Patent Law

1. Patent Law Using your common sense and whatever patent knowledge you have, should this be patentable? Why? An apparatus for use as a toy by an animal, for example a dog, to either fetch carry or chew includes a main section with at least one protrusion extending there from that resembles a branch in appearance.

2. It Got a Patent - US Patent No. 6,360,693 -Patent Law Overview • Patentable subject matter • Anything man made • Useful • Novel • Non-obvious • Adequately described

3. Useful Patents? Buttocks support deviceUS Patent No. 6,360,375 Issued March 26, 2002 BeerbrellaUS Patent No. 6,637,447 Issued October 28, 2003 Pass around patent samples

4. 6,681,419

5. Patent Law Overview Continued • Grant of Exclusive Monopoly. Exclusive monopoly for a limited period of time – 20 years • Reveal Secret. Must reveal to the public the secret • Federal law – not state • Court of Limited Jurisdiction. US Court of Appeals for the Federal Circuit (rather than patent cases spread among all federal circuit courts) • Conflict Between Antitrust and Patent Law. • The Congress shall have the power… To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right tot their respective Writings and Discoveries - US Constitution • Soon passed The Patent Act

6. Deep Secrets Revealed! What is it? Interestingly, it is an improvement on three previous patents on roughtly the same idea. U.S. Pat. Nos. 6,023,792; 6,081,941; and 6,125,480. This patent extends the umbrella to add a leash to the dog. Previous patents for pet umbrella’s did not include the leash U.S. Pat. Nos. 5,546,970 and 5,918,611

7. Key Sections of The Patent Act • § 101.“Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefore, subject to the conditions and requirements of this title” • § 102. If the invention lacks novelty, i.e. public is aware, then no patent shall issue. • § 103.Non-Obvious

8. Change in Direction • KSR v. Teleflex. 2007 US Supreme Court Case Struck down patent on a gas pedal as nothing more than “obvious” combination of existing technologies. • Bilski v. Doll – - discussed later under business process patents

9. Go to patent website Non-Obvious • Standard. Would have been obvious at the time of the invention was made to a person having ordinary skill in the art to which said subject matter prevails. • Example. • Inventor invents A + B. • A is known art • B is know art • Upon looking at A and then looking at B, would someone of skill in the art consider A + B to be already know? • If yes, obvious. • If no, then non-obvious • Subjective Standard.

10. Non-Obvious? Towel for Hair Styling

11. Non-Obvious Patent? Copied from actual patent

12. Recent Patent Cases

13. Types of Patents – Utility • Utility. Useful inventions • process • machines • manufactured goods • composition of matter • improvements (a better mousetrap) • 20 years

14. False sideburn sunglasses Design Patent # 376,811 Types of Patents - Design Patents • Design Covered • Ornamental features • Exclusions • Novel • Non-obvious • Years. 14 years • Weak – protects what is drawn • Marketing Value • “patent pending” • “patent issued” • Multiple Design Patents – help protect • Design Patent and Utility Patent on Same Invention Two: Aug 28, 2007 Issued Design Patents, Ideas? First design patent

15. End-of-Chapter Question 2– Design Patent on Ink Cartridge • Patent Infringement Suit. Seiko Epson Corp sued Nu-Kote International for design patent infringement • Court Held No Infringement. District court held design patent not valid • The cartridge is not visible after installation and during use – the design was “not a matter of concern to consumers.” and • The design is not aesthetically pleasing • What are your thoughts? Should Seiko Epson be entitled to a design patent on an ugly design that cannot be seen?

