Archive for government

Under the America Invents Act, the United States Patent and Trademark Office (USPTO) was given broad new powers to “correct” past mistakes in issuing patents through the power given to the PTAB, the Patent Trials and Appeals Board. The PTAB is an administrative law that decides issues of patentability, formed on September 16, 2012 under the America Invents Act. Their impact on patents, innovation, and the US economy has far exceeded anything contemplated when Congress debated this provision. They have become the “go to” route almost anytime significant patent litigation is underway, and the results have been devastating to patent holders. Large numbers of seemingly valuable patents have been invalidated and patent holders have faced huge costs and losses as opponents can launch repetitive assaults that need to be defended at great cost. For many of us in the innovation and IP communities, the term “patent death squad” sadly seems appropriate.

The PTAB consists of numerous “judges” who conduct trials on the patentability of patents that have already gone through years of examination at the USPTO. It’s a painful burden that often results in the USPTO saying, “Sorry — we messed up completely when we granted your patent that you struggled so many years to prosecute. Should never have been issued in the first place.”

But who are these “judges” that are causing such havoc? Gene Quinn of IPWatchdog.com has done some great investigative journalism and revealed that these judges are a far cry from what one would expect in terms of their legal experience. Many have just a few years of experience, which helps explain some of the surprising decisions they have rendered.

See “PTAB Judges Shockingly Inexperienced Compared to District Court Judges” by Gene Quinn at IP Watchdog, March 6, 2018. A short excerpt follows, but see the original article for key data and some incisive comments afterwards.

Inexperienced PTAB Judges

What was most astonishing is just how inexperienced many patent judges of the PTAB are compared to federal district court judges. For example, many PTAB judges were appointed to the PTAB at a time when they were associates, and in some cases junior associates.

This study uncovered several shocking revelations. First, 12.64% of PTAB judges were appointed with less than 5 years of experience prior to their appointment as APJs (i.e., 5 years or less removed from graduating from law school), while some PTAB judges were appointed with as little as 2 years of experience. Indeed, 7.47% of APJs had 4 or less years of experience when they were appointed to the PTAB. More than one-third (36.21%) of PTAB judges were appointed with 9 years or less of experience….

The America Invents Act (AIA) invests PTAB judges with extraordinary powers. For example, overwhelmingly institution decisions are not appealable. Yet, there have been numerous lawyers with shockingly little experience appointed to the position of patent judge, and vested with the power to make decisions that cannot be reviewed by any Article III federal court.

Nov
17

Innovation Fatigue: How Britain Almost Lost the War Against Hitler

Posted by: | Comments Comments Off on Innovation Fatigue: How Britain Almost Lost the War Against Hitler

A book on World War II teaches a lesson for today on innovation. In Churchill and Orwell: The Fight for Freedom by Pulitzer-prize winning author Thomas E. Ricks (New York: Penguin, 2017), we learn about some of the reasons England struggled to defend itself effectively in dealing with Germany. A key problem discussed by Ricks was England’s poor state of preparation with inadequate machinery, feeble industrialization, weak supply chains, etc., that made it hard to fight a serious war and led to embarrassing disasters like the rapid loss of Singapore, their supposed fortress in southeast Asia. Close to home in Europe, Britain had a hard time just moving troops around — they often had to walk — and the Brits were amazed at how quickly their American cousins could mobilize when they came to the rescue. Why was England so poorly prepared?

England, as you will recall, was the birthplace of the Industrial Revolution, yet by the time of the War, they were awkwardly behind in many of the basic technologies they would need. How could this happen? Ricks comments are insightful:

Managed by family members more interested in reaping dividends than investing in new machinery and other gear, “British firms were unable to adopt modern, best-practice technology,” concluded business historian Alfred D. Chandler Jr. As a consequence, Britain’s brilliant university research generally did not make the transition into factories. Britain had led the first Industrial Revolution of coal and steam power, but generally sat out the “Second Industrial Revolution” of the late nineteenth and early twentieth centuries, built around oil, chemicals, metals, electricity, electronics, and light machinery, such as automobiles. By the end of the 1940s, it would have neither an empire nor an economy capable of competing with those of other major powers. As Correlli Barnett put it, the reality was that by the time World War II ended, the British “had already written the broad scenario for Britain’s postwar descent to the place of fifth in the free world as an industrial power, with manufacturing output only two fifths of West Germany’s.” Interestingly, Barnett was the keeper of the Churchill Archives at Cambridge University from 1977 to 1995. [Ricks, pp. 203-204]

Something similar happened in China, which once led the world in innovation and GDP, but from the Qing Dynasty until the late 20th Century, in part due to apathetic leaders unwilling to invest in or even open the doors to innovation and technology, China missed out on much of the Industrial Revolution. Only through massive reform and exerted effort in recent decades has China begun its return to a position of global leadership in innovation, IP creation, and economic growth.

