In our third and final discussion with Todd Miller, I asked him to answer the questions our readers had submitted on this blog and various other forums. Todd told us about the basics of patents, and how to deal with patent disputes in our last Q&A sessions.
It happened that on June 28th, the US Supreme Court had a patent case ruling related to “business methods” (Bilski v. Kappos), and many readers asked us to talk about this case. So I asked Todd to also tell us what the court was considering, what the ruling was, and how will it affect business moving forward. Given that I hold a few business patents, this was of particular interest to me personally.
SECTION I: Reader questions
Do you have a list of reference sites to see if a process, formula, or tangible product has already been patented? Also, if someone were (more or less) uninformed on how to conduct a targeted search, how would he or she search to see if his or her idea has already been patented?
The best site is http://www.uspto.gov/. There, the U.S. government provides a number of ways to search to see if an idea has already been patented. In particular, you’ll want to refer to http://www.uspto.gov/patents/process/search/index.jsp. What I typically do is conduct a Boolean search at http://patft.uspto.gov/netahtml/PTO/search-bool.html. There, you can search by field, such as by title, abstract, summary of the invention, claims, etc. Plug in key words to your invention and review what results, if any, pop up.
The European Patent Office has a fine site at http://ep.espacenet.com. Also consider using WIPO’s PATENTSCOPE® service at http://www.wipo.int/patentscope/en/.
Google also has full-text searchability of some 7 million patents offered at http://www.google.com/patents. Google highlights your search terms and allows the patent to be easily downloaded. But in my experience, Google’s database does not contain the most recent patents or the published applications. The USPTO’s site does.
Google Scholar is also a terrific resource. Subscription tools such as Dialogue are also wonderful.
How do you place a value on certain patents when there is no market? Does one use the dollar value of the attorneys’ fees?
Where there is no established market, a patent’s value still goes back to basics, in other words, the amount a buyer is willing to pay. In setting a price, consider looking at analogous established markets for guidance. Also consider what income, cost-savings, or other benefits may accrue to a user of the claimed invention.
Will you accept infringement litigation on a contingency basis?
Yes.
Can you tell us a little more about patent infringement? How is the average person supposed to know whether a product or process infringes?
This question is a complicated one answered by the jury, or judge if there is no jury, during every patent trial unless infringement has been stipulated or is otherwise not an issue. Patent infringement is a two-step process. First, the claims are construed as a matter of law based upon how one of ordinary skill in the art would understand the claims at the time of the invention. The claim scope is then compared to the accused product or method as a matter of fact. To infringe, the accused product or method must embody each limitation in the claim, either literally or by a substantial equivalent.
Here’s an example that I give when teaching. Supposed the asserted claim is: “A bicycle comprising: a first wheel, a second wheel, and a frame linking the first wheel to the second wheel.” If the accused device is a unicycle, there is no infringement. The claim requires at least two wheels, and the accused device only has one. Since the accused product does not embody each limitation in the claim, there can be no infringement. When teaching, I take this rather simple example and expand upon it to show how complex the issues can quickly become. For example, does a motorcycle infringe this claim? What about a car? What about a device with a wheel and a block and a frame linking the wheel to the block? To me, it’s all richly engaging.
SECTION II: The Supreme Court decision on Bilski
Can you tell us what was at issue in Bilski?
Generally speaking, the Supreme Court considered whether to exclude business methods from patent protection.
Can you give my readers an example of what you mean by “business methods”?
The simplest example is the business method claimed by Bilski, namely, instructing how commodities buyers and sellers in the energy market can protect, or hedge, against the risk of price changes. Other examples of business methods include tax strategies, e-commerce, banking, and insurance schemes.
Did the court decide to exclude business methods from patent protection?
No. The Supreme Court was unwilling to exclude all business methods from patent protection.
Did the court rule that Bilksi’s business method was patentable?
No.
Why not?
