Resources

Obtaining Patents in the Biotechnology Field

In order to be deemed patentable, the USPTO requires that an invention must be useful, novel and nonobvious. This summary highlights some of the trends and also discusses how the usefulness requirement presents a unique problem for patents in the biotechnology field.

Biotechnology is any technique that modifies the products of living organisms or improves existing organisms. This field has developed from simple processes of making certain foods such as cheese to manipulation of organisms on a cellular level. While, biotechnology can be used to improve the quality of our lives, the research needed to develop this technology is expensive. Patents are one of the few ways for research companies to recover that cost.

However, the USPTO does not provide guidelines on how to apply the usefulness requirement for biological inventions. Before 1980, the courts denied many biological inventions because such inventions were considered “products of nature.” However, in 1980, the U.S. Supreme Court rejected that view and held that man-made life forms were patentable. This decision created tremendous commercial interests in biotechnology, and companies rushed to patent their creations. In that same year, two scientists were granted patents for techniques that resulted in the first cloning of the mammalian hormone insulin. Today, patents have been granted for biological inventions ranging from hybrid seeds to sequences of human DNA.

In reaction to the explosion of applications, the USPTO, in 1995 and 2001, revised its rules so that makes it harder for biological inventions to pass the usefulness requirements. The patent office now requires an applicant to assert how a specific utility is related to the subject matter, rather than just a general assertion of utility. Critics argue that this requirement will hinder innovation in biotechnology field because certain compounds such as the cloned human genes have uses separate from their biological function. For instance, such clones can be used to signaling component in an analytical device and be studied in conjunction with other genes. In fact such clones are often sold in commerce and have “practical” or “economical” utility. Yet, these clones cannot be patented because their specific benefit or utility in their currently available form are not known. Meanwhile, the usefulness requirement has a lower threshold for patents in other field. For instance, the federal Circuit held, “To violate section 101 the claimed device must be totally incapable of achieving a useful result.” As a result, patents have been granted for inventions that seem to have little or no utility, such as a hat that looks like a fried egg or a method of exercising a cat. This disparity between patents for a biological invention and one in any other field is great and may lower the level of innovation in that field. Consequently, the USPTO needs to better define the term usefulness and may need to set specific guidelines for the biotechnology field.

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The Madrid Protocol: An International Trademark Registration System by Ross Martin

The Madrid Protocol is an international treaty established in 1989 that facilitates international trademark protection through streamlining international trademark application filing. One of the main goals in drafting the Madrid Protocol was to entice countries, like the United States, that had never joined a similar 1891 treaty, (the Madrid Agreement), to join the Protocol. On Saturday, November 2, 2002, President Bush signed legislation that implements U.S. accession to the Madrid Protocol.

The Madrid Protocol, like the Madrid Agreement, makes it possible to obtain foreign trademark protection by means of one application submitted to the World Intellectual Property Organization (WIPO), located in Geneva, which is then forwarded by WIPO to the member countries selected by the applicant. Currently, 56 other countries are members of the Madrid Protocol. U.S. accession to the Protocol will take place near the end of 2003, after the Patent and Trademark Office (USPTO) establishes implementation regulations and the U.S. State Department deposits the instrument of accession with WIPO.

To file an international trademark application under the Madrid Protocol, applicants must first register or apply to register their mark in their home country. The international application is based on this home country registration or application. The trademark holder will then file the international application, designating the countries where protection is sought, with their home country's trademark office, which will, in turn, have two months to forward the application to WIPO. WIPO will then forward the application to the Trademark Offices of each selected member country. These countries will evaluate each international application received from WIPO according to their own examination and registration procedures. Ultimately, the applicant will have a bundle of foreign trademark registration rights, all bearing the same international registration number.

It is generally believed that U.S. accession to the Madrid Protocol will net positive results for U.S. businesses and trademark owners. However, there are many issues that must be considered before deciding to seek foreign registration under the Madrid Protocol. The trademark seeker must consider the resources available to do searches, the scope of protection sought, and the descriptiveness of the mark.3 All of these factors must be analyzed together with the trademark registration laws and procedures of each individual country where protection is sought.4 In some instances, seeking protection through the Madrid Protocol may prove cost effective and more efficient; but in most cases, it may be wiser to file individual national applications, which is the current practice in the U.S.

