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Biotechnology Law Report
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  • Archive for the ‘Patent’ Category

    It’s Christmas Eve: Internet systems at patent offices in U.S.A. and Australia have crashed. Just coincidence?

    "Lights Out: A Cyberattack ..." by Ted KoppelChristmas Eve 2015:  Why are the Internet services at the government patent offices in both the United States and Australia shut down right now?

    Did you heed last month’s book release by Ted Koppel: “Lights Out
    A Cyberattack, A Nation Unprepared, Surviving the Aftermath

    Remember my talk in July 2011: “Are you legally prepared for the coming cyberwar?

    Do the dots connect?

    –Gerry J. Elman

    Here’s the official announcement of the disaster at the U.S. Patent and Trademark Office, as posted December 24, 2015 on  home page of www.uspto.gov

    A major power outage at USPTO headquarters occurred Tuesday, December 22, resulting in damaged equipment that required the subsequent shutdown of many of our online and IT systems. This includes our filing, searching, and payment systems, as well as the systems our examiners across the country use. We are working diligently to assess the operational impact on all our systems and to determine how soon they can be safely brought back into service. Status updates and alternative filing methods can be found on our systems alert page (www.uspto.gov/blog/ebiz/) as they become available, as well as on our Facebook (www.facebook.com/uspto.gov) and Twitter (www.twitter.com/uspto) accounts.Thank you for your patience as we work to restore full service as soon as possible.

    And here is what “IP Australia,” the government patent office Down Under, is telling the public:

    eServices and Business to business (B2B) will be unavailable until Monday 4 January 2016.

    This outage is due to a system issue.

    We will enable the Alternate Lodgement Service (ALS) for eServices during this outage. The ALS is a simplified version of eServices that allows electronic submissions during outages and downtime. You will be automatically redirected to the ALS if you attempt to access eServices during the outage period. You will need to agree to new terms and conditions to use the ALS and you will not be required to sign in.

    We sincerely apologise for any inconvenience. If you require further information please email eservices@ipaustralia.gov.au.

    Don’t Let a Defective Provisional Sink Your Patent

    Invest the time and money in crafting a complete provisional patent application. It will be the foundation for a strong and enforceable patent. Avoid the pitfall of filing a “quick and dirty” provisional. Whatever you imagine you’ll save upfront will be wasted in the long run when the patent turns out to be worthless.

    Unfortunately, some companies and inventors have been taken in by the dangerous myth that a provisional U.S. patent application is but a first draft – that you can “just write something quickly and get it on file.” But in fact, a provisional application must describe the invention as completely as a non-provisional application. A “quick and dirty” description is likely to omit something essential. Instead of laying a foundation for a valid patent, the inventor could wind up with nothing.

    Congress created the provisional application in 1995, to give American inventors a simplified initial patent filing. A supposed benefit was that provisional applications needn’t include formal patent claims, presumably lowering the cost of preparing this preliminary application. Nevertheless, a provisional application is defective unless its written description adequately supports the claims of the non-provisional application that will issue as a patent.

    New Railhead Manufacturing learned this the hard way.  In 1996, their engineeringFig 4 label removed - Dont Let a Defective Provisional Sink Your Patentteam invented an improved bit to drill horizontally through solid rock. Before then, when a utility wanted to lay cables and pipes under a street, the entire street would be ripped open. With this tool, you could efficiently drill under the street without tearing up the pavement. In mid-1996, New Railhead began selling the new drill. Hoping to protect their revolutionary technology, the company filed a provisional patent application in February 1997, and then filed a non-provisional application in November 1997 with description and drawings that were more complete. The Patent Office examined the application and agreed the invention was patentable. The patent issued in May 1999.

    New Railhead’s success quickly attracted copycats. Other companies, including Earth Tool Company, began to sell their own version of this drill. New Railhead wasted no time defending their turf: the day after the patent issued, they sued Earth Tool for infringement. But sadly for New Railhead, Earth Tool persuaded the judge that the patent was invalid.

