Section §101: Abolish This Troubling Statute in Patent Law?

Section §101: Abolish This Troubling Statute in Patent Law?

Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.

35 U.S.C. 101 (Section §101)

As we’ve discussed before, Section 101 is one of the most basic and yet has become one of the most troubling statutes in patent law. While at first glance §101 appears broad, the “judicial exceptions” established in Bilski and expanded upon in Mayo, Myriad, and Alice have greatly limited what judges, (and as a result examiners) regard as patentable subject matter and not simply as “abstract ideas”. Determining what counts as “abstract ideas” has become so exceedingly difficult that some commentator have argued that the patent system is now broken.

Recognizing the predicament that many patent lawyers and patent owners now find themselves in, Dave Kappos, the former director of the USPTO, has proposed a rather eloquent solution to the §101 conundrum: simply drop §101 from the books. Speaking at a Federal Circuit Judicial Conference, Kappos called for Congress to “to abolish Section §101.” Kappos pointed out that many countries, including countries in Asia and Europe, do not have parallel provisions and yet “seem to be doing just fine in constraining patent-eligible subject matter”. To be fair, Kappos is not the first to suggest that §101 be abolished. Similar arguments were made by Eli Lily Co. in an Amicus brief for Ariosa v. Sequenom.

Supporters of abolishing §101 point out that it would help alleviate the mess the Supreme Court has made of software patents.  Furthermore, there is the argument that it makes economic sense. Much of the subject matter deemed unpatentable under Alice is still protected in many foreign countries, which may lead many companies to move their research and development departments out of the U.S. By removing §101 and allowing patent protection in the United States for inventions which are protected abroad, the U.S. would be signaling to companies that the country still values innovation.

However, the abolishment of §101 would not be without its own challenges. Foremost being what becomes of all the patents which were recently invalidated under §101. Would/could these patents be reinstated? If they are reinstated, what becomes of the businesses that moved forward believing the patents would remain invalid? Could owners of the now reinstated patents shut down these business or would the courts force compulsory licenses? As one can see, even fixing an arguably bad law is not without unforeseen consequences.

In summary, Kappos’ proposal is a possible, although unconventional, solution to the legal challenges now faced under §101. With many other statutory provisions acting as hurdles to obtaining a patent, perhaps §101 is causing more harm than good.  Nevertheless, lawmakers (and judges) need to tread lightly when making any modifications to the legal framework that governs patents.  Creating stability in patent law is often as important drafting good statutes.  Companies can and will adapt to consistent laws (even if the laws are consistently bad). What companies cannot prepare for, and what would cause them to abandon the patent system, is unpredictability.

Are your company’s IP dollars producing the strong patents you need?

Good Patents are like bees—they should protect what's sweet and sting when they need to.
—Bob Fieseler, Founder of Corridor Law Group

Corridor-law-Group_Patents-are-like-bees

Technology companies, investors, inventors and start-ups, ask yourselves—are your company’s IP dollars producing the strong patents you need?

Of the 3,000 patents the U.S. issues every week, only 2-3% are said to cover technology that’s ever sold. Companies need to know that their IP dollars are producing strong patents that protect the key features of their products. Corridor Law Group‘s success rate beats the average by an order of magnitude. In other words, the patents Corridor Law Group secures will cover what makes your product unique and worth buying so money isn’t wasted on patents with negligible value. Corridor Law Group’s veteran attorneys make it their business to understand what’s important to your business, and then craft patents that will keep others out of your market and withstand challenges from those who don’t respect innovation.

Let Corridor Law Group be your company’s IP champions. We offer a no obligation 20-minute consultation. Call us today.

Corridor Law Group’s Passion For Innovation And…Honey!

Corridor Law Group’s Passion For Innovation And…Honey!

