Intellectual Property and IP Rights

7/26/2019 Intellectual Property and IP Rights

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INTELLECTUAL PROPERTY AND IP RIGHTS

*Intellectual Property: Intellectual property (IP) refers to creations of the mind, such as inventions; literary and artistic works; designs;and symbols, names and images used in commerce.IP is protected in law by, for example,patents,copyright andtrademarks,whichenable people to earn recognition or financial benefit from what they invent or create. They allow creators, or owners, of patents,trademarks or copyrighted works to benefit from their own work or investment in a creation.

*Intellectual Property Rights: Propriety rights over works and inventions granted by law. These rights are outlined in Article 27 of theUniversal Declaration of Human Rights, which provides for the right to benefit from the protection of moral and material interestsresulting from authorship of scientific, literary or artistic productions.

CATEGORIES OF IP

1. Industrial Property patents for inventions

trademarks

industrial designs

geographical indications

2. Copyright Literary works (i.e., novels, poems and plays)

films

music

artistic works (i.e., drawings, paintings

photographs and sculptures)

architectural design

performances by artists

recordings

broadcasting in radio and television programs
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PATENT

DEFINITION:An exclusive right (think: legal monopoly) granted for an INVENTION

SCOPE OF THE TERM INVENTION:1. A product or process that provides a new way of doing something, or2. One that offers a new technical solution to a problem

TERM OF PROTECTION:Typically, 20 years

Patent protection means an invention cannot be commercially made, used, distributed or sold without the patent owners consent. Patentrights are usually enforced in courts that, in most systems, hold the authority to stop patent infringement. Conversely, a court can also declare apatent invalid upon a successful challenge by a third party.

RIGHTS OF PATENT HOLDERS:1. To decide who mayor may notuse the patented invention for the period during which it is protected. Patent owners may2. Give permission to, or license, other parties to use their inventions on mutually agreed terms. Owners may also

3.

Sell their invention rights to someone else, who then becomes the new owner of the patent.

EFFECT OF EXPIRATION OF A PATENT:Protection ends and invention passes into the public domain. This is also known as becoming off-patent, meaning the owner no longer holdsexclusive rights to the invention, and it becomes available for commercial exploitation by others.

REQUIREMENTS FOR THE GRANT OF PROTECTION:1. Invention must be of PRACTICAL USE2. NOVELTY (i.e., it is NOT part of the body of already existing knowledge in a given field)3. The must be an INVENTIVE STEP (i.e., a step that could not be deduced by a person with average knowledge of the technical field.)4. Its subject matter must be PATENTABLE (i.e., not all inventions are automatically patentable. In many countries, scientific theories,

mathematical methods, plant or animal varieties, discoveries of natural substances, commercial methods or methods of medical treatment

(as opposed to medical products) are not generally patentable.

GRANTING AUTHORITIES

National Patent Offices or Regional Patent Offices that work for a group of countries

i.e., European Patent Office (EPO), African Intellectual Property Organization (OAPI)

PROCESS OF APPLYING FOR PROTECTION:Applicant requests Protection for an invention in one or more countries, and each country decides whether to offer patent protection within itsborders. The World Intellectual Property Office (WIPO)-administered Patent Cooperation Treaty (PCT)provides for the filing of a singleinternational patent application that has the same effect as national applications filed in the designated countries. An applicant seeking protectionmay file one application and request protection in as many signatory states as needed.


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TRADEMARK

DEFINITION:A distinctive sign that identifies certain GOODS OR SERVICESproduced or provided by an individual or a company. Helps consumers to identifyand purchase a product or service based on whether its specific characteristics and qualityas indicated by its unique trademarkmeet theirneeds.

TERM OF PROTECTION:

Can be INDEFINITE, upon successive and continuous renewal of license

EFFECT OF TRADEMARK PROTECTION

Ensures that the owners of marks have the exclusive right to use them to identify goods or services, or to authorize others to use themin return for payment of fees to the granting authority.

Hinders unfair competitors, such as counterfeiters, to use similar distinctive signs to market inferior or different products or services.

