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Chief Judge Rader described the Bilskiand CLS v Alice rulings as “the great-est failure in my judicial career” and
said the Federal Circuit will try to correct wide-spread confusion over Section 101.The judge was responding to a comment
from AIPLA’s Executive Director Q. ToddDickinson, who remarked during a questionand answer session at Friday’s lunch recep-tion that the Supreme Court had adoptedthe “abstract idea” approach advanced byJudge Rader’s dissent in Bilski.“I think in all honesty I consider [the
result in CLS] the greatest failure in my judi-cial career,” said Rader. “I think we have a responsibility to deal
with what we are given and try to provideguidance in the right direction and we didnot do that. But the opportunity is still openand I think the court will move with dili-gence to try to correct the problems we cre-ated in CLS v Alice.”Rader used some colorful metaphors to
describe the roles of the USPTO and thePatent Trial and Appeal Board in shaping IPrights.“You have got an agency with people giv-
ing birth to IP rights, then you have got peo-ple attacking them as death squads killingproperty rights,” he said. “I think there’s akind of schizophrenia going on there.”He said that there needs to be more effi-
ciency and discipline in the discovery process,but that it would be difficult for Congress tomake rules to correct the issue.“I don’t think there’s any way to set a rule
for something as case-specific as discovery,” hesaid. “At least 10 districts have adopted themodel that was proposed by the FederalCircuit’s Advisory Council and that continuesto have good results throughout the system.But to set a rule really attacks the heart of judi-cial independence and the judicial system andthe need to tailor the rules to the case.”Rader spoke about how sequestration
had affected the Court following the recent
breakdown in budget negotiations betweenthe Republicans and Democrats. He said theCourt had unanimously voted to continue tohear cases, but had to let go of employees inorder to meet the demands of sequestration.
One of the casualties of sequestrationwas the Mediation Program, but the courthas maintained it with the help of volun-teers. The Program is now being run bymagistrates.
I t’s official: the explosion of generic top-level domains (gTLDs) has begun. OnWednesday, the first four strings were
delegated under ICANN’s New gTLDProgram. All four strings are international-ized domain names, using non-Romanscripts (see below), and their registries are
SATURDAY EDITION
managingip.com
DAILYREPORT
AIPLA ANNUAL MEETING, WASHINGTON DC, SATURDAY, OCTOBER 26 2013
Your guide to the HagueAgreement News Page 4
Meet incomingPresident WayneSobon Interview Page 6
Continued on page 2
PUBLISHED BY
AIPLA
Rader: Court will correct problemswith CLS v. Alice
Four newgTLDs delegated
– Arabic for “web/network”онлайн – Cyrillic for “online”сайт – Cyrillic for “site”游戏 – Chinese for “game(s)”
The four new gTLDs
AIPLA attendees celebrated the Roaring '20s with dinner and entertainment last night
Knowing both your client and youropponent is crucial when develop-ing a strategy for dealing with
patent trolls.At yesterday’s session The Latest
Thinking About Non-Practicing Entities(NPEs), speakers discussed ways to respondto demands from trolls.David Foster, a partner of Foster Murphy
Altman and Nickel, said lawyers should takeinto account the type of business model theNPE has adopted.For example, some NPEs take what he
described as a “lottery” approach, seeking alarge payoff from relatively few cases. Theytypically conduct extensive due diligence andare willing to go to court. They usually seeklitigation against at least one significant play-er with the means to pay high damages.Other NPEs take a “scattershot” approach,
attempting to extract relatively small settle-ments from a large number of parties. Theirclaims may be weak and they often targetsmaller businesses. Their business model isbased on the large number of patents theyown and leveraging the cost of litigation.“Where the NPE has concerns about the
quality of the patent, it may be more inclinedto go after targets it believes will be less will-ing to litigate and more inclined to settle,”said Foster.Some NPEs have recently begun using
the ITC because of the potential to obtain aSection 337 exclusion order enforceable byUS Customs, which creates a high incentivefor targets to settle.
