Santa Clara University’s High Tech Law Institute Recognized as a “Legal Innovator”

The High Tech Law Institute at Santa Clara University has been named as a Legal Innovator by the legal publication The Recorder for its commitment to preparing law graduates to work in the local and national technology community.

The Institute has launched cutting-edge programs such as the Entrepreneurs’ Law Clinic led by Assistant Professor Laura Norris, JD ’97, and the Privacy Law Certificate program led by Professor Eric Goldman. Santa Clara University recently hosted the first hearing of the Patent Trial and Appeal Board outside of Washington D.C., strengthening the connection between the local intellectual-property community and the new Silicon Valley Patent Office.

Santa Clara University has been center-stage on national intellectual-property law matters.  Associate Professor Colleen Chien returns this spring from her appointment as advisor to the White House on Intellectual Property Policy to teach international IP Law to Santa Clara’s law students.

“The High Tech Law Institute embraces the entrepreneurial spirit of the surrounding Silicon Valley community,” said Brian Love, co-director of the High Tech Law Institute and assistant Professor of Law. “We are continuously looking for new opportunities to better prepare students for the high-tech law jobs of the future.”

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Snickers for GSK, Candy Corn for the PTO

Well, it looks like the PTO will have to find other ways to reduce their backlog, because the new claims and continuations rules have been put on hold. Perhaps in honor of All Hallow’s Eve, Judge Cacheris delivered a trick to the PTO and a treat to Gene Quinn,the PLI , and the amici filed in support of GlaxoSmithKline’s opposition to the rules. A preliminary injunction was issued to stop the new rules from being implemented, and the people rejoiced. In granting the injunction, Judge Cacheris stated that

Allowing the implementation of rules that may or may not remain in effect is likely to cause much greater uncertainty and squelching of innovation than a preliminary injunction giving the Court time to consider the validity of the Final Rules before they go into affect.

Additionally, the court allowed the amicus briefs filed by Elan, Hexas, the Roskamp Institute, Tikvah, and AIPLA. In doing so, the Court limited the scope of the briefs, stating that

the Court will grant each of the three motions for leave to file an amicus curiae brief, but will not consider any legal issues or arguments therein that were not raised by the parties themselves.

Judge Cacheris’ order can be found here (PDF), along with all other documents from the case (courtesy of Gene Quinn). GSK’s arguments against the PTO rule changes were discussed in this In the News post. Additional discussions by the Patent Baristas, Peter Zura at the 271 Patent Blog, Patently-O, and Patent Prospector.

The Opposition to Patent Reform Grows

The patent reform debate is often characterized as a battle between tech companies and those in the pharmaceutical industry. However, not all tech companies are in lock step with each other, and Tech LawForum was fortunate enough to speak with a couple of Innovation Alliance members. In case our readers were not aware, the Innovation Alliance is a lobbyist group that was formed in response to all of the patent reform activities on capitol hill. Many are familiar with the Coalition for Patent Fairness, which counts Intel, Apple, and Cisco among its vast membership. The IA was formed as a response to the Coalition, and serves as a mouthpiece to voice the concerns of the many smaller firms here in the Bay Area. Earlier this week, the Innovation Alliance joined PhRMA (the largest lobbyist group of pharmaceutical companies) and companies from many other fields as signatories on a letter(PDF) written to Senate Majority leader Harry Reid and Senate Minority leader Mitch McConnell voicing their displeasure with S. 1145 (a.k.a. the Senate version of the Patent Reform Act of 2007). The letter articulates the problems with the bill as such:

While we welcome efforts to make improvements to the U.S. patent system, we must make clear our opposition to S. 1145 as approved by the Senate Judiciary Committee. This bill contains provisions that will create uncertainty and weaken the enforceability of validly issued patents. Some of the proposed reform provisions, such as an expanded apportionment of damages, an indefinite post-grant opposition process, excessive venue restrictions, burdensome and expensive mandatory search requirements, and unworkable interlocutory appeal provisions, pose serious negative consequences for continued innovation and American technological leadership in a competitive global economy. In addition, the bill codifies the current inequitable conduct doctrine rather than to make broadly supported reforms to eliminate litigation abuse of the doctrine and gain increases in patent quality.