16. End of Chapter – Question 4– Design Patent on Cigarette Package • New Feature – Package opens from bottom • Quote: “I was motivated… to design a new cigarette package when I happen to see… workers pull out cigarettes from the packages holding their filter tip top with dirty fingers during work to smoke them. Some even used their teeth to pull them out so as not to contaminate the filter-tip end with dirty fingers, and some others tore open the bottom part of the package to take out cigarettes from the bottom.” In re: Uie S. Chung 2000 US App Lexis 24916 (Fed. Cir. Oct 2000) Note: this is not the same patent as this case but close

17. Plant Patent • Novel, Non-obvious and Distinct • Living Organism Duplicated Through Asexual Reproduction. A living plant organism which expresses a set of characteristics determined by its single, genetic makeup or genotype, which can be duplicated through asexual reproduction, but which can not otherwise be "made" or "manufactured." • Hybrids and Natural Plants. Sports, mutants, hybrids, and transformed plants are comprehended; sports or mutants may be spontaneous or induced. Hybrids may be natural, from a planned breeding program, or somatic in source. While natural plant mutants might have naturally occurred, they must have been discovered in a cultivated area. • Algae and macro fungi are regarded as plants, but bacteria are not. • That the plant is not a plant which is excluded by statute, where the part of the plant used for asexual reproduction is not a tuber food part, as with potato or Jerusalem artichoke. • That the person or persons filing the application are those who actually invented the claimed plant; i.e., discovered or developed and identified or isolated the plant, and asexually reproduced the plant. • That the plant has not been sold or released in the United States of America more than one year prior to the date of the application. • That the plant has not been enabled to the public, i.e., by description in a printed publication in this country more than one year before the application for patent with an offer to sale; or by release or sale of the plant more than one year prior to application for patent. • That the plant be shown to differ from known, related plants by at least one distinguishing characteristic, which is more than a difference caused by growing conditions or fertility levels, etc. • The invention would not have been obvious to one skilled in the art at the time of invention by applicant.

18. Patent Statistics *The percentage of patents granted is approximate as I am simply dividing total patents issued in a year by total applications submitted. Patents applications generally take more than a year so this is not an accurate measure but at least provides rough guidance. The 100% of plant patents approved highlights the weakness of this method - a high percentage are approved but not 100%. http://www.uspto.gov/web/offices/ac/ido/oeip/taf/reports.htm

19. Patent Searches Made Easy • US Patent Office Web Site http://www.uspto.gov/patft/index.html • Free Patent Search Web Site http://www.freepatentsonline.com/search.html Patent Issues bigw 862221 • First to Invent. • Application Process • Prior art search • Cost • Fully disclose invention as “price” of getting patent • Must file within 1 year of first commercial use • Notice • “Pat.” • “patented” • Patent number • Idea made public after 18 months unless withdrawn (U.S. used to not make public until granted – recent change to match more of the world) Question 2, p. 421 Who gets patent?

20. Business Process Patent- State Street Bank • Oral presentation – Graded as a project • Summary of facts • Statement of legal issues • Summary of law that pertains • Analysis of the law • Your Thoughts • Both Sides – Debate • Why this case is important • Answer questions from class

21. Mutual Fund Mutual Fund Mutual Fund Mutual Fund Mutual Fund Valuation Hub Pooled assets Mutual Fund Mutual Fund Mutual Fund Mutual Fund Mutual Fund State Street Bank Case • Business process patent • Both State Street and Signature Work as custodians for mutual funds • Mutual funds pooled into larger groups to save administrative costs and enable daily valuations • Complex process to do so – getting values and then distributing those values back to the spokes • Relies heavily on math formulas as well as process • State Street sought license from Signature and sued for declaratory judgment of patent invalidity when talks broke down

22. State Street Bank – Legal Issues • Can you patent a business process? • Yes – since this case • Can you patent a math algorithm? • Sort of – no if it’s pure math, but yes if it’s a “process employing a law of nature, natural phenomenon, or abstract idea”… that produces a “useful, concrete and tangible result” • Why not allow patents on math itself?

