Week 9 Silly Patent #1: Light Bulb Changer

Title: Light Bulb Changer
United States Patent 6826983

Abstract: A light bulb changer method and apparatus that contains components that allows for instantly detecting a burned out light with a replacement bulb. The changer operates without human intervention, and can be assembled from a kit having a light fixture, detecting sensor, removing and replacement hardware. The kit can allow a consumer to assemble the changer for use as a novelty item, and/or also to be used as a working light fixture, such as a table lamp, and the like. The changer can also be used as a retrofit for existing light fixtures so that the existing light fixtures can be modified.

Analysis: In essence, the purpose behind this invention is to provide an automatic sensor and apparatus in terms of detecting and replacing burned out light bulbs. And in terms of validity, it cannot be argued against that this is a lack of invention or this lacks novelty. Quite frankly, this machine is revolutionary in the sense that it provides users the capability to have their light bulbs replaced automatically. This machine is undoubtedly non-obvious in terms of providing a service that the prior art for this does not account for, making this quite an original invention. What makes this patent silly is the fact that this contraption is so complex to complete such a simple task that its purpose is nonsensical.

Week 8 Blog #2: Motorola vs Intellectual Ventures

Motorola Mobility was found by a US jury to have ripped off an Intellectual Ventures-owned technology patent although they were fortunate to have a second infringement claim against them dropped.

The panel of peers ruled that a range of Moto smartphones in 2011 infringed US patent 7,810,144, which describes a process in which files are uploaded, authenticated by a third party to check the identity of the sender, and then passed on to other devices, but did not infringe US patent 7,409,540, which describes a TCP/IP packet-centric wireless point-to-multi-point transmission system architecture. Intellectual Ventures, known in the industry for its patent-hoarding methods, accused Motorola Mobility of using the technology in a dozen handset models without permission as part of its ongoing war against Lenovo-owned Moto.

It was the second time the two companies faced off in court after the first round ended in February 2014 due to mistrial after jurors could not agree on a verdict. Intellectual Ventures recently scored a $17 million win against Symantec and while it licenses its portfolio out to companies such as HTC and Samsung, it has recently become more well known for suing tech companies who might be infringing on its intellectual property. Intellectual Ventures argues that what separates them from patent trolls is that the company does not file frivolous lawsuits. Nonetheless, Intellectual Ventures shows the clear signs of a company that burdens innovation by using patents they buy to pursue lawsuits instead of building any products.

Week 8 Blog #1: Advice on How to Beat a Patent Troll

Chris Hulls, the chief executive officer of the family networking and communication service, Life360, and a UC Berkeley alumni, recently posted a piece on TechCrunch recounting his tale with dealing with a lawsuit brought forward against his company by Advanced Ground Information Systems Inc. for patent infringement. Under their interpretation of the patents, any company that showed a location marker on a map or connects a group of people using location-sharing capabilities on smartphones could be infringing. Refusing to settle, Mr. Hulls took AGIS to federal court, where a jury returned a verdict of non-infringement against Hulls and Life360. In the article, Mr. Hulls provides three non-traditional methods his company undertook against the troll.

1. Go Nuclear
Trolls expect companies to listen to their lawyers, stay quiet, and pay them to go away. By publicizing the role of trolls in a case through various mediums, trolls and their law firms become fearful for their own reputation and hesitate about proceeding further with a case or possibly launching future lawsuits.

2. Share Information and Resources
To help other companies facing AGIS, Hulls open-sourced all of the prior art collected with the tech community and announced free legal support for other startups with less than $25 million in funding facing AGIS. These forms of action draw attention to a case and the claims brought forward by trolls such as AGIS while also sending a message to trolls that the players within any industry is committed to sticking together rather than fighting independently.

3. Go With Your Gut and Commit To It
While some advisors will encourage companies to settle, this short term view will only weaken the long term stance of the company. You are far less likely to become a target if you have a prior record of making it difficult for the troll versus paying up each time.

While litigation is expensive, these hardline measures send a message to trolls and keep them at bay.

