Let it snow! Burton Patents

To say that the winter of 2014 as been harsh would be an understatement. In the North-East and West, snow totals are approaching historic levels. Even as I type, another monster storm is gathering to dump feet of snow on an area stretching from upstate NY to Maine.

If there are any winners in intense snowy winter, it is ski resorts. Resorts, it is obvious to state, can't function without skiers and snowboarders.  One of the premier outfits in snowboarding Burton is, aside from a trendsetter in slope apparel and design, a prolific patentee.

According to the patent databases, Burton has more than 100 issued patents and pending application in the US.  An appreciable number of these patents are directed to function features, such as the spring leaf modified glide board design seen above.  Other patents address the continuous problem of lacing your boots. For example patent 8418381, describes a lacing system for boots.

One of the features that drives sales in the apparel / sporting goods space is the relentless need to innovate and produce new and improved models. In that respect, the Tech space and the sports retail space are not significantly different.   The ability to patent these advancements, however incremental, mean increased sales and wide recognition as an innovator.

Not every patenable idea is a commercial success, nor should it. A large purpose behind the patent system is to allow companies and individuals to iterate over known ideas to get new ideas. Sometime, the iteration is not worth the added expense. Sometimes the iteration was the last piece of some overall systems puzzle that advances the art, and becomes the basis of new paradigm in the industry.

Burton made a large push for the integrated boot binding combination. Had it taken off, it would have changed the technological direction of the industry. At the end of the day, in 2014 at least, that technology is a side show to the more simplistic boot binding system employed by Burton and other board manufacturers.

The point is that you never know which ideas might strike and catch fire, and which ideas whither on the vine. If you wait until you are successful to patent those ideas, it is already too late.


Jordan Garner

The Case for a Financial Engineering Art Unit at The PTO

If you understand the formula to the left, then congratulations, you are probably a financial engineer.

Financial engineering is a multidisciplinary approach to finance that uses mathematical modeling, computer algorithms, and economic principals to develop various sophisticated financial instruments. The goal, as with every alchemist, it is generate something of immense value from something of very little value.

Where the end product of financial engineering intersects with IP law is the notion of the "business method patent".  Most of the concern regarding Non-Practicing entities (Patent Trolls), are focused squarely on the validity of patents relating to financial engineering implementations.

 The U.S. Supreme Court has recently granted Cert. in CLS Bank v. Alice Corporation. The internet is full of blogs explaining the merits of each parties' position, and i have nothing useful to add to that conversation.

What I do add is this: The general disposition of people opposed to business method patents is that the concepts are abstract, and do not do anything new with old concepts. Unfortunately, that opinion confuses the prohibition on non-patentable subject matter (Sec. 101) and novelty (Sec 102).

If the argument is that a financial engineering concept, like the 3rd party escrow arrangement in ALS, were abstract, then why are we arguing about it? Clearly someone implemented the idea, hence making it tangible. Once something can be made tangible, it is no longer abstract.  Really, most positions on business method patents collapse into a novelty argument.

The patent office was issuing loads of patents on financial concepts tied to various computer implementations. When these patents are challenged, the argument is always that the patentee is merely applying the concept with a computer. The parties could point to the prior art, but they usually find it lacking. Thus, they settle into a long patent-eligible subject matter argument instead of a novelty, obvious argument.

The result is that Congress, the President and various industry groups are attempting to change the law to suit the goal of eliminating harmful business method patents.

A better way to solve the problem is to move the issue back into the patent office. It is my theory that one of the reasons that business method patents get through the patent office is that most of the Examiners in the art unit have a computer science background and not a financial engineering background. If the PTO actively recruited a financial engineering unit, and stationed them in a Manhattan Satellite Office, they would have the synergy of a examiner corp that is familiar with high-end financial concepts, and a store of knowledge as to what constitutes prior art.

Why Manhattan? Proximity  to Wall Street; home to several leading financial engineering graduate programs. Supply of former and current financial industry employees who can transition into the examiner role.

Before we close off an entire field of patentable subject matter, we should at least try to diligently examine them.

Jordan Garner

Getting Hired in the IP Field [PTO Stats]

There is nothing better then data...said no one...ever. However, I think lawyers should have a keen eye to trends, and trends only make sense with data.  The patent office is a great resource to uncover strategies and long term trends in the field (and in American innovation in general). Below are some patent stats for 2012.

It is interesting that slightly more than half of all the applications filed in the US, originated from inventors in foreign countries. The take away is that foreign filing in the US is a serious source of work and revenue for firms, large and small (there is a reason I go to Japan once a year). However, one could argue that Americans have lost the edge in their own patent office. When you break out the foreign countries into their own catagory, the situations becomes more interesting.

Japan, once the second largest economy in the world, is still the second largest filer of Applications in the US. In contrast, China (PRC), is the world's second largest economy, but is tied with Canada for the amount of applications filed in the U.S. Over time, these number will begin to reflect the rise of China on the global stage, but the concern that China is already at the front, is a bit misplaced.


Lastly, the estimated number of active patent practitioners is 26,000. So, when you calculate the total number of applications filed by the number of active practitioners, you get 20.8 Applications per practitioner. Seeing that some of these applications are pro se, some companies have hundreds of applications filed by a small team, the number of applications per attorney or agent is actually quite small. I will let you draw your own conclusions on what that means for the prospects for new lawyers.