REGISTRABLE MARKS

May be one or a combination of words, letters and numerals Drawings, Symbols or three-dimensional signs, such as the shape and packaging of goods Collective marks: owned by an association whose members use them to indicate products with a certain level of quality and who agree

to adhere to specific requirements set by the association Certification marks: i.e., ISO 900 or eco-friendly marks

EXTENT OF TRADEMARK PROTECTIONAlmost all countries in the world register and protect trademarks. Each national or regional office maintains a Register of Trademarks containingfull application information on all registrations and renewals, which facilitates examination, search and potential opposition by third parties. Theeffects of the registration are, however, limited to the country (or, in the case of regional registration, countries) concerned.

GOVERNING BODY:World Intellectual Property Office (WIPO)To avoid the need to register separate applications with each national or regional office, WIPO administers an international registration system fortrademarks.

PROCESS OF REGISTRATION Application with the appropriate granting authority Search by the granting authorityIf no colorable similarity exists with previously-registered marks, and no third person interposes any

objection on the ground of similarity, the protection is granted

REQUISITES FOR THE GRANT OF PROTECTION:1. Mark must be DISTINCTIVE in and of itself2. Mark must identify a particular product3.

Mark must not be misleading or deceiving to consumers4.

Mark must not be violative of public order or morality (defined according to national standards)5.

Rights applied for must not be the same as, or similar to, rights already granted to another trademark owner


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COPYRIGHT

DEFINITION:Protection granted to authors, artists and other creators for their LITERARY AND ARTISTIC CREATIONS, generally referred to as works

TERM OF PROTECTION:

Beginning with the creation and fixation of the work, and lasting for not less than 50 years after the creators death. National laws may

establish longer terms of protection. Related rights enjoy shorter terms, normally 50 years after the performance; recording or broadcast has taken place.

RIGHTS OF A COPYRIGHT HOLDERTo authorize or prohibit a works reproduction in all forms, including print form and sound recording; its public performance and communicationto the public; its broadcasting; its translation into other languages; and its adaptation, such as from a novel to a screenplay for a film.

1. PROPRIETARY RIGHTS- Economic rights pertaining to profit and compensation for works

2. MORAL RIGHTS- Right to claim authorship of a work- Right to oppose changes to the work that could harm the creators reputation

PROCESS OF ACHIEVING PROTECTION:None. Protection inures to the moment of creation. Copyright and related rights protection is obtained automatically without the need forregistration or other formalities. However, many countries provide for a national system of optional registration and deposit of works (i.e.,deposit in the national libraries of states).

INDUSTRIAL DESIGN

DEFINITION:Refers to the ORNAMENTAL OR AESTHETIC ASPECTS OF AN ARTICLE. An industrial design is primarily of an aesthetic nature, and anytechnical features of the article to which it is applied are not protected by the design registration. However, those features could be protected by apatent.

TERM OF PROTECTION:

Generally five years, with the possibility of further renewal, in most cases for a period of up to 10 or 15 years. Depending on the particular national law and the kind of design, an industrial design may also be protected as a work of applied art

under copyright law, with a much longer term of protection than the standard 10 or 15 years under registered design law.

SCOPE OF THE TERM DESIGNMay consist of three-dimensional features, such as the shape or surface of an article, or two-dimensional features, such as patterns, lines or color

REQUISITES FOR PROTECTION1. Design must be NEW or ORIGINAL2. Must be NON-FUNCTIONAL (otherwise it would qualify as an invention)


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GEOGRAPHICAL INDICATION

DEFINITION:A sign used on goods that have a SPECIFIC GEOGRAPHICAL ORIGINand possess qualities or a reputation due to that place of origin

DISTINGUISHED FROM TRADEMARK:A trademark is a sign used by a company to distinguish its goods and services from those produced by others. It gives its owner the right to

prevent others from using the trademark. A geographical indication guarantees to consumers that a product was produced in a certain place andhas certain characteristics that are due to that place of production. It may be used by all producers who make products that share certainqualities in the place designated by a geographical indication.

