White House Task Force Issues Recomendations on Patent Issues

Earlier this month, a white house created task force looking into Patents issued 7 legislative recommendations and 5 executive actions. The task force report can be found here. A good write up on the task force report can be found at the IPWATCHDOG blog.

The 7 legislative recommendations are listed below:

  • Require patentees and applicants to disclose the “Real Party-in-Interest”by requiring that any party sending demand letters, cheap filing an infringement suit or seeking PTO review of a patent to file updated ownership information, and enabling the PTO or district courts to impose sanctions for non-compliance.
  • Permit more discretion in awarding fees to prevailing parties in patent cases, providing district courts with more discretion to award attorney’s fees under 35 USC 285 as a sanction for abusive court filings (similar to the legal standard that applies in copyright infringement cases).
  • Expand the PTO’s transitional programfor covered business method patents to include a broader category of computer-enabled patents and permit a wider range of challengers to petition for review of issued patents before the Patent Trial and Appeals Board (PTAB).
  • Protect off-the-shelf use by consumers and businesses by providing them with better legal protection against liability for a product being used off-the-shelf and solely for its intended use. Also, stay judicial proceedings against such consumers when an infringement suit has also been brought against a vendor, retailer, or manufacturer.
  • Change the ITC standard for obtaining an injunctionto better align it with the traditional four-factor test ineBay Inc. v. MercExchange, to enhance consistency in the standards applied at the ITC and district courts.
  • Use demand letter transparency to help curb abusive suits,incentivizing public filing of demand letters in a way that makes them accessible and searchable to the public.
  • Ensure the ITC has adequate flexibility in hiring qualified Administrative Law Judges.

The 5 executive actions are listed below:

  • Making “Real Party-in-Interest” the New Default. Patent trolls often set up shell companies to hide their activities and enable their abusive litigation and extraction of settlements. This tactic prevents those facing litigation from knowing the full extent of the patents that their adversaries hold when negotiating settlements, or even knowing connections between multiple trolls. Today, the PTO will begin a rulemaking process to require patent applicants and owners to regularly update ownership information when they are involved in proceedings before the PTO, specifically designating the “ultimate parent entity” in control of the patent or application.
  • Tightening Functional Claiming. The AIA made important improvements to the examination process and overall patent quality, but stakeholders remain concerned about patents with overly broad claims — particularly in the context of software. The PTO will provide new targeted training to its examiners on scrutiny of functional claims and will, over the next six months develop strategies to improve claim clarity, such as by use of glossaries in patent specifications to assist examiners in the software field.
  • Empowering Downstream Users Patent trolls are increasingly targeting Main Street retailers, consumers and other end-users of products containing patented technology — for instance, for using point-of-sale software or a particular business method. End-users should not be subject to lawsuits for simply using a product as intended, and need an easier way to know their rights before entering into costly litigation or settlement. Today, the PTO is announcing new education and outreach materials, including an accessible, plain-English web site offering answers to common questions by those facing demands from a possible troll.
  • Expanding Dedicated Outreach and Study. Challenges to U.S. innovation using tools available in the patent space are particularly dynamic, and require both dedicated attention and meaningful data. Engagement with stakeholders — including patent holders, research institutions, consumer advocates, public interest groups, and the general public — is also an important part of our work moving forward. Roundtables and workshops that the PTO, DOJ, and FTC have held in 2012 have offered invaluable input to this process. Today, we are announcing an expansion of our outreach efforts, including six months of high-profile events across the country to develop new ideas and consensus around updates to patent policies and laws. We are also announcing an expansion of the PTO Edison Scholars Program, which will bring distinguished academic experts to the PTO to develop — and make available to the public — more robust data and research on the issues bearing on abusive litigation.
  • Strengthen Enforcement Process of Exclusion Orders. Once the U.S. International Trade Commission (ITC) finds a violation of Section 337 and issues an exclusion order barring the importation of infringing goods, Customs and Border Protection (CBP) and the ITC are responsible for determining whether imported articles fall within the scope of the exclusion order. Implementing these orders present unique challenges given these shared responsibilities and the complexity of making this determination, particularly in cases in which a technologically sophisticated product such as a smartphone has been successfully redesigned to not fall within the scope of the exclusion order. To address this concern, the U.S. Intellectual Property Enforcement Coordinator will launch an interagency review of existing procedures that CBP and the ITC use to evaluate the scope of exclusion orders and work to ensure the process and standards utilized during exclusion order enforcement activities are transparent, effective, and efficient.

