This Week’s Twitter Posts October 26, 2012

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This Week’s Twitter Posts October 19, 2012

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This Week’s Twitter Posts October 13, 2012

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A response to Professor Lemley’s Paper on Functional Claiming to Limit Software Patents

Professor Lemley has posted a paper suggesting that if we more strictly enforced 35 USC 112(f), the interpretation of means for language, then much of the problem with software patents would be eliminated.

His paper can be found here:  Software patents and the return of functional claiming.

His basic argument is that most software claims are means-for claims, because they use the phrasing “a computer system programmed to.”  Means-for claims are construed to only “cover the corresponding structure, material or acts described in the specification and equivalents thereof.”  The courts have interpreted means-for equivalents narrowly.  Professor Lemley hopes to require the inclusion of algorithm/code/pseudocode in the Specification, and have the claim scope be limited to that code, and its equivalents.

Of course, this would likely invalidate most existing software patents which do not include algorithms.  It would also lead to an immediate change in claim formats, to avoid the language which was interpreted to trigger the “means for” type analysis.  In this, Professor Lemley appears to take a “magic language” based approach to a problem that is not the result of poor language choices.  The primary problems with software patents are lack of rigorous prior art searching and the incredible expense of responding to even an unreasonable lawsuit. Even if Professor Lemley’s interpretation were adopted by the courts, it would be a stopgap measure, until patent owners could rephrase their claims to once again avoid limiting the claims to the specific structures/algorithms described in the Specification.

Greg Aharonian, a perennial critic of the patent system, does not agree with Professor Lemley’s thesis, and takes apart his argument in some detail.  He has given me permission to post his response here. Be aware, he uses quite colorful language.

Continue reading “A response to Professor Lemley’s Paper on Functional Claiming to Limit Software Patents”

Patent License, Signed prior to Litigation, Cannot Prohibit Challenge of Patent Validity

The Second Circuit said, RATES TECHNOLOGY INC v. SPEAKEASY INC and others,  Tuesday that patent licensing agreements reached before litigation cannot be used to bar a licensee from later challenging the validity of a patent, even if the deal is called a legal settlement.  The court held that such an agreement, signed after accusations of infringement but before litigation, is void for public policy reasons under the Supreme Court’s decision in Lear, Inc. v. Adkins, 395 U.S. 653 (1969).

Rates Technology Inc. (RTI) notified Speakeasy that it believed Speakeasy was infringing its patents and offered to release Speakeasy from liability in exchange for a one-time payment.  It used a standard tiered pricing structure based on the size of the accused infringer measured by its annual sales.  RTI and Speakeasy entered into a Covenant Not to Sue, with a one-time payment of $475,000.  In addition to acknowledging the validity of the patents in question, and agreeing not to challenge their validity, the Convenant also included a liquidated damages clause, which said that Speakeasy would pay $12M if they assisted in any such challenge.

Subsequently, Speakeasy, then owned by Best Buy, was somehow affiliated with Covad.  When RTI asked Covad to license those same patents, Covad filed a Declaratory Judgment action.  RTI countersued, for violation of the Convenant not to Sue based on an allegation that Speakeasy and Best Buy assisted Covad in filing the DJ action.

The court noted that consent decrees, agreed to after the commencement of litigation, would estop future challenges to a patent’s validity.  Furthermore, they approvingly cite Flex–Foot, Inc. v. CRP in which the Federal Circuit held that a settlement, even without the entry of a consent decree, would likely not violate public policy.

Weighing for not holding the clause enforceable was that “neither side filed a lawsuit, and thus Speakeasy never had the opportunity to conduct discovery regarding the validity of RTI’s patent.”  The court noted that this meant that the defendant did not have a full opportunity to assess the validity of the patent, and there is no evidence that they had a genuine dispute.

As RTI argued, this may lead to more “sham litigation” in which a patent holding company files a lawsuit, prior to allowing a consent decree/settlement agreement, to ensure that its questionable patents’ validity not be challenged.  Given the enormous cost of patent litigation, defendants will have the incentive to settle, with a consent decree, to avoid the costs of litigation.  Whether or not a settlement filed prior to discovery will be sufficient to block later validity challenges remains an open question.