ENFORCEMENT OF PROTECTION:Through laws against unfair competition, consumer protection laws, laws for the protection of certification marks or special laws for the protectionof geographical indications or appellations of origin. In essence, unauthorized parties may not use geographical indications if such use is likely tomislead the public as to the true origin of the product.

STRUCTURES

A. WIPOThe World Intellectual Property Office works as part of the United Nations system of specialized agencies to establish andharmonize rules and practices for the protection of intellectual property rights. It services global registration systems fortrademarks, industrial designs and appellations of origin, and a global filing system for patents. These systems are underregular review by WIPOs Member States and other stakeholders to determine how they can be improved to better serve theneeds of users and potential users.

B. UNCITRALThe United Nations Commission on International Trade Law is the core legal body of the United Nations system in the field ofinternational trade law. It is a legal body with universal membership specializing in commercial law reform worldwide. Itformulates rules on arbitration and commerce which include: Conventions, model laws and rules which are acceptable worldwide Legal and legislative guides and recommendations of practical value Technical assistance in law reform projects Regional and national seminars on uniform commercial law

IP and disputes concerning IPR are one of the nine fields over which the UNCITRAL has arbitral power


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HISTORICAL BACKGROUND AND THE BIG PICTURE

The US patent system goes back to the nations founding; it is explicitly delineated in the Constitution, which, in the name ofthe progress of science and the useful arts, gives Congress the power to grant inventors the exclusive right to theirrespective writings and discoveries for a limited timegenerally 20 yearsduring which period competitors are forbiddenfrom selling similar products. Without those assurances, there would arguably be no incentive to innovate; why invest moneyand effort on a breakthrough that anyone could then take and sell? Patents created a business environment that led to suchlandmark technologies as the cotton gin, Morse code, the Yale lock, the Xerox machine, the laser, and the Hula Hoop.

But over the years patents became much more than just protection . They were also assets. Inventors who won patentswere free to sell them on the open market, giving the buyer the right to their creations. In theory this was another boon forinnovation; even if original patent holders couldnt maximize the potential of their inventions, they could still turn a tidy profitby allowing someone else to build on their ideas. But in practice it meant that even people who never invented anything intheir livesa group of lawyers, for instancecould scoop up a bunch of patents and start suing other inventors for infringingon their intellectual property.

Traditionally, patents could be awarded only to specific technologies, not broad concepts. But during the 1970s, the PatentOffice didnt have the expertise or bandwidth to limn those kinds of distinctions. In the mechanical age, it was relatively easy

to determine when a series of equations crossed the line into patentable invention; you couldnt protect the underlying math,but you could protect the machines built from it. Software presented a new kind of challenge. It never left the realm ofalgorithms; it represented a process, not a physical object. Meanwhile, the industry was exploding, burying theundermanned Patent Office with a burst of applications. The Supreme Court would eventually provide guidance by declaringthat software processes and business practices could indeed be considered patent-worthy. The overwhelmed Patent Officeseemed to take this as an OK to apply a rubber stamp to thousands of requests, some of them questionable.

The past three decades of wanton patent-granting have created a disastrous environment for innovation. Today itspractically impossible to build anything without violating a patent of some kindand risking a multimillion-dollarlawsuit for your troubles. Once intended to protect lone inventors, patents now form a kind of shadow tech industry, inwhich billions of dollars are spent on amassing huge portfolios. (The New York Times has noted that Apple and Google,

companies that define themselves by innovation, now invest more in patent acquisition and defense than in research anddevelopment.)

Large companies have built their patent stockpiles as a purely defensive measure. They were dissuaded from suing oneanother because they knew their target likely had patents that covered similar territory and they could be countersuedquicklythe legal equivalent of mutually assured destruction. Typically theres a cross-license that keeps companies fromhaving to assert literally 10,000 or 20,000 patents against each other, Google general counsel Kent Walker says.But that pact has been broken. What operated for years as an uneasy dtente has descended into a Strangelovian shootingwar.The world saw this firsthand in last summers epic court battle between Apple and Samsung, the geek equivalent of theO. J. Simpson trial. Ostensibly a fight over whether the Korean electronics giant infringed specific Apple smartphone patents,the lawsuit was more appropriately seen as corporate warfare waged not in the marketplace but through the courtsa

consequence of Steve Jobs vow to go thermonuclear on Googles Android operating system, which powers Samsung phones.


