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Intellectual Property Roundup: The Latest IP Policy & Enforcement News

September 18, 2013 By

Enforcement News

Kim Dotcom’s Mega-Lawsuit Could Make Him a Multi-Millionaire Again (Wired)
MegaUpload founder Kim Dotcom filed a seven-figure lawsuit against the New Zealand government over the 2012 raid on his mansion, and the electronic spying that preceded it.

Aereo Claims DC Injunction Doesn’t Affect It (GigaOM)
Broadcasters and upstart streaming TV service Aereo are skirmishing in Boston over whether an injunction issued in DC against another streaming service should affect Aereo. Aereo claims the two companies’ technology are not the same, and that the DC ruling misunderstands copyright law.

Fashion Designers Look to Patents to Fight Knockoffs (Reuters)
Because U.S. copyright and trademark laws often do not apply to new, logo-free designs, fashion designers are applying for design patents — patents that protect the way something looks — to protect clothing and other accessories from being targets for knock-offs.

MPAA Report Says Google, Other Search Engines a Major Gateway to Piracy (Los Angeles Times)
A study released by the Motion Picture Association of America alleges that search engines are making it too easy for consumers to find pirated content online, even when they’re not looking for it. The MPAA says it found no evidence that the change Google made to its algorithm last year to take into account the number of copyright takedown notices a site has received affected search-referred traffic to illegal sites.

IP Policy News

Senate Judiciary Chairman Crafting Bill to Combat ‘Patent Trolls’ (The Hill)
Senate Judiciary Committee Chairman Patrick Leahy plans to introduce legislation in the coming weeks to limit frivolous patent lawsuits.

Expanded Anti-Piracy Bill Hits Russian Parliament (RIA Novosti)
A new bill allowing for websites to be blocked if they contain any copyright-infringing content was introduced in the Russian parliament, expanding an earlier law against film piracy that was met with considerable public outcry.

Keith Kupferschmid is General Counsel and SVP, Intellectual Property Policy & Enforcement at SIIA. Follow Keith on Twitter at @keithkup and sign up for the Intellectual Property Roundup weekly newsletter here.

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Intellectual Property Roundup

August 28, 2013 By

Government Study Calls For Tougher Patent Reviews (The Hill)
The Government Accountability Office (GAO) released a report recommending the U.S. Patent and Trademark Office should do more to ensure that unclear and overly broad patent applications are rejected.

Harvard Law Professor Lessig Sues Record Company, Claims Copyright Threat Violated Law (ABA Journal)
A Harvard law professor who is an expert on copyright issues decided to sue after an Australian record company accused him of infringement by using a French band’s song in a lecture posted on YouTube.

Apple is the Patent Trolls’ No. 1 Target, With 171 Suits Since 2009 (Fortune)
Of all the companies sued over the past five years by so-called non-practicing entities, or “patent trolls,” Apple got hit the most, with 171 patent lawsuits as of June 2013.

Microsoft Sues Israeli Businesses For Copyright Infringement (Globes)
Microsoft has filed lawsuits against five Israeli businesses for copyright infringement on the sale of computers with unlicensed Windows operating systems and unlicensed Office programs.

Keith Kupferschmid is General Counsel and SVP, Intellectual Property Policy & Enforcement at SIIA. Follow Keith on Twitter at @keithkup and sign up for the Intellectual Property Roundup weekly newsletter here.

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It is Time to Let 1,000 Flowers Bloom on Patent Trolls

May 21, 2013 By

On Sunday, an article in the Washington Post suggested that the Supreme Court’s decision in the Monsanto patent infringement case “creates the theoretical possibility of biotech “patent trolls” who sue farmers for accidentally planting infringing seeds.”  It appears that the author may have been confusing the present patent troll problem with a patent mole problem because the theoretical fallout faced by the biotech industry from the Monsanto case seems to have little or nothing in common with the very real patent troll problem technology industry and their customers–including retailers, supermarkets, and financial service companies–have been facing for quite some time now.

The patent troll problem was addressed to some extent back in September 2011 when the Leahy-Smith America Invents Act (AIA) was passed.  But even then, we all knew that the AIA only addressed part of the problem and that it was just a matter of time before Congress would need to re-visit the issue and consider new legislative initiatives aimed at addressing the continuing patent troll problem.  That time has arrived.