Bilski was attempting to patent a mathematical formula that covered the basic concept of hedging risk. An abstract idea, law of nature, or mathematical formula is not patent-eligible.
How does Bilski affect doing business moving forward?
Business methods will continue to be patentable. However, any attempt to patent a mental process, algorithm, mathematical formula, or fundamental principle that does not require a particular machine, article, transformation, or application will be met with rejection at the United States Patent and Trademark Office.
What about the patents that are already out there covering business methods?
Those patents are presumptively valid. But challengers will point to Bilski to argue that not all business methods are patentable. Should the claims cover an abstract idea, or merely limit the use of an abstract idea or add insignificant postsolution activity, a challenger may say these claims are invalid, just like they were in Bilski. A challenger may also say that the claims are invalid as being obvious where the claims cover a mathematical formula or the like known in the prior art.
Any other thoughts?
Post-Bilski, the Supreme Court has suggested that the Federal Circuit continue to develop tests to determine what is patent-eligible subject matter. Including the recently remanded Mayo Collaborative Services v. Prometheus Laboratories Inc., there are about six other cases ripe for Federal Circuit clarification regarding the patentability of business methods, software, medical, or other processes. In the meantime and no doubt for some time afterwards, expect to see more rather than less prosecution and litigation on what is patent eligible or obvious if the formula, algorithm, etc. is known in the prior art.
Todd R. Miller is a trial attorney who represents clients in high-stakes, complex intellectual property disputes. He has particular experience in patent litigation arising in the electronics, computer, semiconductor, and software industries. Having tried and won matters before jurors, judges, and arbitrators, Todd is a seasoned litigator who efficiently and effectively advocates the case to obtain client goals. More at: http://www.jonesday.com/trmiller/
The answers provided reflect only the present considerations and views of Mr. Miller, and should not be attributed to Jones Day, or to any of his or its former or present clients.
Showing posts with label patent disputes. Show all posts
Showing posts with label patent disputes. Show all posts
July 6, 2010
June 23, 2010
Interview with Todd R. Miller, part II: patent disputes and patent litigation
In part I of my discussions with Todd Miller, we discussed the ins and outs of applying for patent protection, when to apply, how to apply, and what to expect. In part II, we discuss what to expect if there’s a patent dispute or litigation. This is Todd’s specialty, and if you have any questions about patent disputes or how to handle them, make sure to leave your questions in the comment section here. We will compile your questions with responses from Todd for the third installment of this series.
Please note specific cases will not be considered for discussion.
If patent rights are being violated, what are the options?
The options generally include doing nothing, filing a lawsuit, or putting the infringer on notice by sending what’s commonly referred to as a notice letter.
Why would you want to give an infringer notice?
To dissuade commencement or continuance of infringement, to seek license royalties, to seek some other business relationship, to start running the damages where actual notice is required by law, or to give the infringer knowledge of the patent to set up possible liability for enhanced damages or active inducement.
Are there any issues with sending a patent notice letter?
Yes. Depending on how notice was provided and other circumstances, the recipient may choose to file a declaratory judgment lawsuit. Doing so gives the choice of forum and timing to the accused infringer. Other issues include legal retaliation such as the filing of a lawsuit asserting patent violations by the other side. Business retaliation is also a possibility.
Are there any practical tips for sending patent notice letters?
If the product is covered by a patent, mark the product; it provides constructive notice. Care must be taken here to make sure the product is indeed covered by a patent and only active patent numbers are marked.
If there is a concern with a declaratory judgment action, consider giving notice of the patent without mentioning infringement or licensing, or requesting a confidentiality agreement, or filing an infringement suit first but not serving it.
To set up a willfulness claim, elaborate with a claim chart or otherwise show why it would be objectively reckless to continue. In anticipation of litigation, appropriately label documents and involve counsel on communications. Finally, before sending, conduct a thorough litigation risk analysis.
What about receiving a patent notice letter? Are there any issues there?
