31 October 2013

Congressman Goodlatte Versus the Patent Trolls

There's Nothing Like a Good Latte!I have previously expressed the opinion here that the patent troll problem is primarily one of litigation abuse, rather than patent abuse (see, e.g., earlier articles on why trolls are largely a US phenomenon, and why the Australian system is less conducive to their nefarious business models).  Previous US attempts to curb troll activity, such as the proposed Saving High-Tech Innovators from Egregious Legal Disputes (SHIELD) Act of 2013 [PDF, 248kB], and its predecessor of 2012, have generally made the mistake of focussing on the technology to which the patent applies and/or the nature of the patent holder.

But a troll is defined by its actions, not by its corporate identity, the history of its patents, or the technology to which those patents apply.

Republican Congressman Bob Goodlatte apparently gets it.  On 23 October 2013 he introduced the proposed Innovation Act 2013, which he describes as a patent litigation reform bill.  The bill is technology-neutral and, as the Congressman’s media release explains:

…targets abusive patent litigation behavior and not specific entities with the goal of preventing individuals from taking advantage of gaps in the system to engage in litigation extortion.  It does not attempt to eliminate valid patent litigation.

In the past week I have read numerous responses to the Goodlatte bill.  A few have been relatively neutral, and simply set out the various provisions of the bill.  Others raise a number of the issues which have previously caused me to express some scepticism as to whether the US would be willing to take the action necessary to rein in patent trolls.  Over at the IAM Magazine Blog, Joff Wild rightly points out that the bill is not specifically ‘anti-troll’, but will affect the risks and obligations faced by patent plaintiffs generally.  Andrew Williams, writing on the PatentDocs blog, describes the proposed legislation as a ‘blunt instrument that will impact all patent infringement actions’.  The Innovation Alliance, which largely represents smaller innovators and patent owners, has also been critical of the bill

None of this surprises me.  I have previously expressed my opinion that there is no way to curb trolls without impacting the rights of patent-holders more generally.  The goal must be to strike the right balance, not to try (and fail) to be all things to all people.

27 October 2013

NZ Government ‘Approves’ Single Trans-Tasman Patent Applications

TeamworkAccording to a media release issued on 23 October 2013, the New Zealand Government has approved the implementation of a single application process (SAP) and single examination process (SEP) for New Zealand and Australian patent applications.

Regular readers of this blog will be aware that this has been in the works for quite a while, as part of the ‘Single Economic Market’ (SEM) initiative between Australia and New Zealand.

An announcement from the Australian Government in July 2011 indicated that an SAP would commence in early 2013, with the full SEP implemented by June 2014.  Clearly, therefore, the plan is already a long way behind schedule, primarily because the initial work sharing arrangements between IP Australia and the Intellectual Property Office of New Zealand (IPONZ) were originally contingent on passage of the new NZ Patents Act, which was delayed far longer than expected.  A work sharing pilot eventually commenced in September 2012, with IP Australia reporting that ‘underlying knowledge and skills used by examiners of both offices are very similar’.

According to a current timetable revealed in NZ Government Cabinet documents, full implementation of the SEP will not occur until at least 2017.

25 October 2013

IP Australia Head, Philip Noonan, to Move On

Philip NoonanI have it on good authority (two independent sources, just like a proper journalist) that the Director General of IP Australia, Mr Philip Noonan, has made the decision to leave his post at the authority, possibly as soon as 13 November 2013.

Philip Noonan has been with IP Australia for nearly six years, having joined as Director General – replacing Dr Ian Heath – in January 2008.  According to his LinkedIn profile, he has Bachelor degrees in both law and science, which are ideal qualifications for patent law.  He is admitted to practice as a solicitor and barrister in Victoria, although I am unaware that he has ever done so.  Instead, he has pursued a career in public service.

From 1982 to 1998, Mr Noonan worked for the Attorney General’s Department, firstly as a Senior Legal Officer working in legal policy, and later as the Head of the Consumer Affairs Division.  At this point, there is a gap in his profile which I have been unable to fill with the assistance of Google, however for the three years immediately prior to his appointment at IP Australia he headed the Tourism Division in the Department of Resources, Energy and Tourism.

A lot has been achieved at IP Australia in the past six years, so it is perhaps unsurprising that Mr Noonan would feel that his work there is done, and that it is time for a change and to let someone else take over!

23 October 2013

Samsung’s European Proposal – Fair, Foul or Foolhardy?

EU LogoIt has been widely reported in the past few days that Samsung has made a proposal to the European Commission (EC) in the hope of avoiding a fine of up to $18.3 billion, following an EC investigation into the Korean company’s use of its standard-essential patents (SEPs) in ongoing litigation, particularly against Apple.