    Earth Tool’s lawyers had detected a defect in the patent applications. The claims that issued from the non-provisional application stated that the drill bit attached to its housing at an angle. Unfortunately, that aspect was missing from the provisional application. After placing the drill on sale in mid-1996, New Railhead needed to file a complete patent application within 12 months, or be barred from ever getting a patent. The provisional patent application was filed on time but, unfortunately, wasn’t complete. The non-provisional application was complete, but it was filed too late. The appellate court in Washington, D.C. agreed with the district judge that the incomplete provisional was too weak to serve as a foundation for the claims of the later-filed non-provisional application. So the copycats could continue copying with impunity.

    Inventors need fully-descriptive patent applications to protect their precious inventions, but few inventors can see their inventions with a stranger’s eye. The patent attorney’s independent perspective complements the inventor’s vision, and together they produce a more complete description of the inventive concept and its various ramifications. Don’t go it alone: you and your patent attorney are more valuable together than apart. Partner up from the outset, to ensure that your provisional application provides a rock-solid foundation to support the patent you are hoping for.

    Oct. 20, 2014 – Meet Steve Zeman and get tips about European Patent Office practice

    Join us Monday, October 20, 2014,  for a presentation at noon by European Patent Attorney Steve Zeman, of the Grünecker firm in Munich.

    Steven M. Zeman, Ph.D.

    Steven M. Zeman, Ph.D.

    We look forward to learning from Steve’s extensive experience with the European Patent Office in seeking to overcome “new matter” objections and other particular difficulties.

    Though educated primarily in the United States, Steve is licensed as a German and European Patent Attorney and as a European Trademark Attorney.  He holds degrees in chemistry and biochemistry from the University of California at San Diego and from Yale (Ph.D. 1999).

    This meeting is co-sponsored by Elman Technology Law and Bob Yarbrough’s Delaware County Pennsylvania Intellectual Property Forum.  Pennsylvania CLE credit will be available for existing and new members of the Forum.   Participation is free of charge, but preregistration is required.  Call 610-892-9942 for further information or to register .

    Venue: the Delaware County Bar Association headquarters, 335 W. Front Street, Media, PA 19063, basement conference room.  You’re welcome to bring a “brown bag” lunch.

    Supreme Court, snowed by ACLU smear campaign, resurrects archaic requirement of “invention” as a test of patent eligibility.

    In their decision June 13, 2013, in Association for Molecular Pathology v. Myriad Genetics, the Supreme Court seems to have been snowed by an anti-patent publicity campaign engineered by a brilliant but diabolical law professor and gullible lawyers at the venerable ACLU.

    The opinion of the Court resurrects an archaic requirement of “invention” that was disavowed by Congress in 1952. The late Judge Giles S. Rich, father of the patent statute revision enacted at that time, may no longer rest in peace. See his article: Laying the Ghost of the “Invention” Requirement, 1 AIPLA Q.J. 26-45 (1972), recently reprinted in 41 AIPLA Q.J. 1-28 (2013) with a foreword by Judge Paul R. Michel.  The reprinted article is available online (AIPLA member login required).

    And yet, the Court’s Myriad Genetics opinion written by Mr. Justice Thomas states:

    The [patentable] Chakrabarty bacterium was new “with markedly different characteristics from any found in nature,” … due to the additional plasmids and resultant “capacity for degrading oil.” …. In this case, by contrast, Myriad did not create anything. To be sure, it found an important and useful gene, but separating that gene from its surrounding genetic material is not an act of invention [emphasis added]. Groundbreaking, innovative, or even brilliant discovery does not by itself satisfy the §101 inquiry [as to subject matter patent-eligibility].

    In Biotechnology Law Report, we’ve chronicled the efforts of anti-intellectual-property activists such as Prof. Ravicher and Jeremy Rifkin to dismantle the U.S. patent system. See the article on Getting Beyond the ACLU and Public Patent Foundation’s Anti-Gene-Patent Grandstanding that I coauthored with Scott Rylan Powell in February 2010.

