Patent Litigation ! Is it really worth it ?

Have you ever used a ‘slide to unlock’ feature on your I-phone or used 4G network to receive data ? Apple has a patent for ‘slide to unlock’ feature and Samsung has patent for receiving data over 4G network. Both the companies has been fighting PATENT WAR with each other for so long. Similarly in the case of ‘Basmati rice’ a US company Ricetec faced a global outrage after the grant of patent for basmati rice in their name. Below is the excerpt of wikepedia on this case

In September 1997 Texas, USA company RiceTec was granted U.S. Patent No. 5,663,484 on “basmati rice lines and grains.” The patent secures lines of basmati and basmati-like rice and ways of analyzing that rice. RiceTec, owned by Prince Hans-Adam of Liechtenstein, faced international outrage over allegations of biopiracy. It had also caused a brief diplomatic crisis between India and United States with India threatening to take the matter to WTO as a violation of TRIPS which could have resulted in a major embarrassment for the United States.[12] Both voluntarily and due to review decisions by the United States Patent and Trademark Office, RiceTec lost or withdrew most of the claims of the patent, including, most importantly, the right to call their rice lines “basmati.”A more limited varietal patent was granted to RiceTec in 2001 on claims dealing with three strains of the rice developed by the company. 

There has been numerous such cases in past where either the companies are facing patent litigation or have claimed and filed suites on its competition. Seeing and observing the whole litigation filing process and the money spent by companies on such suites one question comes to mind, whether this was required?

Many individuals think that to avoid such types of incident there needs to be changes made in present patent act so that the companies can invest their money as well as its resources in innovation rather than these type of patent litigation cases. Taking alone the case of apple and samsung they have been on each others throats for more than 40 times. During the State of the Union address to Congress in January 2014, President Obama called for passage of a patent reform bill that would allow businesses to stay focused on innovation, not litigation. Today, in what was billed as part of the “Year of Action: Making Progress Through Executive Action,” the Obama Administration highlighted progress made on previously announced executive actions, and also announced three new actions to further respond to the President’s desire to increase patent quality.

I would like to get a response from the readers as to what are the reforms they think, is to made in present patent act which could improve the quality of patent and avoid patent litigation cases.

Why doesn’t apple sue google?

Suing Google wouldn’t get Apple far since Google doesn’t make its own phones or tablets and gives away its operating system for free. Instead, Apple has sued companies that sell physical devices using Android, a rival to Apple’s iOS mobile operating system. In particular, Apple believes Samsung has followed a strategy to copy its products and then undercut Apple’s pricing.

For Apple, it’s easier to point fingers at the handset makers who generate revenue and profit off of Android phones, rather than Google, which only indirectly generates revenue through mobile advertising and services. It’s also easier to display an iPhone next to a Galaxy device and show the similarities and describe how the iPhone predated other rival smartphones. Work had started on Android before the iPhone launched, making it harder to persuade a jury that Google was a copycat.

Overall, the lawsuits are part of a broader effort by Apple to halt the momentum of Android, which has long surpassed iOS as the dominant mobile operating system. Apple isn’t just looking for damages; it wants the phones barred from sale. Legal experts say Apple could deal more damage and potentially reap a higher reward going after multiple handset manufacturers than by just striking at Google.

“It is much more effective to sue the device makers as their incremental margin per device is low relative to the benefit that Google gets from having access to your eyeballs,” said Chris Martlett, CEO of MDB Capital Group, an investment bank that maintain an intellectual property database. “Ultimately if the device companies can’t make a good margin on the phones, they will go out of the phone business. This ends up being a much more effective route to hurting Android.”

Quiz post : – Relevance of Patents

In response to “post a topic and win big” contest, i received many queries through facebook messages, emails and blog comments. I hope to have properly answered all the readers questions. As far as contest goes, of all the topics posted by our readers we selected the question posted by one of the member.  The topic is relevant to all the beginners in this industry especially those who does not come from a legal background. I will be withholding the name of the winner for the sake of her privacy. I will contact her personally and awards her the prize as promised. I know you all want to know what her question was?