The EC opened the proceedings in January of 2012, based on Samsung’s applications for injunctive relief in various European countries against ‘competing mobile device makers’ (i.e. Apple).  While Apple has principally asserted non-standards-related patents, Samsung’s defensive strategy has been based substantially on alleged infringements of patents which it has declared as being essential to implement global mobile telephony standards.  The EC was concerned, in particular, that Samsung may have failed to honour its commitment to license any SEPs on fair, reasonable and non-discriminatory (FRAND) terms, and that such behaviour might amount to abuse of a dominant position.

Samsung is right to be concerned about the consequences of an adverse finding by the EC, which can levy fines of up to 10% of a company’s global turnover during the year preceding an investigation.  In 2004, for example, Microsoft was fined €497 million (US$794 million) over licensing, interoperability and software bundling practices.  In 2008, Microsoft was ordered to pay an additional €899 million (US$1.44 billion) for failure to comply with the 2004 decision.  And in 2009, the EC fined Intel €1.06 billion ($1.45 billion) for anti-competitive behaviour.  Samsung’s global turnover during 2011 was over $180 billion!

Samsung’s proposal has been published by the EC, which is seeking comments from ‘interested parties’.  The proposed commitment is simple enough.  As summarised in the EC press release:

Samsung has proposed to commit for a period of five years not to seek any injunctions on the basis of any of its SEPs, present and future, that relate to technologies implemented in smartphones and tablets ("Mobile SEPs") against any company that agrees to a particular licensing framework.

The licensing framework consists of: (i) a negotiation period of up to 12 months and (ii) if no agreement is reached, a third party determination of FRAND terms by either a court or an arbitrator, as agreed by the parties. If the parties cannot agree on either submitting to court or arbitration, the parties will have to submit to arbitration.

Personally, I think that this is a pretty fair compromise.  Certainly it lies somewhere between the two more extreme views expressed by IAM Magazine (that denying Samsung the ability to obtain injunctions will actually harm, rather than benefit, consumers) and by FOSS Patents’ Florian Müller (that ‘Samsung's proposals would make things worse, not better, and they would increase, not decrease, legal uncertainty’).  I do not agree with either of these positions.

19 October 2013

EPO Reverses Controversial Divisional Filing Restrictions

M132/0644The European Patent Office (EPO) has announced that, effective from 1 April 2014, the regulations relating to the filing of divisional patent applications in Europe will be amended to reverse the controversial restrictions in place since 2010, under which divisional applications can only be filed within 24 months of the earliest office action or within 24 months of a new lack of unity objection (i.e. that the claims in the application cover multiple inventions) being raised.

From 1 April 2014, it will once again be possible to file a divisional application at the EPO based on any pending application, i.e. which has not been granted or finally refused.

It will also again be possible to file ‘chains’ of divisional applications (i.e. divisionals of divisionals) regardless of the status of the original application.  However, the EPO Administrative Council has indicated that there will be additional fees for second and subsequent generations of divisional applications, and that these fees will escalate with each generation until some cap is reached.  The amount of the additional fees, and the level of the cap, are yet to be determined.

This reversal is not entirely unexpected, but appears to have (pleasantly) surprised many people in the patent professions.  The EPO conducted a consultation on the 24 month time limit earlier this year, and I understand that the issue has also been under discussion through the Standing Advisory Committee before the EPO (SACEPO).  However, it does not seem that many people expected such a complete reversal from the EPO.

Sponsor a Patent Attorney and Help Kids in Need

Port Phillip BayTomorrow (i.e. Sunday 20 October 2013) I am going for a bike ride.  That is not news in itself, since it is something I do most weekends.  However, tomorrow’s ride is a bit longer than usual – 250 km (that is about 155 miles in non-metric units, or nearly 1250 furlongs for those gearing up for the Spring Racing Carnival here in Melbourne).

The ride is around the local body of water, Port Phillip Bay.  The route I am taking is the really long one marked in magenta on the map to the right.  For readers unfamiliar with the geography around Melbourne, Port Phillip Bay is just like Sydney Harbour… only without the Opera House.  Or the bridge.  Or the picturesque views.  But it is about 35 times bigger than Sydney Harbour, with 260 km of coastline, which pretty much makes it perfect if your goal is to ride in a 250 km circle in one day.

The major sponsor is the health insurer Bupa, and the name of the event imaginatively combines the sponsor’s name with a fairly literal description – Bupa Around the Bay.  It used to be called ‘Around the Bay in a Day’ and, since there are now many courses, most of which do not go all the way around, I expect that one day it will simply be called the ‘Bupa Bay Ride’.

For those of you who may be concerned about my sanity, you need not fear.  I have done (and survived) this for the past four years, so I am definitely crazy!  You may also be relieved (as I am) to know that there is a break in the middle for lunch, and to catch a ferry across the mouth of the Bay, from Queenscliff on the western shore to Sorrento on the eastern side.  All going well, I will head off from Melbourne at 5.30am, reach Queenscliff before 11am, be on my way from Sorrento shortly after noon, and arrive at the finish before 4.30pm.