    By hoodwinking the Supreme Court to focus on the “information content” rather than the chemical structure of the polynucleotide described in pertinent patent claims, the ACLU attorneys representing the putative plaintiffs in this case have, unwittingly or hypocritically, endorsed a philosophical worldview of “intelligent design.” Ironically, the ACLU had successfully challenged that unscientific perspective in Dover, Pennsylvania, just a 7 1/2 years ago. See my previous musings on this point.

    See also Chris Holman’s Editorial in Biotechnology Law Report

    For further explanation and cogent comment, see the Editorial by Prof. Chris Holman posted online at the website of Biotechnology Law Report June 26, 2013.

    State of Vermont Declares War on “Patent Trolls”

    Update Submitted on 2015/10/01 at 3:25 PM

    On September 28, 2015, the Court of Appeals for the Federal Circuit denied an appeal by MPHJ of a (second) federal district court order denying removal of Vermont’s State Court case to federal court.  Click here for the CAFC opinion.

    Click here for commentary from Corporate Counsel magazine.


    Senator Patrick Leahy (D-VT) spearheaded the Leahy-Smith America Invents Act, which was signed into law on September 16, 2011, and took effect in stages culminating March 16, 2013.  During the pendency of the legislation, Sen. Leahy pointed out the long history of innovation by Vermonters, observing that Vermont receives more patents per capita than any other state in the nation.

    But last week, Vermonters’ focus on patents shifted from obtaining patent protection for their innovations to avoiding burdensome claims of patent infringement, and from the seat of federal government in Washington, D.C. to the state capital of Montpelier.

    State Attorney General Sues Patent Owner That Demands Licenses from End-Users of Info Tech Invention

    On May 22, Attorney General William H. Sorrell announced that his office had brought a first-of-its-kind lawsuit against MPHJ Technology Investments, LLC (“MPHJ”), marking the first time that a state attorney general has filed suit against a so-called “patent troll.”

    The Attorney General’s complaint filed in Vermont Superior Court alleges that MPHJ (and 40 “shell subsidiary” companies with names that look like they were spooned from a bowl of alphabet soup) has engaged in unfair and deceptive acts under Vermont’s Consumer Protection Act.  MPHJ has sought to assert certain patents against a variety of businesses by sending letters to many Vermont small businesses as part of a nationwide campaign offering licenses under the patents. The letters are said to contain multiple deceptive statements and demand about $1,000 per employee.

    The complaint alleges that the following were illegal under the Vermont statute, as unfair trade practices in commerce:

    • Stating that litigation would be brought against the recipients, when MPHJ was neither prepared  nor likely to bring litigation;
    • Using legal counsel to imply that MPHJ had performed a sufficient pre-suit investigation, including investigation into the target businesses and their potentially infringing activities, that would be required to justify filing a lawsuit;
    • Targeting small businesses that were unlikely to have the resources to fight patent-litigation, or even to pay patent counsel;
    • Sending letters that threatened patent-infringement litigation with no independent evidence that the recipients were infringing its patents;
    • Shifting the entire burden of the pre-suit investigation onto the small businesses that received the letters;
    • Propounding burdensome information demands on any business that claimed not to infringe the patents;
    • Using shell corporations in  order to hide the true owners of the patents, avoid liability, and encourage quick settlements; and
    • Making deceptive statements in threatening letters which would likely lead recipients to believe the following:
      1. MPHJ would sue the target businesses if they did not respond within two weeks;
      2. MPHJ would sue the target businesses if they did not pay money;
      3. MPHJ had a reasonable basis for identifying the target businesses as infringing its patents;
      4. Subsidiary Shell LLCs were exclusive licensees able to enforce the patents;
      5. Target businesses were within the sending Shell LLC’s alleged area of exclusivity;
      6. MPHJ’s licensing program had received a positive response from the business community;
      7. Many or most businesses were interested in promptly purchasing a license from MPHJ;
      8. Based on prior licensing agreements, the fair price of a license was between $900 and $1200 per employee;
      9. Target businesses were receiving a third letter, which refers to two prior letters, when in many cases recipients had received no prior letters.

