Week 11 Blog #2: Roadblocks to a Patent Sale

In Ms. Kasznik's presentation, she spoke about the industry trend of a slow-down in patent transactions. Looking further into this trend, I found an article published by Art Monk of TechInsights listing some of the potential hazards preventing the successful sale of a patent portfolio. Hazards include the following:

1. Unknown encumbrances appear during the buyer's due diligence
The discovery of an unknown encumbrance during the buyer's due diligence, particularly if the entities that have major shares in the markets the patents read on, can derail the transaction.

2. Prior art is found that invalidates the key patents
This is a known fact that we have repeated a countless number of times in our course before: any discoveries of prior art during a potential buyer's diligence effort can derail a proposed acquisition. Buyers go to great lengths to ensure that no public disclosures that would have enabled a person skilled in the art to formulate the invention were available at the time the patent was filed. If such disclosures are discovered, then the patents for sale would essentially have no value as they would be invalidated.

3. Chain of title is incomplete
The USPTO records do not show the seller as being the current title holder as there is no requirement under US law to record prior patent assignments so buyers will require this be corrected before a transaction can close.

4. A government entity contributed development funds
If a R&D fund is back by the government, the government may seek a share of the transaction proceeds to recoup its investment additionally insisting on information rights covering the identity of future buyers and their commercialization efforts associated with the patents, factors that could potentially discourage potential buyers from engaging in a deal with the seller.

5. Rights to past damages were not previously transferred
Unless the ability to sue for past damages has been explicitly transferred in all prior assignments, the patents being sold may have no rights to past damages which can come up in the buyer's diligence and if not dealt with, could impair the transaction.

6. Rights of first refusal 
Some sellers enter into agreements to allow a third party the right of first refusal to acquire designated IP assets. This impairs the ability of the seller to market a patent/portfolio because buyers will not invest significant funds into a diligence effort if they know a third party might exercise a right of first refusal and trump their best offer.

7. Inventor attended meetings of a standards body
If inventors attend meetings of a standards-setting organization, inventors must sign an agreement that any patents they file after the meeting that read on the standard will be available to license by third parties on a fair, reasonable, and non-discriminatory basis which can affect the future value of such patents.

All of these scenarios and situations are issues that can slow down the closure of a patent transaction and may explain for the recent trend that Ms. Kasznik presented in Monday's lecture.

Week 11 Blog #1: Industry Trends to Watch

In her lecture this past Monday, Efrat Kasznik went over a few industry trends to watch in the case of patent monetization in the coming months. Some of these trends to watch were quite encouraging in my opinion, but others were alarming in the sense that we need continued patent law reformation in this nation. Below, I will briefly go over each trend to watch and my opinion on this.

1. The Enforcement Business Model is Under Attack
As Ms. Kasznik went over earlier in her presentation, patent litigation has recently seen a decline for the first time in 5 years as enforcement entities are scaling down. In my opinion, this is a fantastic trend and really has shown that the AIA has been a positive first step in reducing the harm posed by patent trolls. In the video of John Oliver deriding patent trolls in a satirical, but entirely true manner, it was estimated that patent trolls have caused an estimated $1 trillion hit to the U.S. economy. And it was especially disturbing to find out in Ms. Kasznik's presentation that these trolls were targeting companies that generally could be considered small, as at least 66% of patent troll defendants were companies with less than $100 million in annual revenue and at least 55% of unique defendants in patent troll lawsuits make under $10 million per year. This small startups are the lifeblood behind the growth of the modern economy and without them, innovation and business domestically slows down. These trolls have long been harming the foundation of the American economy by primarily attacking these small startups and it is encouraging to find that the government has taken an initiative to combat this trend and the results so far have been positive.

2. Patent Transactions Slowing Down
On the other side of the spectrum, I was discouraged by the fact that patent transactions seem to have slowed down, especially in software patents, and buying has moved to China where mobile and IoT are hot right now. It is now surprising that patent transactions in software has slowed down due to the flexible nature of the software nature. When companies construct different forms of software and patent it, competitors can get around these patents by utilizing the same structure as the originally constructed software, but with a few separate variations that make the patent for this new software valid. The fact though that buying has moved to China is the truly worrisome part as this gives leverage to the large Chinese companies to bring legal pain to some of its competitors, many of whom are U.S. companies. This has the ability to lead to further patent wars such as the ones we saw emerge between Samsung and Apple and could truly confound the patent market further.

3. Focus Shifting to Validity
The enactment of the AIA led to the creation of the Patent Trial and Appeal Board, allowing for patents to be reexamined. This board has been called the "Patent Death Squad" as it has reversed the validity rulings on many patents. I believe there is both good and bad that arises from this situation. The good is the fact that there are now more opinions on whether a patent can truly be considered valid. I believe this strengthens the goals and mission of the USPTO in terms of truly validating patents. Where the negative lies is the fact that the trend has resulted in many patents being ruled invalid, as owners are being consistently challenged and having their patents overturned. Basically, those in the patent office that had originally ruled the validity of a patent are consistently having their opinion and patent decision invalidated by their peers. This rate of turnover is quite concerning and I truly believe it is a situation where the current model needs reform in terms of consistency when it comes to Board decisions.