Felicia Boyd, a partner of Barnes &Thornburg, said it may be difficult to accu-rately assess upfront the cost of settling ver-sus the cost of going to trial. “Someone whohas a lot of patents and can keep coming atyou with different ones will have to be dealtwith differently than someone who has oneor two patents,” she said.Boyd said lawyers should also consider
the type of client they are representing. “If Irepresent a small company, their decisionabout whether to defend a case is likely goingto be different than an Apple or a 3M.”Some companies, such as Vimeo, publicize
the fact that they never settle with trolls, inorder to avoid being identified as an easy tar-get. In other cases, it may be better to ignoreletters from trolls. “Sometimes the bestresponse is no response,” said Boyd. “Youmight have been part of a huge letter-writingcampaign. The troll can’t sue everyone.”
2 NEWS SATURDAY, OCTOBER 26 2013 AIPLA DAILY REPORT
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How to respond to patent trolls
• What’s your history? How has yourbusiness responded to troll threatsin the past?
• Do you have a viable way to controltroll risk?
• Do you have a product featureclearance program?
• Can you identify individualized trollclaims as opposed to letters thathave been sent to numerous tar-gets?
• Keep a central repository of trollletters and how you have respond-ed to them. Once you have identi-fied your strategy, stick to it consis-tently.
Is your business a troll target?
soon expected to begin the compulsory sun-rise period during which brand owners canregister domains corresponding to theirtrademark rights. The four gTLDs delegated this week
are the first of up to 1,400 expected to belaunched over the next two years. The newgTLDs will be launched gradually, withsome being operated as open registriesand others as closed. Some brand ownershave applied to operate one or moregTLDs themselves, but all companies nowhave to consider whether they want toprotect their trademarks in open registries,either for their own use or to preventcybersquatting.Mark Partridge, Chair of AIPLA’s
Trademarks and the Internet Committee,told the AIPLA Daily Report that to takeadvantage of the sunrise process in any of thenew gTLDs, brand owners need to registertheir trademarks in the TrademarkClearinghouse (TMCH). He said: “Is theTMCH perfect? No. But is it better thannothing? Yes. Without it, we would have todo this separately with each new gTLD. Itwill save a lot of time and expense.”As well as enabling trademark owners
to participate in sunrise periods, theTMCH offers benefits including notifica-tion of relevant domain name applications,reduced costs when using the newUniform Rapid Suspension service and eli-gibility for extended rights protectionmechanisms, such as those planned by reg-istry operator Donuts. Partridge said not all brand owners
would want to make use of theClearinghouse, but they should at least con-sider it. “Some companies are more at riskeither because of the nature of their busi-ness or the nature of their brands,” headded, “rights holders need to have a strat-egy to deal with this. If not, they will runinto problems.”
Panelists at yesterday's session on Evolving IP Rights in China discussed the country's IP Strategy, recent trademark and copyright developments, patent litigation andunfair competition
Continued from page 1
New gTLDs
Former USPTODirector DavidKappos receivedthe Board ofDirectorsExcellence Awardlast night
Is harmonization of the grace periodgetting closer? Surprisingly, it couldbe. That’s the message Peter
Schechter of Edwards Wildman broughtback from the AIPPI Forum & ExCo inHelsinki last month. Schechter co-chaired the US committee
that produced a country report on one of fourquestions debated at the Congress this year,and also co-chaired the international commit-tee. Speaking at the AIPPI-US meeting yester-day, he described the experience as “fascinat-ing,” saying he thought it would be merely “anacademic exercise,” but he ended up being sur-prised by the extent of agreement. In a vote onthe resolution, 93% of delegations supported asingle, simplified, 12-month grace period.The responses to the questions posed on
the grace period were “all over the map,” saidSchechter. “Most countries do have a graceperiod for patents but most of them are com-pletely unusable – so most lawyers andcountries take the view ‘we can’t use it.’”That meant, he said, that the overriding viewwas that the only way forward is to have asingle, simple system.Since the passing of the AIA, there seems
to have been a softening of resistance to hav-ing a grace period in some major markets,notably in Europe. AIPLA ExecutiveDirector Q. Todd Dickinson noted that thegrace period was one of four major issues
addressed by the Tegernsee group of patentoffices and that 51% of respondents to arecent study in Europe supported it. “A lot ofthe traditional institutional opposition inEurope is disappearing. There seems to bemovement,” said Dickinson. However, he
cautioned that any substantial reform is “along way off.”Chairing the meeting, David Hill of
Finnegan (pictured) said that the resolutionon the grace period was one of four passed atthe Helsinki meeting. The others concernedcopyright term, the relevant public for pro-tecting famous trade marks and relief otherthan injunctions in IP cases. He noted thatall four resolutions “were supportable by ourUS group.” A fifth resolution, on plain pack-aging, was passed by correspondence afterthe meeting despite US opposition. Shortlyafter, the European Parliament rejected a
proposal to mandate plain packaging fortobacco products resulting in the unusualsituation that, as Hill said, “the EU positionis more favorable to trademark owners thanthe AIPPI resolution.”Next year’s AIPPI Congress will be held
in Toronto. The working questions to beconsidered then cover second medical usepatents, the basic mark requirement underthe Madrid Protocol, copyright exhaustionand IP licensing and insolvency. The USgroup will make reports on all four ques-tions, and the process to analyze them willbegin in February.