    The patents referred to in the sample letter attached to the complaint are US 7,986,426; US 7,477,410; US 6,771,381; and US 6,185,590. A pending patent application is also identified in the letter, Serial No. 13/182,857, with a statement that it is expected to issue soon.  (I checked the online docket of the U.S. Patent and Trademark Office and found that the application apparently was voluntarily withdrawn from issue a few months ago to permit additional prior art to be placed before the Examiner, then formally allowed again last Monday, May 20.)  These patents are a family stemming from a provisional U.S. patent application filed in 1998 by Illinois inventor Laurence C. Klein on aspects of distributed computer architecture and “virtual copying.”

    Sample claims from the more recent patents are:

    Claim 1 of US 7,986,426:

    A computer data management system including at least one of an electronic image, graphics and document management system capable of transmitting at least one of an electronic image, electronic graphics and electronic document to a plurality of external destinations including one or more of external devices and applications responsively connectable to at least one of locally and via Internet, comprising:

    at least one scanner, digital copier or other multifunction peripheral capable of rendering at least one of said electronic image, electronic graphics and electronic document;

    at least one memory storing a plurality of interface protocols for interfacing and communicating;

    at least one processor responsively connectable to said at least one memory, and implementing the plurality of interface protocols as a software application for interfacing and communicating with the plurality of external destinations including the one or more of the external devices and applications,

    wherein the computer data management system includes integration of at least one of said electronic image, electronic graphics and electronic document using software so that said electronic image, electronic graphics and electronic document gets seamlessly replicated and transmitted to at least one of said plurality of external destinations.

    Claim 8 of US 7,477,410:

    A computer data management system including at least one of an electronic image, graphics and document management system capable of transmitting at least one of an electronic image, electronic graphics and electronic document to a plurality of external destinations including one or more of external devices and applications responsively connectable at least one of locally and via the Internet, comprising:

    at least one memory storing a plurality of interface protocols for interfacing and communicating;

    at least one processor responsively connectable to said at least one memory, and implementing the plurality of interface protocols as a software application for interfacing and communicating with the plurality of external destinations including the one or more of the external devices and applications,

    wherein the computer data management system includes the capability to integrate the electronic images into a destination application without the need to modify the destination application.

    The Attorney General’s suit doesn’t allege that any of the patents is invalid, but says that a previous assignee of the patents had settled litigation by withdrawing suits without an adjudication of validity of any of the patents.   I’ve found that in the past couple of years, the patents were being similarly asserted against alleged infringers by a company called Project Paperless, LLC.  An Atlanta-based company Blue Wave Computing announced last August that they had stood up in court against Project Paperless, whereupon the patent holder withdrew the suit unconditionally.

    Thus although the statutory presumption of validity expressed in the federal patent statute would continue to apply t0 these patents, the complaint seems to imply that this history is an indication of their weakness.

    More to the point seems to be the allegation that MPHJ Technology, after acquiring this family of patents from a previous assignee, sent flurries of letters threatening suit on the patents but hasn’t actually sued anyone nor even hired counsel in Vermont to prepare for such litigation.  Also, the complaint accuses MPHJ Technology of failing to do their own “due diligence” investigation as to whether the recipients of the letters are in fact infringing any of the claims.   The sample letters attached to the complaint, however, seem to be an informal version of  “discovery” requests,  asking for factual responses in the form of checklists.  Whether it’s an “unfair trade practice” in Vermont for a patent holder to communicate this way with businesses that it deems are likely to be infringers is a question raised by this suit.

    Vermont Enacts Prohibition Against “Bad Faith” Assertions of Patent Infringement

    In addition, the Vermont legislature has just passed an amendment to the state Consumer Protection Act, which was signed into law, also on May 22. It provides certain remedies to Vermonters accused in bad faith of patent infringement. As this provision is not scheduled to take effect until July 1 this year, the Attorney General’s lawsuit against MPHJ Technology Investments, LLC, alleges violation of the preexisting version of the Act.