In the paper industry, which I’ve been close to for many years, it’s clear that the American paper industry has largely fallen into the same trap that nearly cost Britain its freedom and did cost many lives unnecessarily. The American paper industry has largely failed to invest in new technology and relies heavily on antiquated paper machines and pulp mills that are decades behind what we have in Asia (China and Japan in particular). Their slower, less efficient machines and less efficient plantations put them at a distinct cost disadvantage. Instead of taking steps to compete better, the US industry too often tries to rely on protective legislation to raise tariffs on imported paper and make everyone in the nation pay much more for their paper than they should. The real problem is not Chinese competition, but American businessmen falling into the same pattern that nearly cost Britain the war: focusing on immediate profit and dividends while neglecting the future.

Each industry, whatever it is, needs to build for the future with investment in innovation and a willingness to boldly cope with the threats and opportunities of disruptive innovation. If your industry is dominated with leaders who feel like they can just milk their business as a cache cow with no need to invest in the future, that industry will fail.

Comments Comments Off on Innovation Fatigue: How Britain Almost Lost the War Against Hitler
Mar
13

Immigration and Innovation

Posted by: | Comments Comments Off on Immigration and Innovation

Many of the greatest inventions in America came from immigrants. See Steve Brachman’s article, “American innovation has been fueled by immigrant inventors” at IP Watchdog. Nearly all of our inventions, in fact, came from people who were either immigrants or descendants of immigrants (sometimes we seem to forget our own roots!). Immigrants with skills and a desire to succeed often become great entrepreneurs that create jobs and wealth that benefit the rest of us. Today, unfortunately, there is a lot of misunderstanding about immigrants.

Sadly, many people with great innovation potential and good education find legal immigration is nearly impossible or takes many years. They are punished with unreasonably high barriers to entry. Making the barriers greater for them will only hurt the economy and our innovation potential.

The Sovereign Man Explorer newsletter (from Sovereignman.com) of Feb. 5, 2017 has an excellent article on immigration to consider:

Everyone Loves a Good Ol’ Immigrant Witch Hunt!

Republicans aren’t the only ones who want to limit immigration. While democrats are crying foul over Trump’s policies towards immigrants, they have initiated a little foreigner witch hunt of their own.

A whole bunch of Democrats in Congress introduced a bill that would have the Secretary of State, and other federal agency directors, create a list of foreigners believed to have manipulated the election, or tampered with American political parties.

It would give the government power to freeze their assets, and bar them from entering the United States.

And this would happen based solely on the investigation and recommendation of the State Department; no due process.

What this means:

This is some pretty weak criteria for having your assets frozen and being barred from entering America. True, Trump’s plan to ban all immigrants from particular countries is extreme as well, but at least he doesn’t plan on freezing immigrants’ assets.

This essentially could rob immigrants’ of the products of their labor, while stifling their international mobility, just because their name ended up on a list.

How much evidence is required to end up on the list? We don’t know. Can they get off the list, have their travel allowance returned, and have their assets unfrozen? We don’t know. Will this be used politically against enemies of politicians? We don’t know.

This is a vague and ill defined bill which gives more power the the Feds to arbitrarily harass immigrants. And it proves this attitude is held by both major American political parties.

Innovation thrives when there is certainty and an environment where the risks of developing a new business or other innovation can bring returns. When there is the risk that government with the stroke of a pen can seize assets without due process or otherwise take everything by changing the rules of the game, there is uncertainty that chokes innovation. Scaring away talented innovators and threatening them with the loss of assets for supporting a political opponent will leave all of us worse off.

Of course, a government so out of control that it will seize immigrants’ assets for arbitrary reasons is a threat to all of its citizens as well. It is the ultimate source of innovation fatigue and worse.

Comments Comments Off on Immigration and Innovation
Jan
06

How Abstract Is Your Automobile?

Posted by: | Comments Comments Off on How Abstract Is Your Automobile?

carBe careful about the vehicle you’ve been driving. As sturdy, tangible, useful, and inventive as it looks to you, it may turn out to be merely an abstraction, perhaps nothing more than the mere idea of “transportation” or “going places,” making it unworthy of the thousands of patents protecting its numerous technologies — if the USPTO and America’s elite judges get their way. An abstract automobile? You don’t want to be caught dead driving one. Unfortunately, since the USPTO’s Patent Trial and Appeal Board (PTAB) just ruled that an MRI machine is abstract and thus not patentable under the odious and vague principles of the Supreme Court’s recent Alice decision, it could be that automobiles and virtually every other machine under the sun could be next on the anti-patent chopping block. Your trusty Toyota or your faithful Ford are about to go abstract on you, courtesy of the USPTO. Look out.

In the PTAB’s elite view, as Gene Quinn explains, all the physical wizardry of the mighty MRI machine as claimed in a recent patent application for an improved MRI is just an abstract idea based on the abstraction of “classification.” It defies logic and defies the requirements of the Alice decision and the USPTO’s rules for applying Alice, but the PTAB has become a patent munching zombie that doesn’t seem bound by logic or law. They are one of the strongest forces promoting innovation fatigue. Many innovators are just giving up or going to other nations where IP rights are more meaningful.

