In the interest of full disclosure, “yes,” this particular blog post is a marketing piece. But, it is also intended to be educational and inform prospective clients why it matters who they select to work with to identify innovations, draft patent applications and strategically manage their company’s patent portfolio. This brings up two related questions: why should it matter; and assuming it does matter, how do I identify the right person?
Why Does It Matter?
To answer the first question — a properly constructed patent portfolio is more than a collection of government-issued property rights. Because it is a set of property rights backed by the judicial power of the U.S. government, it is a business asset. A patent application (which is really a misnomer, as a patent application is closer to a 30-50 page report) uses text and images to describe a use of one or more technologies or structures in a specific way to solve a problem. Each report must be prepared and expressed in terms that satisfy very specific requirements, as expressed by law and court decisions. Further, the author of each report may choose to include or exclude certain language or concepts to accomplish their goal, where that goal is more than to obtain a patent; it is to obtain a patent with a certain set of enforceable definitions of the property right (termed “the claims”). This is why the contents of a patent application matters, and also why it is so important to select the “right” person to draft a patent application. This is particularly true if the application is directed to a complex technology and/or is expected to protect a fundamental aspect of the product, service or business model.
The patent application, if allowed, will be issued as a U.S. patent. This enables the owner (who is not necessarily the same as the inventors, if they have assigned their rights in the invention to another party) to use U.S. law and courts to prevent others from doing certain things. These include making, using, selling, offering to sell or importing the claimed invention. But an important (and often overlooked) aspect of owning a patent or patents is that an owner of a patent can obtain both tangible and intangible benefits without having to sue someone if they view a patent as a business asset that can be helpful in achieving certain business goals.
In one sense, a patent application is a tool to convert an idea into a business asset. Because this asset may have multiple uses or potential uses (some of which may not be fully understood when the application is filed), ideally the tool should be capable of being adapted so that it may be used in those multiple ways. These use cases may include:
- Reducing the likelihood of being sued by creating the threat of a counter-suit (where this may involve submitting a new set of claims in an application in an attempt to cover a competitor’s product or service);
- Increasing the likelihood of being able to offer something of value to a company that the owner wishes to engage with in a business relationship;
- Enabling the execution of a patent cross-license with another party, with an accompanying payment to (or lesser payment from) the patent owner;
- Protecting its own market or at least erecting a barrier to entry of a close competitor; or
- Increasing the likelihood of obtaining additional capital by serving as collateral for a loan, demonstrating inventiveness or providing an exit strategy for investors via licensing or sale.
A properly constructed patent portfolio is one that increases the chances of having leverage over (or providing something of value to) another party in a business relationship. Any situation in which a claim or claims arguably cover a product or service of another party, a product or service in that party’s product development pipeline, a product or service of a competitor of that party, or even a product or service of the competitor’s competitor may provide value to the patent owner. The variety of possible uses, along with the importance of (and requirements on) how concepts are described in a patent application is why it matters who a company selects to prepare its applications. This is because the language and concepts described in a patent application are much more than simply a translation of what an inventor said into “legalese;” companies that do not understand this difference have often been disappointed by the value of their patent portfolio.
How Do I Identify the Right Person?
Because of the complexities of preparing a patent application that can be used to support claims of varying scope and contexts, it is best to look for a patent attorney or patent agent who has indications of being able to handle the technologies and business models that are most relevant to a company. These indications typically include at least some (if not all) of the following:
- A technical degree (preferably an advanced degree or an undergraduate degree) and several years of experience as an engineer, researcher, scientist, etc. in the most relevant mathematical or scientific discipline (applied math, physics, electrical engineering, biology, chemistry, chemical engineering, biochemistry, software engineering, computer science, fluid mechanics, mechanical engineering, etc.);
- Experience in protecting innovations in the same general category as those expected to be developed by the company (this is a bit nebulous, but examples might include eCommerce platforms, SaaS, web or cloud-based services, authentication methods, virtual reality systems, artificial intelligence methods, machine learning, data mining, telecommunications, semiconductor processing, signal processing, etc.) — this enables the patent attorney or agent and the inventors to have a larger common knowledge base, and as a result, to be much more likely to communicate effectively when it comes to identifying and describing the protectable aspects of the product or service;
- At least five years’ experience, but preferably 10, in which the person has focused almost exclusively on patent prosecution and has also had significant experience with either patent licensing or patent litigation support;
- Experience as an in-house patent counsel as well as in a law firm; this enables the person to have a better understanding of the business issues that may be involved and to present issues in terms of business decisions (in some cases this may be gained from working in a law firm with someone who has served as an in-house counsel); and
- If in a law firm, experience serving as a virtual patent counsel for a company of the same relative size or stage of development as the company that wishes to hire them — this ensures that the patent attorney has had experience interacting with senior business, legal and technical executives (such as founders, CTO, GC, etc.) and understands their concerns regarding budget, market developments, investors, etc.