A patent notice letter may provide the accused infringer of actual knowledge of the patent and infringement, and thus set the stage for a willfulness finding or patent inducement.
Are there any practical tips with regard to receiving patent notice letters?
Immediately after receiving the notice letter, send out a litigation hold notice and label attorney-client and work product documents appropriately. Take advantage of the opportunity to make your own evidence and keep managing it. Under attorney-client privilege and work product protection, determine if a design-around is possible. If so, take remedial steps. Have defenses that make it a “close case.” Determine if an offensive case is possible and how best to use it. Consider reexamination or the threat of it.
What percentage of patents end up in litigation?
Very few, roughly 2%.
Once a patent ends up in litigation, what is the likelihood of adjudication versus the likelihood that the case will be settled?
Patent cases, like other civil matters, typically settle. Looking at the 2009 data as a guide, roughly 88% of the patent cases settled. About 8% were disposed of by summary judgment; about 3% were disposed of by jury trial; and about 1 % were disposed of by bench trial. From January 2005 to May 2010, there have only been 263 patent verdicts.
What is the typical period from start to finish for a patent litigation?
This depends on multiple factors including the case filing location, whether the jurisdiction has patent local rules, the court’s existing docket load, the merits of the case, the amount of damages at stake, etc. Total time can thus range anywhere from weeks to years.
Do companies typically recoup their entire cost of litigation?
Successful patent holders typically recoup their entire cost of litigation. A victory also provides a number of other intangibles including increased leverage in future settlements.
What is the median cost of patent litigation?
The median cost typically depends on the amount and the location of the suit. According to the AIPLA Report of the Economic Survey 2009, the nationwide median cost where less than $1 million was at stake was $650,000. For cases between $1 million and $25 million, the median cost was $2.5 million, and for cases with over $25 million at stake, the median cost was $5.5 million.
How should a company deal with international patent infringement?
For international patent infringements, a company needs to have a strategic plan of where to sue first and when to sue. While U.S. litigation is more expensive, the market is typically larger and thus more damages may be at stake. For purposes of maintaining costs and effecting a coordinated approach, it is preferable to have a single firm handle such work.
What’s the best way to prevent a patent litigation case?
Short of completely staying out of the market, a search for patents that may pose a barrier should be performed. If there is anything close, the options include designing around, licensing, and obtaining advice of counsel. A company should also build up its own patent portfolio as a deterrent, as well as for cross-licensing and offensive position.
What industries are currently experiencing the most patent disputes?
There has been an explosion of internet-related business method patent cases. Cases involving the electrical arts and pharmaceutical industries continue to be prevalent. There has also been an uptick in litigation involving the “clean tech” area including hybrid cars, wind turbines, and smart grids.
Todd R. Miller is a trial attorney who represents clients in high-stakes, complex intellectual property disputes. He has particular experience in patent litigation arising in the electronics, computer, semiconductor, and software industries. Having tried and won matters before jurors, judges, and arbitrators, Todd is a seasoned litigator who efficiently and effectively advocates the case to obtain client goals. More at: http://www.jonesday.com/trmiller/
The answers provided reflect only the present considerations and views of Mr. Miller, and should not be attributed to Jones Day, or to any of his or its former or present clients.
Please note specific cases will not be considered for discussion.
If patent rights are being violated, what are the options?
The options generally include doing nothing, filing a lawsuit, or putting the infringer on notice by sending what’s commonly referred to as a notice letter.
Why would you want to give an infringer notice?
To dissuade commencement or continuance of infringement, to seek license royalties, to seek some other business relationship, to start running the damages where actual notice is required by law, or to give the infringer knowledge of the patent to set up possible liability for enhanced damages or active inducement.
Are there any issues with sending a patent notice letter?
Yes. Depending on how notice was provided and other circumstances, the recipient may choose to file a declaratory judgment lawsuit. Doing so gives the choice of forum and timing to the accused infringer. Other issues include legal retaliation such as the filing of a lawsuit asserting patent violations by the other side. Business retaliation is also a possibility.