AIPLA DAILY REPORT SATURDAY, OCTOBER 26 2013 NEWS 3
Surprising progress on grace period
Randi Karpinia, chairwoman of AIPLA’s Women in IP Law Communications and Electronic Outreach Subcommittee, was presentedwith a superhero cape at the Women in IP Law Breakfast yesterday morning.
Author Joseph Heller would haveunderstood cyber crime. “Justbecause you’re paranoid doesn’t
mean they aren’t after you,” he wrote inCatch 22, published in 1961. Speakers atyesterday’s session on Terra Terror andTraveling Tricks echoed that message.“Things have got worse,” said Steve
Chabinsky of CrowdStrike (pictured),explaining that many companies are seeing“data going out of the door” to cyber attacksfrom organized criminals and some nationstates. Thomas E. McCabe of Alion Scienceand Technology Corporation, agreed: hecited a study estimating that cyber crime hascost the US 508,000 jobs and $100 billion,with the global cost as much as $400 billion.“This is the greatest transfer of wealth inhuman history. It’s bigger than the interna-tional drugs cartels,” he added.
In one attack, Saudi Aramco, the world’slargest company, had 30,000 computer harddrives wiped clean overnight. In another, acompany lost not only all its data but also itsback ups, and the attacker published thestolen information online. According toChabinsky, by the time a company realizes ithas a problem the security breach has typi-cally existed for more than a year.It’s not just corporate IT systems that
need to be protected. Increased connectivitymeans that cars, medical systems and evenpacemakers inside the body are vulnerableto hacking. “It’s life in the fast lane,” saidChabinsky, quoting the Eagles: “People aretaking everything all the time.”What’s more, he said: “Lawyers are
absolutely being targeted. We have a goldmine of sensitive data and typically we don’thave the security our clients have.” That’s
why some state bars are now consideringfirms’ ability to protect both their own andtheir clients’ data, when assessing compe-tence to practice. And lawyers are mistakenif they believe they can take care of the chal-lenge without specialist help, he added: “Youwouldn’t let your IT staff give legal advice.Why would you advise on IT?”But McCabe added that lawyers have a
vital role to play alongside computer special-ists: “It’s not just a technology issue. It’s abusiness risk. Lawyers have to be part of theprocess.” Everyone should take simple stepssuch as creating original passwords, chang-ing them regularly and updating softwarefrom trusted sources. Organizations shouldalso put in place a formal plan to respondbefore there is a problem, including havingarrangements with forensic security compa-nies, law firms and PR agencies.
Finally, you need to consider how you willreact when the attack comes. Gabrial M.Ramsey of Orrick stressed the need to “be agood victim.” Find out who was responsible,get trade secret litigators involved, shareinformation on the threat, then name andshame them (Facebook is good at this). Inthe last resort, you may even be able to hackback, said Ramsey: “There may be legal waysto dismantle their technical infrastructure.”