The opinion was not blithely submitted, as the one page letter was accompanied by 16 more pages listing over 430 companies opposing the legislation. According to an Innovation Alliance press release:

The letter is signed by innovation leaders from every U.S. state and the District of Columbia in fields as far ranging as agriculture; alternative energy; biotechnology; chemicals; computer hardware, software, networking; cosmetics; entertainment; financial services; food/beverage; health care; heavy industry; life sciences; manufacturing; medical devices; material science; nanotechnology; optics; security; semiconductors; space systems; startup incubation; telecommunications, venture capital and Web-based businesses.

GlaxoSmithKline Calls Shenanigans on New Claims & Continuation Rules

As the patent world prepares to deal with the new claims and continuation rules promulgated by the USPTO, some are taking it better than others. Ed Taylor and Dan De Vos of Blakely Sokoloff Taylor and Zafman, voiced their concerns with the rules, but believe the PTO got a lot right with the changes. Other parties, however, are not taking it well and do not have such a positive outlook on the new rules. GlaxoSmithKline has had enough time to review the rules and call shenanigans on their legality. It is GSK’s contention that the rules exceed the PTO’s authority and are unconstitutional. The complaint , courtesy of Mr. Quinn at IPwatchdog.com, states that power to pass rules of such scope and nature rests only with Congress. Of particular interest in the complaint are references to the pending house patent reform bill (H.R. 1908) as proof that the rules are ultra vires. The argument is that the bill includes a provision to ensure the “quality and timeliness” of applications:

Congress has not yet granted the PTO the authority to make rules of practice that restrict continuing applications–if Congress had already given the PTO such authority in 35 U.S.C. Section 2, then Section 14 of H.R. 1908 would be redundant and meaningless.

GSK also weighed in on the Senate version of the bill, applauding the absence of a provision to expand PTO rulemaking authority in S. 1145. Between the GlaxoSmithKline suit and the one previously filed (Tafas v. Dudas), it will be interesting to see how the Eastern District of Virginia handles these two similar cases.

USPTO Playing Nice with the Other Children

Lately, there has been much talk in the blogosphere and in the news about H.R. 1908 being passed by the House of Representatives. As a result, even more attention is being heaped upon the patent reform bill pending in the Senate (S. 1145). One of the goals of each of these pieces of legislation is to bring the United States Patent system a little more in line with the rest of the world (i.e. the shift to a first-to-file patent system). Well, Tech LawForum would like to draw some of the attention away from Congress for the moment and point out that the PTO itself is doing what it can to play nice with the rest of the world. In the past two weeks, the PTO has begun two new initiatives to garner help abroad with the backlog, and encourage cooperation with two more countries’ patent offices. The first program is a Patent Prosecution Highway between the United Kingdom and the U.S. According to the USPTO’s press release

:

The Patent Prosecution Highway will leverage fast-track patent examination in both offices to allow applicants in both countries to obtain corresponding patents faster and more efficiently. It also will permit each office to benefit from work previously done by the other office, in turn reducing examination workload and improving patent quality.

Basically, the Highway will allow claims that have been approved as patentable in one office to be fast tracked through prosecution in the other. The second program is one that will have the Swedish Patent and Registration Office (PRV) aiding the USPTO with search and examination services for the USPTO on international applications filed with the USPTO under the Patent Cooperation Treaty (PCT). The press release announcing the program states:

Each year, the USPTO receives over 50,000 PCT international applications in addition to over 400,000 national applications. The USPTO is testing whether, by having international applications processed elsewhere, it can dedicate more resources to examining the approximately 750,000 national applications currently in the pipeline, with the goal of increasing productivity and enhancing quality.