There is so many patents granted every year. How many of those patents are of actual importance ? Why patent offices grant patents to inventions which are of no use? What is the criteria that an inventor should follow to check whether he/she should file a patent for his invention or not?

The relevance of patent cannot be judged according to its application in real world or its usefulness to common man. Then what is the use of patent? To understand this First we need to understand what the patent actually is? This is an agreement between the government of the country with the inventor where the government allow the patentee to restrict others from using that invention in return the inventor has to share his knowledge and findings with the citizens of that country. The government does this so that citizen of his country can gain knowledge and improve their living standard. What seems of no use to us can be of great value to others. Knowledge is the key. Let us take an example to understand this. Suppose somebody invented “nails” and patented “nails”. In the process he shared all his knowledge with the citizen of the country. Now everyone is using it in the country and somehow it becomes a very popular product. Every body is using it for one or the other purpose, somebody is using it to hang clothes, somebody for building wooden structure etc. But let us suppose nobody is using “hammer” for nailing or think as if hammer does not exist at that time. Somebody is using some utensil to nail it; somebody is using bricks to hammer it on to the surface. Meanwhile someone comes up with an idea of “hammer”. Hammer is invented. Now think how easier it is to nail the “nails” to the surface with the help of a hammer. We can in a way say that patent of nails helped in invention of hammer. One hammer improved the working standard of person’s earlier working with different tools to get the job done. Later on people realized that hammer can also be used in different application like checking the breakage of bones by doctors. Thus hammer can at times be critical in saving someone’s life also. Though a “hammer” and “nail” are two different entities but one came into existence only due to knowledge shared by the inventor of first. Suppose the inventor of nail would not have shared his knowledge then in that way application of nails would have been restricted to carpenter community and secondly hammer would never have been invented.
I also first thought why one should file a patent for petty things like safety pins or straws etc. But when I further studied I realized sharing of knowledge is increasing of knowledge. Government does a great work by implementing patent system in the country. This not only helps in preventing interest of patentee but also helps in overall increasing the knowledge of citizens. I would also like to discuss this point (relevance of patents) from industrial point of view. Why patenting is essential for a company?

To look at this let us explore the technical definition of patent. A more technical definition of patent would be, PATENT is a right given to a patent holder by the country, by virtue of which he can prevent others from selling, importing, using, manufacturing or offering for sale of the patented invention within that country. The patented invention can be manufactured only when the inventor give a permission to do so to the manufacturer.

The question now arises if the government of India is not giving any kind of monetary benefit to the inventor then why he shall file a patent and share his knowledge, expertise on the matter with the whole world, in-fact the government is charging an inventor for filing a patent and even for the duration for which the inventor wants that patent to be in his name (Inventor pays money to maintain his name in the record of patent office).Then why?

The basic reason why inventors/ companies go for patent protection is for the exclusive right that they hold over their invention for a specific period. But besides this obvious reason, there are other reasons why an inventor/ assignee would want to patent his invention.

Before we discuss the other reasons, let us first look at what rights do the term “exclusive right” of the inventor encompasses. Exclusive rights means the inventor wields monopoly rights over his invention, such that he can stop others from using his invention without his permission. This, interpreted in another sense, would mean he can gain royalties from persons who use his invention. Royalties is one reason why many inventors/ companies want to patent.

Besides this privilege of exclusivity, many companies use the patent system as a weapon of defense also, i.e. they patent to stay ahead of others besides being able to stop others from overtaking their progress.

Sometimes, a single novel invention is all it takes for a company to leap light years ahead of others. In extreme cases, a single patent had started up entire industries- like the xerography technology started by the company, Xerox Corporation.

As a start-up company, having a patent brings an advantage of the company’s ability to rope in investors. Investors would always look for signs of growth, of knowing that his investment would be protected in a company and he would get some returns out of it. Companies with strong patents would always have a unique position in the market. This would in turn rope in investments to your company.

