House has already signalled its approval of HR 1249. So will there even be a fight on fee-diversion and other controversial provisions like expanded prior-user rights, or will the Senate just adopt the House version? Anyone want to put some money (or milk) on the Senate just voting through HR 1249's text as is?

Letter from AmeriKat II: Good Day Sunshine (patents)

Google's $900 million bid for Nortel's patents

Last Monday Google announced a bid to buy almost 6000 patents and patent applications from Nortel, the bankrupt Canadian telecoms equipment manufacturer, for $900 million. The patents include patents for wireless, internet and social platform technologies. The bid comes as part of Google's strategy to shield itself from patent litigation. The thinking is that if you buy enough patents that cover a wide and diverse range of technologies and industries, you may have a patent in your legal arsenal that may have otherwise been used against you. Google currently possess a comparatively weak patent portfolio in comparison to their market share and expansion into mobile operating systems, especially in relation to android-related technology. Readers may recall that Oracle sued Google last fall for patent infringement of its Java patents by Google's open-source android operating system. (District Judge Alsup, who is presiding over the case, last week received a tutorial in Java. Also, for a fun trade secret case involving HP and Oracle see this recent news here)

Although it was reported that other tech companies were expected to make bids for Nortel's patents, there may be few that can beat Google's incredibly high bid. On Monday, Google's general counsel and Senior VP Kent Walker(picture, left) wrote on Google's blog that

"... one of a company’s best defenses against this kind of litigation is (ironically) to have a formidable patent portfolio, as this helps maintain your freedom to develop new products and services. Google is a relatively young company, and although we have a growing number of patents, many of our competitors have larger portfolios given their longer histories.

So after a lot of thought, we’ve decided to bid for Nortel’s patent portfolio in the company’s bankruptcy auction. Today, Nortel selected our bid as the “stalking-horse bid," which is the starting point against which others will bid prior to the auction. If successful, we hope this portfolio will not only create a disincentive for others to sue Google, but also help us, our partners and the open source community—which is integrally involved in projects like Android and Chrome—continue to innovate. In the absence of meaningful reform, we believe it's the best long-term solution for Google, our users and our partners."

The planned sale of Nortel's patent portfolio must first beapproved by judges overseeing Nortel's bankruptcy cases in the US and in Canada. As reported by Bloomberg, anyone planning to beat Google's offer has to beat it by at least $25 million more than Google's initial offer, or at last count, $5 million more than the last offer. Anyone have $905 million to spare? The AmeriKat wonders what the return on investment is on purchasing a patent portfolio which with patents and/or applications that will have only about 20 or so years of life in them? Will Google ever make back theri $905 million on savings to legal fees or from patent damages? Or does that even matter as long as Google is sending a message to would-be plaintiffs that their patent portfolio is now robust, so sue at your peril? What do readers think?

US and UK unite for some more sweet patent harmony

David Kappos's UK harmonization tour last week not only yielded a Monday morning breakfast at UCL, but progress on the UK and US's joint action plan to combat the problem of patent backlogs and their effects. The joint announcement was made by Kappos and Baroness Wilcox, (compare the IP experience) Kappos stated that:

“The joint action plan highlights that while 21st century patent challenges are global in scope, so too are their solutions. Work sharing is a powerful tool that equips examiners to extract value from our skilled colleagues in other patent offices. By reducing redundant workloads and chipping away at the backlog, we can collaborate to unleash millions of jobs lying in wait and breathe life into our economies.”

The action plan is designed to allow an examiner in one office the ability to reuse work already done by an examiner in the other office on a corresponding applications, as much as possible to avoid duplication of work.

Kappos was also interviewed by The American Lawyer recently regarding the recent patent reforms (read interview here) and the America Invents Act (see recent AmeriKat posts here). When asked whether he thought it was that the House would pass a similar bill, Kappos replied:

I am off-the-charts optimistic.

The AmeriKat loves the enthusiasm.