When you look at these two programs in light of the cooperative efforts already in place with the Japanese Patent Office and the Australian Patent Office, its seems that the PTO is serious about trying to reduce their backlog problems even if the Patent Reform Act of 2007 isn’t passed. It is good to see that we are getting along so well with our friends across the pond and around the world.

Congress Says Whooooooaaa to Patent Reform

Dennis Crouch over at Patently-O has broken the news that the writing may be on the wall for the Patent Reform Act of 2007. According to a letter written to Speaker of the House Nancy Pelosi, there are some voices preaching patience that wish to delay any further progress of the legislation. The letter was signed by Republican Leader John Boehner and Republican Whip Roy Blunt; additionally, Congressmen John Conyers, Lamar Hunt, Howard Berman, and Howard Coble were copied on the letter, so many of the heavy hitters on the reform issue were included. The letter states a desire (that we have all heard before ad nauseum) for measured, responsible patent reform that will be enjoyed by all. The letter highlights the concerns that there are myriad forces at work on the bill, and the fractious nature of the interest groups means that the reform issue should be tabled until a consensus is reached. The letter is hardly the first ripple of discontent with the Act (see the quote from Hans Sauer, associate general counsel for intellectual property of BIO), however it is the latest indication that the latest reform bill will join its predecessors on the scrap heap. Perhaps most importantly, it comes from the legislators themselves, as opposed to the pundits and interest groups that have heretofore been the loudest critics.

Vonage Back From the Dead

Many, including we here at Tech LawForum, have greatly exaggerated the demise of the VoIP company known as Vonage. Vonage has returned from patent infringement purgatory, and perhaps their witty commercials aren’t far behind. According to ComputerWorld, Vonage has been utilizing new methods that avoid infringing Verizon’s patents of aspects of its VoIP technology. Two of the work-arounds have been in use since July, and the third has just recently been created. Despite this victory, Vonage still has the appeal of their adverse District Court judgment pending until next month. At least they will be able to continue to provide their customers with service, unless the damages they must pay to Verizon dooms them to SunRocket’s fate (read: out of business). Additionally, it appears that Vonage will have to fight a similar fight with Sprint/Nextel, so they aren’t out of the woods yet.

Victory in San Diego! Microsoft Keeps $1.5 Billion

Earlier this week, U.S. District Judge Rudi Brewster in San Diego let Microsoft off of a 1.5 billion dollar hook. Alcatel-Lucent had sued Microsoft for infringing its patented MP3 technology, and won the largest patent infringement verdict in history. The bad news came in February of this year, and it took a mere five and a half months to have it wiped off the record books. The alleged infringement claims regarding the ‘457 patent were all overturned, and Judge Brewster ruled that Microsoft had a valid license of the ‘080 patent. Some excellent analysis of these rulings can be had courtesy of Mr. Zura. While Microsoft got favorable JMOL rulings on the infringement claims, there was also a favorable ruling on the calculation of damages that is particularly interesting. The judge first discussed the use of the ‘computer’ as the royalty base. Lucent had asked for a royalty based upon each computer sold with the offending software, utilizing the ‘market value rule’. Judge Brewster was not a fan of using such a basis for royalty calculations:

Two major problems arise in applying the entire market value rule here. The first is the failure of the evidence to establish a link between the cost of the computers (rather than the operating system, Windows Media Player, the MP3 codec or some other “unit”) and the customer demand or value of the patented technology. The second and probably even more troublesome problem is the failure to establish that the patented features themselves produced any customer demand or value of the product.

