29 January 2017

The Patent History of Australia’s Most Litigation-Prone (Former) Senator

From the Australian Parliament websiteI read a column today recommending that Australians ride out the Trump presidency by having a laugh at America’s expense – ‘we must’, the author extols us, ‘make sport of her in this high season of her weirdness, this peak of her fever, this pomp of her lunacy.’  Who knows, maybe this is good advice.  But it does have one major failing: right now Australian politics is itself hardly a bastion of seriousness and sanity.  And of all the buffoons and bloviators propelled into parliamentary prominence by last year’s farcical federal election, there is arguably none more compellingly attention-catching that ex-One Nation Western Australian senator (or, quite probably, ex-senator, unless you are asking him) Rodney Norman Culleton – a man whose submissions at a Federal Court bankruptcy hearing have been described by the Chief Justice of the court as ‘unfocused’ and ‘bombastic’.

It would be impossible to compress the continuous carnival that is Rod Culleton’s political career into an entire article, let alone a single paragraph.  But for the benefit of my international readers, I will do my best.  Culleton was propelled into the Senate at the election of 2 July 2016, grabbing the 11th (of 12) Western Australian seats despite receiving only 0.52% of the primary vote – of which the bulk (0.5%) was for One Nation as a party, rather than for Culleton personally – thanks to a byzantine cascade of preferences.  He succeeded despite (or because of) new voting rules that were intended to prevent minor candidates from getting elected off the back of byzantine cascades of preferences.  Even so, the legitimacy of his candidacy fell under a cloud, on account of the fact that he had been convicted of theft.  The conviction was subsequently quashed, but this does not alter the fact that at the time of voting he would have been barred from being elected under s 44(ii) of the Constitution.  With the High Court still considering that particular conundrum, Culleton then resigned from the One Nation party (the source of 96% of his primary vote), before being declared bankrupt by the Federal Court (just in time for Christmas), disqualifying him from remaining in parliament under s 44(iii) of the Constitution.  The bankruptcy orders were stayed, to give him time to appeal, but in the meantime his Senate seat was officially declared vacant.  Not that Culleton is fazed by such trivial setbacks – the official parliamentary website may have him listed as ‘Former Senator Rod Culleton (Independent)’, but the man himself has shown a marked preference for the ‘alternative fact’ that he is ‘still a senator’.  Through all of this, Culleton has become renowned for his ability make absolutely no sense whatsoever, and to become involved in physical altercations at the most inopportune moments.

And that is all in under six months.  So, aside from the fact that you would have to laugh, otherwise you would cry for the demise of Australian democracy, you might be wondering what any of this has got to do with the usual subject matter of this blog.  Well, as the former senator’s parliamentary web page states, Culleton’s qualifications and occupation before entering Federal Parliament include ‘business entrepreneur in farming, manufacturing, inventor and transport/logistics’, while his sole listed publication is ‘”Storage Bin”, 2015202345, Australian Divisional Patents, IP Australia, 2004’.  This connection came to my attention when I read that Culleton has accused former Wesfarmers director Dick Lester, who brought the proceedings to have Culleton declared bankrupt, of ‘abusing the bankruptcy process to get hold of Culleton’s Australian Keg Company patent in lieu of payment “to obtain what he wouldn’t otherwise have got”.’

Indeed, not only is Culleton an inventor, but one of his patents has even been successfully enforced after the infringer attempted to sue the Australian Keg Company for making unjustified threats of patent infringement.  I wrote briefly about that decision here, back in January 2014.  This is of some interest, because of course the overwhelming majority of patents are never litigated.  Yet Culleton appears to be a man drawn to the courts as inexorably as a moth to a flame!

22 January 2017

The Challenges of Protecting and Commercialising IP in Casino Games

Skull CardsThere are people who seem to believe that ‘inventing’ is some kind of get-rich-quick scheme – come up with an idea, slap a patent on it, and then wait for the untold millions to (magically) come rolling in.  A logical corollary to this belief is that if somebody acquires an idea from such a person, and subsequently incorporates the idea into a patent application, then they have clearly deprived the originator of their rightful fortune!  And, of course, the way to deal with such a situation is by spending, collectively, a few hundred thousand dollars disputing ownership of the patent application firstly in a state Supreme Court and then before a Full Bench of the Federal Court of Australia.