Design owners and attorneysshould have a new tool next year,when the Hague Agreement is
expected to enter into force in the US. “Thisis not the PCT,” said Alan Datri of WIPO atThe Hague Agreement is Coming session onThursday. “It is a lot different. You actuallyobtain an international registration.”That international registration can be
filed electronically in one language with oneset of fees, in one currency. It has the sameeffect in each designated contracting party,unless protection is refused. Today theHague Agreement has 61 contracting par-ties. But with countries such as the US,China, Korea, Japan and Russia expected tojoin soon, it could have 66 by 2015. “This is an exciting topic,” said Mark A.
Charles of The Procter and Gamble Company.But he stressed that Hague is mainly aboutstreamlining processes: “It does not serve as asubstitution for examination in each country.”Charles added that while Hague would beattractive to many applicants, it might also bringpitfalls, particularly the need for multiple sets ofdrawings: “Your illustration costs will go up.
The goal is a set of drawings that is acceptable inany country, but realistically you want a set thatyou can cure in any country.”For this reason, he said, applicants need to
monitor developments carefully, particularlywhen the US rules are published, which isexpected to be in the next few months, and keeptheir options open: “Just because you have theability doesn’t mean you have to use it.”
4 NEWS SATURDAY, OCTOBER 26 2013 AIPLA DAILY REPORT
13th Fl., 27 Sec. 3, Chung San N. Rd., Taipei 104, Taiwan, R.O.C.Tel: 886-2-25856688 Fax: 886-2-25989900/25978989Email: [email protected] www.deepnfar.com.tw
ProsecutionInfringementLitigationIP
How to beat the cybercriminals
Say hello to the Hague
Wayne Sobon begins his term as AIPLA Presidentwith calls to change the patent law coming fromthe media and from certain parts of Washington
DC. He is all too aware of the challenges this brings. There aremultiple bills before Congress, including the discussion draftrecently published by Rep. Goodlatte, and AIPLA is studying allof them in order to engage in the debate. While emphasizing thathe does not want to pre-empt the outcome of that discussion,Sobon believes that whatever action is taken should be “narrow-ly and carefully tailored.” He argues for a cautious approach:“Those who would change a system have a huge burden giventhe evident success of the American experiment in patent law.”That’s not to say the system is perfect, of course. “There are
certain behavior that are problematic and inappropriate—I callthem parasitic,” says Sobon, citing reports of threatening letterssent to Mom’n’Pop stores demanding hush money. “In anyindustry, you have people who don’t play by the rules. That kindof behavior is counter productive” But he cautions: “Whateveryou do to address specific behaviors, don’t undermine a systemthat has nurtured America’s economy for more than 200 years.”Sobon says one of his priorities during his term will be to
encourage greater public understanding and appreciation ofthe value of the IP system. While there are loud voices pro-claiming that patents are destroying the economy, there arefewer presenting the opposite view. “Reading the media youwould think patents are a poison. I believe AIPLA can play a
crucial and unique role in addressing that misunderstanding,”he says. This is partly thanks to its broad membership and widereach, which Sobon hopes to develop as President, with moreroadshows and local events and more activities for under-rep-resented groups: “We can broaden our umbrella as an organi-sation.” One area in particular which he will prioritize is thebridge between businesspeople and lawyers: “Value is lostwhen both sides don’t talk to each other and we don’t share acommon language. Sometimes lawyers can be too navel-gazingabout the details of the law and miss the bigger picture.”Sobon’s interest in issues surrounding patent law and
reform comes from his own career experiences. In particular,he has voiced concerns about changes to patent eligibilityregarding software and business methods—something he hasbeen following closely since working at Andersen Consulting(later Accenture) during the 2000s. He was recruited to helpfound its IP department and recalls being “surprised” at theextent to which Accenture Laboratories were developinginteresting new internet and communication systems, coin-ciding with the development of early smartphone technology.Part of his task at Accenture was to build a robust patent port-folio to protect these inventions. Sobon describes as “a very blunt tool” the machine-or-
transformation test developed by Federal Circuit case law:“The test was a significant threat to what we were doing, whichwas the marriage of software and business services.” As a result,
Accenture became involved in the Bilski case, filing briefs atboth the Federal Circuit and US Supreme Court. Sobon saysthe Supreme Court’s overturning of the machine-or-transfor-mation test in favor of more flexibility was “a very big step” andadds that the principle that an invention should be patentablesubject matter as long as it has a practical application and is notabstract is “perfect” and “completely correct.”What’s more, he rejects criticism from those who say the
Supreme Court’s ruling does not provide enough clarity forSection 101 analysis: “That is the one of the greatest bugbearsplaguing the system right now. It has infected the courts like avirus.” He describes the debate over patent eligibility as “a
6 PROFILE: WAYNE SOBON SATURDAY, OCTOBER 26 2013 AIPLA DAILY REPORT
It’s going to be a busy year for the new AIPLA President Wayne Sobon. Hetalks to James Nurton about his varied career and why he is closely watchingproposals for further patent reform in the US.