Some potential benefits of the Madrid Protocol5:

• Applicants can file in several foreign countries with one application and in one language (English or French), thereby reducing translation and application preparation costs.
• Applicants can forego the hiring of independent foreign counsel to file the application. This will reduce costs of the professional filing fees.
• Registrants will only need to track one registration for renewal, assignment, and change of address purposes once the mark is registered in the designated member countries.
• In contracting for the assignment of trademark rights, parties will only need to deal with one system, rather than several individual countries.

Some disadvantages of the Madrid Protocol6:

• Since the U.S. requires a comparatively narrow description of goods, a U.S. applicant under the Madrid Protocol may sacrifice the broader trademark protection available in many foreign countries provided through the filing of individual applications.
• Any costs saved by initially not hiring independent foreign counsel will most likely be lost if the application has any difficulties during the examination of the application or is opposed by a third party because then independent foreign counsel will be necessary.
• To keep priority from the home country registration or application, the international application must be filed with WIPO within two months of the home country filing date. Otherwise the priority date will be the WIPO receipt date. Under the Paris Agreement, home country priority can be maintained by filing individual foreign applications in Paris member countries for as long as six months.
• The biggest disadvantage is that if trademark rights are lost in the applicant's home country, the international application in each country will die too. Then individual applications must be filed in the national offices of the designated countries in order to maintain the priority established under the international application, resulting in new filing and professional fees, and requiring a local attorney.

In conclusion, the main beneficiaries of the Madrid Protocol are likely to be the very large corporate trademark owners with in-house trademark legal departments. All others would be well advised to seek the legal counsel of a trademark attorney.

IPLG attorneys are prepared to advise clients on international trademark registration options and the viability of filing under the Madrid Protocol (when that option becomes available in late 2003). For more information, please contact Shinae Kim-Helms at (408) 286-8933.

1. See John Welch, Madrid Bound: The United States Approaches Ratification of the Madrid Protocol, INTELLECTUAL PROPERTY TODAY, Dec. 2000, at 34.
2. See Carlo Cotrone, The United States and the Madrid Protocol: A Time to Decline, A Time to Accede, 4 MARQ. INTELL. PROP. L. REV. 75; and P. Jay Hines, A Short Primer on the Madrid Protocol for U.S. Trademark Owners and Counsel, INTERNATIONAL TRADEMARK ASSOCIATION, found at http://www.inta.org/policy/madrid_primer.shtml (last viewed on Jan. 4, 2003).
3. See Welch supra, note 1 at 34.
4. See Id.
5. See Piper Rudnick, Madrid Protocol Client Alert (2002), http://piperrudnick.com/db30/cgi-bin/pubs/MadridProtocolOct02.pdf.
6. See Id.

For more information check out the WIPO website at http://wipo.org.

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Losing Trademark Rights

INTRODUCTION

The government grants registration benefits to trademarks; but in exchange registrants must monitor and use their marks to enjoy those rights. Trademark rights are not only acquired, they can be lost. Companies spend a lot of money and time to have their marks registered, but some take no precautions to ensure that they keep those rights.

Two Ways of Losing Your Trademark Through Abandonment

1. Non-Intentional Acts of the Owner

Uncontrolled Licensing of the Mark

The purpose of a trademark is to tell a consumer about the source and quality of a product. Trademark owners have a duty to control quality when they license their marks. When trademark owners do not monitor the products that bear their mark, the goods or services may not be "genuine" and the trademark loses its significance. Rights are given in trademarks to assist consumers in making informed purchases and to protect producers and sellers.

Dilution by Third Parties

The classic case of dilution is dilution by blurring, where the same mark is used more than one producer to identify different products. For famous marks, no likelihood of confusion is required. In these cases, there is not a likelihood of confusion, but the distinctiveness of the mark is diluted because consumers will associate the mark with more than one producer or product. The distinctiveness of a trademark is its value. If a mark is not distinctive, it cannot build goodwill for the name.

Dilution by Tarnishment

The defendant's unauthorized use of the mark is to tarnish, degrade, or dilute the distinctive quality of the mark. Since 1996, the Lanham act provides for protection against dilution. If a registrant does not police and protect their mark against dilution, they will lose the distinctiveness of their mark (even though their registration will not be cancelled).