    Here is the new provision of Vermont law:

    Sec. 6. 9 V.S.A. chapter 120 is added to read:



    (a) The General Assembly finds that:
    (1) Vermont is striving to build an entrepreneurial and knowledge based
    economy. Attracting and nurturing small and medium sized internet
    technology (“IT”) and other knowledge based companies is an important part
    of this effort and will be beneficial to Vermont’s future.
    (2) Patents are essential to encouraging innovation, especially in the IT
    and knowledge based fields. The protections afforded by the federal patent
    system create an incentive to invest in research and innovation, which spurs
    economic growth. Patent holders have every right to enforce their patents
    when they are infringed, and patent enforcement litigation is necessary to
    protect intellectual property.
    (3) The General Assembly does not wish to interfere with the good faith
    enforcement of patents or good faith patent litigation. The General Assembly
    also recognizes that Vermont is preempted from passing any law that conflicts
    with federal patent law.
    (4) Patent litigation can be technical, complex, and expensive. The
    expense of patent litigation, which may cost hundreds of thousands of dollars
    or more, can be a significant burden on small and medium sized companies.
    Vermont wishes to help its businesses avoid these costs by encouraging the
    most efficient resolution of patent infringement claims without conflicting with
    federal law.
    (5) In order for Vermont companies to be able to respond promptly and
    efficiently to patent infringement assertions against them, it is necessary that
    they receive specific information regarding how their product, service, or
    technology may have infringed the patent at issue. Receiving such information
    at an early stage will facilitate the resolution of claims and lessen the burden
    of potential litigation on Vermont companies.
    (6) Abusive patent litigation, and especially the assertion of bad faith
    infringement claims, can harm Vermont companies. A business that receives
    a letter asserting such claims faces the threat of expensive and protracted
    litigation and may feel that it has no choice but to settle and to pay a licensing
    fee, even if the claim is meritless. This is especially so for small and medium
    sized companies and nonprofits that lack the resources to investigate and
    defend themselves against infringement claims.
    (7) Not only do bad faith patent infringement claims impose a
    significant burden on individual Vermont businesses, they also undermine
    Vermont’s efforts to attract and nurture small and medium sized IT and other
    knowledge based companies. Funds used to avoid the threat of bad faith
    litigation are no longer available to invest, produce new products, expand, or
    hire new workers, thereby harming Vermont’s economy.

    (b) Through this narrowly focused act, the General Assembly seeks to
    facilitate the efficient and prompt resolution of patent infringement claims,
    protect Vermont businesses from abusive and bad faith assertions of patent
    infringement, and build Vermont’s economy, while at the same time respecting
    federal law and being careful to not interfere with legitimate patent
    enforcement actions.

    § 4196. DEFINITIONS
    In this chapter:
    (1) “Demand letter” means a letter, e-mail, or other communication
    asserting or claiming that the target has engaged in patent infringement.
    (2) “Target” means a Vermont person:
    (A) who has received a demand letter or against whom an assertion
    or allegation of patent infringement has been made;
    (B) who has been threatened with litigation or against whom a
    lawsuit has been filed alleging patent infringement; or
    (C) whose customers have received a demand letter asserting that the
    person’s product, service, or technology has infringed a patent.

    (a) A person shall not make a bad faith assertion of patent infringement.