In the near future we expect that leaders in the relevant House and Senate Committees will release draft bills that will begin the process of more formally discussing how best to combat the patent troll plague.  But this time around, the discussions aren’t just about how these trolls are adversely affecting the software, hardware and other technology industries.  Ordinary end-users–like your neighborhood supermarket–have become part of the conversation as the take-no-prisoners approach of patent trolls has expanded to suing the customers of high tech companies.  Legislation is needed to ensure that companies are able to voluntarily intervene in cases where their customers are sued.

This new tactic of suing the users of patented technology rather than the manufacturers  represents just one of a litany of patent troll-related problems that needs to be addressed.  It is our view that any legislation in this space must include proposals that help combat the patent troll problem at both the litigation and the pre-litigation stage.  These proposals may include legislation to address:

  • The asymmetry in patent discovery
  • The problem of identifying the real-party-in-interest during litigation – and even more importantly during prosecution of the patent application as well as any grant or conveyance of the patent
  • The awarding of court costs and attorneys’ fees in patent cases in a manner that will effectively impede a troll’s ability to bring unwarranted infringement suits.  The first step in ensuring such effectiveness is inclusion of a bond requirement that prevents a patent troll from circumventing an attorneys’ fee award by setting themselves up to be judgment proof
  • The need for heightened pleading requirements with enough specificity regarding the product(s) and/or feature(s) that satisfy the claim limitations

These are just a few of the concepts that need to be fully aired and discussed.   We would like to see other concepts on the table – concepts relating to damages, willfulness and venue  – which in our view still need to be addressed.  But whatever measures are considered, they need to be effective. It is  essential that those proposals  are considered, and move forward–not watered down.

At this early stage of the discussions we see no reason to restrict the dialogue to consideration of a few proposals.  Instead, we favor the “let a thousand flowers bloom” approach – so long as those flowers don’t come from Monsanto seeds.

Keith Kupferschmid is General Counsel and SVP, Intellectual Property Policy & Enforcement at SIIA.

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SIIA Applauds Congressional Commitment to Fight Patent Trolls; Calls for Congressional Action to End Abusive Litigation

March 14, 2013 By

SIIA today applauded the House Judiciary Committee for addressing the pressing problem of abusive patent litigation. SIIA member companies Adobe Systems, Inc. and SAS Institute Inc. will testify at today’s hearing, held by the Subcommittee on Courts, Intellectual Property and the Internet.

Without federal action, patent trolls will continue to damage the economy, hurt America’s tech industry and threaten innovation. Today’s hearing is important for drawing attention to the harmful effects of patent trolls.  We are hopeful that policymakers will work together to enact sensible changes – such as the SHIELD Act – that will help curb to abusive patent troll litigation.  Through this and other proposals, such as efforts to shift the burden of costs when one party is seeking discovery that goes well beyond what is necessary, SIIA is committed to working with Congress and the Administration to find effective solutions to the problem.

The one thing that is clear is that patent trolls are doing real and significant damage to American businesses.   Abusive lawsuits brought by patent trolls have cost the U.S. economy $500 billion over the last 20 years, and the annual costs of these patent assertions have increased 500 percent since 2005 to more than $29 billion each year.  That’s money that would be far better spent on efforts to hire more tech workers, advance American research and development efforts or invest in new technologies.

View Adobe and SAS’s testimony.

Ken WaschKen Wasch is President of SIIA. Follow the SIIA Policy team on Twitter at @SIIAPolicy.

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Obama on Patent Reform: We’re Not Done Yet, Patent Trolls Need to be Reined In

February 15, 2013 By

SIIA thanks President Obama for taking on patent trolls in yesterday’s Google+ Hangout. Obama said that patent reform was only a partial fix to the patent troll problem, and argued that more needs to be done to stop these abusive patent lawsuits. He said:

“[Patent trolls] don’t actually produce anything themselves. They’re just trying to essentially leverage and hijack somebody else’s idea and see if they can extort some money out of them.”

Though the passage of the America Invents Act in 2011 was an effective first step in addressing the problem of abusive patent litigation by trolls, we agree with Obama that more must be done. Patent trolls continue to damage the economy, hurt America’s tech industry, and threaten innovation. Obama continued:

“There’s a delicate balance between protecting intellectual property and making sure people aren’t ruined financially by patent trolls. What we need to do is pull together additional stakeholders and see if we can build some additional consensus on smarter patent laws.”

In December, SIIA joined with several other trade associations in issuing a call for action against abusive patent lawsuits, in a letter to the Congressional leaders who led the passage of patent reform in 2011. We welcome any opportunity to build consensus on this vital issue.

Watch the full Hangout:

Laura Greenback is Communications Director at SIIA. Follow the SIIA Public Policy team at @SIIAPolicy.