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Essentially, the issue revolves around the use and abuse of patents and other intellectual property rights. The current riseof what has come to be known as Patent Trollingi.e., suing competitors for IPR infringements upon their refusal to enterinto expensive settlements has given rise to a call from many sectors to reform the patent system.

The basic patent troll business modelconsists of getting a patent, suing a business that can't afford to pay for legal defense,and then negotiate nuisance settlements.

FIRST PRINCIPLES AND THEIR APPLICATION

Sample Motions:THW institute reforms that regulate the number of patents that can be held by non-practicing entities (NPEs)THBT a cap on corporate-held patents should be imposedTHW require corporations to co-invent with independent entrepreneurs as a pre-condition to the granting of patentsTHBT compulsory licensing should be the general rule, and no longer the exceptionTHC patent litigation insuranceTHW abolish software patents

PARADIGM 1GOVERNMENT SHOULD INTERVENE

(CONSERVATIVE)

PARADIGM 2

NO TO BIG GOVERNMENT/THE MARKET CAN STABELIZE ITSELF

(NEOLIBERAL)

THE PATENT SYSTEM HAS GONE OUT OF CONTROLREVERT BACK TO PHYSICAL PATENTS

Almost any business that uses basic technology is a possibletarget of non-practicing entities(NPEs), also known as patenttrolls -- the result of a patent system that has done a terrible jobof evaluating software patents and a court system that hasn'tdone much better at examining them. An increasing number ofpatent owners are taking advantage of weaknesses in the systemto exploit their rights in ways that on net deter, rather thanencourage, the development of new technology.

The equation of market exclusivity for a time and the unlimitednumber of ways a patent can be tweaked and applications for it

be amended is causing a catastrophic breakdown of the IP

THE PATENT SYSTEM IS NOT BROKEN

Patent disputes are a natural characteristic of a vigorously

competitive industry.

And theyre nothing new: Similar skirmishes havehistoricallyoccurred in areas as diverse as sewing machines,winged flight, agriculture, and telegraph technology. Eachmarked the emergence of incredible technological advances, andeach generated similar outcries about the patent system.

Patents Are Healthy for Innovation and the EconomyIf anything, patent skirmishes demonstrate the value thatcompeting companies place on the innovations in their

marketplaces.
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system.

The problem has gone beyond the power of individual personsnatural or corporateto fix. Overbroad software patens aregiving rise to patent trolling.

The actors like non-practicing entities (NPEs or patent trolls)have discovered the loopholes in IP law and are wreaking havocon the field of innovation, to the detriment of both inventors andconsumers.

The most frequent offensive use of patents is by NPEs. NPEs donot make any products, but license their patent portfolios tooperating entities. NPEs come in all types and sizes from the loneinventor in his garage to multi-billion dollar patent aggregatorsand consortiums.

Examples:

Intellectual Ventures, a self-termed invention investmentcompany and one of the top five holders of U.S. patents. IVhas acquired over 70,000 patents, mostly throughpurchases, and makes its money by licensing technology tooperating companies in virtually every technology sector.

Acacia Research, a publicly traded patent licensingcompany with 160 different patent portfolios across allindustries. Acacia licenses and enforces through varioussubsidiaries.

Rockstar, a patent consortium funded by tech giants Apple,Microsoft, Sony, Ericsson, and RIM. Rockstar paid $4.5

billion to buy Nortels patent portfolio out of bankruptcy in2011 and has since begun aggressively enforcing thepatents against Google, Huawei, Samsung, and others inthe handset space.

We are actually witnessing fewer patent suits per patentissued today than the historical average,according toeconomic historian Zorina Kahn. The rate of patent litigation wastwice what it is today compared to some decades in the mid-19thcentury.