Assignment of a Mark Without Good Will

A trademark is merely a symbol of goodwill; it has no independent significance apart from the goodwill it symbolizes. A mark cannot be sold without the goodwill that it symbolizes. Good will can no more be separated from a business than reputation from a person.

Genericide

A generic name can never serve as a trademark. A generic term merely identifies the genus of which the particular product is a species. "Automobile" or "car" cannot be trademarked for vehicles because it would not give competitors (or consumers) another way to describe the product. They would have a monopoly on the only way to describe the product. The problem of genericide is that a once distinctive mark has become the generic term for describing the product. When a seller develops trademark rights in a term that a majority of the relevant public then appropriates as the name of a product, the mark is a victim of genericide. These trademark owners are victims of their own success (and their lack of foresight). Genericide frequently arises where the challenged mark was the first product of its kind on the market. Genericide usually comes up in two contexts: 1) Litigation - a registrant challenges another's use of the mark only to have their mark cancelled for being generic by a federal court. 2) Cancellation - a challenger can offensively seek to cancel a mark for being generic in an attempt to avoid litigation. In both cases, the decision is made on a case-by-case basis.

Trademark victims of genericide include: ASPIRIN, BRASSIERE, BUDDY LIST, BUNDT, CELLOPHANE, COLA, DRY ICE, EASTER BASKET, ESCALATOR, GOLD CARD, HOAGIE, KLEENEX, MONOPOLY, MULTISTATE BAR EXAMINATION, SHREDDED WHEAT, THERMOS, TRAMPOLINE, YELLOWPAGES, and YO-YO.

2. Non-Use of the Mark

The U.S. trademark system is based on use, not registration. Use is defined as "the bona fide use of the mark in the ordinary course of trade and not merely to reserve a right in a mark." Marks can be cancelled for non-use in two ways. The first is through cancellation - another party wants to use the mark seeks cancellation of a mark they believe is no longer in use. The trademark owner must intend not to resume using the old mark. I.e. A company advertisement stating "We Are Changing Our Name from ALPHA to ZETA. Don't Call Us ALPHA any more." Courts require clear and convincing evidence of abandonment because it is a forfeiture of trademark rights. The second is through a failure to renew registration (or to prove continued use at renewal) - continued use must be proven between the 5th and 6th year after registration and then marks must be renewed every 10 years. At renewal, continued use must be proven. The PTO may cancel a mark even if it is not challenged by a third party if use is not proven. Marks are deemed abandoned when "its use has been discontinued with intent not to resume use" and non-use for 3 consecutive years is prima facie abandonment. This is a presumption of abandonment.

CONCLUSION

Trademarks are assets, in some cases, the most valuable asset of a company. Thus, to prevent losing trademark rights, owners should do two things: First, they should retain a trademark attorney to review and monitor their trademark portfolio. Second, they should make sure they have continued use.

Attorneys can: Review and monitor licensing of trademarks, review proposed assignments, order watch services and send cease and desist letters to 3rd parties, ensure proper usage of trademarks, monitor use by others, and monitor deadlines for renewal. Trademark rights as the embodiment of consumer goodwill are valuable but intangible, thus sometimes owners overlook them until it is too late to protect them.

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Knock It Off!

Imitation is the sincerest form of flattery, but not if it cuts into your business!

Manufacturers who spend great effort and time to develop and promote products, once they are successful, often find that imitators are looking for a free-ride by copying either the trademark and trade dress of the product or the product design itself, or both!

Such knock-off products are usually significantly cheaper and involve inferior manufacturing, thus less value to the consumer. We've all seen boot-leg VHS or DVD movies, fake brand name purses, and fake brand name watches, the movies are not of good quality, the purses poorly made, the watches of much inferior quality. In extreme cases, such as in imitation pharmaceutical products, customer's health and even lives may be endangered by untested and unregulated drugs sold over the internet.

Consumers often confuse these knock-off products with the real thing and blame the poor quality on the real owner/manufacturer, thus tarnishing the hard won reputation of the real manufacturer.

Even when consumers are aware that the knock-offs are not the real thing, a flood of low quality imitations dilutes the value of the original products and trademarks (brand names) of the real manufacturer.

Consumers can protect themselves by being careful about not buying counterfeit products on street corners or over the internet, and examining goods carefully in stores and flea-markets.