For additional information regarding the uses and ways of developing an effective patent portfolio, see the following publications:
Fitness device maker Jawbone was recently featured in a Re/code article announcing that the company had raised $165 million in new funding. The article mentioned another aspect of the Jawbone’s fundraising efforts; the company raised an additional $280 million using its patent portfolio as a significant part of the collateral in a previous arrangement with BlackRock Inc., the largest asset management company in the world.
The BlackRock deal is an example of viewing a patent portfolio as a business asset; BlackRock presumably felt that if Jawbone could not pay back the convertible note, then the patent portfolio might be the most valuable (and possibly only) asset available to enable them to recoup part or all of the loan amount. Regardless of how much value was given to the patent portfolio by BlackRock (because valuing a patent portfolio is a combination of using mathematical models and making certain estimates that are dependent upon how it might be used), the fact that BlackRock was willing to accept it as collateral demonstrates an important aspect of a properly developed patent portfolio.
A patent application represents a way of converting an innovation into a business asset. This asset has value to the business because it can be used in multiple ways to preserve or increase revenue, avoid or lessen risks, and generally provide a company with options it would not have in the absence of a properly constructed patent portfolio. A properly constructed patent portfolio is one that contains assets that have (or can be modified to have) multiple value propositions, some of which benefit the company and some of which may benefit other players in the market.
In some sense, patents enable the value associated with R&D investments to be realized in ways that are not limited to the sale of a product. This can provide an “exit strategy” in the event that the business is not successful, in which case some of the capital invested may be recouped via sale or licensing of the patents. And as demonstrated by Jawbone, capturing the value of innovations in this way can also assist in raising capital during operation of the business, in part because it suggests that new products and services are being developed and with that the possibility of increased market share and new sources of revenue.
The multiple value propositions and potential uses of a properly constructed patent portfolio should provide companies with an incentive to evaluate their products and technology in an effort to identify potential innovations. Business and transactional attorneys should also be aware of these value propositions and are encouraged to seek the advice of a suitable patent attorney (one with both the knowledge and skill set needed to understand the technology, and the ability to craft patent applications having strategic value) when dealing with current or prospective clients.
Lane Powell’s patent attorneys have prior experience as in-house patent counsel and in establishing effective patent programs for clients and are experienced in protecting a wide variety of technologies in multiple industries (including semiconductor manufacturing, flash memory design and operation, telecommunications, eCommerce, wireless data and mobile devices, signal processing, artificial intelligence network security, authentication methods, SaaS and cloud-computing). They have assisted companies ranging from startups to publicly-traded companies to identify innovations and develop effective strategies for protecting and leveraging those innovations. Please contact Alan Minsk or Kevin Jablonski for further information.
A diverse panel of International Trademark Association (INTA) members met with Office of Harmonization for the Internal Market (OHIM) officials, OHIM examiners and representatives from the national offices in Alicante, Spain, for the 2015 INTA/OHIM Industry Training Seminars organized by INTA’s Government Officials Education and Training Committee. The training took place on October 5 in OHIM’s offices. The theme of this year’s meeting was “Trademarks in Regulated Industries.” The overall premise of the morning session was to acknowledge that there are agencies other than trademark offices involved in the companies’ decisions regarding the selection and use of trademarks.
Representing the alcoholic beverage industry was Jose Ramon Fernandez, Director of European Corporate Affairs for Pernod Ricard. The banking industry was represented by Carrie Hefte, Senior Vice President for Wells Fargo & Company. The pharmaceutical industry was represented by Maria Fernandez-Marquez, Senior European Corporate Counsel for Pfizer GmbH. The tobacco industry was represented by Ronald van Tuijl, Director of Intellectual Property for JT International, SA. The panel was moderated by Frances Jagla of Lane Powell PC.