USPTO/AIPLA Roundtable Report: Chinese utility models and design patents

While the AmeriKat had her whiskers in a pile of papers (picture, left) last Monday, the United States Patent & Trademark Office (USPTO) and the American Intellectual Property Law Association (AIPLA) was busy hosting a travelling roundtable discussion on China’s system for the procurement and enforcement of utility model and design patents. The aim of the roundtable was to afford US lawyers, companies and the public understanding about how China’s utility model and design patent system. The AmeriKat and IPKat's good friend, Michael Lin, of Marks & Clerk (Hong Kong) was there reporting on the key issues discussed at the event:

The USPTO's Elaine Wu started off the roundtable, and key note speeches by the USPTO's Dave Kappos and AIPLA's President, David Hill, (picture right) emphasized the growing importance of understanding IP in China via actual discussion with on-the-ground experts vs. the reliance on hearsay. To this end, the AIPLA and USPTO are jointly sponsoring this traveling roundtable discussion program with subsequent events being planned in the US and China.

Microsoft's Director of International IP Policy Mark Cohen laid out the background and framework of Utility Models ("UMs") and Design Patents in China and their alternative as a cheap and fast form of IP protection. Mark also showed some interesting statistics that it is overwhelmingly Chinese entities who are filing and using UMs and Designs Patents. Discussion followed as to the root causes of this, and why relatively few foreign entities apply for Chinese Designs, and particularly UMs. US practitioners are typically unfamiliar with UMs because they are not available in the US, although some other countries (Germany, Japan, etc.) do have them. While many countries have Designs Patents, few foreigners file their Designs Patents in China, as their scope is generally regarded as being quite narrow as dotted-lines (i.e., partial designs) are not allowed.

Elaine chaired the first panel discussion with Thomas Moga (Shook, Hardy & Bacon) (picture, right) explaining his interesting uses for Design Patents in China beyond what is typically allowed in the US. Meanwhile, Toby Mak (Tee & Howe) explained that the subject matter of UMs in China is limited to physical objects whose novel element is related to the shape or construction thereof. Thus, protection of chemical compositions, methods of use, etc. are not allowed via UMs. Toby also discussed the procedure for concurrently filing for both Invention Patents (i.e., US-style Utility Patents) and UMs in China. Toby also explained that by filing for both a UM and an invention patent in China, you can obtain both short-term protection as well as long-term protection; once the invention patent is ready to grant, then the Examiner may ask you to elect to keep either the UM or the Invention patent and abandon the other one in order to avoid double-patenting. IBM's Associate General Counsel for IP, Manny Schecter explained that IBM does not file for such IP in China (or elsewhere) as they are not subject to substantive examination and therefore their enforceability is highly suspect, even when granted. It seems that IBM, for one, simply wishes to have greater assurance that any of its granted patents are actually ultimately enforceable.

Skip Fisher (Perkins Coie) (picture, left) then chaired the panel discussion about enforceability of UMs and Design Patents. Michael Lin (Marks&Clerk, Hong Kong) led off the discussion about enforcement via China-specific administrative routes such as at Customs, local raids, seizures, and at trade shows. Ultimately, Michael believes that UM and Design Patent enforcement is possible in trade fairs, especially for exact copies. However, enforcement via customs and other administrative routes are more difficult than, for example, trade mark enforcement. Ping Gu (Unitalen) discussed the many complicated issues involved with legal enforcement of IP via the Chinese court system. Geoffrey Lin (Hogan Lovells) described his personal involvement with the Chint v. Schneider case which resulted in the largest ever IP judgment in China of 330 Million CNY ( about US $44 Million). Although IP litigation in the courts is increasing and the judges are getting better, evidence collection, forum shopping, local court regulations, political factors, etc. may all greatly affect the result of first-instance litigation. However, the availability of appeals to a higher court may in some ways mitigate these effects. As China has virtually no "discovery" available to plaintiffs, all panelists agreed that the collection of court-acceptable evidence prior to initiating litigation is essential and remains a serious problem in China.

The roundtable concluded with USPTO's Albert Tramposch heading an open discussion with all participants identifying issues (e.g., susceptibility of UMs and Designs Patents for abuse by NPEs, lack of a duty of disclosure, lack of substantive examination before grant, etc.) and discussing potential future actions, law changes, administrative, changes, etc. to address some of the issues. Participants hope that China will pay special attention to legal and administrative transparency and further improve equal treatment under the law.

Overall, it was a highly informative roundtable with excellent questions and observations from both the audience, presenters and panellists.