The anti-patent forces that have taken hold of far too many influential posts in America view property rights and especially intellectual property rights as a barrier to the ideal society they envision. If only we could get rid of patents, they seem to think, drug prices would fall and Obamacare, for example, would not be such a disaster. But the bounty some intellectuals promise by weakening property rights is an illusion, for without IP rights, what is the incentive to take on the risks and costs of innovation if you cannot benefit from the occasional successes that come from your uncertain work? If your hit product can be taken and marketed by others who did not have to spend so much time and money developing it, then the inventor is often at a competitive disadvantage to everyone else. Why bother?

America’s war on patents is a war on the future of innovation. It’s a war we cannot afford to lose.

May
15

The Housing Market in China: Warning Signs of a Bubble Economy

Posted by: | Comments Comments Off on The Housing Market in China: Warning Signs of a Bubble Economy

China’s housing market is in a bubble, in my opinion, for it seems to display some of the same excesses and questionable behavior that the United States had in real estate shortly before the big subprime mortgage crash in 2007. We have a flood of newly created cash flowing into the market at low interest rates for easy loans. We find unusual business models popping up to exploit the cheap credit and drive up housing prices and housing demand. And we will see rapid changes occur as the bubble pops in some way.

Easy credit from the banks of China and abundant new cash from China’s equivalent of “quantitative easing” have been used in an attempt to stimulate the markets, just as has been done with little success in the U.S., Japan, the European Union and Zimbabwe (before their cataclysmic crash with hyperinflation and economic chaos). Initially much of the new money being created was being used to drive the Chinese stock market. As that bubble popped, rich Chinese looked again to real estate as the traditional safe way to make lots of money. In popular cities, home prices have shot up. In Shenzhen, housing prices show a 57% increase over last year. That’s a ridiculous rate showing something is wrong.

Owners of apartments until recently were not too concerned about rent since they real money were making was coming from rapidly appreciating property values in cities like Shanghai. But with fear that recent rises were no longer going to be sustainable, rental prices are now getting more emphasis. This appears to be driven in part by the very large-scale actions of a giant force, the real estate company Lianjia (United Homes), according to a friend of ours who is a real estate agent. Lianjia has managed to obtained huge capital reserves that it has used to buy up many former competitors, giving them a stranglehold on the real estate market. They are also using large amounts of capital to make loans to customers who otherwise might not be able to afford the down payment of a new property. Further, they are actively working with property owners to push for significantly higher rental values. This increases their commissions and also make landlords happy.

In spite of China’s slowing economy, many renters are reporting significant jumps in rent this year. Our landlord, for example, wanted to increase our rent by 33%. Since we take good care of the place and don’t make many demands, though negotiation, she was willing to sacrifice to help us by just asking for a 24% raise in rent instead. But she has agents from Lianjia calling her and saying she could be getting 33% or even 40% more. This seems to be happening all over the city.

In looking for new, more affordable apartments, my wife found that when she went to the nearby Lianjia office and asked for places with a price similar to what we have been paying the past year, they said it wasn’t possible and that we would have to pay a lot more to get a place with the features we now have. When we went to one of the increasingly hard-to-find non-Lianjia dealers, we learned that there certainly were places in our price range that could meet our needs. While my wife and a non-Lianjia agent were looking at one apartment priced at 14,000 RMB, a Lianjia agent came to the same place with a Chinese girl who was looking to rent. She liked the place and asked how much it was. My wife heard the Lianjia agent say it was listed at 18,000, a full 4,000 RMB above the actual asking price. The girl was shocked and wondered how it could be so expensive. She turned to the agent my wife was with and asked what price he had been told. Not wanting to make another agent lose face, our agents just nodded his head and said it was 18,000. But this apparently was Lianjia’s attempt to drive up the price, deceiving a customer. Ugly.

By offering easy loans to customers who might not otherwise be able to get one, and by collaborating with landlords to drive prices up, the rental market in Shanghai has been booming at a crazy pace, the kind of pace that looks like a classic bubble. The housing bubble is already popping in Hong Kong, with a significant drop now in housing prices since the Sept. 2015 peak, said to currently be in “free fall.” That cold front may soon sweep northward to cities like Shanghai.

In bubble economies, it’s hard to tell precisely when the insanity will stop. With abundant injections of cash and other policy actions, the government could keep driving up prices for a while, but eventually (what, two more months? maybe six? a year?) economic reality has to kick in, and when it does, it can be painful and sudden. The bigger the steps taken to keep the bubble going, the worse the pain will be and the longer the correction will take.

When cheap mortgages to unqualified buyers begin to fail and threaten the banks, we could be in for a repeat of the subprime mortgage crisis the US faced a few years ago. When property owners begin to see that real estate values can drop significantly, they may look to the ultimate way of preserving capital in risky times: precious metals, particularly gold and silver. A dramatic pop of any kind in China could send shock waves throughout the world.