Nowadays, most companies understand the importance of IP valuation and have IP portfolios to manage their IP assets. Valuation is important for investment- to show the investors the strength of the company’s IP; and also for licensing and Mergers & Acquisition- to realize the full potential of the patents.

The one major hurdle in the patent procedure is that patenting is an expensive affair. It becomes an even more expensive affair when you want to patent in several countries; since, unlike the general notion, patents are territorial and are not protected internationally.

Hence, one should identify in which inventions to invest money and which to forsake. To estimate whether one should go for patenting or not, the question to be asked is- how successful will the patented product be? If it is successful enough to be wanted by the competitors, then it is worth protecting. If it can give a reasonable profit by licensing it to others, then also it is worth protecting. However, if it gives a very meager amount of profits, then there is no point in investing money trying to patent it. Commercially if you think, you will be investing anywhere around 20 to 40 thousand rupees to get a patent filed and granted and if you personally feel you would buy that invention from market my suggestion would be go for the patent. If you think you don’t want to buy it at all then don’t go for its patent. You can even do a market survey beforehand and analyze the viability of the product then decide whether to go for a patent or not.

Though patenting might give your company very many advantages, yet before going forth, you should fully realize the value of your patent, the equation of your investment to the value you will receive from your patent; and once sure of the value of your patent, go forth investing in it.

Note: This article has been compiled with inputs from various persons and various resources like other blog, websites etc. If any one has any objection regarding the post please notify the post will be modified with immediate effect.

suggest topic and win recharge of Rs 100

ImageA request to all reader of my blog and facebook page. I am starting a “suggest a topic” contest. Rules and regulation of this contest is very simple. Just comment a topic on facebook page and if that topic is used as blog post then you win recharge of Rs 100. Every week one lucky winner will chosen and his topic will be well researched and his topic will be used as a post. There is only one condition that suggested topic must relate to patents and its applications. For any query you can mail me at chaitanya@aimcorpindia.com or you can send message on facebook page.

Patent Myths and Misunderstanding !

A patent protects what is shown in the drawings

  • The patent claims define the scope of protection, not the drawings.

  • The drawings only illustrate the examples.

  • A good application is filed with claims broader than the examples.

  • The claims issued might remain broader than the examples.

  • The claims issued might no longer include all examples.

A provisional patent is the normal or preferred first step on the road to obtaining a patent

  • The normal and preferred first step is a non-provisional application.

  • While there are legitimate uses for a provisional patent application, it increases overall costs and it has risks for anyone not experienced in patent matters.

  • Using the provisional patent application route to obtain a “patent pending” can destroy the potential for obtaining meaningful patent protection down the line.

Something shown and/or described in an expired patent can be re-patented

  • What is shown and/or described in any patent, expired or not, is known.

  • Something known cannot be new.

  • To be patentable, the subject matter must be new.

  • To be patentable, the subject matter must also be non-obvious in comparison to what is known.

Something is patentable if it is not “out there” – wrong, if “out there” means what is on the market –

  • To be patentable, the subject matter must be both new and non-obvious in comparison to what is known.

  • What is known is defined by statute and court interpretations, and it includes far more than what is on the market.

  • The patent literature, which is just one source of known s, includes many, many things that are not, and never have been, on the market.

Patent makes people rich.

  • There is no guarantee that an invention, design, or plant that is patented will sell. In fact, most patents do not generate income for  their owners.

Patent are offered only to great ideas

  • Patents are not issued for great ideas or mere suggestions. Patents are granted to people who (claim to) “invent or discover any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof”—to quote the essence of the U.S. statute governing patents.

Provisional patents

  • Provisional patents do not exist. Rather, a Provisional Application for Patent, which is often confused as a “provisional patent,” is a legal document filed with the Patent office that ascertains an early filing date and is not subject to some of the formal requirements necessary for a regular patent application. Moreover, it only develops into an issued patent when the applicant files a regular patent application within one year. A provisional application is not meant to provide any enforceable rights, which is often frightening for inventors. This application is not reviewed by the patent office and becomes invalid 12 months after filing.

