Create, Consult, Control
News & commentary on intellectual property issues.
Oct072011 | Steve O'Donnell
Steve Jobs, 1955-2011
I mourn the loss of Steve Jobs.
If it wasn’t for him, well, I’m not sure if we’d still be using DOS, but I think it’s safe to say that technology wouldn’t be where it is now.
If he retired with the stack of money he had following his ouster from Apple in the mid-80s, I doubt we’d be at the point where I can hand a device to my 4-year old or to my mom, and have both people intuitively know how to use it without a long explanatory demonstration. Also, without his influence, technology would still be ugly. He realized there wasn’t a good reason tech had to be beige and that it could form the aesthetic centerpiece of a desk, office, or even living room.
Steve Jobs was also a prolific inventor and realized that patents were vital to business, especially to a company whose strength lies in innovation. He is listed as an inventor on 317 patents that range from computers and peripherals to OS innovations, and even to staircases. I’m not going to list them all, especially since the New York Times already has here. Take a few minutes to look through their list to get an appreciation of the depth of Steve’s influence.
The Times list, of course, doesn’t contain applications that haven’t yet issued as patents. I don’t know how many of those are pending, but I know we’ll be seeing Steve Jobs’ influence for years to come.
Aug012011 | Steve O'Donnell
Can I get sued for this?
Rarely do I go longer than a few days without someone asking me if they can do something without getting sued. I’d bet every lawyer gets that question, or some version of it, a lot. The questions can rarely be definitely answered. If there was an easy answer, then the person asking probably knows the answer. For example the question “is it OK if I kill my spouse?” doesn’t really need to be asked. Unfortunately (for clients), or fortunately (for lawyers), the questions usually aren’t as easy.
For example, here are four questions I’ve been asked over the last couple weeks:
•Can I sell my drawings of famous articles/landmarks and not get sued? (maybe)
•Can I get in trouble for publishing my erotica that features popular TV/movie characters? (maybe)
•Can I be sued for reusing a picture I found on a website? (maybe)
•Can I get in trouble for counterfeiting arcade tokens (that one was answered with a long, uncomfortable stare)
First of all, you can be sued for just about anything. A neighbor could sue you for letting your grass get too long (if any of my neighbors are reading this: I swear I’ll cut it when the heat breaks). You could be sued if your toddler said something mean to another toddler at the park. Someone could sue you because they think you’re conspiring with Elvis, Oprah, President Obama, and a group of sewer-dwelling reptile-people to steal their thoughts. Granted, the chances of any of these cases being filed is narrow, and the chances of them getting anywhere in a court is even smaller, but they could happen. Asking whether you can be sued for something isn’t the right question to ask. Better questions are what is the chance of being sued, and what are likely damages. An even better question is “what can I do to reduce that chance or eliminate it?”
Often when I get these kinds of questions I’ll need to get more information before I can even suggest a plan. For example, to even start thinking about the question about selling drawings of famous articles/landmarks I needed to know what was being drawn. It’s one thing if you’re drawing a cityscape, it’s quite another if you’re drawing a Coke can or Batman. After that, what context is the famous article/landmark being used? Fan art of Batman is probably not going to rile DC’s feathers nearly as much as a drawing of Batman doing something extremely non-heroic and exceedingly out of character (let your mind wander for a moment, I’m sure you’ll think of something). Another big factor is the money involved. It’s one thing if you‘re planning on selling the art on a street corner or mall kiosk, it’s another if these drawings are being incorporated in a large, national publication that can generate thousands in revenue. Simply put, it’s not generally worth the expense to bring a lawsuit against someone if that suit can’t possibly pay off.
Depending on the exact facts behind a question, the likelihood of being dragged to court might be very low, or dangerously high.
No matter where that likelihood ends up, we can usually lower it a bit more. Ideally, we can get a license from any rights holder, but even without that, there are things that can be done, and precautions that can be taken that can reduce the chance of being taken to court.
Once you know the risk you‘re taking, which is something like: (chance of being sued * estimated legal fees and costs * estimated damages * chance of losing) you can decide if you want to change your course of action or if you want to go forward. Without knowing these things you’re going in blind.
Sep102010 | Steve O'Donnell
Reverse settlements still ok for now.
In a reverse settlement, at least in the pharmaceutical context, a patent owner agrees to license the patent or pays off a generic company to drop their patent challenge.