Now, here is the important bit: you can sponsor me to put myself through this arduous ordeal.  Better yet, if you are reading this after the event, but before 31 October 2013, you can sponsor me for already having put myself through the ordeal, confident in the knowledge that I did not back out at the last minute and renege on my side of the bargain.

Money raised by riders in the event goes to The Smith Family, which is a children's charity helping disadvantaged Australian children to get the most out of their education, so they can create better futures for themselves.  If this is not enough to persuade you of the worthiness of the cause, read on for the extended ‘hard sell’ version.

13 October 2013

Commissioner Of Patents Applies to Appeal RPL Central Decision

Symbols of JusticeOn 30 August 2013, Justice Middleton in the Federal Court of Australia upheld the appeal by RPL Central Pty Ltd against the decision of the Commissioner of Patents to revoke an innovation patent relating to an automated information and evidence gathering system.  The Commissioner had determined that the patent was invalid on the ground that it did not relate to a patent-eligible ‘manner of manufacture’.

On 25 September 2013, the Commissioner filed an application with the Federal Court for leave to appeal Justice Middleton’s decision (the case is number VID1023/2013 in the Victorian Registry of the court).

As I have pointed out on previous occasions when reporting on this case, I am not an impartial observer, nor am I at liberty to reveal all that I know about the status of the matter, or to express all of my true thoughts and opinions.  RPL Central Pty Ltd is a client of my employer, Watermark Intellectual Asset Management.  I drafted the patent specification which is under scrutiny in the case.  My colleagues within Watermark’s IP Law firm ran – and continue to run – the Federal Court appeal.

The World of Science and Innovation is No Place for Discrimination

One WorldThis is, nominally, a blog about patents.  But I like to think that it is a bit more than that – I endeavour, when I can, to write about the role of patent law, practice and policy in a broader social context.  I believe strongly in the importance of discovery and innovation to the prosperity and improvement of individuals, communities, nations and humanity at large, and therefore that the ways in which we encourage and foster these activities are also vitally important.

The universe is full of mysteries, and the world of problems in need of solutions.  OK, so some of those problems – such as how to signal to the user of a touchscreen device that they have reached the end of a scrollable page – are of a decidedly ‘first world’ nature (though they are nonetheless important to the prosperity of innovative companies).  However there are other challenges – such as how best to bring the benefits of pharmaceutical innovations to populations in the developing world – which genuinely test the limits of our resolve to apply human ingenuity for the benefit of all.

It is, I believe, self-evident that the more people we have involved in the entire process of innovation – in basic research, in development, in commercialisation, in policy-making, and so forth – the more progress will be made.  It is, therefore, utterly unacceptable for anybody to be excluded from the endeavour, or discriminated against, on the basis of gender, skin colour, age, sexuality, or any other irrelevant consideration.  This is, of course, equally true in all fields of human endeavour, but I think we are entitled to expect that those built on a rational scientific foundation, and populated substantially by the privileged and highly-educated, should be leading the way in this regard.

Which is why I count myself among the large number of people who have been rightly outraged by the treatment of Scientific American blogger DNLee in recent days.  Indeed, she experienced two successive acts of discrimination: firstly by some low-life blog editor at Biology-Online.org, who called her a ‘whore’ because she had the temerity to say ‘no’ to providing them with free content; and then again by Scientific American itself, which removed her post reporting on the incident on the spurious basis that Scientific American ‘is a publication for discovering science’ and that ‘the post was not appropriate for this area’.

06 October 2013

NZ’s PowerbyProxi Sits on a Potential SEP Goldmine

ZapA $4 million investment by Samsung Ventures Investment Corporation in New Zealand company PowerbyProxi Limited has received wide coverage over the past week (see, e.g., the IAM Magazine blog, scoop.co.nz, gigaom.com and AllThingsD, among many others).

On the face of it this is a good news story for the NZ start-up company, which was founded in 2007 based, in part, on intellectual property originally developed at the University of Auckland.  PowerbyProxi claims to have developed the world’s most advanced and safest wireless power system, and the first commercial wireless recharging system capable of 3D power transfer, regardless of how a device (such as a smartphone) is oriented within the recharging unit.  It also claims to own a portfolio of 126 granted patents worldwide, along with numerous further pending applications.

There are two components to the Samsung deal.  Samsung Electro-Mechanics has entered into a strategic partnership with PowerbyProxi, under which it will license the NZ company’s consumer electronics and home appliance wireless power IP and technology.  The other component is the $4 million in strategic funding from Samsung Ventures Investment Corporation, which will also see Samsung Ventures America senior investment manager Michael Pachos joining the PowerbyProxi board, suggesting that the deal gives Samsung a substantial equity interest in the company.

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