Manufacturers can protect themselves by filing to protect their intellectual property rights, including copyrights, trademarks, and patents through federal registration, early, before the infringement occurs, and by policing infringers after it occurs.

Trademarks and trade dress, in particular, are the "I.D." for products and companies as well as the symbol of consumer good will. Knock-offs are purely theft of the manufacturer's identity and goodwill, valuable but intangible assets that need to be protected for the manufacturer as well as for the consumer.

The Washington Post has an interesting article regarding furniture knock-offs at http://www.washingtonpost.com/wp-dyn/articles/A19484-2003Aug20.html

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Internet Search Engines Potential Liability For Trademark Infringement

The application of traditional trademark principles to the Internet has been confusing for many federal courts. However, in the past year, some federal courts have made rulings based on whether Internet search engines should be held liable for trademark infringement based on the sales of advertisements linked to trademarked keywords. The overpowering issue for the courts has been whether or not the search engine's sales of keyword trafficking constitutes a "use" necessary to bring a trademark infringement suit under the Lanham Act.

Presently, American Blind & Wallpaper Factory has brought suit in the Southern District Court of New York alleging that Google infringes their trademarked terms by allowing competitors to purchase keywords that are similar to its trademarks such as "American Blind," "American Blinds" and "Americanblinds.com." American Blind is also arguing that Google intentionally encouraged competitors to create brand confusion.

Earlier this year, the Ninth Circuit ruled that the owner of the trademarked terms "Playboy" and "Playmate," Playboy Enterprises, Inc. should survive summary judgment on its trademark infringement claims against Netscape Communications. Playboy Enterprises v. Netscape Communications, 354 F.3d 1020 (9th Cir. 2004). The Ninth Circuit held that advertisement banners of competing advertisers of Playboy Enterprises were displayed as a result of typing in "playboy" or "playmate" (among 400 other terms) into the search engine. These ads also had "click here" buttons and were not specifically identified, so as to identify the source of the advertisement. Playboy contended that this could lead the Internet user to another website, not knowing that they were being misled to a site other than Playboy Enterprises'.

While the Ninth Circuit held that this constituted "use" because the Internet user might stay at the misleading website, even after discovering it is not what they initially searched for, the Eastern District of Virginia has not been as sympathetic to plaintiffs in this context. In U-Haul Int'l v. WhenU.com, 279 F.Supp.2d 723 (E.D.Va. 2003), the district court in Virginia would not accept any of U-Hauls arguments that it was trademark infringement when WhenU.com used U-Haul's trademarks as a keyword trigger to display pop-up ads of U-Haul's competitors.

Another court in the Southern District of New York has distinguished WhenU.com's use of trademarked terms from the U-Haul case and allowed the plaintiff in that case, 1800 CONTACTS, to withstand a motion for summary judgment.

While the law is still up in the air on the issue of "use," it will certainly be interesting to see if the American Blinds v. Google case will make it past summary judgment and how the court will rule when the trademarked terms are as generic as "American" and "blind" - terms which are not nearly as strong as "Playboy," but the trend seems to be for increased trademark protection on the Internet.

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Software Patents: How Microsoft Makes The World Turn

Microsoft is a defendant in more than 30 pending patent-infringement cases. These cases involve a wide range of Microsoft's products, including its Windows operating system, office productivity software, Xbox video game machine, Pocket PC handhelds, keyboards and mice. Here are two interesting cases showcasing Microsoft's power within the industry.

Immersion Corp. V. Microsoft:

Microsoft has been sparring with Immersion Corporation, a San Jose based technology company, when Immersion filed a lawsuit claiming that Microsoft's Xbox game console infringed on their patent for Haptic Technology. Haptic Technology allows video game users to feel sensations such as shooting a gun or hitting a golf ball.

Microsoft ended up paying Immersion $20 million for a perpetual license and invested another $6 million in the company. This accounted for a 10% stake in the company and the next day sent Immersion's stock skyrocketing.

Eolas & UC Regents V. Microsoft:

In 1993 Doyle, Michael Doyle and colleagues of University of California at San Francisco's Innovative Software Systems Group, were exploring ways to interactively share research information. In 1994, Doyle launched Eolas to market technology that allows users to access interactive programs embedded in the Web. Eolas owns the exclusive rights to market the technology, while the University of California (UC) owns the patent. The technology would allow web users to not only read online information but also interact with it.