There are regulatory issues that make pharmaceutical patent litigation different than other cases. If a generic company wants to enter the market for a patented drug it needs to file a certification with the FDA regarding the patent, one such common certification is under “paragraph IV.” With a paragraph IV certification, the generic is alleging that the patent is unenforceable. When they do that, the patent holder has a chance to file a lawsuit for a technical act of patent infringement (meaning it’s really not an infringement yet, but the statute says it is). If they do that, then the FDA puts everything on hold until either the case ends, or 30 months, whichever comes first.
If this litigation goes to it’s conclusion and the generic company wins, then the patent holder potentially loses years of patent exclusivity and the huge stacks of cash that comes with a patented drug. The generic victor in this situation will have the 180 days of exclusivity as I noted, but then a flood of other generics is virtually guaranteed, which will erode profits.
With the billions of dollars at stake, it’s hard to imagine that someone wouldn’t come up with a clever innovation. You know, necessity being the mother of all invention, or something like that.
Increasingly we’re seeing reverse settlements. In these settlements, the generic company agrees to drop the lawsuit, typically in exchange for the ability to enter the market under a license. In that way, the patent holder is happy because they get to hold onto their exclusivity and the generic is happy because they’re guaranteed entry into the market, often for a longer time then the 180 days marketing exclusivity that they could have received from the FDA.
The FTC and the class action plaintiff’s bar has been arguing that these settlements are anticompetitive, and I have to agree with them. The drug companies argue that the settlements are pro-competitive because they ensure that a generic will enter the market. However, even if a generic enters the market, it’s still not an open marketplace, it’s an oligopoly (a market controlled by a small number of businesses). Accordingly, the generic keeps its price fairly close to the brand name drug, after all, there is no real competition to drive the price lower.
This battle between the FTC/lawmakers and the pharmaceutical industry has been going on for a couple years and the pharmaceutical industry appears to be winning. Just the other day, the 2nd Circuit refused a full rehearing of a case concerning one such settlement.
What do you think should happen? Should these settlements be barred? If so, doesn’t that go against the strong bias we have towards equitable settlements? I think it’s clear that the settlements are anti-competitive, but patents themselves are anti-competitive and most recognize that they’re generally beneficial. Maybe the statute should incentivize a second generic challenging after a reverse settlement. Right now the 180 day generic exclusivity is only available to the first challenger, maybe changing that would mitigate the impact of reverse settlements. I’m not sure what the answer is, but I’d love to hear some ideas.
Sep062010 | Steve O'Donnell
Turning an invention into money
Although there are some people that want patents just to fill up their résumé, most want their invention to become a money making machine, many inventions don’t. How does someone turn an invention into money?
First things first, if you don’t have some sort of protection for your invention or you’re just asking to be ripped off. Patents would be the most obvious route to protect an invention, but copyright, trademark, and trade secrets might also be relevant. This is the time to contact an intellectual property attorney and get an opinion on structuring a protection scheme.
When people call me, one of the first things I ask is what they’re going to do with a patent. Patent’s aren’t cheap or easy to get, and before someone starts throwing money at me I want to have at least some indication that they’re planning ahead and have a shot at recouping their investment. I lose more clients that way than I can care to think about.
First, many people seem to think that once they have a patent that companies will find it and search them out with a briefcase full of cash. I guess that could happen, but it sure doesn’t happen often.
There are basically three or four ways of turning an invention into money. Each has their strengths and weaknesses and which is the best will depend on the specific facts of the invention and the inventor: do it all yourself, license or sell the invention, or troll.
Most first time inventors want to do it all themselves. In other words, they want to start cranking out their widget in their basement, or pay a manufacturer to make it for them, and promote/sell it themselves. There are huge benefits to that. Obviously, all the profit goes to the inventor. However, if the inventor does not have the background or bankroll to commercialize a new product, the chances of success aren’t the best.
Another route is to either assign or license the inventor to an established company. The advantage are that the other company already has the infrastructure to commercialize the invention; on the downside, the inventor will likely only get a small fraction of profits.
If those fail to excite you, trolling has become popular. In a nutshell, what you do is get a patent and sit on it while waiting for someone to infringe it. If that happens, you wait until their product has taken off and then you sue them. It’s not a particularly popular option, and there are grumblings about how Congress might make that a less attractive option economically, but it is still an option.