Week 10 Blog #4: Beth Noveck and "Opening" Up the Government

Beth Noveck's Ted Talk concerned her work as the White House Chief Technology Officer and leading the Obama administration's movement for an "open source" government. I found it quite amazing that when she arrived to the White House, how secretive the government was at the time and how the Obama administration attempted to open up the dialogue the government had with the general public. I found it especially reassuring that she made the claim that this "open government revolution is not about privatizing government, because many cases what it can do when we have the will to do so is to deliver more progressive and better policy than the regulations and the legislation and litigation-oriented strategies by which we make policy today".

I think this is a fabulous effort made by the American government to open up about the rationale and decision-making about executive decisions that will be made concerning not just the average citizen, but by the country as a whole. I especially appreciate how the government has divided this into two separate phases: one in which gathering information is imperative and the second is to continue the search for data through the mining of information through hackathons to allow for people to engage and participate. I thought Ms. Noveck's argument was progressive in the sense that it allows for us citizens to understand the rationale behind the decisions that the government makes and why it feels to go that way.

In a world where data has become increasingly accessible to everyone, I think Ms. Noveck highlights the role the government is playing to reinforce the ideal that the federal government is looking out for our best interests. We need to continue this open-source policy to allow for a direct and clear line of communication between the public and those serving the interests of the public. I strongly support the measures that the federal government has taken under Ms. Noveck and I hope they continue to publicize their effort in attempting to pass through policy that the general American public understands.

Week 10 Blog #3: Ellen Hoen and the Ethical Nature of Pooling Medical Patents

Ellen Hoen in her Ted Talk brilliantly brings up the need for companies to participate in the Medicines Patent Pool, where pharmaceutical patent holders voluntarily make their patents available to the Medicines Patent Pool which then license those out to whoever needs access to those patents. She brings up the example of anti retroviral medicines (ARVs) for AIDS treatment in the early 2000s when ARVs cost about $12,000 per patient per year. The patents on those drugs were held by a number of Western pharmaceutical companies that were not willing to make those patents available, causing patent wars to break out and an overall drug prices crisis to take place. Luckily, countries that didn't recognize pharmaceutical product patents product generic versions of these ARVs, dramatically lowering prices from $10,000 per patient per year to $350 to the current price of $60.

However, rules have changed where all countries are obliged to provide patents for pharmaceuticals that last at least 20 years and as new drugs are invented, a drug price crisis approaches closer once again. That is why the Medicines Patent Pool for HIV created by UNITAID in 2010 is critical to prevent cases where swaths of the world unable to afford high-priced patented medication are forced to suffer. The risk of this pool is the voluntary nature of it: these pharmaceutical companies are not obliged to participate within this pool and while the pool has been working so far, I believe it needs to be expanded. It shouldn't be just for HIV, but should be for a variety of diseases that afflict this world.

I believe the Medicines Patent Pool for HIV has been a great first step in addressing this issue, but I don't know the feasibility for its voluntary nature to continue to work in the long-run. I believe as new drugs for other diseases are produced and their value and need increases, these companies will be more so motivated in profits rather than contributing to the greater good. I believe in the long-run what we will need to do is to expand this pool and make it mandatory for pharmaceutical companies to throw their patents into. It is the only way to prevent these profit-seeking organizations from withholding medicine from those who need it the most.

Week 10 Blog #2: Kirby Ferguson and Separating Property from Remixes

In his Ted Talk, Kirby Ferguson notes the inability of the American patent system to understand the ideology of the term "remix". Remixing involves three techniques according to Mr. Ferguson: Copy, transform, and combine. He demonstrates this in music with the example of Bob Dylan, who some argued simply stole other individuals' songs. But copying and remixing are two separate actions. Bob Dylan, as Mr. Ferguson notes, copied melodies, but then transformed them and combined them with new lyrics which were frequently their own concoction of previous stuff. That is remixing, building upon the work of old to produce something new and possibly, better overall.

I agree with Mr. Ferguson's argument that the American patent system runs counter to this notion of building on the work of others. The idea of property fits well in the case of land because you have to defend it from squatters and such, but the idea of "property" when it pertains to intellectual products and ideas runs into a grey area. Yes, it is important to make sure that ideas aren't simply stolen and taken credit for by individuals who did not originally come up with the idea or product. That is a necessary defense in the system that is built in place to promote innovation and continually building products. But the issue that comes up is those that have built themselves up through recreation and consistently mixing and matching with prior inventions now seeking to defend themselves from those looking to build on their ideas.