The morning session was opened by H.M. Bello, Director of the OHIM Academy, and Ronald van Tuijl, President-elect of INTA. The session was attended by Senior OHIM representatives, OHIM examiners, and examiners and representatives from multiple national offices. In addition, over 50 attendees participated via webinar. After introducing their respective companies and responding to specific OHIM questions ranging from the importance of 3D marks to acquired distinctiveness to an overall “how is the office doing,” the panelists described the regulatory realities for their industries. These regulatory discussions helped to provide the examiners with a framework to identify specific challenges to companies doing business in regulated industries. Included in the discussion was the impact of geographical indications in the alcoholic beverage industry; the advent of the e-cigarette and “vaping “ products, and their classification in the tobacco industry; the relevant public degree of attention to products in the banking industry; as well as “why are so many trademarks for pharmaceuticals unpronounceable and impossible?” (such characterization was vehemently disputed by Ms. Fernandez-Marquez).
After a networking lunch among the panelists, INTA representatives and Senior Examiners, the afternoon sessions involved breakouts for each industry. The sessions gave the panelists one-on-one time with OHIM to provide additional information regarding their industries, including the challenges faced at OHIM and the national offices. This also gave OHIM the opportunity to ask questions of the panelists and to help define where they can improve upon or add new services to an industry.
It’s become a hard-knock life for ElevenParis, a French fashion retailer with stores in the U.S. After selling t-shirts and other merchandise with these not-so-subtle designs:
and this label:
the kings and queens of rap and pop hustled together to bring 58(!) causes of action in a lawsuit filed in the Southern District of New York this week.
Among other claims, the complaint alleges violations of rights of publicity, unfair competition, and trademark infringement and dilution. The claims stem from the artists’ undeniable fame and federal trademark rights in marks such as BEYONCE’, KANYE WEST, CLOTHING BY KANYE WEST, PHARRELL WILLIAMS and RIHANNA. And it doesn’t help the defendants’ case that all of the pop plaintiffs own their own clothing lines, with most using the artists’ names as part of the brands.
The suit does not mince words and alleges that “Defendants are habitual, willful intellectual property infringers that, without authorization, usurp the trademarks, copyrights and other rights of A-list celebrities and world-recognized brands and deceive consumers into purchasing such products at the consumers’ expense and for defendants’ profit.” The allegations accuse defendants of continuing to sell unauthorized products “[e]ven after receiving warnings from Plaintiffs to cease and desist from selling the infringing products and to further cease and desist from using Plaintiffs’ names, images, likenesses and/or trademarks (or any marks colorably similar thereto).” In addition, the plaintiffs claim that “Most egregiously, as of the date of the filing of this Complaint, Defendants’ ELEVENPARIS store located in New York City boldly offers for sale dozens of infringing merchandise including, but not limited to, the t-shirts and bags shown in the images above. The sale of this merchandise is in direct contravention of both a written agreement with at least one Plaintiff, as well as ongoing settlement discussions in which Defendants have represented and warranted that they are no longer selling infringing merchandise anywhere in the world.”
Sounds like the defendants are in for a fight from the divas who run this town.
A recent ruling from the Trademark Trial and Appeal Board (“the Board”) found a coupon to be an acceptable specimen for the U.S. Trademark Office (“Office”) showing proper trademark use. Johnson & Johnson submitted the coupon to the Trademark Examiner in support of the mark EARNING TRUST WITH EVERY BOTTLE for their usual line of products: “Facial and skin cleansers; facial and body washes; soaps; shampoos; and body lotions.” The Trademark Examiner issued an Office action in which he found the coupon to be an unacceptable specimen and eventually made the refusal to register final. After remanding to the Examining Attorney after a Request for Reconsideration, the Board finally reversed the refusal and found the coupon to be an acceptable specimen showing use of the mark in commerce.
The decision tracks the language of Section 45 of the Trademark Act (“the Act”) which states that a mark is deemed to be used in commerce when “it is placed in any manner on goods or their containers or displays associated therewith or on the tags or labels affixed thereto.” The holding turned on whether the coupon could be considered a “display” within the meaning of the Act. Ultimately, because the coupon displayed Johnson & Johnson’s goods, showed the applied-for mark next to the goods, identified the retailer where the goods could be bought, and was dispensed to the customer in the very store where the goods were located, the Board found that the presentation of the coupon to the customer began the association of the mark with the goods.