Patent your idea.

  • Ideas can not be patented. Inventions are patentable. This could be explained as , unless and until one implement his ideas and comes up with a working system he can not file a patent application. Systems (machine) which solves any kind of problem can only be patented

 

Ten myths about patent !

Myth 1: Nobody would invent anything if they couldn’t patent it.

Fact: People invent for a lot of reasons. Some people invent because they can. In this, they share a strong drive with artists. But focusing on the commercial innovation, nobody invents because they can patent the innovation. They invent because they can make money on it.

In practically all industries, this money is made from selling products and services relating to or incorporating the innovation. Patents do not sell products and are, for the most part, granted long after the related product is so old it is obsolete and no longer generating money.

If companies did not innovate, they would lose the ability to sell products, and therefore lose the ability to make money. This is much more relevant than the ability to patent something.

Myth 2: Patents drive innovation.

Fact: Patents do not drive innovation, they ban innovation. A patent is, by its very definition, something that bans the entire world except the patent holder from building and improving on a particular innovative step. If patents are driving innovation, which is claimed, then this outright ban must be shown to have side effects that somehow drive innovation to a larger extent than the extent to which the direct ban destroys it. No such side effects have turned out to exist.

To the contrary, patents are being used by incumbent industries to shut down disruptive competition. Rather than competing with better products and services, the current kings-of-the-hill are finding it more cost efficient competing with more expensive lawyers. This does neither drive innovation nor a healthy competitive market.

Myth 3: Nobody would invest in startups that don’t have patents.

Fact: The seasoned startup investors absolutely hate patents and the entire patent system. They compare it to a cancer in the economy. As soon as a company has any money at all, it will be sued for patent infringement on pure speculation. These purely speculative patent threats have been estimated to burn about 10% of all investment capital today.

Myth 4: Patents are good and useful as a measure of innovation.

Fact: This is the broken window fallacy. To measure innovation in terms of how many innovative steps have been stopped by legal means for the duration of a patent — usually 20 years — is just not dysfunctional, it deserves a whole array of psychological disorder diagnoses.

Just because you can get a number on something doesn’t mean it can be used as a measure. Particularly not so if the number is a quantitative measure of bans on innovation, and you are trying to use it as a measure for innovation potential.

Myth 5: The patent system derailed just recently with the advent of the patent troll. Patents can be brought back on track if the troll problem is dealt with.

Fact: Patents have always been a brake on innovation. Lately, the pace of ideas have picked up, and so the problem has become more obvious — but it has always been there. The Industrial Revolution was delayed 30 years because of Watt’s patent on the steam engine (and people who improved it were even put in jail). The flight industry was delayed 25 years because of patent wars. Broadcast radio was delayed by ten years twice — first when it arrived in the 1920s, and a second time when FM radio arrived.

Myth 6: Patents protect the small, poor inventor against exploitation by ruthless big corporations.

Fact: A patent is only worth as much as you can spend on a lawsuit defending it. A small, poor inventor can’t even afford the application cost of €50,000 (average, including legal advice) for a European patent. That doesn’t even grant the patent, it’s just the application. Then, they will have to defend the patent in lawsuits against huge corporations, where one single patent lawsuit easily can (and typically does) run into millions of dollars in costs for each side. It’s plainly a joke that a small player can play in the patent arena, and it only offers protection for big players against small entrepreneurs.

Small and medium-sized businesses are increasingly shying away from patents, and politicians tend to see this as a problem, rather than considering the possibility that entrepreneurs have understood something that the politicians haven’t.

Myth 7: Patents disclose innovations – the alternative would be trade secrets.

Fact: This is wrong on both accounts. First, the trade secrets and critical know-how today lie in the manufacturing process, and very rarely in the finished product, which can be patented. Second, have you ever read a patent? Its language is so convoluted that it is absolutely impossible to comprehend for a normal engineer skilled in the applicable domain. This is also what has led us to at least ten overlapping patents on common things like network plugs. Third, trade secrets are not bad. It is part of normal healthy competition to try to gain the upper hand over your competitor (and is something that the government should not interfere with).