The premise that the growing number of softwarepatentshascaused a corresponding growth in software patent litigationisquestionable. Six of the 10 companies globally with the highestsoftware revenues are U.S. companies, including the top three. Inother words: The success of the U.S. software industry correlateswith its use of software patents to protect its innovations. Ifpatent litigation caused by the U.S. patent system stifledinnovation, U.S. software companies would not be the mostsuccessful in the world.

If an invention is novel, the idea that it should be patent-

protected in hardware but not in software makes no sense.

Eliminating patents for software will not enhance innovation orbenefit the economy. Software is also the most easilyappropriated type of intellectual property. Ever since U.S. courtsmade it clear that copyright is unavailable to protect their ideas,developers have sought to protect inventions embodied in theirsoftware via patents. Denying patent protection for software willcause these developers to look for other ways to protect their IPinvestmentresulting in code that is less open, less accessible,and less interoperable

REGULATE THE NUMBER OF PATENTSPROTECT THE END-USERS

The permutations for patent holdings are creating a hotbedfor nuisance-value litigation which harm inventors and end-

users.These permutations include the unlimited number of

THE NUMBER OF PATENTS IS AN INALIENABLE RIGHT

The laws guarantee the inalienable right to property.

The number of patents held by a company makes a business

attractive to investors.
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applications that may be filed for virtually unlimited fields andsubject matters, as well as the number of times applicants areallowed to amend their patent applications claims part.There arealso bare limits to the number of times a company may be suedon a patent, necessitating an equal number of counter-suits.Even the fees and damages that are legally demandable are notset. And when these companies go to court, they must abide bydiscovery procedures (i.e., the process of acquiring evidence andproving it to be admissible in court) which also require them tospend.

Current legal battles have even extended the domain of thepatent to the realm of e-commerce, with patent-holdersrequesting tweaks or follow-ups to their original patents in orderto claim fees and damages for processes allegedly similar totheirs which are being employed in electronic commerce.

In the wider marketplace, patents arent valued because of the

innovations they might foster. Instead, they are assessed on theirpotential to exact tolls on existing companies that have veeredunintentionally into territory covered by the often bloated claimsof the patent holders

Instead of promoting innovation, patents are used as aweapon to stop it.

Example:

Applehas aggressively sought patents on practically everyconceivable feature it builds into its products, as well as on

some ideas it may never end up implementing. Despite theclaim of its CEO Tim Cook that infringing on IPR is likestealing from an artist, critics point out that this is not theequivalent of Picasso protecting his masterpieces. Its more

akin to some artist churning out sketches and storing themin his atticthen claiming theft when someone unwittinglypaints the same subjects.

The consequences of current patent crises reverberate far beyondSilicon Valley, straight into end-user wallets and pocketbooks.When companies are suddenly paying billions of dollars for

patents, consumers ultimately end up paying the tab.

For a small company, the patents and technology it develops areoften its most valuable asset and the incremental cost of addingadditional patents in surrounding areas around criticaltechnology is relatively low compared to the potential returnsfrom investors and buyers.

Example:

IBMhas successfully advertised the large number ofpatents it obtains each year as part of its overall marketingstrategy, taking out full-page ads in major newspapers.

Google and Facebookhave recently paid billions to buycompanies like Nest, WhatsApp, and Oculus VR justbecause they have interesting technology and intellectualproperty.

Patents are treated similarly to any other piece of property: Theycan be bought and sold on the open market, and what a patent

holder does with a patent is his business. Just as a homeownermight decide to purchase a piece of land and not develop it orpermit others to use it, a patent holder may also choose to donothing with the patented invention. Alternatively, the patentholder might authorize someone else to utilize his patentedinvention; license it to others for their use; or hold on to thepatent as an investment until he decides to sell it (or it expires).

Patent rightsthe exclusive ability to sell an invention for aperiod of yearsprovide powerful financial incentives tocompanies to research and develop technologies that benefit

society

The real problem lies not in the artificial negative significanceattached to the numbers, but in who holds the patents and howthey are used.