Week 7 Blog #4: Recent Trends in NPE Litigation

In a recent report published in the July 2012 version of The Lawyers, Thomas Fisher and Tomoyoshi Furukawa published five defining trends they've seen emerging in NPE litigation. These trends have shown that in recent years, the typical NPE strategy of forcing defendants into settlements may become more difficult in a continually hostile environment towards NPEs. These trends include:

1. Difficulty in Obtaining a Permanent Injunction
NPEs will often seek a permanent injunction against defendants in addition to money damages as the equitable relief in the form of a permanent injunction provides an NPE with additional negotiating leverage in settlement negotiations with defendants.

In eBay Inc. vs MercExchange, L.L.C., the US Supreme Court made it clear that prior to granting a permanent injunction, a four factor test must be applied as the plaintiff must show (1) that plaintiff has suffered an irreparable injury; (2) that remedies available at law are inadequate to compensate for that injury; (3) that considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be dis-served by a permanent injunction. Since it is difficult for NPEs to satisfy factors (1) or (2), permanent injunction have been hard to come by for NPEs post-eBay.

2. Venue
NPEs have historically favored the US District Court for the Eastern District of Texas ("EDTX") as a venue as EDTX has a reputation for being a patent-friendly venue, and for its juries having a willingness to grant large damages awards. In 2011 however, three EDTX judges retired leaving to be seen if EDTX's patent-friendly reputation will be sustained through the years.

3. Limitation of Joinder of Accused Infringers
Before the America Invents Act became effective in 2011, it was typical for NPEs to sue many defendants in a single lawsuit, even if the defendants were not related to each other. However, under the provisions of the AIA, this strategy is no longer valid. NPEs may only assert a patent against multiple defendants where: (1) defendants are jointly and severally liable or infringement arises out of the same transaction, occurrence, or series of transactions or occurrences relating to the making, using, offering for sale, selling or importing into the US and (2) there are questions of fact common to all defendants. Thus the opportunity to include multiple organizations in a lawsuit brought forward by an NPE has been significantly reduced by the specificities needed to bring those organizations together.

4. Reduce the Defendant's Burden of E-Discovery
Defendants typically bear a heavy burden of extensive discovery in NPE patent litigation while an NPE's burden of discovery is much less since it doesn't make any patented products. The demands of electronic discovery have increased the burden of discovery causing courts to start making new rules regarding e-discovery to reduce the parties' burden of discovery. Examples include the 2011 Model E-Discovery Order that provides that requests for production of e-mail must identify specific issues, and the requesting party must identify (i) custodians, (ii) search terms, and (iii) a search period. Thus, the limits placed on e-discovery in accordance with the Model Order substantially decrease a party's burden of discovery.

5. Attorneys' Fee Award
Recently, the Federal Circuit has held that a case in which the NPE's strategy is to sue many defendants with the goal of securing settlements is an "exceptional case" and has required the NPE to compensate defendants for their attorneys' fees where the NPE does not prevail. This serves as a warning to NPEs who file baseless suits with the simple objective of seeking early settlements.

Week 7 Blog #3: Factors that Encourage NPE Activity

There are various factors in a patent system that might influence or encourage activity by a NPE. Peter Arrowsmith, a patent attorney and partner at London based firm Cleveland IP put together a comprehensive list of possible factors and comparing the strength of these factors in both Europe and the US.

     1. Low cost risk in litigation

In the US, NPEs can initiate infringement proceedings without incurring a significant cost risk as the losing side does not typically pay the winner’s legal costs and NPEs can often find a law firm willing to take the case on a conditional fee basis. In Europe, the losing side is typically required to pay at least a portion of the winner’s legal costs and conditional fee arrangements are also less common.

           2.  Uncertainty

A NPE is likely to benefit in a patent system where the outcome of a case is difficult to predict, especially if this is coupled with high costs in litigation. This is likely to encourage a NPE to bring more cases on the basis they are statistically likely to register wins which will increase the pressure to settle before trial. Europe may be considered more predictable than the US simply because decisions are made by experienced patent judges, rather than lay juries.

            3.   Size of Market

A NPE is likely to benefit if their patent has a wide geographical scope in an important market because a single adverse decision could have a large economic impact on the other side. In the US a single decision can be effective across the entire country, whereas in Europe it is necessary to enforce patents country-by-country.

            4.  Bifurcation

A system in which the issues of infringement and validity are considered separately are also likely to favor a NPE because the NPE can obtain a favorable decision on infringement before validity is even considered. Europe is considered more attractive to NPEs in this comparison as certain countries permit bifurcation.