Standing up for patents
pseudo-problem” and says that the emphasis in patent exami-nation should be on novelty and obviousness under Sections102 and 103 rather than on Section 101. “The smartphone isprobably the most complex device human beings have evercreated. Why would you say that putting an extra gear into acuckoo clock is a patent-eligible invention but adding an inno-vative app on a smartphone is not?” he asks.Today, if anything, Sobon is even more directly affected by
the debates in Congress. Since January this year, he has beenVP and General Counsel of Inventergy, a start-up licensingcompany that helps technology leaders achieve greater valuefrom their IP assets. He describes joining the company, which
is led by former HP head of IP and global strategy Joe Beyers,as a “fantastic opportunity” to work with a great entrepreneur-ial team and “flex some muscles I haven’t used in a while.” Heworked without a salary for the first few months, but initialfunding is now secured and Sobon is concentrating on build-ing a long-term platform in different technology spaces. “I really wanted to combine the business and legal side of
IP,” says Sobon of his latest move. His career up to now hastaken in optical engineering, private practice and working in-house, and he says this latest challenge is unique. After study-ing physics and German at Stanford, he joined Hughes Aircraftas an engineer in 1985 at the height of the Cold War, but was-n’t satisfied and found himself asking: “Will someone tell mewhat I want to do?” By chance, a Hughes patent attorney tookhim to lunch, a fortuitous meal that led to him becoming anapprentice patent agent, and then joining a Los Angeles patentfirm. He graduated from UC Berkeley in 1992 with a JD andMBA degree, and joined the Silicon Valley office of Fish &Richardson, later moving with fellow partner and mentor JimPooley (now WIPO Deputy Director-General for Patents andalso a former AIPLA President) to Gray Cary, which becameDLA Piper. From there, he was recruited to AndersenConsulting, where he worked for a decade, before joiningRambus as chief IP counsel, dealing among other things withlicensing and standards issues. It’s already been a long and varied career, all sparked by
that chance lunch in the 1980s, which led Sobon to value theintellectual challenge of marrying technology and communi-cation. “I quickly realized I loved the patent field,” he says,“especially translating technical issues into language.” That’s askill that should stand him in good stead for what promises tobe a busy and demanding year as AIPLA President.
AIPLA DAILY REPORT SATURDAY, OCTOBER 26 2013 PROFILE: WAYNE SOBON 7
Alongside patent law, Wayne’s other passion in life ismusic: he writes and performs under the name WayneParrish. His four-track EP “Outside” was producedearlier this year and is available on iTunes, Spotify andother download sites. The songs will appeal to lightrock and country lovers. Wayne describes them as“personal” and one reviewer wrote: “Just bought andlistened to Outside! Amazing I love it.”
My other life
“Sometimes lawyers can be too navel-gazing about thedetails of the law and miss thebigger picture.”