Market-oriented alternativessuch as co-invention with otherentrepreneurs, cross-licensing and patent infringementinsurance are better solutions than an all-out ceiling on patentholdings, which serves little purpose and only incentivizes moreaggressive circumvention of the law.


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But money is only part of the impact on consumers. What cantbe measured are the products that are never builtbecausetaking on even bogus patents is too much of a hurdle for someinnovators.

Example, patent insurance:

RPX (Rational Patent Exchange) Corporation, aprovider of patent risk management solutions, hasintroduced anew insurance servicefor businesses facingpatent infringement litigation with patent trolls.RPX's newsolution focuses on the underlying causes of patent trollrisk. Through market intervention, RPX reduces risk by

acquiring patents before patent trolls can assert themagainst its network of 168 clients. This acquisition activityhas led to companies in the RPX network receiving morethan 430 dismissals from over 60 litigations. Using the datafrom this acquisition activity to drive its actuarial model andunderwriting methodology, RPX can model patent risk forpolicyholders and offer effective risk transfer.

ANOTHER MARKET-ORIENTED SOLUTION:BUILD AN OFFENSIVE/DEFENSIVE IP PORTFOLIO

It behooves companies and inventors to protect themselves fromexploitation, and this can be done by building a well-rounded IPportfolio that is self-perpetuating and protects core technology aswell as defends against competitors.

A basic offensive strategy protects a business core technologyand drives profits. Meanwhile, a defensive-minded strategy looksto capture unclaimed territory surrounding core technology bypatenting incremental improvements, which builds value, blocksalternative designs, ensures freedom to operate, and shieldsagainst attacks by competitors.

The offensive and defensive IP strategies are not mutuallyexclusivemany assets within the IP portfolio can be used bothoffensively and defensively. The problem is that companies do notundertake the work needed to build their portfolios (therebymaking themselves prime targets for trolling) and later oncomplain that the government should do something about theeffects of the complacency or negligence.

Example: Texas Instruments is famous for successfully licensing its

vast patent portfolios. Once the largest semiconductor maker in
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the world, TI lost market share to rivals in the 1980s. Inresponse, TI began supplementing its declining operatingrevenues by aggressively asserting its patent portfolio andlicensing key technologies to competitors. The strategy paid off. TIwas able to capture billions of dollars in licensing revenues whiletransitioning its research and development toward newtechnologies.

Good portfolio management requires monitoring of thecompetitions patent holdings to identify opportunities andthreats. For example, a company may be able to design around acompetitors patents or initiate a reexamination proceedingagainst an overly-broad patent. This can be an aggressivealternative to waiting for litigation. In addition, due to the speedwith which many companies must develop and move a product tomarket, those products may contain one or more elements thatinfringe a patent within your portfolio.

More often than not, the actors claiming to be damaged couldthemselves reverse such damages by targeted changes in theirown strategies.

LEGISLATION IS NEEDED TO CURB THE ABUSE

Trolling is a multibillion-dollar industrybecause the currentlegal standards favor it. It costs a few thousand dollars to securea patent, which can easily bring millions through litigation. Therise of trolls came as a result of a system that seemed tofavor them every step of the way. The vagueness of the

underlying patents, the ridiculous ease with which plaintiffscould file a suit, the high costs defendants faced, and theunthinkable consequences of losingall created an environmentin which trolls were routinely rewarded for filing frivolous suits.

There is a need to actively curb abusive behavior in patentlitigation and IP portfolio management, and the best way to dothis is to enact legislative safeguards.

Examples

proposed US patent reform bill (03 April 2014)

S. 1720, the Patent Transparency and Improvements Act

CONGRESS DOESNT NEED TO ENACT NEW LAWS

While patent law aims to promote innovation by giving inventorsthe exclusive right to their inventions, modern patent law paysfar less attention to what the patentee actually inventedthan towhat the patent claims. Such claims are the legal definitionofthe patents scope, and the lawyers drafting them have a natural

tendency to broaden claims as much as possible to secure thestrongest possible rights for clients. This kind of functional over-claiming is whats causing the mess.