            5.  Speed

A fast system can allow a NPE to exert pressure on the other side, which can encourage early settlement, as these systems are likely to favor NPEs. In this comparison, there is little to choose between Europe and the US, since fast or slow decisions are possible in both systems.

Overall, it seems that the US patent system is more attractive than Europe for NPEs. However, the European system is still viable for NPEs, although they may need to be more selective about the cases and targets they pursue.

Week 7 Blog #2: Addressing Patent Trolls

In the case of patent trolls, the Federal Trade Commission and Department of Justice are in the process of assessing the impact of their activities on innovation and competition and their implications for antitrust enforcement and policy. In late 2013, Edith Ramirez, chairwoman of the FTC, planned to ask the full commission to approve an agency inquiry, a 6a(b) study of the so-called "patent troll" issue, that will include the issuance of subpoenas to these patent assertion entities.

The purpose behind this form of action by the government is to gather information from both small "legal shells" which gather patents and issue "demand letters" citing infringement, as well as the large firms who manage portfolio of patents that they license and to investigate if antitrust policy can mitigate the activities of these PAEs.

The government must understand that a one-size-fits-all antitrust enforcement policy approach is one that could possibly fail. While the vast majority of PAE litigation is concentrated in the information technology sector, the diverse range and intangible nature of IT services has led critics to urge Congress to undertake targeted reforms in the industry sector.

The Obama administration has listed several legislative recommendations to Congress that it believes will "bring about greater transparency to the patent system and level the playing field for innovators." These recommendations include requiring patentees and applicants disclose the "real-party-in-interest"; permit increased discretion in awarding fees to prevailing parties in patent cases; expanding the USPTO's transitional program for business method patents to include computer enabled patents; and providing off-the-shelf use by consumers and businesses to name a few of the possible reforms that the government could enact.

In 2013, we saw action take place in the form of two new laws: the re-introduction of the "Saving High-Tech Innovators from Egregious Legal Disputes Act of 2013" ("SHIELD ACT") and the "Patent Quality Improvement Act of 2013" ("STOP Act"). The SHIELD Act applies to all patents (not simply software patents) and requires NPEs that are unsuccessful in suing for patent infringement pay the defendants legal costs if they lose their lawsuit while the STOP Act establishes a new process in which technology patents get reviewed by the PTO before being litigated for alleged infringement, essentially to eliminate "frivolous" claims brought by PAEs.

In essence, the three branches of the federal government are focused on a bipartisan patent law reform addressing PAE litigation abuse and reducing the possible harms that these entities bring about.

Week 7 Blog #1: What is an NPE?

A Non Practicing Entity (NPE) can be broadly defined as "any entity that earns or plans to earn the majority of its revenue from the licensing or enforcement of its patents". Because these entities do not sell actual products or services, they do not infringe on the patent rights contained in others' patent portfolios. This feature is critical as it makes these entities essentially invulnerable to the threat of counter-assertion, one of the most important defensive measures in patent disputes.

NPE litigation is particularly challenging for companies facing it as they can be distracting to management, which must pay money to legal counsel to defend itself, or to the entity to secure a license, or both. Those who support NPEs argue that large technology companies can be regularly found guilty of infringement and thus deserve the onslaught of patent infringement litigation that NPEs offer.

A "patent troll" is a specific type of NPE that uses patents as legal weapons, instead of actually creating any new products or coming up with new ideas. These trolls are in the business of litigation and often simply buy up patents on the cheap from struggling companies. These patents are generally very vague and the trolls will proceed to send out threatening letters to those they argue infringe these vague patents and these letters threaten legal action unless the alleged infringer agrees to pay a licensing fee.

Those companies that receive infringement letters typically choose to pay the licensing fee, even if they believe the patent is bogus or their product did not infringe simply because of the high cost of patent litigation. In particular, the in-app purchasing technology development world has seen Lodsys, a company that neither makes nor sells a product, target small app developers. Lodsys has sued at least 11 of these developers with Apples and Google both intervening within the lawsuits, challenging the validity of Lodsys' patents. However, the slow nature of the justice system leave developers with the present choice of either taking a license from Lodsys or possibly entering into a lawsuit.