Adrian Cyhan @HiTechIPLawThat makes me & my partners 2.5 %ers ;)“@PatentBuff: Only 2.5% of US attorneys areadmitted to the #patent bar. Wow!@WomenInIP #aiplaAM13”
Rudy Hofmann IP Law @RudyIPLaw
A world-wide 1-year grace period for filing int’l#patent applications? It’s closer than youmight think! #awesome #aiplaam13 #AIPPI
Franke Hyland @FrankeHyland
Chief Judge Rader says there needs to bemore efficiency and discipline in the discoveryprocess. #aiplaam13
KeltieLLP @KeltieLLP
At the #NPE session at #AIPLAAM13. A verywell attended session! Clearly a hot topic,especially after recently proposed Innovation Bill
Women in IP @WomenInIP
Anthony Greene: “Women get judged onperformance. Men get judged on potential.”#Aiplaam13 #womeninip
ManagingIP @ManagingIP
In trade secrets session at #aiplaam13Learned that Santa’s good/bad children list isa trade secret. But what is its economic value?
Paul Foot @pfootyRader: smartphone litigation is testament tosuccess of US patent system in economy’smost innovative sector #AIPLAAM2013
#aiplaAM13
7:30–8:30 am WIPO Advisory Group Breakfast Meeting (Group Members Only) Virginia A, Lobby Level
8:00 am–12:00 pm Registration, Exhibits, Cyber Café, Technology Center, CLE Information* and Membership Service Center Exhibit Hall A, Exhibition Level
*CLE Information Booth will remain open until 1pm
8:00-9:30 am Continental Breakfast Exhibit Hall A, Exhibition Level
8:00 am–12:00 pm Spouse/Guest Hospitality Suite Park Tower 8201
9:00–11:00 am Global Sector Leadership Group Meeting (Leadership Group Members Only) Thurgood Marshall North, Mezzanine Level
10:00 am–12:00 pm 2014 Mid-Winter Institute Planning Committee (Committee Members Only) Maryland C, Lobby LevelClosing Plenary Session
9:00 am–12:00 pm Case Law: The Year in Review Marriott Ballroom Salons 2 & 3, Lobby Level
12:00–2:00 pm Networking Luncheon Virginia BC, Lobby Level
12:00–4:00 pm Board of Directors Meeting Delaware AB, Lobby Level
TODAY’S SCHEDULE: SATURDAY, OCTOBER 26 2013
Jeffrey WolfsonHaynes and Boone,Washington, DC“The biggest issue wouldbe the ongoing fee
diversions from the innovationcommunity into the USTreasury. Fees are higher thanthey should be and the servicesdon’t function as efficiently asthey should because of the dis-agreement in Congress.”
Arlir AmadoKramerAmado,Alexandria, VA“The commoditization ofprosecution. The corpo-
rate clients want to makepatent prosecution a packagedeal. They are trying to bringthe cost down as much as pos-sible.”
Rob RayInfinium Technologies,Powder Springs, GA “Trolls. They cost a lot ofmoney. Usually we try
not to pay them. My company isa supplier so we often get law-suits and cease and desist let-ters. It’s often a challengebecause it can be very expen-sive.”
Jacqueline LeeHC Park & Associates,Reston, VA“NPEs. We representmanufacturing companies
so we constantly get sued. Theyuse a lot of shell companies sosometimes it’s difficult for us tofind the real party in interest. Interms of cost management, itbecomes a challenge.”
Liza HeinigTarolli Sundheim Covell & Tumming,Cleveland, OH“The biggest issue is
transitioning to first-inventor-to-file. Getting my clients tounderstand the transition andchange their internal proce-dures appropriately withoutpanicking is a challenge.”
Christine HoeftMcCarthyBarnes & Thornburg,Washington, DC“Stretching our budget –
whether to litigate, how muchIP to protect, what to enforceand whether or not to settle.Clients are very cost-con-scious.”
Dajian WuYuhong, Beijing, China“Enforcement is thegreatest concern. Alsofor us, I have continuing
concern about Section 337.More and more Chinese compa-nies are being brought beforethe ITC and have been investi-gated. It is a very big issue formany Chinese companies, forexample clients exporting highspeed technology.”
David MorelandMeunier Carlin &Curfman, Atlanta, GA“I litigate, so it is certain-ly NPEs. Getting a rea-
sonable negotiation at thebeginning is hard unless it is alarge NPE. If it a small NPE thatis most difficult.”
VOX POP What is the number one IP issue foryou and your clients?