He next discussed the royalty rate of .05%. The Judge could find no real problem with the rate, but there was no evidence in the record to support the jury’s decision:

The Court finds that the jury’s verdict was against the clear weight of the evidence; although a plethora of licensing agreements were admitted into evidence, the majority of these which advocated a royalty rate in the 0.5% range lacked sufficient relevance to the technology at issue here, the relevant date of the hypothetical negotiation and/or the scope of a license that would be negotiated between these parties. Moreover, since the royalty base must be redetermined, the royalty rate dependent thereon also should be reconsidered.

So it seems that Microsoft can breathe easy knowing that should their recent victory be stripped from them on appeal, it is highly likely that the price tag will come in well under $1.5 billion.

Hey Congress! You Missed a Spot!

The buzz on Capitol Hill is all about the Patent Reform Act of 2007’s journey through the halls of Congress. There is also a lot of talk about the new rules being proffered by the PTO. Amidst the talk of changing the system and identifying problems with it, there is always talk of patent grant rates, the workload of the PTO, and how they will deal with added responsibilities if the bill should pass. Here at Tech LawForum, there have been posts about patent examiners before because it seems that more attention should be paid to what will help them do their jobs more effectively and efficiently. They are perhaps one of the most crucial parts of the U.S. patent system, and they have gotten little to no input (it would appear) on the Reform Act. According to POPA’s 2007 newsletter, there are currently about 5,000 patent examiners working for the USPTO (which is 2,000 more than in 2002). The presence of more should mean that the PTO is heading in the right direction with lowering their backlog of applications. Not so fast, says Robert Budens, president of the Patent Office Professional Association (POPA):

The real problem is that we�re not retaining people. In fiscal year 2006, we hired 1,200 people and lost 510.

And as to the reason for such turnover, Mr. Budens had this to say:

The number one reason is that you don�t have time to do your job. Examiners are stressed out. I started in 1990 and just afterwards, the USPTO issued its 5 millionth patent. It took 200 years to get to that, and yet in the next 17 years, we�ve reached the 7 millionth patent.

Given those statistics and the fact that there is a growing backlog of applications, one would think that in order to increase the retention of examiners, there would be a push to give them more time to do their jobs. However, POPA’s pleas for more time have fallen on deaf ears. Once again, according to their website

:

POPA has been testifying before Congressional Committees and lobbying Congressional members and staff on the issue of more time for examiners for at least 10 years. POPA has written in our Newsletter distributed to many influential government and private sector individuals and organizations of the need for more time. The most recent news release from POPA called for an increase of 20% more time for examiners since the goals have not been changed since 1977.

Examiners have never gotten the increased time that they need, and here’s the ironical part:

POPA IS PROHIBITED BY LAW FROM NEGOTIATING ON PRODUCTION OR GOALS.

Now, this is just a suggestion to those in Washington, but perhaps this issue should be addressed by the new Act.

The Unions Weigh in on Patent Reform

There has been a lot of talk about the new Patent Reform Act going over, around and through all of the hoops required on its way through Congress. During its winding journey through committees and hearings there have been changes in response to complaints from lobbyist groups and Congressmen and women. We here at Tech LawForum have written extensively on much of the testimony and discussions pertaining to the Act. However, it seems one large group was left on the outside looking in on the Patent Reform party, until now. The American Federation of Labor and Congress of Industrial Organization (AFL-CIO) has recently written a letter to Congress voicing their previously unheard opinions on the legislation. According to their website, the AFL-CIO represents about 10 million union workers across the nation, or roughly 2/3 of all the United States’ unionized workforce. In their letter to Congress, the AFL-CIO, voiced its concern that the proposed bill could cause problems for manufacturing companies that employ many of their constituents. The letter stated that their concerns centered upon the apportionment of damages portion of the bill and the new post-grant review procedure. The letter didn’t specify, but it would seem that as the second window was dropped during the Judiciary Committee review that the latter concern has already been addressed. As for apportionment of damages, the AFL-CIO wants to see courts allowed to retain use of the Georgia Pacific factors in making such determinations. A PDF of the letter may be found here, courtesy of Peter Zura’s 271 Patent Blog.