The AmeriKat thanks Michael for reporting and AIPLA and USPTO for organizing this roundtable. She is often surprised daily about how many UK IP lawyers do not take action in China or are unaware of what is available to them and their clients in China. Does anyone know if the UK IPO has planned or will be planning something similar for the UK audience?

AIPLA-USPTO roundtable here.
Round pool table here.
A famous Round Table here.

A round robin here.

Letter from AmeriKat: Return of the AmeriKat

For anyone who knows the AmeriKat personally and professionally, they will know that during the past seven weeks the AmeriKat has faced a flurry of deadlines, deliberations, duplicitous documents and a dosing of sleep deprivation. Her absence from her beloved letters was not one of choice, but one of necessity as every two days she was hit with another deadline. (picture, left - the AmeriKat up late in front of one of her many outstanding deadlines) The deadlines were increasing in frequency, but as the old saying goes “absence makes the heart grow fonder”, especially when the absence is not voluntary. When the AmeriKat was writing this post, she was curled up on her bed, watching her clock until she had to leave to catch a flight for yet another deadline. However, now with the passing of the last seven weeks, she has returned to first give you a brief glimpse of the first of the latest US IP tails. She will be back later throughout the week with more detailed posts on some of the most important news in US IP law.

Patent Reform Act 2011 Gets Senate’s Thumbs-Up

Two weeks ago the US Senate passed by overwhelming majority (95-5) the America Invents Act (“AIA”) (a.k.a. the Patent Reform Act 2011). Mr. IP himself, Senator Patrick Leahy (D-Vermont) introduced the Patent Reform Act 2011 to the Senate Judiciary Committee this past January. The AmeriKat has set out below the main provisions that the original draft bill contained before the Senate and what the AIA now contains below (a comparison of the two can be found here):

First -to-File: The biggest change introduced by the AIA would be the transition in the US from a first-to-invent system towards a first-to-file system where each patent application would be allocated an “effective filing date”. Similar to that in the EU, the application’s novelty and obviousness is then judged on the prior art available before the effective filing date of the patent, but with a one year grace period still remaining in effect in respect of the inventor’s own disclosures. Democratic Senator Dianne Feinstein had proposed an amendment (Amendment No. 133) that would have removed these provisions arguing that their effect would be especially burdensome to small independent inventors (click here to watch her introduction of the amendment.) However, the Senate voted down the amendment by 87-13 with proponents of the first-to-file provision arguing that the availability of applications such as pre-issue disclosure, post-grant review and inter-partes review would rebalance any alleged burden that the first-to-file paradigm could create. Opponents to the first-to-file system also believe that this introduction will worsen the huge backlog of patents faced by the USPTO (see post here) and result in the system being clogged up with thousands of unmeritorious inventions.

Damages: The review of the assessment of patent damages that was taken up by Microsoft in their initial appeals in the i4i case last year (see AmeriKat posts here) evidenced only a sliver of general unrest with the assessment of US patent damages. The original draft of the Patent Reform Act 2011 introduced proposed amendments that would provide for specific procedures on how judges in patent cases manage the damages assessment. These included mechanisms for the court to consider the evidentiary merit of each parties’ case on damages and then the judge introducing a methodology that would be used in assessing the damages awards. Close the AmeriKat’s heart at the moment was the old text also requiring a judge to split the damages portion of a trial at a parties request and only rejecting that request in the absence of a good cause, such as “the absence of “issues of significant damages or infringement and validity”. All of these draft provisions did not make it past the Senate's approval perhaps signaling a reluctance to delve into the problematic pool of patent damages which may have held the entire bill’s passage hostage.

Enhanced Damages: In the current US Patent Act, there is not specific reference that the increase of patent damages should only be reserved to cases of willful infringement. Section 284 of the current statute, instead, states that “the court may increase the damages up to three times the amount found or assessed.” The Federal Circuit’s interpretation has limited this section to cases to willful infringement and where the defendant’s actions were objectively reckless. The draft text of the Patent Reform Act had basically codified this precedent, but again, like with general damages, this did not make it to the final text.