Corridor Law Group’s founder and CEO, Bob Fieseler, is passionate about intellectual property law and innovations that change the world–but did you know that he’s also passionate about beekeeping? Yes, it’s true. Bob loves the art of beekeeping and enjoys its many natural health benefits. Local opinion recognizes that Bob has cultivated some of the best tasting honey in Naperville and often sends honey to friends and clients. On any given Saturday morning during the Spring and Summer months, you’d find Bob in his beekeeping suit caring for his bees and their hives. Bob harvested almost 12 gallons of honey, weighing about 125 pounds, from his hive last year!

Here’s a wonderful article about a new innovation that allows beekeepers to collect honey without ever opening the hive. How appropriate—passion and innovation nestled into one really cool product innovation called Flow Frame.™

A Father and Son's Genius Beehive Invention: Collect Honey Without Opening Hive
“The world of bee keeping has been waiting a very long time for a new innovation. The Father and son team of Stuart and Cedar Anderson have come up with a genius way to collect honey without opening the hive. They call this innovation the "Flow Frame.”

According to honeyflow.com (their website):

“Flow™” is the name of our new invention that allows honey to be harvested directly from the hive without opening the hive and with little disturbance to the bees. The Flow frames are the beehive frames that make this possible. The team recently launched a crowd-funding campaign on Indiegogo and at the the time of this writing, have raised over $2,500,000 dollars. This is pretty amazing considering their initial goal was to raise $70,000.”

 

 

“The Andersons believe that beekeepers and bees have a special symbiotic relationship that goes back thousands of years. We have literally evolved together. We care for them, they pollinate our crops and of course make lots of delicious honey. Without the bees we may not be able to sustain human life as we know it, and without the beekeepers we wouldn’t have enough bees….In this modern world of limited natural habitat, beekeepers have become vital carers of bee colonies. We hope Flow™ hive will encourage thousands more people to become passionate carers and advocates of bees and become more aware of the threats facing not only bees but the matrix of life. For more information check out the Indiegogo Campaign or the HoneyFlow website.”

Corridor Law Group sends out a big “congratulations” to father and son inventors, Stuart and Cedar Anderson! We love your innovation Flow Frame™ and its potential to change the world– one hive (and one jar of honey) at a time. Cheers, guys.


Excerpt from eatlocalgrown.com.
 
 

Did Apple Pay $533 Million to a Patent Troll or a Good Guy Standing Up for the Common Man?

(Did Apple Pay $533 Million to a Patent Troll or a Good Guy Standing Up for the Common Man? expands upon our article, An Extensive Collection of Patents Can Deter Lawsuits Altogether.)

Non-practicing entities are sometimes called “trolls” and are typically painted as bad guys in the IP world; however in this case it looks like Apple was seen as the bad guy and the “troll” was viewed as standing up for the little man. We think this case shows the importance of the “story” behind the patent, and how good lawyers recognize that story and use it to their client's advantage, (either in front of a jury or an examiner at the USPTO).
USPatent7334720-figure-drawings

How Apple lost $533 million to an 8th-grade dropout patent troll, by Philip Elmer-DeWitt at Fortune.com.

 

One of its mistakes was to make a fuss about Patrick Racz’ education in front of a Texas jury. Apple rarely comments on legal matters, and when it does it chooses its words carefully. So I read with interest the statement it issued after it was ordered to pay $532.9 million to Smartflash LLC for willful infringement of three U.S. patents. It’s a classic of the genre:

"Smartflash makes no products, has no employees, creates no jobs, has no U.S. presence, and is exploiting our patent system to seek royalties for technology Apple invented. We refused to pay off this company for the ideas our employees spent years innovating and unfortunately we have been left with no choice but to take this fight up through the court system. We rely on the patent system to protect real innovation and this case is one more example of why we feel so strongly Congress should enact meaningful patent reform.”

You don’t have to love the U.S. patent system or non-practicing entities (A.K.A. patent trolls) to wonder: How the hell did Apple lose this case? It’s a question that took on new urgency when Smartflash turned around two days later and sued Apple a second time, this time for infringement of four new patents. I wasn’t able to reach Apple’s attorneys, but I did have a chat with Brad Caldwell, the Dallas-based patent infringement specialist who represented Smartflash. He tells a curious story.