The only way this could all be a bigger waste of money and effort would be if the patent application in question was directed to some kind of unpatentable subject matter, such as a method of wagering on a card game, for example.  Sadly, this was precisely the situation in a case decided last October, Kafataris v Davis [2016] FCAFC 134.  There was, however, more to the dispute than inventorship and rights to a potentially worthless patent application.  Also at issue was whether or not the plaintiff had made a contribution to the wagering system described in the application that the defendants were obliged to keep confidential.  If so, then he might have been entitled to some form of compensation, regardless of the fate of the patent application.

Setting aside the ultimate futility of the legal action, there is a valuable lesson to be extracted from this particular dispute for those people who choose to direct their innovative efforts to the wagering and gaming industry – namely that novel developments in this field can be notoriously difficult to protect as a form of intellectual property.  Fortunately, the high level of regulation of gaming creates some barriers to entry which can be used, along with branding, as a means to secure an edge on potential competitors, even if patents are not available.

16 January 2017

The Most Prolific Inventors of the Past 25 Years, and the Connections Between Them

“No man is an Island, entire of itself; every man is a piece of the Continent, a part of the main...” – John Donne, Meditation XVII
Leg up
A simple analysis of inventor data from the US Patent and Trade Marks Office (USPTO) records reveals something interesting but, upon reflection, unsurprising: invention does not happen in a vacuum. Prolific inventors tend to be associated with other prolific inventors, and/or with prolifically inventive organisations.  Of the ten people who have received the most US patents over the past 25 years, there are four ‘pairs’ of inventors who have worked closely together over an extended period, and one who works for IBM – a company that recently topped the list of US patent recipients for the 24th consecutive year.  And, while the final member of the top 10 is not partnered with any other famously prolific inventor or company, he has at least one co-inventor on around half of his granted patents, where the same names of family and associates keep cropping up.

Two Australians make the list.  Indeed, the most prolific recipient of US patents over the last quarter century is Australian Kia Silverbrook.  The other Australian in the top 10, at number five, is Paul Lapstun, who has worked with Silverbrook for many years.  Japan’s top inventor, Shunpei Yamazaki comes in at number two, with his colleague at Yamazaki’s company Semiconductor Energy Laboratory (SEL), Jun Koyama, at number four.  Long time collaborators, and now senior inventors at Intellectual Ventures, Rod Hyde and Lowell Wood sit at numbers three and six respectively. 

Two members of the list, Apple’s Jony Ive (10) and Bartley Andre (seven), make the grade primarily on the basis of their large numbers of design patents, while Kangguo Cheng comes in at number eight on the basis of his work at IBM Research.

The tenth member of the top ten, coming in at number nine, is Donald E Weder, who is inventor or co-inventor on a mix of utility and design patents relating primarily to floristry.  Even though Weder is not paired with any other member of the top 10, or associated with a famous corporation like IBM, he is nonetheless a collaborator like all the other, sharing the inventing credits with up to 11 others on some of his patents.

All of this serves to confirm that the popular image of the lone inventor, toiling away in isolation in a laboratory or garage somewhere, is a complete myth.  Innovation mostly happens where the conditions are right, and that means having a supportive environment, including teams of innovative people who can work together and bounce ideas off one another in the course of creating something new.  Indeed, over 3,600 patents attributed to the top 10 inventors have two members of the list as co-inventors.

15 January 2017

The Importance of Continuing Professional Education (And of Not Lying About It!)

StudyingIf you are the client of a patent attorney, you probably expect that your experienced (and, perhaps, expensive) professional adviser is keeping up-to-date with the latest developments in their chosen field. Indeed, in many professions some form of continuing professional education (CPE) – alternatively known as continuing professional development (CPD) – is not just an expectation, it is a mandatory requirement.