    (b) A court may consider the following factors as evidence that a person
    has made a bad faith assertion of patent infringement:
    (1) The demand letter does not contain the following information:
    (A) the patent number;
    (B) the name and address of the patent owner or owners and
    assignee or assignees, if any; and
    (C) factual allegations concerning the specific areas in which the
    target’s products, services, and technology infringe the patent or are covered
    by the claims in the patent.
    (2) Prior to sending the demand letter, the person fails to conduct an
    analysis comparing the claims in the patent to the target’s products, services,
    and technology, or such an analysis was done but does not identify specific
    areas in which the products, services, and technology are covered by the
    claims in the patent.
    (3) The demand letter lacks the information described in subdivision (1)
    of this subsection, the target requests the information, and the person fails to
    provide the information within a reasonable period of time.
    (4) The demand letter demands payment of a license fee or response
    within an unreasonably short period of time.
    (5) The person offers to license the patent for an amount that is not
    based on a reasonable estimate of the value of the license.
    (6) The claim or assertion of patent infringement is meritless, and the
    person knew, or should have known, that the claim or assertion is meritless.
    (7) The claim or assertion of patent infringement is deceptive.
    (8) The person or its subsidiaries or affiliates have previously filed or
    threatened to file one or more lawsuits based on the same or similar claim of
    patent infringement and:
    (A) those threats or lawsuits lacked the information described in
    subdivision (1) of this subsection; or
    (B) the person attempted to enforce the claim of patent infringement
    in litigation and a court found the claim to be meritless.
    (9) Any other factor the court finds relevant.

    (c) A court may consider the following factors as evidence that a person
    has not made a bad faith assertion of patent infringement:
    (1) The demand letter contains the information described in subdivision
    (b)(1) of this section.
    (2) Where the demand letter lacks the information described in
    subdivision (b)(1) of this section and the target requests the information, the
    person provides the information within a reasonable period of time.
    (3) The person engages in a good faith effort to establish that the target
    has infringed the patent and to negotiate an appropriate remedy.
    (4) The person makes a substantial investment in the use of the patent or
    in the production or sale of a product or item covered by the patent.
    (5) The person is:
    (A) the inventor or joint inventor of the patent or, in the case of a
    patent filed by and awarded to an assignee of the original inventor or joint
    inventor, is the original assignee; or
    (B) an institution of higher education or a technology transfer
    organization owned or affiliated with an institution of higher education.
    (6) The person has:
    (A) demonstrated good faith business practices in previous efforts to
    enforce the patent, or a substantially similar patent; or
    (B) successfully enforced the patent, or a substantially similar patent,
    through litigation.
    (7) Any other factor the court finds relevant.

    § 4198. BOND
    Upon motion by a target and a finding by the court that a target has
    established a reasonable likelihood that a person has made a bad faith
    assertion of patent infringement in violation of this chapter, the court shall
    require the person to post a bond in an amount equal to a good faith estimate
    of the target’s costs to litigate the claim and amounts reasonably likely to be
    recovered under § 4199(b) of this chapter, conditioned upon payment of any
    amounts finally determined to be due to the target. A hearing shall be held if
    either party so requests. A bond ordered pursuant to this section shall not
    exceed $250,000.00. The court may waive the bond requirement if it finds the
    person has available assets equal to the amount of the proposed bond or for
    other good cause shown.

    (a) The Attorney General shall have the same authority under this chapter
    to make rules, conduct civil investigations, bring civil actions, and enter into
    assurances of discontinuance as provided under chapter 63 of this title. In an
    action brought by the Attorney General under this chapter the court may
    award or impose any relief available under chapter 63 of this title.
    (b) A target of conduct involving assertions of patent infringement, or a
    person aggrieved by a violation of this chapter or by a violation of rules
    adopted under this chapter, may bring an action in Superior Court. A court
    may award the following remedies to a plaintiff who prevails in an action
    brought pursuant to this subsection:
    (1) equitable relief;
    (2) damages;
    (3) costs and fees, including reasonable attorney’s fees; and
    (4) exemplary damages in an amount equal to $50,000.00 or three times
    the total of damages, costs, and fees, whichever is greater.
    (c) This chapter shall not be construed to limit rights and remedies
    available to the State of Vermont or to any person under any other law and
    shall not alter or restrict the Attorney General’s authority under chapter 63 of
    this title with regard to conduct involving assertions of patent infringement.

    This act shall take effect on July 1, 2013.





    2016 Martindale-Hubbell® Peer Review Rating of AV Preeminent® Gerry Elman has received a 2016 Martindale-Hubbell® Peer Review Rating of AV Preeminent®
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