Information Disclosure Statement Submission After Issue Fee Payment (USPTO Pilot Project)

In an attempt to make the late submission of IDSes less costly, the Patent Office is instituting a pilot program to extend the ability to submit an Information Disclosure Statement under 37 C.F.R. 1.97(d) to after the payment of the issue fee.  The pilot program starts on Wednesday, March 16, 2012, and is slated to end September 30, 2012.  However, the process is somewhat complex, and unlikely to be much used.

The Patent Office issued a Press Release, and published the Federal Register Notice that includes all the rules.

Submission of such an IDS will require:

1.  New transmittal form PTO/SB/09 which will be made available as a PTO form. (currently not there, I will update the link when it is added)

2.  IDS including IDS submission fee ($180)

3.  Declaration under 1.97(e)(1) or (2) that:

    • That each item of information contained in the information disclosure statement was first cited in any communication from a foreign patent office in a counterpart foreign application not more than three months prior to the filing of the information disclosure statement; or
    • That no item of information contained in the information disclosure statement was cited in a communication from a foreign patent office in a counterpart foreign application, and, to the knowledge of the person signing the certification after making reasonable inquiry, no item of information contained in the information disclosure statement was known to any individual designated in § 1.56(c) more than three months prior to the filing of the information disclosure statement.

4.  A Petition to Withdraw from issue after payment of issue under 37 CFR 1.313(c)(2), including fee ($130)

5.  A Request for Continued Examination (RCE) form, including fee ($930/$465)

The Examiner will, upon review of the IDS, determine whether prosecution needs to be reopened.  If so, the RCE will be entered, and prosecution will be reopened.  However, the IDS fee will not be refunded.

If the Examiner determines that the IDS does not raise new issues, the Examiner will issue a Corrected Notice of Allowability, indicating that the IDS has been considered.  The RCE fee will be refunded.  There will be no need to respond to the corrected Notice of Allowability, the case will automatically progress to issue.

So the new policy effectively requires exactly the same process as you would use now, upon receiving a late reference, except that the Patent Office will treat the RCE request as conditional, and will refund the RCE fee if they determine that the references do not raise new issues.

As a general policy, we do not recommend the use of declarations under 1.97(e)(2) because it requires “reasonable inquiry” that no one associated with the case was aware of any of the references.  There is a real risk that someone, maybe an inventor who is no longer with the assignee, was aware of a reference.  However, a declaration under 1.97(e)(1) only requires is a reference from a foreign patent office in a computerpart foreign application.  Unfortunately, that does not include related patent applications, whether U.S. or foreign, only references from  foreign counterpart applications.

There are two potential advantages to this procedure.  First, there is the savings of the RCE fee, a savings of between $750 and $285, since the IDS fee is now required).  Second, any such submission will be placed on the examiner’s “expedited” stack. Currently the wait for RCE responses has been increasing drastically, due to the pressure on Examiners to reduce wait time for the first office action.  Thus, being on the expedited stack may be a significant time advantage.  Despite these advantages I don’t think this procedure will significantly change existing practice, or help with the excessive RCEs.

Impact of USPTO Proposed Fee Increases

The USPTO’s published fee increase proposal is going to have an impact on every patent department in every company. You can find the Patent Office’s discussion and a PDF with the fee increases on the AIA microsite.  While some fees are untouched, and a few are even reduced, many fees are significantly increased.

Some of the major fee increases:

USPTO Patent Fee Change Table
USPTO Patent Fee Change Table


Many fees are increased by a small amount, those are not listed in the above table.  The only noticeable fee reduction is for issue fees.  If an application is publishes, the issue fee will be reduced by 50% compared to an issue fee for a non-published application.  While publication will still cost $300, the savings of $1,080 on the issue fee is not insignificant.  However, this change is not scheduled to start until January 1, 2014, almost a full year after the new fee increases become effective.