[Ngram Viewer] Patent troll vs software patent vs open source

This is a brief follow up to the earlier post on not fearing/feeding patent trolls. I wanted to see the mention frequency for patent trolls measured against open source software and software patents. The chart is below and self explanatory. Social media tends to drive our opinions as the the current state of IP. However, the empirical evidence tells a differs story.

Clearly, the story of innovation is being driven by open-source technologies. While software patents exists, the percentage of mind share they occupy pales in comparison to open source.

Don't Fear the Patent Trolls

One of the concerns revised by start-ups is fear that their small company will be sued by a Patent Troll (Non-practicing entity). Generally this concern is premised that the software (it is almost always a software start-up which fears patent trolls ) used by the start-up is covered by some obscure software patent.

Much like the Satanic Moral Panic scares of the '80s and 90's, the fear of patent trolls outstrips the actual reality.

Generally, the goal of a NPE is to obtain a lump sum payment for past infringement. Suing a start-up which has not demonstrated any revenue, or even a viable business plan to generate revenue, wouldn't gain any meaningful recovery. In order to recover for patent infringement, you have to show lost profits, reasonable royalty or willfulness. Since NPE's (by definition) do not practice the patent, they have a hard time showing lost profits. Thus, they rely heavily on a reasonable royalty of the Companies' profits.

If your start-up has barely received a series A funding round, the profit motive for litigation is not there. That doesn't mean that a NPE won't send you a letter alleging infringement, thus trying to rattle the tree a bit in the hopes that you have deep pockets. However, if you are a start-up without a lot of revenue, or a famous or wealthy founder, odds are you are not going to find yourself in Court.

However, if you do receive a nasty gram from a lawyer claiming patent infringement, ask the sender to identify the patent and the particular claims alleged as infringed. Wait to hear back from them. If they get back to you in a manner that does not answer those two questions, then it is time to contact a professional IP attorney.

The point is that NPEs suing start-ups are not a wide spread issue. A quick google search shows about half a dozen high profile instances, but that is contrasted against the list of start-ups supported by every major venture firm out there.

Not every start-up is being sued into oblivion on the basis of specious patents. For instance, the Government Accountability Office found that Patent Troll Litigation only counted for 20% of patent litigation cases in the US. The rest were simply run of the mill patent disputes. Of that 20%, most NPEs directed their fire to major multi-national corporations, not 3 man start-ups.

Code, innovate, and create. Don't spend your time thinking that their are monsters under the bed.

Jordan Garner

Standard essential patents are...essential

Forbes has an interesting article on standard essential patents (SEPs). You can read it here. http://www.forbes.com/sites/hbsworkingknowledge/2014/01/16/a-way-to-mitigate-smartphone-patent-litigation/

The article often points to Qualcomm's 6 billion dollar /year in licensing royalties (for CDMA patents) as though it were an example is an in the breakdown of the SEP system. 

However, the article fails to note that CDMA is not an obscure technology foisted on an industry. CDMA is the one of the most widely used cell phone communication standards on the planet. 

The whole purpose of the SEP system is to provide a reasonable royalty to the inventor of technology that the market determines is the best way to implement a solution to an industry-wide issue. 

If the industry is unable to perform this function, as the article implies ( noting the increased politicization of the process ), then why entrust the process to industry?  Forbes appears to be making an argument that the market, as it relates to SEPs, has failed.

If un-elected industry officials can not pick technological winners and losers, why not ask the un-elected bureaucrats to do so? In that scenario, some collection of professors, lawyers and government appointees could hash out some solution which results in a standard, non-negotiable license applied across the board.

If that outcome feels less than appealing, then the basic premise that the system is failing needs to be reevaluated.

If your technology undergrids global communications, you should be compensated for it, regardless of if you build every piece of equipment or not. The fact that different factions would argue for their technology is not a break down in the system, it is the system functioning as it was intended.

Jordan Garner
(c) 2014 Moorsgate Media

[Scam Alert] UPTS.org

Unlike intros to songs featuring Jay-Z, this is not a "new watch" alert but a a [New Scam] alert. However, much like the rap impresario, I come to tell you tales of The Hustle.

Much in the same way that modern hip-hop reinterprets the classic Greek tragedy, IP scammers seek the remix of old strategies.
Before the Internet, IP scammers must have had it made.  All that was needed was an official looking document and an Eastern European P.O. Box. Presto, cash in bank.

Now, in order to have a credible shot at committing fraud, IP scammers have resulted to professional looking webpages, and even more official looking documents.

I find UPTS.org to be particularly innovative in this respect. They use a web URL that is surprisingly homologous to the USPTO. That off-set  P grabs you, roping in those who are vaguely aware of the existence of the USPTO, PCT and EPO. Add in the .Org and it all looks so plausibly above board.

However, the briefest reviews shows that once again, those eastern European O.P. boxes are behind the scenes. Looking to collect your checks (and god forbid,) your credit card number.

Safe to say that UPTS.org is a scam. Do not give them your money. Add them to the List.

IP-Data.biz
UPTS.org

Jordan Garner