This is a good time to be prepared. Get out of debt. Have cash on hand to keep you going for two or three months in case there is a run on the banks (the available currency in the US is a tiny fraction of the vast amount of digital money that has been created, and if banks fail or are hacked, turning those digits into something you can spend may be a challenge that faces many delays, not to mention massive threats of hacking. Physical cash on hand may be an important part of your survival kit. Food and other supplies, and some gold and silver coins or bullion, may be a good idea.

Comments Comments Off on The Housing Market in China: Warning Signs of a Bubble Economy
May
21

More Cold Water on the Fire of Innovation: Unnecessary Patent Reform

Posted by: | Comments Comments Off on More Cold Water on the Fire of Innovation: Unnecessary Patent Reform

iStock_000050431454_LargeAbraham Lincoln said that the patent system “added the fuel of interest to the fires of genius.” Today the fires of genius and the fire of innovation itself is getting doused with something less helpful than fuel. These fires are being cooled and, in some cases, extinguished with harsh attacks on the IP rights that once enabled and motivated lone inventors and small businesses to take the fruits of their genius to the market.

The owners of small businesses, the people who generate most of the innovation and business growth in the United States have good reason to be worried. Their ability to attract funding through valuable intellectual property is being compromised. Their ability to protect their products and innovations from the power of corporate giants is being whittled away. This has come from many quarters, but there is a widespread anti-patent movement driven by politics and misinformation. It’s the bitter fruit of a bitter anti-property rights movement that exaggerates the threat of a few bad actors to justify widespread weakening of property rights in ways that will hurt the economy and our society for years to come.

We have seen a recent series of Supreme Court cases that have made it much harder to obtain patents and enforce them. We have seen massive changes in US patent law that make it easier to invalidate patents after they are granted and make it harder and more costly to stop infringers if your patent survives. Now the bogeyman of “patent trolls” is held up as a threat to America that requires more sweeping “patent reform” to make it even harder to enforce a patent, and it looks like both parties are united in a quest to do “something big” to shake up the IP rights that helped drive the American economy for so many decades. Corporate giants benefit from this reform as it clears away the annoyance of other people’s IP rights standing in the way of their marketing muscle. But the economy as a whole and the rights of many are hurt in this process this amplifies innovation fatigue .

Several recent articles highlight just how serious the problem has become. Louis Carbonneau in “Toxic Asset: The Gradual Demise of the American Patent” (IPWatchdog.com, December 10, 2014),  surveys the radical changes in the past two or three years:

On the judicial front, in 2014 we saw no fewer than 5 Supreme Court decisions going against patent holders on the various subjects of obviousness (a key test for patent validity), what constitutes “abstract ideas” (which now undergo a more stringent test for patentability), business method patentability, indefiniteness (how you construe claims), reasonable royalty (how you calculate damages), willful infringement (how you punish the “bad actors”) and fee shifting (making losers pay for winners legal fees). All of these decisions have collectively made it harder for patent owners to: i) maintain the validity of duly issued patents (previously presumed by law), ii) pursue infringement claims, ii) prove damages (let alone treble damages), iv) have open discussions with potential infringers prior to litigating, and have left the unsuccessful patent owner at risks of paying millions in legal fees to the other side if the judges so decides.

Parallel to judicial reform at the federal courts, recent US patent reform with the American Invent Act (AIA) introduced a new post grant review mechanism called Inter Partes Review (IPR) which allows a party to challenge the validity of any issued patent before the Patent Trial & Appeals Board (PTAB). Strangely, despite the PTAB being an emanation of the same USPTO that delivered all these patents in the first place, there is no longer a presumption of validity before the PTAB for the patents being challenged while other rules make it easier to invalidate patents based on prior art.

Finally, on the political front, in 2013 the US House of Reps. passed the Goodlatte bill, which would erode rights conveyed to all patent holders despite being primarily directed at NPEs. It is now expected that the new Republican led Senate will revive the bill -currently on hold- in early 2015 and, with a rare showing of bipartisanship from the White House, it is expected to be signed into law. At the same time, 27 US States have passed or are in the process of passing laws that make it harder for people to assert the patents they own.

Carbonneau goes on to explain that in recent Federal Circuit cases, patent owners are being crushed, and in Inter Partes Review (IPR) cases before the USPTO, nearly 80% of the owners of challenged patents are being told by the USPTO that their patents are not valid over the prior art that the USPTO itself supposedly considered before granting the patent in the first place. Carbonneau puts it rather wryly:

The most interesting statistics come from the PTAB [the USPTO’s Patent Trial and Appeal Board, which processes IPR cases] because it only focuses on validity issues based on prior art; the very same prior art patent examiners are supposed to have found and analyze prior to issuing a patent. Since patents going through IPRs are usually the same ones that being litigated, you would assume that owners did a lot of due diligence before investing in a costly patent lawsuit. Well, the PTAB is declaring 77.5% of reviewed patents invalid! And this is not limited to “abstract” software; patents related to biotech and pharmaceuticals, medical and mechanical devices, are being invalidated at an even higher rate! Remember, this is an offspring of the very same agency that inventors paid thousands of dollars in the first place to review applications and issue their patents. Now, after having to pay a quarter to a half million dollars in legal fees (average cost of an IPR procedure for a patent holder), the same agency is telling patentees nearly 80% of the time: “Very sorry we made a mistake; we would not have allowed your application had we looked more carefully for existing prior art. And no, there is no refund available.