23. More on Business Process Patents • Patent for Janitorial Services • Show patent • Illustrations

25. Change in Direction for Business Process Patents? Bilski v. Doll –on business method of hedging. Ruled June 28, 2010 • Sarcastic Comments About Business Process patents. • Justice Roberts comment: “I buy low and sell high – that’s my patent for maximizing wealth.” • speed dating – Sonia Sotomayor • Great method to teach antitrust – Breyer • IBM Comment – it is the leader in business process patents – it thinks they should be reduced. • New Standard. Business process patent ok if – if (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing (could be okay otherwise as well). State Street Bank standard of “a useful, concrete, and tangible result” is no longer adequate.

26. Group Presentation: Groups 1 and 2 • Diamond v. Chakrabarty, 447 U.S. 303 (1980)) • Chakrabarty created a new bacterium • “Judged in this light, respondent’s micro-organism plainly qualifies as patentable subject matter. His claim is not a hitherto unknown natural phenomenon, but to a non-naturally occurring manufacture or composition of matter – a product of human ingenuity “giving a distinctive name, character [and] use.” … [T]he patentee has produced a new bacterium with markedly different characteristics from any found in nature and one having the potential for significant utility. His discovery is not nature’s handiwork, but his own; accordingly it is patentable subject matter under §101.”

27. Ownership of Patent • Ownership of patent – employee versus employer • Shop rights • Invention assignment agreements • IBM, Sony, Pitney Bowes, and Nokia announce patent sharing plan. Will not assert patents against anyone who is “using them in an environmentally friendly way.” • IBM is donating….”one for recyclable protective-packaging material for delicate electronic parts. Unlike commonly used foam peanuts, the material can be recycled in the same waste stream as the cardboard box that contains it.”

28. 97% of Patents Lose Money The U.S. Patent & Trademark Office estimates that only 3% of the patents issued by the Patent Office actually make more money than it cost to get the patent . Source: PatentCafe.com 2007 Cost of a Patent Filing • Timing. Generally all fees are not due up front because Patent Office backlogged – generally sits first 18 months. This will allow some budgeting and planning. • Filing fee - $165 for small inventor ($330 for a large inventor) plus a search fee of $270 ($540) and an Examination fee of $110 ($220). Total of $545.* • Issue Fee – an additional $755 ($1,510) • Multiple Filings. Often the patent office will award some claims and not others – you may decide to issue those patents, thus the issue fee, and continue to pursue the other claims – thus more filing fees. • Drawing Fee. You need drawings, generally $100 plus per drawing. • Attorney Fees. National average $250-275 per hour. Attorney will generally do a patent search for around $300. Next step is a patentability opinion which would cost around $1,000 on the low end. • More. Plus more fees for a variety of items. The fees are actually quite a bit more complicated as this slide sticks to the basics. *2009 Numbers

29. Average Cost of Patent Process Source: Quinn, The Cost of Obtaining a Patent, IPWatchdog.com (July 26, 2007)

30. Patent Invalidation/Infringement • Directly infringe • Induce another to infringe • Actual infringement by a third-party is a necessary element • Sales literature, etc. to get another to infringe • Contributory infringe • Sell a key element of patented product, that has no use except as a component of a patented product • Action contributes to another’s direct infringement • Manufactures or sells components to be assembled abroad • Imports, sells or offers to sell or uses a product made abroad through patented processes • Note: retailers are potentially liable but not liable if an adequate remedy against the primary manufacturer • Attorneys Fees. The winning party to recover legal fees from the losing party in exceptional cases like intentional infringement. • Treble Damages. The court may award treble damages if the defendant willfully infringed or acted in bad faith. 2009 update Proctor and Gamble sold Folders (to Smucker’s) and settled

31. Inducement to Infringe • Inducement. Assist a person to infringe • Contributory. Sells a material component. • Snuba International v. Dolphin World, Inc.