Congress doesnt need to enact new laws; it just needs tointerpret the existing statute given the realities of software andmodern patent practice. The law should rein in efforts to claimowning a goal itself rather than a particular means ofachieving that goal. If an inventor claims to own any means ofusing a computer to solve a problem, we should read that claimas being limited to the particular algorithm s/he wrote to solve

the problem and ones like it. Didnt write an algorithm (or code)?


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which looks at end-user protections and adds higherstandards for patent demand letters and authorizes theFederal Trade Commission to crack down on unreasonabledemands

The Electronic Frontier Foundation(EEF) proposespoints for better reform such as: limiting overbroadfunctional claims in the application for patents, reviewing allbusiness method patents, especially software-type patents,requiring more details in complaints about allegedinfringement in patents

Patent qualitythe scope of patentsis at the heart of thepatent troll issue. Standards should be enacted in order toproperly define the limits of patent holdings and the process ofapplying for patents.

It is the granting of overbroad and vague software patents that isspawning the rising number of cases concerning IP infringement.

Then its an invalid patent.

All we need to do is recognize that the structure of a modernsoftware program is not a computer the hardware on which itrunsbut the actual design of the program itself. If someoneinvents a program, s/he can own that program and ones likeit, but not every program that might achieve the sameend. While doing so would narrow the scope of software patents(unfairly in a few cases), the social benefits would outweigh thoseconcerns.

Ending functional claiming may be the only way out of thesoftware patent morass. As long as patentees can claim to ownthe problem itselfnot just the solutiondefining better

boundaries and invalidating obvious patents wont do muchto make the patent mess go away.

With one fell swoopwithout changing the patent statute and

without invalidating existing patentsthis may be able to solvemost of the software patent problems.

DEMOGRAPHICS AND STATISTICS

It takes on average 12 years to bring a new product to market from invention to the consumer Only 1 in 5,000 products successfully makes it to market The average cost for research and development per product, in the case of pharmaceutical products, is over $1 billion The volume of NPE patent suits over the past five years increased nearly 600 percent, from about 600 in 2008 to more than

3,600 in 2013, impacting about 8,000 companies in the same period Patent litigation is costing companies worldwide almost $13 billion in defense expenses and settlements last year (2013), up

from roughly $5 billion in 2008. Cost of Facebooks acquisition of Oculus VR: $2 Billion, officially making it the third most expensive acquisition of technology

by Facebook, after WhatsApp and Instagram For 2011 alone, the US International Trade Commission (ITC) reached a peak of 69 cases regarding disputes over technology

relating to smart televisions and smartphones In the initial suit, Apple claimed that Samsung infringed on five patents it held for the iPhone, and asked for a total of $2.2

billion in damages. Samsung wants over $6 million from Apple for infringing two of its patents. Typically theres a cross-license that keeps companies from having to assert literally 10,000 or 20,000 patents against each

other, according to Google general counsel Kent Walker.


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In 2011 NPEs brought 5,842 suits, with a direct cost of $29 billion in legal and settlement feesmore than four times the haulin 2005.

According to Manny Schecter, chief patent counsel at IBM, 75 percent of a companys value is attributable to its intellectualproperty

IP-intensive industries contribute $5 trillion per yearto the U.S. economy. These industries account for about 35 percent ofgross domestic product and40 million jobs,including 28 percent of the jobs in the United States.

PATENT WARS, A BRIEF HISTORY

1997

CommunicationssoftwarecompanyHilgraeve allegesthat McAfeesVirusScaninfringes a

patent onsoftware thatperforms intransit detectionof computerviruses. Thedistrict courtsides withMcAfee, but anappeals courtreverses the

summaryjudgment. A fewyears later,Symantecacquires thepatent and usesit againstComputerAssociatesInternational(now CA

Technologies).

1999

Amazon obtainsa preliminarycourt injunctionto stop Barnes &Noble from usinga single-clickorder button,

thanks to itspatent thatcovers thesystem thatstores billing andshippinginformation. In2002 the tworeach asettlement for anundisclosed

dollar amount.