In the mid-1990s, the Internet became extremely popular, and the technology became a staple of the Web experience, supporting stock information, video players, virtual real-estate tours and games. It was at this juncture that Microsoft is believed to have infringed on Eolas' technology. Microsoft was contacted by UC during this time about obtaining a license for the software but Microsoft never pursued the matter.

During the trial, Microsoft argued that prior art existed at the time of issuance and that in any case they never infringed. Microsoft also said the patent described features the technology didn't deliver. Neither of these arguments were able to hold weight, and jury returned a verdict in favor of Eolas and UC for $521 million, the largest jury verdict in 2003. In January, the court added $45.3 million in prejudgment interest, increasing the already staggering $521 million award to more than $565 million.

In response, Microsoft proposed changes to Internet Explorer that would possibly render millions of pages obsolete. Web developers and the World Wide Web Consortium (W3C) got wind of this information and came to Microsoft's side. They requested that the patent office revoke the patent. Soon after, the USPTO director, James Rogan, ordered a re-examination of the Eolas' patent (Patent No: 5,838,906).

A preliminary finding was issued by the patent office which concurred with the claims by the W3C and others that the patent was improperly granted because of pre-existing similar inventions such as the web browser Viola developed by Pei Wei.

Re-examinations can drag on for years and so instead of waiting for the USPTO to respond, on June 3rd, Microsoft filed an 174-page brief, asking the United States Court of Appeals to overturn the 565 million patent infringement judgment.

In its brief, Microsoft contends that the district court erred multiple times on issues related to prior art and claim construction and that the court's error distorted the proceedings. The jury should be given the opportunity to consider the prior art that was improperly excluded. Microsoft also asked that the infringement judgment be reversed. Short of that, the company asked the court to vacate the verdict and grant a new trial. Microsoft also requested that the court ignore non-U.S. Windows sales in determining a fine, which would result in a 64 percent reduction of the $521 million award to $187 million.

The University of California said it will file its response to the brief by the July 16, 2004 deadline and said Microsoft's arguments are nothing new. If the ruling stands, Microsoft could be doling out payments to the U.C. for another nine years -- until the patent expires in 2012.

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Public & Media Impact on Trademark Rights

The public and media's indiscriminate usage of protected trademarks can make the marks become generic and thus unprotected as trademarks. Trademarks are defined as any word, name, symbol, or device, or any combination thereof used to identify and distinguish one's goods from those manufactured or sold by others and to indicate the source of the goods. The essential functions of trademarks are: (1) to identify and distinguish goods from those sold by others, (2) to signify that goods bearing the same trademark originate from the same source, (3) to show consumers that all goods bearing the same trademark are of the same quality level, and (4) essentially, to represent the good will and reputation of a company.

A generic term is one that comes to describe a class of goods rather than an individual product.

A term is generic, and thus not entitled to protection from infringement, when it refers to genus or class of product, rather than particular product or when majority of buying public associates term with product, rather than source of product, whether source is known or unknown.

Genericide of a trademark is the deterioration of a once valid, protectible trademark into a common term available for use by anyone. Use of a mark to describe the product or service with which it is associated, and not as an indicator of a source for that type of product or service, may cause the mark to become generic and effect a loss of trademark rights. The rationale behind not offering trademark protection for generic terms for a good or service is that granting trademark protection for a generic term would grant the mark owner a virtual monopoly because his competitors would not be able to accurately describe their goods or services. Reasons for genericide: no suitable generic term for the trademarked item, generic term exists but is too cumbersome or difficult for the general public to pronounce, one brand of a product dominates others in the market, or becomes famous for being the first to introduce a product. Although a generic term cannot be trademarked, it is possible for a word to be generic of some things and not others; in such a case, the word may receive trademark protection for its non-generic use. ("ivory" is generic of elephant tusks but arbitrary as applied to soap).

Courts have consistently held that in determining whether a mark has become generic, the only relevant opinion was that of the general public, not that of trade professionals and experts. The appropriate test to determine whether a mark is generic is whether the public perceives term primarily as designation of article. Evidence used to prove genericness can include the following: dictionary definitions are relevant and sometimes persuasive in determining public usage because the assumption is that dictionary definitions "usually reflect the public's perception of a word's meaning and its contemporary usage" and generic usage in the media such as in trade journals and newspapers.