Take the case of Steve Jobs. Mr. Ferguson showed the video of Jobs in 1996, claiming that Apple sought to take prior inventions and build upon it to create their own machines, or as he would quote from Picasso, "Good artists copy. Great artists steal". By 2010, Jobs wanted to "destroy Android because it's a stolen product" and proceeded to patent the "slide-to-unlock" technology in iPhones.

The question that arises here is how are we allowed to progress in this system? When one takes a few steps in innovation, that individual becomes the target of various organizations for infringing on their "intellectual property". Every invention that comes about is built upon the ideas and products of those that have come before it, but in the system we live in today, it seems inventors and organizations want to reject this "remix" ideal. We are dependent on one another and Mr. Ferguson showcases this brilliantly. That is how innovation can take root and really change the world we live in.

Week 10 Blog #1: Analyzing the Case of Drew Curtis and Patent Trolls

Drew Curtis, the founder of Fark.com, gave a Ted Talk on his process in challenging and defeating a patent troll that claimed that his company was infringing on their patent for the creation and distribution of news releases via email. Naturally, I found this story quite amusing and certain points really stuck out to me during his presentation.

1. Sticking with the case rather than settling.
Along with his company, Mr. Curtis noted that other large organizations such as Yahoo, MSN, TechCrunch, and others were also accused of infringement by Gooseberry, but rather than defend themselves, these companies choose to settle in hopes of avoiding the high costs that are associated with patent infringement lawsuits. The irony behind this that caught my attention was the inability of Gooseberry to defend its own lawsuit when Mr. Curtis did not give in to their settlement demands. Gooseberry couldn't even provide screenshots of Fark where the infringement of their patent was occurring. To further compound the hilarity of this situation, they pressed Fark further into settling. In my belief, if this doesn't go to show you the pathetic nature of these trolls and the need for the justice system to take action against these companies, I don't know what further proof you need to highlight the systemic damage these trolls cause on innovation. As the accuser, they cannot even come up with the evidence against the defendant, making it blatantly obvious that their existence solely is to manipulate the patent system for money rather than defending any intellectual property.

2. Lessons learned.
I thought Mr. Curtis brought up some unique defenses in how to combat these trolls. Fighting the infringement, not the patent is definitely a safer route of action to take against these trolls. It's easier to force their hand into showing what aspect you are infringing rather than going up against their patent, which is traditionally difficult to overturn. Making it clear to the troll that you have no money or you would rather spend money fighting the troll rather than giving them any money is another good option as the troll becomes fearful of not recovering any money. And in general, making the entire process extremely difficult and painful for them, simply frustrates them and pushes them into making poor decisions and weakening their allegations. I feel that this way mentally "trolls the troll" as their arguments become weaker and the evidence they draw up against companies really isn't as strong as they thought it would be.

3. Trolls are terrorists.
It's a bit of an extreme statement, but when you consider the fact that trolls have done more damage to the U.S. economy than any domestic or foreign terrorist organization in history every year, it shows you how much harm they cause to the economic environment we exist in. I don't argue with the principles of the free-market economy and capitalism because I believe they have proven to be the most efficient market systems in the world historically, but you cannot possibly defend those who manipulate and hold the markets hostage in such manners. If we have taken such a priority to defend our nation against terrorists both domestically and abroad, shouldn't we take the initiative to defend our economy against those manipulating it? Their has been nothing good coming from the existence of trolls and it's about time we take back our rights of innovation and creation.

Week 9 Silly Patent #4: Beerbrella

Title: Beerbrella
United States Patent 6637447

Abstract: The present invention provides a small umbrella ("Beerbrella") which may be removably attached to a beverage container in order to shade the beverage container from the direct rays of the sun. The apparatus comprises a small umbrella approximately five to seven inches in diameter, although other appropriate sizes may be used within the spirit and scope of the present invention. Suitable advertising and/or logos may be applied to the umbrella surface for promotional purposes. The umbrella may be attached to the beverage container by any one of a number of means, including clip, strap, cub, foam insulator, or as a coaster or the like. The umbrella shaft may be provided with a pivot to allow the umbrella to be suitably angled to shield the sun or for aesthetic purposes. In one embodiment, a pivot joint and counterweight may be provided to allow the umbrella to pivot out of the way when the user drinks from the container.

Analysis: Basically, the purpose of this invention is provide an umbrella covering the contents of a beer bottle while the user either drinks it or puts it down for a period of time. This isn't the same as insulating sleeves in the sense that the umbrella doesn't actually keep the beer cold, but rather simply provides a cover for the beer from the sun. This is what separates this invention from its prior art: the purpose and functionality is completely different from any prior inventions. Since this device is specifically for beer bottles, it's a tad easier to defend the novelty of this invention as there doesn't exist an invention quite similar to this and while its purpose is difficult to ascertain, it is undoubtedly non-obvious. What benefit this invention actually provides to the user is the only question behind its existence.