Texas A&M Wins Trademark Suit Against Soap Company In Washington State By Playing Six Degrees Of Trademark Licensing

from the cleaning-up dept

Readers here will likely be aware of the tortured history of Texas A&M's "12th Man" trademark. If you're not, the term describes the fans of the team and their tendency to make so much noise to effect on-field play during games. A&M, which holds a trademark for the term, has made a name for itself as a trademark bully, going around and threatening basically anyone that uses anything remotely like that term, even as it has in the past infringed on the IP of others. The school has been so successful in locking down this term for use in anything sports related that the Seattle Seahawks, the NFL team that also refers to its fans as its "12th Man", pay a licensing fee to the school to do so.

And now that licensing arrangement appears to be part of the reasoning A&M's legal team used to sue a soap company based in Washington State for using the "12th Man" term as well. In the school's filing, embedded below, it argues that because the soap company resides in the same state as the Seahawks, and because the company's soap product "12th Man Hands" includes an image of a football on the packaging, this makes it an infringement on its trademark, despite soap and athletics not being in related marketplaces. The USPTO somehow actually bought this six-degrees-of-licensing-separation argument.

According to the trademark board, the soap company was trying to call to mind the Seahawks’ 12th Man thing when designing the soap. There’s even a football on the “12th Man Hands” soap bar, and the company acknowledged it was trying to reach Seahawks fans, which makes sense because it’s a Washington-based company.  But according to the board, the soap-makers didn’t clear their use of the 12th Man mark with A&M specifically. That appears to have hurt their case.

And the board ruled against the soap company. That's ridiculous for several reasons. First, no linkage in geography, nor the company's desire to reach Seahawks fans, creates confusion on its own in the public. Other than the image of a football, there is no other linkage to the Seahawks at all. It's just a puck of soap with something of a stock image of a football being held by a hand. Nobody is going to look at that and think it was soap branded by the Seahawks.

Secondly, even if the above weren't true, the confusion would be between the soap company and Seahawks, not Texas A&M. Whatever the licensing agreement between the Seahawks and the school, there is absolutely zero chance for anyone in the public thinking that Texas A&M has anything to do with this soap company. That, I'm confident saying, is completely inarguable. If anyone should have sued here, it should have been the Seahawks, and even that suit would have been ridiculous. A&M included information about past licensing deals for soap with other companies, but none of them were for "The 12th Man" use, and all of them were instead for university-specific terms and imagery, such as its logo.

How in the world the Trademark Board ever bought into this is beyond me.

Filed Under: 12th man, soap, trademark, uspto
Companies: texas a&m

Stupid Patent of the Month: Alleged Cult Leader Wants to 'Improve Performance'

from the can-we-improve-the-performance-of-the-uspto dept

In April, Mexican federal police arrested Keith Raniere, taking him from the $10,000-per-week villa where he was staying and extraditing him to New York. According to the NY Daily News, Raniere, leader of self-help group NXIVM (pronounced "nexium"), is now being held without bail while he awaits trial on sex-trafficking charges. Through NXIVM, he preached "empowerment," but critics say the group was a cult, and engaged in extreme behavior, including branding some women with an iron.

This was not the first controversial program Raniere was involved in. In 1992, Raniere ran a multilevel marketing program called "Consumer Buyline," which was described as an "illegal pyramid," by the Arkansas Attorney General's office. More recently, he has collected more than two dozen patents from the U.S. Patent Office, and has more applications pending—including this one, which is for a method of determining "whether a Luciferian can be rehabilitated."

The USPTO has granted Raniere protection for a variety of curious inventions, including a patent on "analyzing resonance," which eliminates unwanted frequencies in anything from musical instruments to automobiles. Raniere also received a patent on a virtual currency system, which he dubbed an "entrance-exchange structure and method." He applied for a patent on a method of "active listening," and received patents on a system for finding a lost cell phone, and a way of preventing a motor vehicle from running out of fuel. NXIVM members reportedly identified their levels with various colored sashes, which helps explain Raniere's design patent on a "rational inquiry sash."