An appropriate trademark notice (®, ™, SM) must be placed adjacent to the first and most prominent reference to the trademark: never use a trademark in the possessive, never use a trademark in the plural, never use a trademark as a verb, never include a trademarked term in a hyphenated phrase, capitalize trademarks as they appear in the trademark database. Be especially aware of unusual capitalization, and do not abbreviate a trademarked term unless the abbreviation is also a trademarked term.

Once a name is adjudged to be generic, a seller generally cannot take it and use it as a trademark merely by use and advertising. There is, however, the very rare case where with a "massive" amount of advertising, "it does appear possible for a company to reclaim a generic term from the public domain and give it trademark significance."

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Brand Name Babies

Trademarks, a commercial intellectual property, are creeping deeper into the American culture and psyche. Once parents named their children after famous people such as George Washington, recently the trend has been growing towards famous trademarks!

The U.S. Social Security Administration database of popular names shows that in the year 2000, there were 353 babies named Lexus, 298 named Armani, 269 named Chanel, 164 named Nautica, 24 named Porsche and 21 named Loreal. Seven babies were named Delmonte, six were named Timberland, and five were named Guinness. There are even reports of two babies named ESPN, after the sports network, although those did not make the database.

Many of the names correspond with luxury products, suggesting that parents want to link their children with glamour and wealth. "We live in an era of the power of the brand name." says Pamela Redmond Satran, author of the baby-naming book Beyond Jennifer & Jason, Madison & Montana.

So how will brand owner's guard the image of their trademarks against dilution and tarnishment when those marks become personal names? Tiffany's has already experienced this issue as over the last few decades "Tiffany" has become and increasingly popular girl's name as it makes an association with the high-end store Tiffany's.

Conversely, what will happen the unfortunate who was named after a trademark that becomes infamous? Hopefully not too many parents named their sons Enron.

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The 109th Congress: Little For IP In The End

Hayden Gregory, Section Legislative Consultant ABA IP Committee

In a flurry of activity in the final week of the 109th Congress, the House of Representatives passed six intellectual property-related bills (three of which were combined in a single bill). The Senate acted on only one of the six, which it approved and sent to the President for signature. All of the other bills described below, as well as all other bills that were not approved by Congress before final adjournment on December 9, died with the adjournment.

The one successful bill was a relatively minor measure, H.R. 6338, to provide legal protection to distinctive emblems for the Red Cross-related organizations Red Crescent and Red Crystal. That fast-moving bill was introduced in the House on December 5, passed the House that same day, and was approved by the Senate on December 8.

On December 6, the House of Representatives passed S. 1785, the “Vessel Hull Design Protection Amendments of 2006”. The bill had been approved by the Senate a year earlier, on November 18, 2005.

As passed by the Senate, S. 1785 would amend the Vessel Hull Design Protection Act (17 U.S.C. 1301 et seq.) to extend the legal protection of the Act to designs of vessel decks in addition to protection of hull designs under current law.

In addition to the provisions of the bill as passed earlier by the Senate, the House amended S. 1785 to include two other House bills. As a result of these amendments, the bill was sent back to the Senate for further consideration.

The House added to S. 1785 the text of House Concurrent Resolution 319, which commemorates the Bayh-Dole Act on its 25th anniversary. The Bayh-Dole Act enables non-profit organizations and small entities to obtain patents and receive royalties for inventions that result from research and development subsidized by Federal financing.

The second House addition was the text of H.R. 5120, a bill that amends the Patent Term Restoration Act (35 U.S.C. 156) to allow the Director of the USPTO to accept a patent term extension request not later than 5 days after the expiration of the current statutory deadline, provided that the late filing is shown to be unintentional. Current law provides that such a request must be filed within 60 days from the date that the Food and Drug Administration approves the drug for use. Legislative history indicates that H.R. 5120 was designed to provide for a patent term extension for the anticoagulant drug Angiomax, concerning which the request for extension was filed one day late.

Another Bayh-Dole Act related bill, H.R. 6427, passed the House on December 8. H.R. 6427 would amend the Act to permit smaller universities and other non-profit organizations to retain a higher percentage of licensing fees and other royalties for inventions developed under the Act.