2004

Eastman Kodakbrings suitagainst Sony forallegedlyencroaching on10 patentsconcerning

digital camerasand camcorders.Three weekslater, Sonyreturns the favorwith a lawsuitagainst Kodakthat cites 10different patents.In 2007 the twocompanies reach

a cross-licensingagreement toprotect theirpatent portfolios.

2009

Nokia claims theiPhone violatesseveral of itspatents forwirelesscommunication,including one for

bidirectionaltransmission ofpacket data.Under the termsof a 2011settlement, Applepays a onetimesum and ongoingroyalties toNokia.

2010

Oracle, whichgainedownership ofseveral Java-related patentswhen itpurchased Sun

Microsystems in2009, suesGoogle forunauthorizeduse of thedevelopmenttechnology inAndroid. A juryrejects the claim.

2011

A series of Apple-Samsunglawsuitscommence, asthe twosmartphonegiants square off

in courts aroundthe world. InAugust 2012 aUS jury ordersSamsung to shellout $1 billion forfeatures thatinfringe on six ofApples patents.

2012

Facebook refusesto pay licensingfees to Yahoo forallowing users tocustomize theirpages. Yahoofiles suit against

the socialnetwork for freeriding on itspatents.Facebookmanages to avoida payout, as thetwo companiesagree to cross-licensing.
http://www.uspto.gov/news/pr/2012/12-25.jsphttp://www.commerce.gov/blog/2012/04/11/intellectual-property-intensive-industries-contribute-5-trillion-40-million-jobs-us-http://www.commerce.gov/blog/2012/04/11/intellectual-property-intensive-industries-contribute-5-trillion-40-million-jobs-us-http://www.uspto.gov/news/pr/2012/12-25.jsp


14/14

Sources

World Intellectual Property Organization (WIPO)http://www.wipo.int/about-ip/en/

Sci.Dev.Nethttp://www.scidev.net/asia-pacific/enterprise/intellectual-property/?gclid=COmn0rigob4CFZcjvQod8JQAeA

The World Trade Organization (re: TRIPS)http://www.wto.org/english/tratop_e/trips_e/intel1_e.htm

The Permanent Court of Arbitration (re: UNCITRAL)http://www.pca-cpa.org/showpage.asp?pag_id=1061

UNCITRALhttp://www.uncitral.org/uncitral/en/about_us.html

WIRED (opinions on patents)

http://www.wired.com/2012/10/mark-lemley-functional-claiming/http://www.wired.com/2012/11/richard-stallman-software-patents/http://www.wired.com/2012/11/with-all-due-respect-the-patent-system-is-not-broken/

Inside Counselhttp://www.insidecounsel.com/2014/04/14/apple-samsung-feud-delves-into-the-origins-of-touchttp://www.insidecounsel.com/2014/04/03/senate-urged-to-improve-proposal-on-patent-reformhttp://www.insidecounsel.com/2014/04/17/rpx-launches-a-rated-patent-troll-insurance-with-lhttp://www.insidecounsel.com/2014/05/06/oculus-comes-back-at-zenimax-for-ip-violation-claihttp://www.insidecounsel.com/2014/05/05/apple-wins-120-million-in-samsung-patent-case

The Hill (on patent reform in the US)http://thehill.com/policy/technology/204518-this-week-in-tech-senators-seek-breakthrough-on-patent-reform?_ga=1.122661451.1126613107.1399731286http://thehill.com/policy/technology/202632-apple-microsoft-ibm-team-up-for-patent-protectionshttp://thehill.com/policy/technology/191530-law-professors-lobby-for-patent-reform

Quartz (on Amazon and its patent for taking photos against a white background)http://qz.com/207512/taking-a-photo-against-a-white-background-amazon-owns-the-patent-on-that/

The Wall Street Journal (on patent litigation insurance)http://online.wsj.com/article/PR-CO-20140416-907253.html
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Documents

Intellectual Property and IP Rights