“I think the reason we won,” he says, “is because we focused on the questions that were going to be presented to the jury: Were the patents valid? Did Apple infringe? Was the infringement willful?” Apple, according to Caldwell, focused on everything but the issue at hand: Three digital rights management patents granted Patrick Racz and others between 2008 and 2012. Apple, he says, “paraded witness after witness through courtroom who couldn’t be bothered to read the patents.”

I haven’t seen the full transcript of the six-day trial, but I’ve read enough to get a feel for what Caldwell is talking about.
When Apple’s lawyers got Racz on the stand they brought up his education (he left school at 8th grade), his horticultural training, the fact that he was from a farming family on the Isle of Jersey. They asked him, according to Caldwell: “Did you invent the Internet?” “Did you invent touch screen technology?” Racz, of course, had not.

By contrast, Augustin Farrugia, Apple’s director of security and its key witness, had previously designed the national banking system for Singapore. On the stand he said he too hadn’t gotten around to reading Racz’ patents. “They thumbed their nose at other people,” says Caldwell. “They acted like we’re Apple and have no need to respect other people’s intellectual property.”

The jury, I’m told, was paying close attention. They took notes. They deliberated for three hours. They found for the plaintiff.
I don’t know whether Apple copied Racz intellectual property or even knew of its existence. I don’t know that it’s worth half a billion dollar. I don’t know where Racz got the technical chops to file these patents, and I’m certainly not qualified to say whether U.S. Patent Office should have granted them. But I think I know now how Apple lost the case.

So, did Apple pay $533 million to a patent troll or a good guy standing up for the common man? The moral of this tale may be as simple as this—it's important to frame yourself as the good guy, both to a jury and to a patent examiner. Especially, if you're seen as just a wee little troll. For more on the subject of Non-practicing Entities, click here.

Whether you’re looking to add to your own arsenal or are looking to acquire your first patent; give Corridor Law Group a call for a free consultation to discuss intelligent strategies that our firm can implement to protect your company’s assets.

An Extensive Collection of Patents Can Deter Lawsuits Altogether

(An Extensive Collection of Patents Can Deter Lawsuits Altogether is a follow-up to our article, Defensive Patent Portfolio Strategies.)

Technology companies often use defensives patents to prevent and/or settle litigation. The strategy involves accumulating an extensive collection of patents to use as protection in the event a competitor attempts to file an infringement suit. Like the Soviets and the United States during the Cold War, competitors often partake in “patent arm races” with neither side ever actually planning on pressing the metaphorical button, since doing so would set off a chain reaction of law suits leading to the “mutual assured destruction” of both parties.
CLG-patent-arm-races

A well-organized defensive patent portfolio strategy can often help protect your intellectual property—and those patents can deter lawsuits. The legal benefits can include:

  • The ability to force a settlement quickly by threatening a countersuit
  • Preventing competitors and trolls from applying for similar patents

The “patent arms race” is typically seen as an expensive game only the “big boys” can play. (Google's recently spent over $12.5 billion to acquire Motorola Mobility and its portfolio of roughly 17,000 patents to "help protect the Android ecosystem.") However, it’s worth noting that even having a couple of patents can be enough to level the playing field. In Smartflash vs. Apple, Apple was ordered to pay $533 million for patent infringement to patent licensing firm Smartflash LLC.

The moral of the story is, whether you’re a superpower with a patent arsenal large enough to “blow your competitors up" several times over, or a relative newcomer simply looking for respect, having the option to “go nuclear” on a competitor is a very powerful deterrent.

Whether you’re looking to add to your own arsenal or are looking to acquire your first patent; give Corridor Law Group a call for a free consultation to discuss intelligent strategies that our firm can implement to protect your company’s assets.