What makes the most sense for a particular invention and a particular inventor is going to depend on a lot of factors, and it’s never too early in the process to think about these issues.
Call or email me for an individualized analysis of your intellectual property and your options.
Jul072010 | Steve O'Donnell
What happens to patents when a company closes.
A couple days ago someone found this blog by searching for “what happens to a patent when a company goes out of business,” which is surprising, because I don’t recall posting on that. At least it’s less disturbing than the time this blog was found by someone searching for “how to seduce a swan” (I hope they were looking for this.
So, what happens to a business’ patents when the business closes? The answer is pretty close to what you’d hear if you asked “what happens to a business’ copy machine when the business closes?” Patents are property, intellectual property, and even though they differ from physical property in certain ways, in many ways they’re the same.
A closing business can do any number of things with a patent. It could assign or license it to someone, the patent could be part of the company’s assets in a bankruptcy reorganization or liquidation; it could auction it off or dedicate it to the public; the patent could also be left to expire on its own.
The “expiration” is probably what people mean when they ask what happens to patents when the owner goes out of business or dies. For a patent to remain in force, periodic maintenance fees need to be paid to the government. Whether this is for a laudable reason, such as prompting the early public dedication of unused patents or if it’s just another way that the government can extract money from people is a question you can mull over later.
Currently these fees are due at 3.5 years, 7.5 years, and 11.5 years after the patent issues. The cost of these fees increases with each payment. The first maintenance fee is $980, the second is $2480 and the third is $4110 for a large entity and half that for a small entity. I’ve never thought of it before, but those are some strange amounts. If anyone can explain them to me, please leave a comment.
If those fees aren’t paid, the patent expires prematurely. If they are paid, a utility patent will normally expire 20 years after its filing date.
So I guess the answer to the question is closer to that for “what happens to a business’ car when it closes?” Not unlike a car, a patent can be sold, transferred, etc. Also, if a patent is left to languish and isn’t maintained it can be irretrievably lost.
If you’re concerned about a patent, the best thing to do is to have a patent attorney research the patent’s file and determine the best course of action.
Jun292010 | Steve O'Donnell
Bilski didn’t change much except my dinner plans
I (and every patent lawyer) have been anxiously awaiting the Supreme Court’s decision in Bilski, which should have given us a handle on when business method and software patents were patentable. The decision came down yesterday, and the Court punted.
Most patent attorneys had expected J. Stevens to write the opinion and guessed that it would tamp down on the patentability of business method and software patents. J. Stevens didn’t write the majority, and the opinion didn’t really change anything, or leave us with a clear indication of when business methods or software were patentable or not.
For the last few months I had some thoughts on what this post should be, I expected some softer rule than what the Fed Cir had stated, but we didn’t get a rule, only a dodge.
I anticipated a flurry of analysis and writing today and planned on picking up dinner while coming home from getting my kids at daycare to free a few more minutes for drafting. Since the Court didn’t give me much to work with, I decided that rather than trying to expound on a narrow ruling that gives little or no guidance, I instead will just write about what I made for dinner last night since the Court was kind enough to free me from my expected burden. So, here it is, Green Curry Macaroni and Cheese:
This recipe was based on Alton Brown’s Baked Mac & Cheese and inspired by Roger Mooking’s Curried Mac & Cheese.
Baked Green Curry Macaroni and Cheese
ingredients
1/2 pound elbow macaroni
3 tablespoons butter
3 tablespoons flour
2 tablespoons green curry paste
3 cups milk
4 teaspoons coconut extract
1/2 cup yellow onion, finely diced
1 large egg
12 ounces provolone
1 teaspoon kosher salt
black pepper
fresh Cilantro
directions
1. Preheat oven to 350 degrees F.
2. In a large pot of boiling, salted water cook the pasta to al dente.
3. While the pasta is cooking, in a separate pot, melt the butter. Whisk in the flour and keep it moving for about five minutes. Make sure it's free of lumps. Stir in the milk, onion, and curry paste. Simmer for ten minutes.
4. Temper in the egg. Stir in cheese and heat till melted. Season with salt and pepper. Fold the macaroni into the mix and pour into a 2-quart casserole dish.