The Australian patent attorney and trade marks attorney professions are among those in which a mandatory CPE requirement exists.  Some outsiders might be surprised, however, to learn that this has only been the case since 1 July 2008, and that regular compliance audits of attorneys only commenced in 2011. It has therefore been just a little over five years that anybody has been monitoring the efforts of Australian attorneys to keep our skills and knowledge current and relevant.

The formal CPE requirements are fairly minimal, being just 10 hours per year in order to remain registered as a patent attorney or trade marks attorney only, or 15 hours for patent attorneys who wish to remain registered as both.  Even so, I am occasionally surprised to encounter attorneys who do not appear to be as familiar with recent developments that I would have expected.

I do not imagine that anyone who reads this blog regularly will be surprised to hear that I believe that CPE is incredibly important.  Since entering the profession as a trainee in 2002, I have been on a constant learning curve.  The Australian law has, of course, evolved over this time through legislative change and through interpretation and development by the courts.  Keeping abreast of developments in other major jurisdictions, including the US, Europe, and China, has also been vital, given that many Australian companies wish to pursue IP rights in key export markets.  And the patent attorney profession itself has changed considerably, with clients having an increasing expectation that their attorneys will have a sound understanding of their business strategies and objectives, and be able to tailor a IP strategy recommendation accordingly.

The reason I have been thinking about the importance of CPE is a story I read recently out of the US, about a Californian IP attorney who falsely claimed that he had completed his mandatory 25 hours of continuing legal education (CLE) – notably quite a bit more than is expected of Australian patent attorneys, but still not hugely onerous – when he had, in fact, completed none!  Which made me wonder, could it happen here?

08 January 2017

How the Fate of Software and Business Method Patents has Turned on USPTO Directors and the Courts

Chart PresentationThe ‘death of software patents’ in the US has been greatly exaggerated.  That is, so long as you exclude patents covering computer-implemented business/financial processes and schemes, which may well be, if not quite yet deceased, for the most part (about 75%, in fact) mortally wounded. 

But for those ideologues who are trying to convince themselves, and others, that software-implemented inventions are simply no longer validly patentable, I am afraid I have bad news.  I have analysed US Patent and Trademark Office (USPTO) data covering millions of patents issued over the past decade, which shows that patents covering computer-implemented inventions, outside the particular fields of ecommerce, business and finance, not only are not in any form of decline, but have never, at any time over the past decade, shown any significant difference in grant rate from the bulk of patents issued by the USPTO across all fields of technology.

Patent claims classified by the USPTO as relating to ecommerce, business methods and finance, are another matter.  The Supreme Court’s Alice decision, issued in June 2014, led to an immediate, dramatic and sustained fall in the number of patents being granted in these fields of endeavour.

Interestingly, the top US Court’s previous pertinent decision, Bilski (issued in June 2010, shortly after I started this blog), had no noticeable impact on the rate of grant of business method patents.  This is, perhaps, unsurprising given that Bilski was the result of an appeal against a rejection of the application at issue by the USPTO, which had already been upheld by the Court of Appeal for the Federal Circuit (CAFC).  Thus it did not represent, or require, any significant change in policy or practice at the Patent Office which the Supreme Court confirmed had been right to reject Bilski’s application.  To the extent that Bilski changed anything with regard to business method patents, it was following the CAFC decision, rather than that of the Supreme Court.

In fact, the last event prior to Alice that had a significant effect on rates of grant of business method patents was the 2009 transition from Jon Dudas to David Kappos as Under Secretary of Commerce for Intellectual Property and Director of the USPTO (via John Doll, who was acting in the role between Dudas’ resignation on 20 January and Kappos’ confirmation on 9 August).  Granting of business method patents had been in decline under Dudas, however this trend was soon reversed under Kappos, with issue of business method patents once again tracking rates across all technology areas by the first quarter of 2010.

My analysis also shows that the CAFC’s Bilski decision and the early months of the Kappos era are associated with an increase in the average word-count of independent claims in granted business method patents, and also in patents directed to other forms of computer-implemented invention, along with a significant jump in the average number of claims in issued business method patents.  These effects are almost certainly a result of changes in examination practice at the USPTO, likely influenced at least in part by Bilski.

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