USPTO Proceedings: The AIA also introduces under Sec 135 a “derivation proceeding” that arises when an original inventor claims that a patent applicant derived their invention from the original. Third parties will also be allowed to submit any prior art documentation with accompanying relevant reasons for the submission to the USPTO prior to the examination proceedings. A post-grant review proceeding would also be created and which allow any party within 9 months of the patent’s issue to present a validity challenge to one or more of the patent claims. Replacing the inter partes reexamination would be the inter partes review which would limit reviews to issues of novelty and obviousness arising from prior art patents and printed publications. The effect of the post-grant review has been considered by some as not ensuring the quality of the granted patents, but as potentially increasing the expense a patent-holder could face during the adversarial proceedings.

Besides deleting more interesting parts of the bill, the Senate did add Section 18 which deals with provisional measures for the establishment of post-grant review proceedings for the review of the validity of business-method patents. False marking lawsuits would be eliminated under the proposed 146 (k) except for ones filed by the US government or by a competitor who can prove competitive injury as a result of false marking. Also, reduced fees for small entities were also introduced.

The American Innovators for Patent Reform (AIPR), a trade association which promotes innovation by strengthening the US patent system, has opposed the AIA. Alexander Poltorak, the founder and President of AIPR and AIPR stated that the AIA, in particular the first-to-file provision would be viewed as a “defeat by many inventors”, however the removal of the damages provisions (which were referred to as the “most damaging provisions” – no pun intended) were heralded as a success. David Kappos, the USPTO's Director, has said that the US is already operating a pseudo-first-to-file system because in 2007 there have only been 7 interference applications (where two inventors file their patents nearly simultaneously) of which only one was decided on priority of the invention and "the truth is that only .01% of all patent applications could be affected" by the change.

The next stage of the bills life will be in the House (watch the life of a bill, courtesy of Schoolhouse Rock). If passed by Congress , the AIA could well be on its way of becoming the first substantial change to patent law in the U.S. in almost 60 years, but a bill’s life in Congress can be a rocky ride and can usually, as has been seen in IP legislation, die a quite death.

So what do non-US readers think? Is the introduction of the first-to-file system the end of civilization as we know it, or if the AIA is passed by Congress is Director Kappos correct and US inventors will not notice any difference at all?

Letter from Amerikat: Birthday Bits 'n Bobs

The AmeriKat is celebrating her 2nd birthday this week (she will leave you to calculate her age in Kat years). During the past few days she has cast her mind back to reminisce over the past two years in music, film, politics, and law. When she was a fresh kitten, the radios were booming with Madonna, Queen, Beastie Boys and Peter Gabriel and movie theaters were welcoming audiences to watch Top Gun, Pretty in Pink and Aliens. And in law, in the January that the AmeriKat was born, Kodak lost a patent infringement case with Polaroid, a loss which signalled Kodak's exit from the instant camera business. Today, we may still have Madonna booming away, but this time it is through our iPods. Patent law has also come a long way from the instant camera days. Nowadays our patent wars focus on mobile phone technology, albeit still concerning their camera technology as well as their touch-screen capabilities. This brief journey down memory lane just goes to show that over the past two *cough* years, everything changes, but everything stays the same be it in music or in IP law.

Lawyer Barbie back in the Federal Circuit dealing with Bratz - Something else that has not changed all that much from last year is the continuation of the Barbie v Bratz battle (previously reported by the AmeriKat here) which last week heard the parties' opening arguments in Californian federal court before Judge Carter. Barbie's maker, Mattel, alleged that the maker of the Bratz doll - MGA Entertainment- stole the idea for the Bratz doll by entering into a deal with the designer of the doll who had previously worked for Mattel. Mattel subsequently filed for copyright infringement and trade secret violations, while MGA alleges unfair competition and also trade secret theft. The case being heard by the court last week follows the previously overturned $100 million verdict of Judge Larson in favor of Mattel. MGA appealed this 2008 ruling on the grounds of incorrect jury instructions and an overly broad injunction. The US Court of Appeals for the Ninth Circuit agreed holding that the federal court judge had erred in ruling that Mattel automatically owned the designer's sketch of the doll under the terms of the 'Employee Confidential and Inventions Agreement' between Mattel and the designer and remanded the case back to the federal court. At the end of 2010 both parties applied for summary judgment on the issue of copyright infringement for the first and second generation Bratz dolls. Judge Carter granted summary judgment in MGA's favor in respect of the second generation Bratz dolls, but the remaining issues, including breach of copyright for the first generation of Bratz dolls and the breach of confidence/trade secret claims, remained for trial.