5. Top with cilantro for service.
Notes: the curry paste container says to use 4T per can of coconut milk. . . which would translate to about 6T for this recipe. I find that to be waaayyy to hot, so I went with a third of that (and it's still pretty spicy, and I'm a guy that drenches pizza with hot sauce). I considered using coconut milk instead of milk+extract but I was concerned that the recipe needed the protein in the milk. . . plus, coconut milk is pretty fatty and there's already a bunch of fat from the cheese. I went with provolone because it’s a mild cheese and wouldn’t compete with the curry paste. The mix is very wet before it goes into the oven, but firms up nicely during the bake. When it was still hot from the oven, the curry spiciness was stronger than I anticipated, but as the dish sat, the spiciness mellowed yet was still very flavorful.
And no, this recipe isn’t patented.
Apr072010 | Steve O'Donnell
You probably don't want a provisional patent application
A number of “inventor assistance” services tout a provisional patent as a low-cost way of obtaining some degree of patent protection. Although a provisional is a little cheaper at the start, many people will wind up paying more in the long run than if they instead focused on a non-provisional application.
As I said before, I usually think of patents as consisting of two parts: the claims and everything else. A provisional patent is the “everything else.”
When I draft a patent, I start with what I consider the two hardest sections: the claims and the summary. The claims are tricky because they define the covered invention in as precise language as possible; the summary is tricky because it’s the “quick read,” plain language summary of the claims.
The claims are written for an intended audience of other patent lawyers and federal judges; the summary is written for potential infringers to read and hopefully come to the conclusion that a license makes better business sense than defending a lawsuit.
The rest of a patent is the foundation for the claims to stand on, and just like how like the visible portion of a building isn’t going to last without a solid foundation, patent claims will collapse if they’re not supported.
To carry that analogy a bit further, just as it doesn’t make sense to build a house without first considering the foundation, it doesn’t make sense to build a foundation without knowing what you’re going to build on it. For that reason, it doesn’t make sense to draft a provisional patent application without knowing what the claims are going to eventually look like.
If one does opt to file a provisional application there is likely going to be some degree of work duplication when, a year after the application is filed, a patent attorney has to refresh his memory on the subject matter of the application and then move to drafting claims. There are also going to be filing fees associated with the process that could be avoided by not first filing a provisional application.
Certainly there are reasons to file a provisional application, sometimes the initial few hundred dollar savings in filing fees demands the course. Other times there can be a looming statutory deadline that requires an application to go out the door before someone can sit down and draft a polished application. In other situations, it might make strategic sense to have a broad provisional on file for a year before deciding what aspect(s) of the invention should be patented. Whether a provisional application is the best route for you is something to discuss with your attorney, just don’t get attached to the idea, because odds are that it isn’t.
Feb052010 | Steve O'Donnell
Infringe? It’s a business decision.
A common question all attorneys get is “am I gonna get in trouble for this?” For some things your attorney will be able to give you a decent answer. . . “yes, that’s a really dumb idea” or “no, that’s fine,” but much more common is a more stereotypical lawyer answer of “it depends.” For intellectual property questions, I usually dredge up middle school algebra.
Every decision can be made with the help of an equation. Let’s say your burning question is "should I hit this guy at the bar that keeps looking at me?" The left side of the equation might be:
“(chance of me losing the fight)*(chance of me landing in jail)”
The right side of the equation might be “(how much would I love to pop this guy?)*(chance that the girl at the end likes macho jerks)”
If the left side of the equation is greater than the right side, not hitting the other guy is favored. Now, of course, you can’t know the real values of any of the variables, but you can estimate. If there is a chance that they guy is really looking at someone else or just has a facial tick, and he’s a 300-lb monster sitting next to his buddy the cop, well, stay seated and order another drink. If he’s obviously being a jerk, you’ve got 40lbs on him, there are no cops around, and you know the girl likes macho jerks, the equation favors popping him. Unknown variables are also in play: maybe he’s a ninja, or an android, or a ninja android. You can’t know everything, but the more information you have, the better your decision making process will be.
It’s similar to questions I get all the time concerning intellectual property. Only a fool would make an uninformed decision. Even a gambler willing to risk big is only going to do so after evaluating the chance of losing with the possible payoff.
It’s part of my job to identify and flesh out what variables are in play. If the question involves using an image for a blog post from and there is a plausible fair use argument, that’s one thing; if the question involves making and selling t-shirts with Mickey Mouse on them, that’s a much different equation.
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