So does this mean that every clipping from the Pennysaver is enough to earn trademark rights? Probably not. But with a well-known brand and a coupon that nails the specifics of mark identification, the decision could represent a foot in the door for more creative point of sale “displays.”
Computer software patents have been receiving significant upset overturn in validity since the well-known U.S. Supreme Court decision providing certain exceptions to patent eligible subject matter under 35 U.S.C. § 101, Alice Corp. v. CLS Bank International came out Alice Corp. v. CLS Bank International, 573 U.S. __, 134 S. Ct. 2347 (2014). Since Alice, the Federal Circuit and other courts have been following the Alice decision and struck many presumably-valid U.S. patents as invalid without providing breakthroughs of how to overcome the 35 U.S.C. § 101 rejections to patent law practitioners.
On September 29, 2015, the Eastern District of Texas denied a summary judgment motion by Google Inc. and YouTube LLC to invalidate SimpleAir, Inc.’s two patents, Patent Nos. 8,572.279 and 8,601,154 by finding that the two patents are not directed toward an abstract idea (SimpleAir, Inc. v. Google Inc. et al.). The two patents cover systems and methods for transmitting data to remote computing devices through a “central broadcast server.” In this case, the District Court applied the two-prong Alice test including “ineligible concept” step and “inventive concept” step and found that the first “ineligible concept” test is satisfied. The Court stated that Google summarized the patents as “packaging and transmission information” and “do not explain how such a characterization, which ignores significant claim limitations, encompasses the invention claimed” by SimpleAir. Even though the Court did not disagree about the patents suggesting “implementation of the abstract idea of ‘packaging and transmitting information’” at some level, the Court’s role is not to “reach into a patent and extract an abstract idea,” rather to “examine” the patents and “determine whether they are directed to an abstract idea.” In this respect, the District Court has put forth a ruling that would appear to support the concept that transitory signals may, in fact, be patent eligible — an area long-held by Examiner to be off-limits.
Another interesting aspect of this decision is that the Court did find “a central broadcast server,” “a data channel,” and “transmitting information whether the user was online or not online to a data channel to an information source” are sufficient to show “significantly more than a patent on that abstract idea [of transitory signals]” to satisfy the Alice “inventive concept” step by heavily construing a “wherein-clause” in the claim language. Further, the Court did not buy an argument by Google that “data-transmission steps can be carried out using standard prior art protocols, carriers, and networks’ and claimed invention [was] ‘well-understood, routine, and purely conventional’” as the Court is asked to determine “whether the function performed by the computer at each step of the process is ‘[p]urely conventional.”
Healthcare giant, F. Hoffmann-La Roche (Roche) filed for and was awarded the transfer of 74 domain names that had been registered by multiple individuals. Roche had filed with the World Intellectual Property Organization (WIPO), for the cancellation and transfer of domains that included Roche’s pharmaceutical product names Accutane, Bactrim and Xenical. The domains were allegedly held by members of a criminal network and a known cybersquatter.
The most interesting aspect of this case is that Roche was able to combine several different respondents under a single complaint. The domains were in the name of more than half a dozen different individuals allegedly located in Russia and China. The WIPO terms allow for the Consolidation of Proceedings where either the domains are owned by the same individual or entity, or that the complainant can demonstrate that the disputed names or websites that the domains resolve to are subject to common control and that the panel determines that consolidation would be procedurally efficient, fair and equitable to all parties. Respondents failed to file any response.
The second issue that the WIPO panel faced was the determination of which language should be used. The panel determined that English should be the language of the proceeding based upon the determination that the Respondents were part of a criminal enterprise in an earlier domain dispute which was conducted in English without any objections, the domain names incorporate only English words and phrases, showing that the Respondents should be capable of communicating in English, several of the domains had identical contact information which was subject to English registration agreements, the fact that the proxy server for the domains was located in China does not necessarily mean that the registrants were located in China, and that to conduct separate parallel proceedings in Chinese would serve to add costs and delays to the process. Finally, all communications regarding the complaint were sent to the parties in both English and Chinese.
The panel confirmed that the domains were identical or confusingly similar to Roche’s trademarks, that the respondents had no right or legitimate interest in the trademarks and that the domains were registered and used in bad faith. The link to the WIPO decision can be found here.