Today, we're going to focus on Raniere's U.S. Patent No. 9,421,447, a "method and apparatus for improving performance." The patent simply adds trivial limitations to the basic functioning of a treadmill, like timing the user and recording certain parameters (speed, heart rate, or turnover rate.) Since most modern treadmills allow users to precisely measure performance on a variety of metrics, the patent is arguably broad enough that it could be used to sue treadmill manufacturers or sellers.

Given Raniere's litigation history, that's not such a remote possibility. NXIVM has sued its critics for defamation—enough that the Albany Times-Union called NIXVM a "Litigation Machine." And Raniere sued both AT&T and Microsoft for infringement of some patents relating to video conferencing. The latter suit ended very badly for Raniere, who was ordered to pay attorneys' fees after he couldn't prove that he still had ownership of the patents in question. So it's worth taking a look at how Raniere got the ‘447 patent.

Raniere's Law ™

Raniere has never been shy about proclaiming how special he is. His bio on a website for Executive Success Programs, a series of courses run by NXIVM, explains that he could "construct full sentences and questions" by the age of one, and read by the age of two. Raniere was an East Coast Judo Champion at age 11, recruits are told, and he entered college at Rensselaer Polytechnic Institute by age 16. The honorifics continue:

He has an estimated problem-solving rarity of one in 425,000,000 with respect to the general population. He has intellectual patents pending in the areas of human potential and ethics, expression, voice and musical training, athletic performance, commerce, education and learning, information processing and human modeling. He also holds several technological patents on computer inventions and a sleep guidance system.

Raniere may be able to convince NXIVM followers that he is a one-in-425 million level genius. A new article from Vanity Fair explains that, inside NXIVM, Raniere's patents were often used as evidence of his brilliance. But how did Raniere convince the US Patent and Trademark Office of his inventing abilities?

Ultimately, he didn't really have to. Taking a close look at the history of Raniere's patent application shows how the deck is stacked in favor of a determined, well-funded applicant. For someone who's determined to prove they're a great inventor, and is reasonably well-funded, the patent office can ultimately be cowed into compliance.

In this case, Raniere's original patent application claimed a "performance system" with a "control system" and a sensor for monitoring "at least one parameter." His examples went beyond exercise: he intended to patent humans making mathematical calculations at increasing speed, or a weightlifter decreasing the time between repetitions.

Appropriately, the examiner rejected all 13 of his proposed claims. But nothing stops patent applicants from coming back and trying again—and again—and that's exactly what Raniere did. To his bare-bones description of a "performance system" he added this dose of jargon:

Wherein said control system includes a device to determine a point of efficiency, said point of efficiency occurring when the linear proportional rate of change in [] at least one parameter of the subject being trained varies rapidly outside of the state of accommodation and the range of tolerance.

Whew! That's a lot of verbiage just to explain that the same "performance system" is measuring how fast changes occurs. The patent would be infringed by any treadmill that could measure a changing variable. Even though earlier patents had described essentially the same thing—Raniere's lawyers insisted that his idea of measure the "rate of change" was "completely different" from a system that used a "precalculated range."

The examiner rejected Raniere's application again, noting that an older patent for an exercise bike attached to a video game still fulfilled all the elements of Raniere's new, jargon-filled patent.

But Raniere simply paid $470 to file a "request for continued examination," and kept pounding his fist on the proverbial table. Raniere, or his lawyers, bloated Claim 1 up with yet more language about the point of efficiency occurring "just prior to the subject no longer being able to accommodate additional stress" and entering a state of exhaustion, and claimed now that it was this more narrow description that was his stroke of genius.

"Nowhere in [earlier patent] Hall-Tipping is it suggested that the user be exercised to the point of exhaustion," pointed out Raniere's lawyers, this time around.

Rejected again, they had an interview with the examiner before coming back with yet another $470 "continued examination" request. Then Raniere loaded up Claim 1 with almost twice as much language about the system repeating itself, and re-measuring new "points of efficiency."

This went on and on [PDF], with Raniere continuing to change language and add limitations. Eight times, the examiner threw out every single one of his claims. Finally, after he added language about the "range of tolerance" being plus or minus two percent, his claims were allowed.