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DOJ/FTC Workshop Will Help Create Momentum to Curtail ‘Patent Trolls’

December 10, 2012 By

SIIA applauds the Federal Trade Commission (FTC) and Department of Justice (DOJ) for their Joint Workshop on Patent Assertion Entity Activities (PAE). SIIA says today’s event is important for drawing attention to the economic and consumer harm caused by abusive patent lawsuits.

FTC Chairman Leibowitz made it clear that he fully understands the damaging effect of PAE’s and is concerned with their impact on competition and American innovation. The Chairman went so far as to say that we may be driving off a patent cliff that could stifle intellectual property innovation and competition. We share the ‘patent cliff’ concern and applaud Chairman Liebowitz for making such a strong statement about the significance of the problem.

SIIA has been a leading advocate for patent reform, and we believe a vital step forward was made in 2011 with the America Invents Act. But the fact is, patent trolls continue to damage the economy, hurt America’s tech industry and threaten innovation. Today’s workshop is important for drawing attention to the problem and we encourage the FTC and DOJ to continue to spotlight the harmful effects of patent trolls. We are hopeful that, coming out of the workshop, all parties – including the FTC, DOJ and Congress – will work together for sensible changes that allow America’s technology industry to thrive.

Keith Kupferschmid is General Counsel and SVP, Intellectual Property Policy & Enforcement at SIIA.

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China’s Utility Model Patent System: A Perfect Storm for Patent Trolls

September 20, 2012 By

In testimony at today’s House Subcommittee on Intellectual Property hearing on international intellectual property enforcement, Victoria Espinel, the US Intellectual Property Enforcement Coordinator, made reference to “unexamined utility model patents” as a problem in the Chinese patent system.

Chairman Bob Goodlatte also raised the issue in his opening statement, noting that it is “problematic” when “a country grants many low-quality or “junk” patents to local companies, so that they can sue American companies and get rich quick. Many of these are utility model patents that go through minimal review and lack real inventiveness.”

It is good news that the Administration and the Congress are focusing on this. A recent Washington Post story highlights the problem.  It looks as if China is about to recreate the patent troll problem we are struggling with here in the United States.  The Post story puts the problem this way: “ Small companies that take on bigger firms in questionable patent cases have become known here as “patent cockroaches,” a play off the U.S. term “patent trolls,” used to describe companies that make money primarily by hoarding flimsy patents and suing others.”

A recent report from Thompson Reuters describes how this lesser-known part of China’s patent system works. It is intended to apply to incremental improvements that change the shape or structure of an object.  It is typically used for electronic or communication devices but software implemented inventions have also been issued as utility model patents.

The problem is that it is too easy, cheap and quick to get these patents.  As a result, they are often of low quality.  Despite this they carry with them the same arsenal of remedies as higher quality invention patents do, including substantial fines and even injunctions.

The threshold of inventiveness is lower for utility model patents.  As compared to prior art, an invention patent has “prominent substantive features and represents a notable progress;” while a utility model patent merely has “substantive features and represents progress.” As a result it is more difficult to invalidate a questionable utility model patent. And there is no mandatory examination upon filing an infringement action.

The utility models are issued without substantive examination typically in under 6 months (3 months is the target) Utility models are 20% cheaper than invention patents to obtain.

Because of these attractive features utility model patents are growing quickly.  Most of these are owned by Chinese individuals.

A few problematic cases have already surfaced. Several years ago, the French company Schneider lost a utility model suit in China, costing them a $23 million settlement. A patent infringement case was filed on July 30, 2012 involving a utility model against Apple by Mr. Lee of Taipei in Zhenjiang Immediate People’s Court.  The case involves Facetime.

The situation is ripe for abuse.  Since 2008, well-known non-practicing entities have begun to establish a presence in China. It is only a matter of time before the patent troll problem burst out there and by then it will be too late to prevent the damage these.

We know the extent of the problem here.  A recent study by Boston University faculty members James Besen and Michael Meurer suggest that the economic loss from patent trolls reached $29 billion in 2011. We don’t need to recreate this problem in the world’s second largest economy. The time is now to begin consultations with industry and other governments to investigate remedies to this potential problem.

Mark MacCarthy, Vice President, Public Policy at SIIA, directs SIIA’s public policy initiatives in the areas of intellectual property enforcement, information privacy, cybersecurity, cloud computing and the promotion of educational technology. Follow the SIIA Public Policy team on Twitter at @SIIAPolicy

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