Those who practice patent law in the computer arts before the USPTO are well aware of dealing with 35 U.S.C. § 101 rejections of claims due to alleged lack of patentable subject matter when claiming so-called “abstract ideas.” Such recent rejections have been euphemistically referred to as “Alice” rejections due to the Supreme Court case Alice Corp. v. CLS Bank International, 573 U.S. __, 134 S. Ct. 2347 (2014). As to what constitutes an actual abstract idea, one could go round and round about legal definitions. This very round and round is playing out at various levels in various federal courts of law.
In a new recent round, DataTern, Inc. v. MicroStrategy, Inc., is a patent infringement lawsuit on remand from the Federal Circuit, where the District Court has now denied a motion for summary judgment based upon the patent being asserted as directed to merely an abstract idea. Specifically, “[t]he Federal Circuit has described the [patent-in-suit] as . . . ‘directed to interfacing an object-oriented software application to access data stored in a relational database. . . creating ‘interface objects’ that act as intermediaries between the object oriented application and the relational database.’ . . . [W]hen read as a whole, the patent here does not recite a computer as a post-solution limitation or a specific application of a more generic abstract idea. Rather, the [patent] is directed at solving a problem that specifically arises in the realm of computing; indeed, object-oriented programs exist only in the realm of computers, and relational databases are utilized primarily, if not exclusively, on computers.”
A take-away here then is that patent claims directed to solving a specific problem are seen more and more as patent-eligible subject matter capable of escaping the gravity of the black hole known as Alice.
On Tuesday, August 25, the United States Patent and Trademark Office (USPTO) opened for public comment a proposed pilot program for inter-partes review proceedings (IPRs), one of the patent post-grant review proceedings made available under the Leahy-Smith America Invents Act. IPR proceedings have two phases: the institution phase and the trial phase. Currently, during the institution phase, a panel of three Administrative Patent Judges (APJs) reviews the IPR petition and decides whether some or all of the patent claims challenged in the petition should proceed to the trial phase. The trial phase is then conducted by the same three-APJ panel.
The USPTO’s proposed pilot program will change the composition of the institution and trial-phase panels. First, it will limit the institution phase to a single APJ. Then, after the institution decision has been made, the trial-phase panel will be comprised of the institution-phase APJ and two other APJs who were not involved in the institution decision. The USPTO cites increased efficiency as the main goal of the pilot program. But presumably the USPTO also hopes the new program will alleviate concerns about actual or perceived bias during the IPR process.
The USPTO will be soliciting public comments on the proposed pilot program through October 26.
For both new and existing businesses, new generic top-level domains (gTLDs) offer increased flexibility and opportunities for an expanded online presence. A gTLD is the part of a web address that comes after the “dot” (“.”). Historically, gTLDs were limited to only a few, such as “.com,” “.org” or “.net.” However, in 2012, the Internet Corporation for Assigned Names and Numbers (ICANN) began accepting applications for new gTLDs, and the first new gTLDs went live in 2013. Some of the new gTLDs are company and brand names such as .Abbot or .Amex, while others are descriptive, for example, .book, .clothing, .flowers and .pharmacy. A list of the new gTLDs and their release dates can be found here. The trademark issues arising out of the new gTLDs are many — here we explore their impact on trademark applications both for new applicants and existing trademark holders.
Generally, the new gTLDs will have little impact on the trademark application process aside from choices for trademarks that might also double as domain names. That is, the process to register yourname.shopping will be the same as the process that has applied to registering yourname.com. In both instances, the mark must be distinctive and in use. In addition, unregisterable matter, such as descriptive or generic terms and non-source-identifying gTLDs may need to be disclaimed. In our example, “.com” and “.shopping” are both technically unregisterable matter. With that said, in many instances the U.S. Patent and Trademark Office (USPTO) has allowed such marks to register, without any disclaimer of the “.com” or “.shopping” portion of the mark. Thus, applications for marks that include a non-source-identifying gTLD are likely to receive the same treatment by the USPTO as marks did before the introduction of the new gTLDs.
If a gTLD has source-indicating significance (.yourbrand), it may be registrable as a trademark. However, not every gTLD will qualify as a trademark. If the proposed mark is perceived merely as part of a website address, it will not be registrable. In addition to the requirement that the trademark is source-identifying, the applicant of such a mark will have to show that (1) he/she has registered the gTLD with ICANN, and (2) the services provided will primarily be for the benefit of others. As of now, there are few businesses or individuals that have taken advantage of this new trademark opportunity. But as these new gTLDs are launched and their presence becomes increasingly important, we may see an increasing number of trademarks composed solely of new gTLDs.