In his specification, Raniere was typically un-self-effacing. He crowed that he had created "Raniere's Maximal Efficiency Principle™" or "Raniere's Law™." (The guy is clearly into branding.)

Unfortunately, this is par for the course. Determined patent applicants get an endless number of chances to create a piece of intellectual property that just barely avoids all the other patents and non-patent art that overworked patent examiners are able to find. The strategy is: find a basic process, and slowly add limitations until you get a patent. That's how we get patents on filming a yoga class and Amazon's patent on white-background photography. The fault lies not so much with the examiner here, but with the Federal Circuit for interpreting patent law's obviousness standard in a way that effectively prohibits the Patent Office from relying on common sense.

So what's the solution? We need the Federal Circuit to apply the Supreme Court's decision in KSR v Teleflex more faithfully and allow the Patent Office to use common sense when faced with mundane claims. We also need to defend the Alice v. CLS Bank ruling so that examiners can reject patents that claim abstract ideas implemented with conventional tools (like treadmills). Patent law should also be changed so that applicants don't get an endless number of bites at the apple.

Reposted from the EFF's Stupid Patent of the Month series.

Filed Under: keith raniere, nxivm, patents, performance, stupid patent, stupid patent of the month, uspto
Companies: nxivm

Judge Cock(y)blocks Author Faleena Hopkins' Demand Other Authors Stop Using The Word 'Cocky' In Their Titles

from the 40-percent-decrease-in-cocksureness dept

Romance novelist Faleena Hopkins recently turned the rest of the genre against her by deciding -- with the USPTO's blessing -- she was the only person who could use the word "cocky" in a book title. Given the nature of romance novels, the striking of the word "cocky" left precious few terms capable of describing a certain blend of bravado and sexual prowess.

The backlash was not only immediate, but thorough. Authors hit with cease-and-desist notices posted these to social media. One writer filed a petition with the USPTO to have the recently-acquired trademark invalidated. To top everything off, the Authors Guild of America joined forces with two of the authors Hopkins sued. What Hopkins likely felt would be an easy win in a trademark infringement case is turning into another cautionary tale about questionable IP and heavy-handed enforcement.

As The Guardian reports, Hopkins has already been handed a loss in her lawsuit against author Tara Crescent and publicist Jennifer Watson.

In the case, heard in a New York court on Friday, judge Alvin Hellerstein described romance readers as “sophisticated purchasers” unlikely to be confused between different authors’ books, found that cocky was a “weak trademark”, and denied Hopkins’s motion for a preliminary injunction and temporary restraining order to stop the publication of books with the word “cocky” in the title.

The lawsuit isn't dead, but authors are still free to use the word "cocky" in book titles until everything's settled. The oral arguments [PDF] suggest the judge doesn't find Hopkins trademark arguments persuasive. Instead, the judge points out any restraining order would cause damage to the people Hopkins is suing, far outweighing anything Hopkins might suffer if other "cocky" products remain on the market.

[I]t seems to me that defendant, who is on the market with her romance novels, if restrained, would also suffer damage and it would be irreparable. If a book is taken off the market, it can't be sold. Books of this nature have to do with timeliness as well. So I can't say that there is any balance here. If there is, it is likely to tip in defendants' favor because a good portion of injury by the plaintiff would be compensable in damages and captured profits. So that factor is in favor of defendant.

Whether an injunction is in the public interest, given the way these trademarks are used, I don't think there is much of a public interest in them.

Here plaintiff can't demonstrate that its trademark merits protection, nor in my opinion that defendant's use of a similar mark is likely to cause consumer confusion. Those are the eight factors that we just talked about. Accordingly, the motion for a TRO and for a preliminary injunction is denied.

And there's this, which has nothing to say about the merits of the case, but does provide a brief glimpse of the intersection of the court of public opinion and the US federal court system.

THE COURT: You present in your papers about a dozen instances of prior use of "Cocky" in a title: Bite Me Cocky; A Little Bit Cocky; The Cocky Cowboy; Cocky Balls Boa, described as an erotic parody; Cocky Cowboys; Cocky SWATS; Cocky: A Stepbrother Romance; Cocky: A Cowboy Stepbrother Romance; and so on.

