The intermediary role of patent assertion entities

Back in December 2014, at Michelle Lee’s first confirmation hearing before the Senate Judiciary Committee,  Senator Mazie Hirono (D-HI) succinctly pointed out that “one person’s patent troll is another person trying to protect his or her patent.” Thus, as like so many issues in the law, the questions surrounding the so-called patent troll debate are not nearly as straightforward as you may have otherwise been lead to believe.

In order to bring some empirical rigor to the debate, Stephen Haber, a political scientist from Stanford University, recently published the results of a study he completed that explains exactly why so-called patent trolls play a vital role in the innovation ecosystem. He explains that patent assertion entities, who are the ones most often labeled as patent trolls, play a vital role as an intermediary. Essentially, Haber explained to me that when an intermediary ceases to provide value, the intermediary ceases to exist. Thus, the very fact that an intermediary does exist in the marketplace suggests some valuable role.

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USPTO embarks on patent quality initiative

“The innovation that is fostered by a strong patent system is a key driver of economic growth and job creation.” That is how the United States Patent and Trademark Office (USPTO) began the Federal Register Notice announcing the patent quality initiative back in early February 2015. While it may seem like the drive for patent quality is a brand new initiative at the USPTO, the truth is that Director Michelle Lee (pictured, left) has been talking about patent quality ever since she assumed the role of Deputy Director and de facto head of the Patent Office nearly 18 months ago.

On Wednesday and Thursday, March 25 and 26, the USPTO took the first public steps on the road to enhancing patent quality by hosting a Patent Quality Summit at the Office’s main campus in Alexandria, Virginia.

Leading up to the event, I spoke with Valencia Martin-Wallace, who was recently named to the newly created position of Deputy Commissioner for Patent Quality. I asked her about what the Office hoped to accomplish with the Summit.

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Professors Urge Congress to Ignore Flawed, Unreliable Data in Patent Debate

On March 10, 2015, 40 economists and law professors signed a letter explaining to Congress that the data that keeps being cited to justify HR 9, otherwise known as “the Innovation Act,” is “flawed, unreliable and incomplete.” The professors suggest Congress proceed cautiously, particularly given the numerous misleading and flawed studies that make “highly exaggerated claims regarding patent trolls.”

As the letter explains, one of the “studies” that is often cited as proof that patent trolls cost U.S. businesses $29 billion a year is pure fiction, has been debunked, and the authors of the study have retreated significantly from their clearly erroneous conclusions. I have explained this issue in detail, as have others.

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An interview with Microsoft’s Chief Patent Counsel

Micky Minhas (pictured left) is Chief Patent Counsel for Microsoft Corporation. He is also someone that I have known for more than 20 years. Like me, Minhas is a graduate of Franklin Pierce Law Center (now part of the University of New Hampshire). What follows are excerpts from my interview with Minhas, which took place on February 20, 2015. You can read the entire interview here.

Minhas on the current state of the law and why Microsoft has adopted the European technical standard as a safe harbor approach to drafting software patent applications:

MINHAS: I think we’re in a period of uncertainty where many participants in the field are wondering where that line on subject-matter eligibility is. I view this debate as a pendulum that had State Street on one end and now it is swinging or has already swung back to the other side with Alice. That depends on how you interpret and if you see any cohesion among all the cases that we’ve seen. So I think the patent practitioner community is in a somewhat uncertain place with respect to U.S. law. In terms of our patent cases – they have been written to satisfy various standards of patentability. A few years ago we ramped up our foreign filings and recognized that we’re writing this one document, this one patent application, for so many different audiences. We started settling in on the European technical standard as a guide for how to draft, how to cover the innovation from that vantage point, in order to try to write this document that would satisfy the USPTO as well as the EPO, Chinese Patent Office, the Japanese Patent Office, and so on. So for me, what this environment means as a practitioner has more to do with how the patent is drafted and how we capture the innovation, and not really a huge difference about what the underlying innovation is or how it’s implemented.

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Fee-Shifting Provisions Front and Center in Innovation Act

In April 2014, the United States Supreme Court addressed the issue of awarding attorney’s fees under 35 U.S.C. § 285 to successful litigants in a patent infringement proceeding. The decision in Octane Fitness, LLC v. ICON Health & Fitness, Inc., was the primary decision simply because that case was treated first by the Court and formed the basis of the Court’s decision in Highmark, Inc. v. Allcare Health Management System, Inc. Essentially, the Supreme Court in these two cases ruled that an appellate court should apply an abuse-of-discretion standard in reviewing all aspects of a district court’s § 285 determination. Those familiar with the abuse-of-discretion standard know that it is a difficult standard of review, which should mean that district courts will have far more latitude to handle attorney’s fee awards without meddling from the Federal Circuit.

After these decisions by the Supreme Court, patent reform died in the Senate after lopsided passage in the House. Politically, and procedurally, the problem for patent reform in 2014 wound up being that the Supreme Court mooted one of the leading drivers of this round of reform — fee-shifting. But that hasn’t stopped patent reform advocates from once again pushing the Innovation Act in 2015, which is identical to the Innovation Act from 2014 that died in the Senate.

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