Monday, August 11, 2008

WSJ's Weinberg on patents

Stuart Weinberg has a piece in the WSJ entitled: What business owners should know about patenting which includes text (in the form of an interview with James McDonough) about obtaining patents -->

It is getting harder to a certain degree. The [U.S. Patent and Trademark Office] appears to be rejecting claims at a greater rate the first time through. I think that reflects a backlash in response to some of the problems we've seen with the issuance of poor-quality patents and how they are being misused by patent trolls [a derogatory term for a company whose only business is to buy patents to collect license fees or court-awarded-infringement damages].

IPBiz notes that current data suggests the USPTO is rejecting ENTIRE applications at a higher rate [ie, the patent grant rate is going down]. This pertains to the entire process, not just "the first time through". Jon Dudas, Director of the USPTO, had stated earlier in 2008:

Our allowance rate has dropped from 72 percent in 2000, to 44 percent in the first quarter this year. This is due partly to our quality initiatives, but much is due to the lack of quality in many applications we receive. [See IPBiz post:
More on the 44% patent grant rate

Separately, if patent trolls are attempting to use the "poor quality" patents, said patents would likely be invalidated in court. There has been a disconnect between evidence linking "poor quality patents" (many of which have evaporated in re-examination) and "litigation abuse." Nobody litigated the "swing patent" or the "cat pointer" patent. IBM did not litigate its "airplane toilet queue" patent. It's sad that Stuart Weinberg didn't explore whether or not there was a link between "poor quality" patents and litigation abuse.

One also has text:

A common problem we see is a portfolio that is driven purely by research. A good IP portfolio should be designed in a way that accurately covers the business objectives of the company while protecting the technologies around which the company is built and exploiting niches of the technology field that are not yet patented.

The Weinberg piece was savaged in the Patent Hawk post "Greenhorn." One notes that James F. McDonough III, while at Emory University School of Law, won the Brown Award for his paper The Myth of the Patent Troll: An Alternative View of the Function of Patent Dealers in an Idea Economy, which appears in 56 Emory L.J. 189 (2006). Only the abstract is available on SSRN.

Weinberg had a separate article in the WSJ titled "Caught in the Crossfire", which began:

Earlier this year, Avistar Communications Corp. was in talks to license some patents to Microsoft Corp. when Microsoft threw it a curveball. The software giant asked the U.S. Patent and Trademark Office to re-examine all 29 of Avistar's patents.

Weinberg noted that Avistar announced plans to cut 25% of its work force, or 27 employees.

The title of the piece showed up in the paragraph:

At the epicenter of the struggle are so-called "patent trolls," a derogatory term for small firms whose only business is to buy patents and assert them in court in hope of obtaining large settlements or damages. Meanwhile, some large firms increasingly are challenging patents rather than paying to license them. And small firms like Avistar, which develop and patent their own technology, say they're getting caught in the crossfire.

Weinberg also noted: The only way Avistar can survive in the current climate is to ensure it files "bulletproof" patent applications, Mr. Simon Moss says. "Regardless of what Congress does, regardless of what corporations do, companies like us are just going to have to work harder to make sure that what they submit [to the patent office] really has all the i's dotted and the t's crossed."

Weinberg also noted efforts by TPL Group's Dan Leckrone.

***Near the time of the Weinberg piece(s), there was a press release from Techalt, Inc. about Stan's Rodeo Ointment ("SRO") which mentioned: Techalt is a public holding company dedicated to pursuing acquisition, licensing and financing opportunities with start-up and mid-stage companies. "Patent troll" or not?

Note also from BNET:

Avistar Communications Corp. (NASDAQ:AVSR), a desktop video collaboration platform provider, and its wholly-owned subsidiary, Collaboration Properties, Inc. (CPI), today announced that CPI has entered into an agreement to license CPI's extensive patent portfolio on a non-exclusive, worldwide basis to Sony Corporation (NYSE:SNE) and its subsidiaries, the multinational manufacturer of audio, video, and communication and information technology products for the consumer and professional markets.


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