Personally, I cannot think of any industry that could survive more than a month with a nearly 80% defective rate, let alone by forcing you to spend a fortune for the “privilege” to confirm that indeed your title was invalid in the first place! Only a government can come up with such a broken system and get away with it.

The impact of these anti-patent efforts has been a surprisingly sudden break from the trend of increasing IP litigation, with litigation in 2014 down about 13% from the previous year according to a new 2015 PwC report on patent litigation. The problem of explosively increasing patent litigation, a common excuse to justify the slashing of patent rights, is not supported by the data.

Richard Lloyd, writing for the IAM Blog, draws this observation from the PwC report:

Of these three classes [of patent litigants considered], NPE [non-practicing entity] companies have been successful 31% of the time in patent cases brought since 1995; this compares with a success rate for universities and non-profits of 48% and a lowly 18% for individual inventors. Individual patent owners also do far worse with damages pay-outs, getting a median award of $3 million compared with $11.5 million for company NPEs and $16.2 million for universities/non-profits.

There could be many reasons for individual inventors doing relatively badly. Although the PWC study doesn’t provide any, it’s easy to speculate that small inventors may have lower average quality patents to begin with, while they probably don’t have the same kind of litigation savvy as other NPEs and are much less likely to have access to the same kind of litigation expertise that larger, better funded patent owners can turn to.

But what PWC’s numbers also strongly suggest is that the US patent litigation system is strongly stacked against small, patent owning entities. Bearing this in mind, it is worrying that the main packages of reform proposed in the House of Representatives (the Innovation Act) and the Senate (the PATENT Act) are only going to penalise them further.

Lloyd notes that potential irony now that many lone inventors, recognizing that they have little chance of winning and have almost no chance of affording the punitive legal bills they may face if they sue and lose, may be more likely to turn to NPEs (“patent trolls”) for help as the most practical way to realize any benefit from their work.

There is a need to rebuild an innovation climate in the United States, starting with educating our leaders about the need for IP rights and the value of patents. If we don’t teach this lesson from within, it will eventually be taught rather loudly from without, for Europe and China are both moving to strengthen IP rights and strengthen IP enforcement. Europe’s Unitary Patent system could be a boon to IP there, though much remains to be seen, but the changes in China are strong and dramatic. That nation has gone from no patents and no IP system in the early 1980s to the world’s biggest source of IP generation and IP litigation, with many changes steadily strengthening the nation’s IP system. There is a long ways to go for China still and there have been some setbacks, but at current rates we can see China becoming a leading source of global innovation while the US loses its lead.

Will the flames of innovation be largely quenched in that nation? Much depends on what we do with IP rights now, the rights that will shape our culture and economy for decades to come. May the fires of genius be encouraged with something other than the cold water Congress and Courts have been sloshing.

Comments Comments Off on More Cold Water on the Fire of Innovation: Unnecessary Patent Reform
Oct
18

Unpatentable “Abstract” Claims in US Patent Law: How To Know It When You See It, Thanks to Abstract Art

Posted by: | Comments Comments Off on Unpatentable “Abstract” Claims in US Patent Law: How To Know It When You See It, Thanks to Abstract Art

The US Supreme Court recently ruled that “abstract” concepts are not eligible for patents. The 2014 case, Alice Corporation Pty. Ltd. v. CLS Bank Intl. or more simply Alice, is said by some to mean the death of thousands of patents if not entire industries. Critics such as Gene Quinn say it is unworkable, vague and indefinite, giving judges and enemies of patents a capricious tool to assault patents for software and other fields. One of the alleged problems with the Supreme Court’s ruling is that they expressly refused to define the word “abstract” because, of course, it is a very difficult word to define precisely for legal purposes. Greg Aharonian has expressed outrage over the “incompetence” of the Supreme Court in failing to even attempt to explain what they mean by “abstract.” IAM Magazine‘s blog warns of “potentially catastrophic effects” of the ruling. Even the calm and collected IP professor, Dennis Couch expresses concern that “there is no standard definition for ‘abstract’ and so it is difficult to identify abstract ideas from non-abstract ideas.” Many other IP experts and patent owners are up in arms because this allegedly adds confusion to patent law and gives judges a broad club to attack patents by merely calling them “abstract.” So much whining!