Joint Patent Infringement Case moving towards Supreme Court Review

The case of Limelight Networks, Inc. v. Akamai Technologies, Inc., Docket Nos. 12-786 and 12-960 (Supreme Court 2013) will attempt to answer the question of “”Whether the Federal Circuit erred in holding that a defendant may be held liable for inducing patent infringement under 35 U.S.C. § 271(b) even though no one has committed direct infringement under § 271(a).”
Direct infringement means that one party has infringed at least one claim of a patent by performing each element in the claim. Joint infringement means that two or more parties, jointly, performed each element of the claim thereby leading to infringement. PatentlyO has a good discussion here.

End of Patent Trolls? Federal Trade Commission to look at Patent Trolls

The New York Times just posted an article about how the Federal Trade Commission will be looking into patent assertion entities (PAE) or patent trolls. The FTC chairwoman Mrs. Ramirez states in the article: ““We have a role to play in advancing a greater understanding of the impact of P.A.E. activity and using our enforcement authority where appropriate to curb anticompetitive and deceptive conduct.” This could be good news for thow who are being harassed by patent trolls The article is here.

Filing a provisional, then a PCT, then the US application?

Interesting post here at patentlyoblog . The main point is about 3% of all recently issued patents were first filed as a provisional patent application, then one year later, a PCT international applicaiton was filed, then 18 months after that (a total of 30 months from the original provisional filing date), the patent applications were filed in the US patent office (technically they entered the National Stage in the United States, among other countries). On drawback is that the USPTO will not put your patent application into a queue for examination until 30 months after your priority date, hence your issued patent will basically be delayed by 30 months. A positive aspect is that you will have “patent pending” status for at least 30 months in the US, plus whatever time it takes for the USPTO to examine your patent application (could be 12 months or more).
Delaying an examination in the US for over 30 months may be good if your business plan only requires you to have “patent pending” status for your invention, especially if you believe that your invention may have a slim change of actually issuing into a patent due to similar prior art.

Requirements for Micro-entity status, and 75% off of USPTO Patent Fees

The patentlyo blog has a nice write up on what is required for a person or entity to qualify for micro-entity status and the resultant 75% off of patent fees. In general, the applicant needs to answer the following:

  • Does the applicant qualify as a small entity? (If no, then no micro-entity);Has the applicant or any joint inventor filed more than four US non-provisional patent applications? (If yes, then no micro-entity, unless those applications were from a prior employment and assigned to the prior employer);
  • Did the applicant or any listed inventor have an income for the past year that was greater than $150,000? (If yes, then no micro-entity). This number will change annually based upon median US household income; and
  • Have rights in the application been promised or licensed to a non-micro-entity? (If yes, then no micro-entity).

Stamford Innovation Center

Last week I attended an Inventors Association of Connecticut meeting where the presenters were from the Stamford Innovation Center (SIC). The SIC provides an environment where entrepreneurs and early-stage startups can gather, collaborate, and innovate. According to Peter Propp, the SIC has powerful network of entrepreneurs, investors, mentors, and industry leaders, who can provide the resources, expertise, and talent an entrepreneur needs. Contact the SIC for more information.

Do you have a Scanner? You may be a patent infringer!

An article at ARS TECHNICA describes how small businesses are being targeted by non-practicing entities (aka Patent Trolls) for patent infringement if they own a scanner that has the capability of scanning a document, then emailing that scanned document to someone. Many new scanners, printers, all-in-one devices now have that capability, and these Patent Trolls are sending out demand letters to all sorts of businesses, including at least one in Connecticut. If you ignore the letter, however, you could be setting yourself up for a default judgement if the Patent Troll files a law suit! Please contact a patent attorney if you do receive such a letter from a Patent Troll.