On December 5, the House approved H.R. 4742, a bill to allow the USPTO Director to waive statutory deadlines for filing and processing of patent and trademark applications in the event of a major disaster such as Hurricane Katrina.

Presidential nominations which have not received Senate approval suffered the same fate as unenacted bills. Included in this group is the nomination of former USPTO Director James Rogan to be a U.S. District Court Judge for the Central District of California. The nomination has been returned to the President, and must be resubmitted after the 110th Congress convenes on January 4, 2007 if it is to be considered further.

Although Congress adjourned after failing to pass most of the appropriations acts, including the bill (H.R. 5672) that funds the USPTO, all agencies continue to receive funding through a temporary funding measure known as a continuing resolution. This temporary funding measure expires on February 15. The 110th Congress will therefore have to complete action on funding the government for Fiscal Year 2007, which began on October 1, 2006. The House has passed H.R. 5672 with full funding for the PTO (no diversion of user fees) and the Senate Appropriations Committee has approved the same figure. It therefore appears likely that when final action is taken, the PTO will again receive full funding with no diversion. Similarly, all these funding measures provide for a one-year extension of the PTO user fee increases that were scheduled to expire on September 30, 2006, and their continuation for at least this period of time seems certain.

Source:
ABA

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Patent Invalidation

There are over 20,000 software patents issued each year, and biotechnology arenas are utilizing more and more computer technology. This results in a “patenting frenzy” of Internet, biotech, and e-commerce advances. Although this may not seem startling at first, other factors combine to cause numerous problems in this area of patents.

The problem starts at the PTO and with the patent examiners. Examiners are not given enough time and resources to perform adequate background checks on prior art. In addition, the literature searches that are usually performed on prior patents are not as effective in the software field since recent developments in software, algorithms, and business methods do not usually show up in the patent system. As a result, patents that should not be issued in the first place make it past the examiners and are stamped with a seal of approval.

As a result, these approved patents carry with them a presumption of validity difficult to overcome. Challengers of these dubious patents face a heavy burden of proof, and a poorly issued patent can threaten entire industries. For example, British Telecom claimed that it held a patent for hyperlinking on the Internet. If enforced, this could threaten and retard years of online development. Another patent holder, Bruce Dickens, claimed to own the patent for the Y2K fix in computers. Again, this single patent holder posed a threat to hundreds of companies attempting a fix. Lastly, Amazon.com’s “one-click shopping” patent sparked a debate during a suit against Barnes and Noble.

It is very important to note that these bunk patents appear in an arena characterized by big money. For example, acquiring a software technology patent from an inventor can cost tens of thousands of dollars. Patent litigation easily goes upwards of millions of dollars in costs. And patent licensing can garner hundreds of millions of dollars over the long haul. It is therefore no surprise that so much attention is being paid to this area of the patent industry.

Software and internet-related patents are not the only ones of concern here - biotechnology patents also pose a problem. Biotech innovations, including DNA fragment patenting, cloning, pharmaceutical developments, and stem cell research comprise an area where profits reach the billions of dollars. The intertwining of biotech and computer research poses the same problems software technology patents face, including enablement and lack prior art (biotech patents tend to have more enablement problems and fewer prior art problems than do software patents).

The question remains: what can be done to remedy the current state of affairs regarding patents? One possible solution is to give patent examiners more time and resource solutions in a “quality over quantity” approach. This might prove to be difficult due to the overwhelming number of patent applications currently flooding the PTO. In addition, some online resources exist for potential patent buyers who want to check their prospective patent’s validity. An archive of invalidated patents is available online at http://www.iplaw-quality.com/invalid.htm. Another interesting yet currently defunct online solution to annoying “bad patents” was BountyQuest.com, which placed a “bounty” on annoying lawsuit-provoking patents with a reward for information leading to their invalidation.

No matter what the eventual remedy may be, the fact remains that overbroad, vague, nonenabling patents are here to stay for the time being and constitute a threat of suit for many in the software technology and biotech businesses.

Resources:

Source Translation Optimization
(http://www.bustpatents.com/)

Patent Absurdity, Steven J. Frank
(http://www.spectrum.ieee.org/careers/careerstemplate.jsp?ArticleId=i080502)

A Call for Bounty Hunters, Michael J. Feldon
(http://pubs.acs.org/subscribe/journals/mdd/v04/i03/html/03patents.html)

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