Following Judge Larson's departure from the federal bench, Judge Carter will now be rehearing Mattel's claims, but unlike the first trial the court will be tasked with determining whether the Inventions Agreement entitles Mattel to the designer's ideas for names like "Bratz" together with sketches that he created outside working hours. Also, ripe for ruling is MGA's trade secret claim against Mattel. Last year, MGA filed a counterclaim alleging that Mattel conducted an elaborate corporate espionage scheme in which Mattel employees, including general counsel Robert Normile and their attorneys from Quinn Emanuel, engaged in a racketeering conspiracy in order to gain access to MGA's private showrooms to obtain confidential information of Mattel's competitor's plans. According to a report last year in Am Law Litigation Daily, Quinn Emanuel partner Michael Zeller said that MGA's claims were "second-rate tactics by desperate lawyers" that "won't survive the pleading stage." Well, apparently they have! Mattel's lawyers say that in so far as the information MGA shared was shared at toy fairs, this information does not constitute a trade secret and therefore MGA is not entitled to their claimed $475 million in damages. The trial continues.

MJ's estate increases litigious activities - Last week, Michael Jackson's estate sued a website who is selling a book written by the singer's mother, Katherine Jackson, alleging copyright infringement. As reported by the Associated Press, Howard Mann, who operates the domain name www.jacksonsecretvault.com (picture, right - a shot of the allegedly infringing website left) is on the recieving end of the suit that alleges that he and the website are infringing copyright and are also liable under unfair competition laws. The complaint is reported to allege that the site is using the late singer's likeness and sketches that he drew and is said to creating a fasle endorsement by virtue of the inclusion of a "special thanks" to the estate. In a statement, the estate's attorney Howard Weitzman said that

"The Estate had hoped Mann would voluntarily cease his conduct but that was not to be. People who trade off of Michael's personality, copyrights and trademarks should not be allowed to exploit the legacy of one of the world's most recognized talents for their own benefit."

For more information see these reports in Hollywood Reporter and AP.

Koons's Balloon Dog to pop gallery's bubble? - Artist Jeff Koons has claimed copyright infringement against San Francisco gallery Park Life over a set of bookends that look like Koon's Balloon Dog, i.e. they look like balloon dogs. What do we think IPKat readers? Can Koons claim copyright infringement for anything that resembles a balloon dog? The AmeriKat thinks his lawyers, reported to be Jones Day, must have a field day at children's birthday parties.... For a more in depth look at that saga please see this excellent article in the New York Times. For how to make a balloon dog or an allegedly infringing Koons dog, please click here. (Pictures below from left to right - Koon's Balloon Dog; Park Life's balloon dog bookends; a balloon dog)

USPTO renews its IP Australia vows - Last week USPTO and IP Australia announced the extension of their existing pilot Paris Convention Patent Prosecution Highway (PPH) agreement and the formation of a new PPH pilot agreement utilizing the Patent Cooperation Treaty (PCT-PPH) results. PPH agreements improve efficiency by allowing patent examiners to use work already undertaken in respect of the same claim or claims already reviewed at other patent offices and PCT Authorities. USPTO Director Kappos has stated that by including the PCT "more work can be shared between our two offices. This will benefit applicants by reducing patent pendency and improving quality.” According to the USPTO press release the addition of the PCT international phase work

"will greatly expand the usefulness of the PPH program to applicants and the offices. The new PCT-PPH pilot is scheduled to launch on January 24, 2011. The PPH pilot program and the PCT-PPH pilot program between the USPTO and IPAU are both currently scheduled to continue until April 13, 2012."

Pancake house drops suit against a house of God - Last year the AmeriKat reported on the trade mark suit filed by US eatery chain IHOP which stands for the International House of Pancakes against the International House of Prayer also known as IHOP. Unfortunately, however, there will be no courtroom fireworks in battle between pancakes and God, because four days before Christmas IHOP dismissed its case against the church citing "ongoing mediation with the defendants."