The increases in the filing fees, RCEs, and maintenance fees are going to have a large impact on patent budgets.  If you budget for prosecution and maintenance fees separately, and I recommend you do, increase your estimates for both, starting in February of 2013.  Since many companies set their budgets annually, make sure your next budget cycle includes the likely increases in patent costs.

For prosecution costs, if you work with an outside firm most of the cost is attorney fees.  I would estimate that this fee increase will lead to an increase of overall costs by approximately 15% across the board.  Of course, if you are handling prosecution in-house, you should be increasing your budget for PTO fees by at least 60%, given the inflation of filing, RCE, and appeals fees.

More significantly, you will need to increase your budget for maintenance fees.  If your portfolio is evenly distributed in terms of status, then you should increase your overall maintenance fee  budget by ~50%.  If your portfolio is younger, with most of your issued patents at the first or second maintenance fee stage, increase your maintenance fee budget by ~35%.  If your portfolio is older, more heavily weighted toward patents in their final maintenance fee stage, you will need to increase your budget by 60%.  For an evenly distributed portfolio of 100 issued patents, the additional cost would be ~$45,500, raising the annual maintenance fee budget from ~$96,700 to ~$142,200.

While the Patent Office has not finalized these fees, I attended the public hearing and there appeared to be little interest in discussing changing these fees, or acknowledging their likely impact on innovation.

America Invents Act: Summary of Sections & Effective Times

The America Invents Act is going to be changing many aspects of patent prosecution and litigation.  I have divided it into four segments, patent strategy, patent prosecution, post-issue owner’s rights, and post-issue third party rights.  Each change to the patent law will impact one or more areas.

These changes have been partially implemented, in September of last year.  Another large group of changes will be coming in September of this year.  The fee changes proposed by the Patent Office, which appear to be non-negotiable despite the many hearings held, are going to be implemented in February of next year.  I will make a longer post about the fee changes, and their impact later.  And finally, in March of 2013, the First to File or Disclose rules, and the associated other rules, will be coming into play.  As you can see, the September 2012 changes will mostly impact third parties, starting the post-grant opposition, and other changes.

This graph is a summary of the changes, their timing and the segments which they primarily impact.

State of the Net West Series for 2012: Technology Town Hall Roundtable with Congressman Mike Honda

There were a lot of themes touched upon in this discussion.  I would consider it three separate discussions, that got rolled into a single roundtable.  There were short discussions on STEM education including inclusiveness, immigration reform (including HB1, DREAM Act, and other aspects), and Internet regulation (including self-regulation, SOPA, and other laws being introduced).  The participants where:

  • Eric Goldman, Professor at Santa Clara University School of Law (@ericgoldman)
  • Congressman Mike Honda (@RepMikeHonda)
  • Dana Ditmore, Oak Valley Consulting and an advocate of STEM education
  • Tim Lordan, Executive Director Internet Education Foundation / Congressional Internet Caucus Advisory Committee (@tlordan)

STEM Education

Rep. Honda noted that STEM education should be starting earlier, e.g. in pre-K.

We are deteriorating internally, and are defeating ourself, per Rep. Honda.  We need to understand that we have to invest in this country.  Should states have the sole responsibility for education?  The Constitution does not exclude the federal government’s involvement in education.  We should have more national involvement.  The only things kids have, their only currency, is time.  It’s not something we can bank.  We need to use it wisely.  Policy makers need to understand why poor schools exist, and why we re-segregated.

Talk in policy language.  Not “all children deserve equal rights and equal opportunity,” but “each child deserves a quality education.”  Use the children’s time well.

Solving this problem is expensive, but mediocrity is not an option.  If someone imposed this level of mediocrity on us, we would consider it an act of war.  We need to invest in it, as if were a real conflict.  If all children can learn, then children in Beverly Hills and Appalachia should have the same educational opportunity.  The bumper sticker says “what is the price of ignorance.”  We see it every year, and in every legislation.