32. Defenses to Patent Infringement • Invention not novel, non-obvious and useful • Not novel, non-obvious and ornamental for a design patent • Patent misuse. • Antitrust – more than patent was meant to do • Inequitable conduct. • Experimental use defense • Not a defense – patent not used (ok to sit on invention) Shox Question 1, p. 421. LG Electronics licenses use its patent to Intel for Intel to make computer chips. Quanta Computer bought Intel chip and LG wants Quanta to pay patent royalty. Quanta argues LG cannot collect patent fees twice – what else would you use an Intel computer chip for? Nike sues Wal-Mart “shoes having designs that are covered by the Nike design patents” Shox brand.

33. NTP v. RIM • Patent for push email technology • Settled for $600 million • 3 million users shut down Ebay v. MercExchange Supreme Court Case - 2006 Injunction – not using the patent and license it to others Based on four factors when an injunction usually issues From ebay Patent Damages

34. Patent Damages Continued • Injunction • Monetary • Lost profits • Reasonable royalty • Attorney’s fees (sometimes) • Treble damages – if willful or reckless • Personal Liability. Corporate officers and managers can be held personally liable. Famous Music Corp v Bay State Harness Horse Racing & Breeding Assoc, 423 f. Supp. 341 (1977) Similar Case: Amazon patented “single action” or one-click purchasing over the internet. BN started “express lane” doing basically the same thing.

35. Sony PlayStation Hit With $90 Million Judgment. Japanese Company, Sony, hit with $90.7 million judgment to pay patent holder of tactile feedback feature. Sony used the feature on its PlayStation consoles – Dual Shock controllers. Copy of iphone –”minione” Patent Infringement – CHINA • Easy ways to clone: • Ghost shift • Shadow factory • Read patents – hire “20 to 40 engineers to reverse engineer” • Often not the same • Cheaper materials • crash tests on copied cars performed much worse than original • Chinese government slow to enforce. May 29, 2007, Zheng Xiaoyu sentenced to death for accepting bribes. The bribes were given in part to secure approval of a counterfeit drug antibiotic that later killed 10 people. CHERY CHEVY Source: Popular Science, Sept. 2007

36. Q: Is it worth it to get a patent in China? A: The big risk – if another company gets a patent International Patent Issues • Worldwide Patent Protection • Each country has its own laws • Paris Convention – 160 countries • National treatment to foreign patents • Patent Cooperation Treaty • 108 members - Cheaper than dealing with each country individually • Novartis Article • Facts. Novartis gave up patent fight in India for its drug Gleevec • Issue. India is not as supportive of patent laws • “Brazil, Russia, India, China and Turkey could account for half Novartis’s revenue growth in the next five years "Big pharma in rich countries is slowing” • Poor countries cannot afford the medicine – thus relying on growing economies • Newly industrializing countries are also more interested in protecting patents as their companies begin developing unique drugs and solutions • Law. India now allows patents on drugs developed after 1995 • Comment. Inventors, at least in the pharmaceutical industry, need to be conscious of foreign patent rules

37. International Issues Continued • New India Law. • 1970 law allowed Indians to reverse engineer drugs to promote better publish health (e.g. aids drugs for $200/year v. $10,000/year in U.S. – ½ of aids drugs come from India) • Now must wait 3 years and pay reasonable royalty to patent holder (4%? Is that reasonable? 45% - what German company wants?) • Difference between U.S. law and other countries(U.S. used to patent for 17 years – now 20 to “harmonize” with Europe.

38. Patent Reform Act of 2007 Did Not Pass • First to file • Easier to challenge patents • Tighter damages laws Patent Reform, Necessary? • Proposed reform: • Lawsuits Tripled. Between 1991 and 2004 lawsuits tripled. Prior to 1990 only one judgment exceeded 100 million, now more than 10 and one topped $1.5 billion. • Loosely Defined Patents. • Company broadly claims patent for making calls over the internet • Another stakes a claim for video streaming – suing universities for distance learning • Create Action for Economic Harm. The reform would allow a party to challenge a patent in the patent office based on economic harm. • Create New Damages Standard. Currently if patent on the windshield wiper, the patent holder can seek damages based on the price of the car.