So how can you know if a claimed invention is “abstract” or not, when claim language invariably requires some degree of abstraction to describe the invention? OK, that’s a fair question, but there’s an easy answer thanks to the visual arts!

With a little artistic understanding, it is easy to predict precisely where the boundaries are for the hard-to-define term “abstract.” This is a case where art comes to the rescue. In my role as both a patent agent and an amateur artist, I can combine my skills to bring a little clarity. Students of art, especially the visual arts, know that artistic expression can capture and define concepts that cannot be precisely rendered by words alone and certainly not legalese.

The eye can often see what the pen cannot express. We should have learned this lesson decades ago in the debate over pornography. As Justice Potter Stewart once said, “I shall not today attempt further to define the kinds of material I understand to be embraced within that shorthand description; and perhaps I could never succeed in intelligibly doing so.  But I know it when I see it.” This statement is from Jacobellis v. State of Ohio 378 U.S. 184, 197 (1964) and while decades old, it still applies brilliantly today. With that judicial framework, we can readily see that pornography is equivalent to the abstract in patent law. Yes, you can know it when you see it, and seeing is what we need to do now to understand the keen thinking of the Supreme Court on this topic. So let’s take a look and understand “abstract” based on abstract art, or more specifically, photographic abstracts selected from my own work, including collections of abstract photographic art. I think after a few examples you will better appreciate just where the boundaries are that separate “abstract concepts” from the concrete, tangible concepts suitable for patentable inventions.

Knowing It When You See It: Examples of Abstraction, Illustrated by Photography

Here I present a series of works from my abstract photographic art and discuss the nature of the abstraction.

People in the Capital, Madison, Wisconsin

People in the Capital, Madison, Wisconsin

The abstract above resembles abstract geometric concepts found in many paintings, almost cubist in flavor, but achieved using photography. I snapped a photo of a group of people inside the Wisconsin State Capital in Madison, Wisconsin, but using a slow shutter speed that resulted in blurring of many features. But you can recognize a black man with a baseball cap on the left. In his right hand is an iPod and you can see a white line representing the ear buds he is wearing. On the right side we see the side of a woman with a purse. Of course, while baseball caps, iPods, ear buds, and purses, like people themselves, are relatively tangible objects, in this context they are rendered less specific by the way in which they are captured or described, thereby creating abstraction from that which was initially concrete and specific. Let that be a lesson to patent drafters, by the way!

Here’s another with a related technique:

Rental Car Dashboard

Rental Car Dashboard

This abstract is based on the structures and controls of the front panel of a rental car. The camera was moved as I snapped the shot. Not a random mistake, but a deliberate effort to convert the concrete into the abstract by blurring and twisting. Of course, the limitations of language tend to do this to some degree to all inventions, no matter how tangible, as they are “blurred” and captured with the unsteady lens of a single patent claim. A little burring in inevitable, but this much blurring definitely turns the tangible into the abstract.

Now let’s consider abstraction without blurring:

Entrance to a Mall in Milwaukee

Entrance to a Mall in Milwaukee

This is a geometrical abstract wherein the elements (abstract circles and lines) from a physical structure dominate the image and create an abstraction. This essentially untouched photo was taken from the entrance of an abandoned shopping mall in Milwaukee, Wisconsin. The scene is drawn from the concrete–or rather, from metal beams, glass, and brick–but when viewed in this way, becomes a combination of abstract elements: circles and lines, rhythm and color. Clearly abstract. The silhouette derived from a remote tree reflected in glass at the bottom is an abstraction representing the intrusion of nature into artificial man-made realms. Don’t let the hint of a tree distract you from the abstract theme here. After all, anything derived a tree is a product of nature and thus unpatentable, according to the Supreme Court in their recent Mayo v. Prometheus decision, which served as a basis for the reasoning in the Alice decision.

Now it’s time for something trickier but still abstract.

Mirror and Roofing Above Cable Car Station in Rio de Janeiro, Brazil

Mirror and Roofing Above Cable Car Station in Rio de Janeiro, Brazil

This image shows a mirror and a section of translucent plastic roofing above a cable car stop on the way to a tall mountain overlooking Rio de Janeiro. The mirror and the roofing are tangible, distinct objects, as are the buildings in the background. But here the image celebrates the blues and greens in conjunction with arcs and circles. The mirror does not display the photographer, but another section of the building, and is a symbol of the failure to reflect upon one’s self, becoming lost instead in the haze of what we call civilization, even while standing next to a towering temple of nature (the unseen mountain). The mirror also punctuates the series of repeated curves of the roofing, like a grand period putting a stop to the rhythms of the sky, an abstract concept again reflecting the invasive nature of civilization. It’s all very abstract stuff, though individual components are tangible, just as patent claims may contain concrete elements such as servers, computers, and processors, but in the end create an overall impression in the mind of the viewer or judge that is decidedly abstract.

Now I turn to an abstraction that is linked to the whole concept of innovation and IP, the famous light bulb, but here an abstract version thereof.