A question on the “war on science” was asked, and Rep. Honda responded that the only way to fix such systemic problem is to change the policy makers.  Also, provide education to those folks who are putting policy makers in place, to see the longterm harm to their children, and children’s children.  We don’t have a national policy to drive science and education.  We appear to have a lot of self-interest, and we forgot about our responsibility to the whole community, and the whole world.


Rep. Honda notes that we are handling immigration piecemeal, and focused on our borders.  We should instead make a comprehensive plan, addressing existing legal and illegal immigrants in the country, as well as the border.  The Congressman supported the DREAM Act, making HB1 more effective and efficient, and family reunification.

Rep. Honda called HB1, as it exist a “high tech coolie” system in which the high regulations, and the amount of power provided to the sponsor, and lack of mobility.  Dana Ditmore, of Oakvalley Consulting, a STEM education advocate, noted that we do have a single comp structure, and that Silicon Valley is driven in part by immigrant talent.  Rep. Honda noted that he does support HB1 visas, but would prefer to address it in comprehensive reform, with additional freedom for the immigrant.

Rep. Honda also noted that he was a sponsor of the DREAM Act.  With respect to the family reunification, Rep. Honda noted that he supported family reunification including same sex families.

SOPA, DMCA, and Internet Regulation

Rep. Honda notes that Congress doesn’t understand technology, or how the Internet works.  He agrees with a constituent who noted that the job of regulation and Congress in this matter is to “stay out of our way.”

Rep. Honda opposed SOPA, and in fact blacked out his own website during the protests.

Professor Goldman noted that for the first time content owners lost a fight, when SOPA was tabled by Congress.  But Rep. Honda noted early on that attempts to control the Internet will not stop.  We need to stay vigilant.

Professor Goldman further noted that the content owners are now going to anywhere but Congress.  They are going to the courts, to industry self-regulation, and to prosecutors.  The risk of self-regulation, and going outside of the legislative process, is that there is no transparency into the process, no due process.  Tim Lordan noted that there is now an Advisory Board for the industry self-regulation, which will likely provide a check on that.  Professor Goldman responded that while the Advisory Board is a good step, it has no power, and we cannot rely on the Board to keep content owners in check.


Avvo and The Attorney

There are numerous attorney rating services out there, ranging from the peer ratings of Martindale-Hubbell, the answer-based ratings of LinkedIn, to the “neutral” ratings provided by services such as Avvo.

Avvo claims on its website that “It’s unbiased. Because ratings are calculated using a mathematical model, all lawyers are rated by the same standards.”

Multiple lawsuits have attempted to challenge Avvo ratings. The latest, Davis v. Avvo, 2:11-cv-01571-RSM (W.D. Wash. March 28, 2012) has been dismissed as Strategic Litigation Against Public Participation (SLAPP), and the attorney has been ordered to pay Avvo’s attorney fees as well as an additional $10K punitive damages, as described on the Technology & Marketing Law Blog.  You can find numerous other examples of Avvo’s lawsuit history on that same blog.

So, suing Avvo is a bad plan. But is Avvo truly neutral?  It is highly doubtful.

An easy example of this is my profile. When I first became aware of the service I looked myself up, and found that I was rated at 2 ½ stars for experience. A quick glance showed that another attorney at my firm, who started at the same time and had identical career path to mine, had 3 ½ stars for experience. Given that the “experience” rating depends, per Avvo entirely on “a lawyer’s years in practice” I found this surprising. When I contacted Avvo, via email, my rating was quickly updated. I now have four stars of experience, which apparently corresponds to my 15-years of practice as a patent attorney.

However, when I look at their “recommended” attorney (which appears directly next to my listing, and is someone who has paid for their listing), it appears that a Stuart James West, who graduated law school in 1998 and was admitted to practice in California in 1999 has 5 stars of experience.

Even more surprisingly, Kirupa Pushparaj, who graduated law school in 2007 and was admitted to the bar in 2008, apparently has a 5 star experience rating.

I would be very curious to have Avvo explain these discrepancies. In the meantime, I recommend ignoring Avvo ratings entirely.