Friday, September 29, 2006

Austin BizJournal thinks prior art searching on application is for infringement

The Austin Business Journal presents different aspects of the new IBM patent policy from those previously reported:

The new policy also calls for patent owners to record their ownership under their own name, rather than using a shell company, and for patent applicants to perform thorough searches in advance of filing an application to ensure a lack of infringement.

Sadly, as written, the text in the Austin Business Journal is gobbley-gook. One does NOT perform searches in advance of FILING an application to ensure a lack of INFRINGEMENT. One performs searches to establish patent validity by showing an absence of prior art. [Also, sadly, there was no contact information to communicate with the Austin Business Journal about the article.]

The Business Journal article has a quote: "The centerpiece of this policy... is based on the principles that patent quality is a responsibility of the applicant," John Kelly, IBM senior vice president for technology and intellectual property, said in a written statement. "IBM is holding itself to a higher standard than any law requires because it's urgent that patent quality is improved, to both stimulate innovation and provide greater clarity for the protection and enforcement of intellectual property rights."

One notes that in May 2006, Joesph Hosteny wrote an article in Intellectual Property today entitled "Is IBM a patent troll?" in which Hosteny mentioned IBM's US 6,886,129: Method and system for trawling the world wide web to identify implicitly defined communities of web pages and IBM's US 6,986,366: System and method for management, creation, storage, search, and delivery of rich media optimized for e-commerce in a distributed information network. Hosteny did not mention IBM's patent on queuing up for a toilet on an airplane.

Separately, note the "let a thousand flowers bloom" aspect of a previous IBM patent initiative.

from Java News Desk:

IBM says it's going to make about 100 of its business method patents, about half of the business method patents it owns [IPBiz: ?], available to the public and acknowledge its direct ownership of all the patents it holds and patent applications it's made in cases where, sly puss, it might have used a surrogate or shell company when it filed.

These modest enough reforms are part of a new patent policy that IBM says it is implementing worldwide as a result of a two-month online colloquy that it had with some 50 outside IP experts back in May and June to upgrade patent quality in the name of promoting innovation.

It's unclear how valuable the business methods patents are that IBM is opening up.


IBM says the wiki that it conducted with the 50 experts resulted in "a collaboratively written document that establishes the foundation for building a functioning marketplace for the creation, ownership, licensing and equitable exchange of intellectual property." It's published the thing at and hard copies are available by contacting

IPBiz note: use of the url provided by java transfers one to

The report may be here:$FILE/building_a_new_ip_marketplace-report.pdf

[got tired of waiting for the download.]

The IBM proposal about shell companies has not drawn much commentary.

HOWEVER, the Wall Street Journal recently reported about Merck:

Thirteen years ago, Merck set up a subsidiary with an address in tax-friendly Bermuda, in partnership with a British bank. Merck quietly transferred patents underlying the blockbuster drugs to the new subsidiary, according to documents and people familiar with the transaction. Merck then paid the subsidiary for use of the patents.

The arrangement in effect allowed some of the profits to disappear into a kind of Bermuda triangle between different tax jurisdictions. The setup helped Merck slash $1.5 billion off its federal tax bills over roughly the next 10 years.

The scheme was named "Project Ryland," for the Ryland Inn in Whitehouse Station, NJ.

Dow Chemical and General Electric may have been involved in similar plans.

[IPBiz post 2023]


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