Abstract Light Emitter

Abstract Idea Representing the Concepts of “Light” and “Bulbs”

This photo is little more than an abstract idea representing the concepts of “light emission” and perhaps “bulbs.” It was actually abstracted from a fairly specific and tangible device, a fluorescent light bulb, but with extreme photographic settings and color adjustment that removed much of what is concrete in favor of the abstract. Sure, you can argue that it has components that are somewhat tangible and concrete, but those of us who know the abstract when we see it have no trouble calling it such. It’s not a patent-worthy bulb. It’s just an embodiment of an abstract idea. Patent ineligible. I know it, because I, like any good judge, know it when I see it. Try proving me wrong! Or rather, just try proving a judge or patent examiner wrong when they see something abstract in your carefully claimed invention.

As you can see, the boundaries of “abstract” are surprisingly clear and easy to predict–and surprisingly difficult to evade. I hope this will help all those complainers worried about “uncertainty” from the Alice decision to appreciate the new kind of certainty that it gives. Good luck to all you inventors and small companies out there. May your patents be less abstract and more valuable in the future.

Originally posted at  JeffLindsay.com as “Abstract Art to the Rescue of Abstract Patent Law: How to Know “Abstract” When You See It.”

Comments Comments Off on Unpatentable “Abstract” Claims in US Patent Law: How To Know It When You See It, Thanks to Abstract Art
Oct
06

Monopolies vs. Health Care Innovation: What Happens When Incumbents Decide Who Gets to Compete?

Posted by: | Comments Comments Off on Monopolies vs. Health Care Innovation: What Happens When Incumbents Decide Who Gets to Compete?

Monopolies can innovate, just like elephants can play tennis. The results usually just aren’t very elegant or successful. Competition, on the other hand, is famous for driving innovation. Even in state-owned monopolies, like NASA’s initial monopoly on space exploration in the US, it was competition between nations during the rush to outer space and then competition between suppliers of technology that inspired the hundreds of inventions and innovations that NASA can proudly boast. But without the incentive to do better and stay ahead of competitors, innovation is slow and clumsy. An elephant might occasionally connect with a tennis ball and score some points, but real success is unlikely.

That all seems pretty obvious to most people, but not to those who benefit from monopolies. Real monopolies do not arise from the success of a competing company like Apple or Google as they rise above competitors and increase market share. In a free market, the competitors are still there and can enter the battle as they wish. Real monopolies arise from the power of the State that prohibits or restricts competition to favor a protected entity. Real monopolies can result in huge profits for the players and great power for the politicians and bureaucrats controlling the field, but they tend to crush meaningful innovation, especially from small start-ups with bold new ideas. If you can keep the start-ups from every showing up in the marketplace, you have enshrined innovation fatigue. Sadly, that’s what is happening in the United States now in the health care sector.

As William Jasper reports, “Certificate Of Need” laws in over 30 states restrict market entry in medicine and healthcare as they protect overpriced hospitals and medical providers. The federal Department of Housing and Urban Development exercises authority over Certificates Of Need. According to Jasper:

Before a hospital, clinic, nursing home, or other healthcare facility can be built, a Certificate Of Need, a CON, must be obtained. Not only that, but in many jurisdictions, a facility must obtain a CON even to install new equipment, such as a CT scanner, MRI machine, a lithotripsy machine, or other important medical technology.

This system prevents new competitors from entering the market and rewards the current dominant players. It is a corrupt cartel system that prevents innovation and competition, denies consumers choices in healthcare, and guarantees ever-rising prices. It’s no surprise, then, that the big companies in the healthcare industrial complex and their Big Government allies support this system. Certificate Of Need laws are indeed a con game — and we are the victims.

If your state has this system, urge your leaders to repeal them and break the grip of incumbents over innovation in health care. The effect of a free market in innovation in healthcare is well illustrated in the fields of cosmetic surgery and Lasik eye surgery, areas not highly regulated, not covered by insurance and Medicare, and areas where advertizing of price and abundant, aggressive competition is allowed. In these fields, real prices have been declining while patient satisfaction (especially in the Lasik areas) is extremely high. When innovation and competition can prosper, good products and services can flourish and prices can actually come down.

Give innovation a chance. “Certificates of Need” do just the opposite. A better name would be “Certificates of Greed.”

Categories : government, health care
Comments Comments Off on Monopolies vs. Health Care Innovation: What Happens When Incumbents Decide Who Gets to Compete?
Jul
11

Alice in Blunderland: The Supreme Court’s Alice Decision Fails to Grasp the Physical Reality of Information

Posted by: | Comments Comments Off on Alice in Blunderland: The Supreme Court’s Alice Decision Fails to Grasp the Physical Reality of Information

The recent Alice decision from the Supreme Court threatens patents for many innovators working with computers, software, information, and knowledge–in short, the heart of the modern Knowledge Economy. By waving around the undefined word “abstract”–a word that the Court expressly refused to define–they have ruled that a major part of the economy is simply not eligible for patent protection. An article at the popular IP blog, PatentlyO, seeks to explain if not justify the Court’s ruling. In “Alice, Artifice, and Action,” Jason Rantanen elucidates the thinking of the Court as he explains that the problem with the invention in Alice is that ultimately, what it involved “is just information” and thus intangible or abstract, unworthy of patent protection. I recognize this is a widely held belief, but it is not based on modern science. Maybe superstition, but not science.