Myth 8: Patents are good for the economy — just look at all the licensing going on.

Fact: The entire patent system is draining resources from all corporations, if nothing else because it is a balance of terror. You need a patent portfolio for yourself in order to avoid patent lawsuits from others: you need the capability to countersue to avoid the lawsuits in the first place. Many corporations have a stated policy of never using patents offensively. The whole system has become a quagmire that sucks resources out of research and development.

When an entrepreneur chooses to pay a patent license, it has very little to do whether the patent has merit or not. Rather, it is a cynical calculation of whether it is more economical to just cave in to the demands and pay the license, or more economical to go to court and challenge the patent and claim as such. The court option is very rarely the one with the most business sense. Therefore, the system has turned into law-backed extortion. On the other side of the scale, politicians see all the licenses being paid and take this as a sign that the patent system works, when it is a result of extortion against the entrepreneurs that drive our economy.

The only group that consistently gains from the patent system are the patent lawyers. With the exception of one industry, the patent system is a net loss to every single industry.

The one exception is the pharma industry, as they use the monopoly deadweight created by the patent system to tax the public for their own gains. (In Europe, 83% of pharma revenue is tax money, on average.)

Myth 9: Patents can’t be scrapped without being replaced with something else that encourages innovation.

Fact: Patents harm the economy and innovation. It is perfectly possible to remove a strong brake on innovation without needing to insert another brake of a different color. If somebody is banging you repeatedly over the head with a hammer, you have the right to ask them to just stop, without having to simultaneously give them an alternative tool to hit you with.

Myth 10: All practicalities aside, patents are morally justified. You should own what you create.

Fact: It is morally just that you can combine your own pieces of property into new kinds of property, using ideas that you get by yourself. Patents allow somebody else to ban exactly this, just because they thought of the idea independently earlier and managed to fill out some particular forms. This is independent of whether you have even heard of the patent holder. Patents are, therefore, a strong limitation on competition rights and property rights. If you have the right to own what you create, then patents need to go out the window.

compiled from – http://falkvinge.net/2011/06/21/ten-myths-about-patents/

who owns patent for “statue of liberty”, “floating soap”,”leather”?

Did You Know?

– that a workman who left the soap mixing machine on too long was responsible for making Ivory Soap? He was so embarrassed by his mistake that he threw the mess in a stream. Imagine his dismay when the evidence of his error floated to the surface! Result: Ivory soap, the soap that floats.

– that the Band-Aid® Bandage was invented by a Johnson & Johnson employee whose wife had cut herself? Earl Dickson’s wife was rather accident prone, so he set out to develop a bandage that she could apply without help. He placed a small piece of gauze in the center of a small piece of surgical tape, and what we know today as the Band-Aid bandage was born!

– that the inventor of the World Wide Web, British-born Tim Berners-Lee, never made money on his invention, which revolutionized the computer world? In 1989 he envisioned a way to link documents on the Internet using “hypertext” so “surfers” could jump from one document to another through highlighted words. Berners-Lee decided not to patent his technology since he feared that, if he did patent it, use of the Web would be too expensive and would therefore not become used worldwide. He therefore passed up a fortune so the world could learn and communicate.

– that Robert Adler has the dubious distinction of being the Father of the Couch Potato? Back in 1955 Adler was employed by what was then Zenith Radio Corp., where he was charged to invent something that would allow viewers to turn down the TV volume without leaving their chairs. After a series of flops (such as a wired contraption that people tripped over), Adler hit on the idea of using sound waves. Thus the Remote Control was born . . . and some viewers haven’t moved since!

– that in 1879 Auguste Bartholdi received a design patent for the Statue of Liberty?

– that Galileo invented the thermometer in 1593?

– that the first ballpoint pen was invented by Hungarian journalist Lasalo Biro and his chemist brother, Georg, in 1938?