Are there any practical tips for sending patent notice letters?
If the product is covered by a patent, mark the product; it provides constructive notice. Care must be taken here to make sure the product is indeed covered by a patent and only active patent numbers are marked.
If there is a concern with a declaratory judgment action, consider giving notice of the patent without mentioning infringement or licensing, or requesting a confidentiality agreement, or filing an infringement suit first but not serving it.
To set up a willfulness claim, elaborate with a claim chart or otherwise show why it would be objectively reckless to continue. In anticipation of litigation, appropriately label documents and involve counsel on communications. Finally, before sending, conduct a thorough litigation risk analysis.
What about receiving a patent notice letter? Are there any issues there?
A patent notice letter may provide the accused infringer of actual knowledge of the patent and infringement, and thus set the stage for a willfulness finding or patent inducement.
Are there any practical tips with regard to receiving patent notice letters?
Immediately after receiving the notice letter, send out a litigation hold notice and label attorney-client and work product documents appropriately. Take advantage of the opportunity to make your own evidence and keep managing it. Under attorney-client privilege and work product protection, determine if a design-around is possible. If so, take remedial steps. Have defenses that make it a “close case.” Determine if an offensive case is possible and how best to use it. Consider reexamination or the threat of it.
What percentage of patents end up in litigation?
Very few, roughly 2%.
Once a patent ends up in litigation, what is the likelihood of adjudication versus the likelihood that the case will be settled?
Patent cases, like other civil matters, typically settle. Looking at the 2009 data as a guide, roughly 88% of the patent cases settled. About 8% were disposed of by summary judgment; about 3% were disposed of by jury trial; and about 1 % were disposed of by bench trial. From January 2005 to May 2010, there have only been 263 patent verdicts.
What is the typical period from start to finish for a patent litigation?
This depends on multiple factors including the case filing location, whether the jurisdiction has patent local rules, the court’s existing docket load, the merits of the case, the amount of damages at stake, etc. Total time can thus range anywhere from weeks to years.
Do companies typically recoup their entire cost of litigation?
Successful patent holders typically recoup their entire cost of litigation. A victory also provides a number of other intangibles including increased leverage in future settlements.
What is the median cost of patent litigation?
The median cost typically depends on the amount and the location of the suit. According to the AIPLA Report of the Economic Survey 2009, the nationwide median cost where less than $1 million was at stake was $650,000. For cases between $1 million and $25 million, the median cost was $2.5 million, and for cases with over $25 million at stake, the median cost was $5.5 million.
How should a company deal with international patent infringement?
For international patent infringements, a company needs to have a strategic plan of where to sue first and when to sue. While U.S. litigation is more expensive, the market is typically larger and thus more damages may be at stake. For purposes of maintaining costs and effecting a coordinated approach, it is preferable to have a single firm handle such work.
What’s the best way to prevent a patent litigation case?
Short of completely staying out of the market, a search for patents that may pose a barrier should be performed. If there is anything close, the options include designing around, licensing, and obtaining advice of counsel. A company should also build up its own patent portfolio as a deterrent, as well as for cross-licensing and offensive position.
What industries are currently experiencing the most patent disputes?
There has been an explosion of internet-related business method patent cases. Cases involving the electrical arts and pharmaceutical industries continue to be prevalent. There has also been an uptick in litigation involving the “clean tech” area including hybrid cars, wind turbines, and smart grids.
Todd R. Miller is a trial attorney who represents clients in high-stakes, complex intellectual property disputes. He has particular experience in patent litigation arising in the electronics, computer, semiconductor, and software industries. Having tried and won matters before jurors, judges, and arbitrators, Todd is a seasoned litigator who efficiently and effectively advocates the case to obtain client goals. More at: http://www.jonesday.com/trmiller/
The answers provided reflect only the present considerations and views of Mr. Miller, and should not be attributed to Jones Day, or to any of his or its former or present clients.
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