It’s time for those in the IP profession to recognize what many scientists and engineers have long understood: that information is physical. Just as e=mc^2 helps us understand the relationship between matter and energy, the laws of thermodynamics plus a good deal of modern quantum mechanics and other fields helps us understand the physical relationships between information, matter, and energy. Entropy is one of the key physical concepts that helps us appreciate that linkage. See Wikipedia’s article on this topic at http://en.wikipedia.org/wiki/Entropy_in_thermodynamics_and_information_theory.

Information cannot be processed without physical, material change often affecting more than just physical entropy alone. That information processing may be in the form of electronic signals, computer chips, magnetic media, graphical interfaces, or chemical reactions with DNA (DNA, of course, is “just information” encoded with a brilliantly simple and tangible system).

In the Industrial Age, we focused on inventions made with cogs and pistons, steel and glass–crude, weighty, and easy to touch or see. Their making and their use involved smoke and flame, clangs and whirrings that nobody could miss. But we have moved into the the Information Age, where the greatest innovations that will drive our economy, the Knowledge Economy, are much finer, often microscopic, involving silent, invisible (to the naked eye) change that is still every bit as physical and real as anything a blacksmith hammered out. To dismiss the workings of the new electronic machines of our day and their many fruits as mere abstractions, intangible, immaterial, the whisps of ethereal spirit devoid of substance, is to miss the reality of the greatest era of innovation and invention ever. To exclude inventions in handling information as inherently unpatentable is a tragic error, one that contributes concretely to the growing innovation fatigue in the U.S.

Comments Comments Off on Alice in Blunderland: The Supreme Court’s Alice Decision Fails to Grasp the Physical Reality of Information
Jun
07

Another Innovation Knifing: Cutting “Natural Products” Out of the Scope of Patentable Subject Matter

Posted by: | Comments Comments Off on Another Innovation Knifing: Cutting “Natural Products” Out of the Scope of Patentable Subject Matter

One of the important new antibiotics discovered and developed by pharmaceutical companies in the past few years is Rifampicin and its relative Rifamycin. These potent antibiotics remain key tools in fighting off serious infection. Their story begins with a soil sample taken from a pine forest on the French Riviera in 1957 that was then studied in an Italian laboratory, where unusual antimicrobial properties were observed in a newly discovered bacterium.  eventually an unusual molecule produced by the bacterium was identified, isolated, mass produced–and, yes, patented.

Rifamycin was credited with conquering drug-resistant tuberculosis in the 1960s. These drugs are marvelous discoveries, important pharmaceutical inventions, and became the subject of multiple patents providing protection and incentives to the developers and improvers of this unique products.

Thank goodness these products were discovered and patented decades ago, because today the USPTO would probably reject any patent application out of hand using its newly fabricated and terribly damaging rules that rule out “natural products” as patentable subject matter. This is the result of what appears to be a politically motivated attack on the pharmaceutical industry by the US government, using a Supreme Court decision (Myriad Genetics) as the excuse, but twisting it to go beyond what the Supreme Court said. The political angle is that politicians want to “stick it” to the pharmaceutical industry and appear to be taking steps to lower the cost of drugs by limiting patent scope and other means. But the long-term effect will be reduced innovation and less progress in medication.

If a product is actually novel, useful, and non-obvious, the fact that it had origins of some kind somewhere in nature should not be a barrier to patentability. The fact that an unknown bacterium in some French soil existed in nature does not enable the public to understand and produce a powerful, pure antibiotic useful in treating many diseases. Those who discovered, tested, refined, and modified the compounds produced by the bacterium deserved and needed patent production. Without it, there would be lessened incentives to take on the burdens of discovery, testing and drug development. We would be less innovative, not more, without patents for novel materials with some kind of basis in nature. But today, such patents and such innovations are threatened. It’s another example of innovation fatigue driven by political agendas and political machinations.

If you think about it, every invention has some roots in nature. The protons, neutrons, and electrons used in every object or affected in every process come from nature. Are we sure that we need a vague and indefinite “natural products” exclusion beyond the more sensible previous criteria for patentability?

 

 

 

Comments Comments Off on Another Innovation Knifing: Cutting “Natural Products” Out of the Scope of Patentable Subject Matter

Our Mission

InnovationFatigue.com is the official blog for the new book, Conquering Innovation Fatigue. Here we provide supplementary innovation, news, tips, updates, and, when needed, a correction or two, to keep those who are using the big on the inside edge for innovation success.