– that power steering was invented by independent inventor Francis W. Davis? As chief engineer in the 1920s of the truck division of the Pierce Arrow Motor Car Company, he saw how hard it was to steer heavy vehicles. So that he would be able to keep the profits from his future invention, Davis left his job, rented a small engineering shop in Waltham, Mass., and developed a hydraulic power steering system that led to power steering.

– that it was melting ice cream that inspired the invention of the outboard motor? It was a lovely August day and Ole Evinrude was rowing his boat to his favorite island picnic spot. As he rowed, he watched his ice cream melt and wished he had a faster way to get to the island. At that moment the idea for the outboard motor was born!

– that two musicians were responsible for the invention of color print film? Fascinated by photography, Leopold Godowsky and Leopold Mannes worked together to produce an easy-to-use, practical color film. They worked full time as music teachers and gave concerts while experimenting during their off hours in Mannes’ kitchen. Their success earned them full-time, well-paying jobs at Kodak and their efforts resulted in Kodachrome film, which was introduced in 1935.

– that the telescope was accidentally discovered in 1698 when Dutch eye glass maker Hans Lippershey looked through two lenses – one held in front of the other – and realized that the image was magnified?

– that one person who claimed to be the inventor of the television is Russian emigre Vladimir Zworykin? In 1929 David Sarnoff, founder of RCA, asked Zworykin what it would take to develop TV for commercial use. He said: a year and a half and $100,000. In reality, it took 20 years and $50 million! Before his death in 1982 at the age of 92, Zworykin said of his invention: “The technique is wonderful. It is beyond my expectations. But the programs! I would never let my children even come close to this thing.”

– that the formulas for Cola-Cola and Silly Putty have never been patented? These trade secrets are shared only with selected trustworthy company employees, and while there have been many attempts to duplicate these products, so far, no one has been successful.

– that Benjamin Franklin invented bifocals because he hated wearing two pairs of glasses?

– that several people are credited with the invention of the flush toilet? Most people have heard of Thomas Crapper (1837-1910), the sanitary engineer who invented the valve-and-siphon arrangement that made the modern toilet possible. Another claimant to “the throne” was British inventor Alexander Cumming who patented a toilet in 1775. Then there’s a nameless Minoan (a native of ancient Crete) who lived 4,000 years ago who supposedly was ahead of his time and created the first flush toilet!

– that after Parker Brothers executives turned down the game of Monopoly because it had “52 fundamental errors” (including taking too long to play), a copy of the game wound up in the home of the company president who stayed up until 1 a.m. to finish playing it? He was so impressed by the game that the next day he wrote to inventor Charles Darrow and offered to buy it!

– that the first rickshaw was invented in 1869 by an American Baptist minister, the Rev. E. Jonathan Scobie, to transport his invalid wife around the streets of Yokohama?

– that to encourage use of his new invention, the shopping cart, market owner Sylvan Goldman hired fake shoppers to push the carts around his store in Oklahoma City? Seems his customers were reluctant to give up their hand-carried baskets.

– that the trademarked name “Baby Ruth” was inspired by President Grover Cleveland’s daughter, Ruth, and not by Babe Ruth?

– that J.B. Dunlop, one inventor of the pneumatic tire, was a veterinary surgeon?

– that Thomas Edison’s patent application on his phonograph was approved by the Patent Office in just seven weeks? In contrast, if took Gordon Gould, the inventor of the laser, 30 years to obtain his patent – finally awarded in 1988!

– that the first Apple computer was born in Steve Jobs’ parents’ garage? College students Jobs and his partner Steve Wozniak worked furiously in that garage assembling computers for fellow students and were totally unprepared for their first commercial order for 50 computers. To raise the needed $1300 for parts, Jobs sold his old VW bus and Wozniak sold his Hewlett Packard calculator. The next year – 1977 – Apple sales hit $800,000 and went on to become a Fortune 500 company in a record five years!

– that “patent leather” got its name because the process of applying the polished black finish to leather was once patented?

Compiled from inventors digest. Copyright © 2009 Inventors Digest All rights reserved.