MR. REUBER: Your Honor, if I may?

THE COURT: No. You are out of the case.

MR. REUBER: I understand, your Honor. But I penned the brief, and there is an error that my client alerted me to this morning in the brief. Specifically, it is first one you just read, Bite Me Cocky, published in 2012. He has learned that that title may have changed as a result of the Cockygate sort of disputes. It might have been originally published as Bite Me and not Bite Me Cocky. I just wanted to point that out.

THE COURT: Originally Bite Me, then it became Bite Me Cocky?

MR. REUBER: Yes, your Honor. That was our understanding.

THE COURT: What is the explanation for the change?

MR. REUBER: As a protest, effectively. That is our best guess.

THE COURT: In response to the protest, he added the word "Cocky"?

MR. REUBER: In response to Cockygate registrations, yes, we believe the author added the word "Cocky" as a protest. That is pure supposition on our part, your Honor. We have only been doing this for about 48 hours.

The challenge of the trademark continues, as is noted at the USPTO website. If everything continues down this road, Faleena Hopkins won't have any trademarks to bully people with, much less a lawsuit victory to justify her bullying behavior.

Filed Under: cocky, cockygate, faleena hopkins, romance novels, trademark, uspto

Rap or Pap? Dr. Dre Loses Trademark Battle With Dr. Drai, A Gynecologist

from the still-drai dept

I trust that readers of this site young and old will be familiar with Dr. Dre. The wildly famous rapper has made hit records, produced some of the biggest names in hip hop, been a mogul in the music hardware space with his headphone line, and performed countless pelvic exams on women throughout the American northeast.

Wait, that last part can't be right. Surely I was legitimately confused by the existence of Dr. Drai, an OB/GYN in Pennsylvania who dared attempt to get a trademark on his name for his doctor-ly practice. It seems that Dr. Dre has been locked in a trademark opposition with Dr. Drai going on three years, arguing that the absurd example of faked confusion above is actually likely to happen for real.

Dr. Drai, a Pennsylvania-based gynecologist filed in 2015 to trademark his name and “Doctor Drai OBGYN & Media Personality." Dr. Dre tried to pump the brakes on that application, claiming it would cause confusion in the marketplace ... since their names sound alike.

The gyno was born Draion M. Burch, but according to his application he's been going by Dr. Drai for years. He's authored books and makes public appearances using it.

Dre's opposition is obviously, and hilariously, without merit. The whole point of trademark law is to keep the public from being confused as to the source of goods and services. Because of that, trademarks are valid only for given markets. Dr. Dre has a perfectly valid trademark case to make in the realm of music and entertainment. He has zero case to make in the realm of medical practices, no matter what stage name he chose to take all those years ago. In short, no woman is scheduling a visit with a gynecologist under the impression that the D.R.E. would be the one performing it.

The trademark office, of course, agreed.

The trademark office agreed with the medical doc, saying although the gangsta doc was well known ... there wasn't enough evidence people would be confused. Let's be honest ... no one's downloading "The Chronic" from a gyno. Although, sounds like there should be a shot for that.

Point being ... the case was dismissed.

Don't worry, Dre. We still won't forget about you.

Filed Under: dr. drai, dr. dre, gynecology, likelihood of confusion, music, trademark, uspto

When In Doubt, Blame Terrorists: Patent Attorney Claims Terrorists Are Infringing And Killing Jobs

from the oh-really-now? dept

For many years now we've had fun pointing out the ridiculous claims of the legacy copyright industry execs insisting that copyright infringement funds terrorism. Of course, the evidence for this was seriously lacking. Back in 2011 there was an incredibly detailed, evidence-rich debunking of the claim by Joe Karaganis, showing basically no connection between terrorism and infringement.

But, alas, it's a topic that never seems to go away. And now it appears that a design patent lawyer has updated the talking points to now claim that terrorists are infringing on design patents to fund their terroristic activity. First, as a quick refresher: when we talk about patents, we're usually talking about utility patents, which are a monopoly for a new invention or process. Design patents, on the other hand, are really more akin to trademarks, in that they grant a monopoly on the look of something. The idea that ISIS is out there infringing on, say, the look of someone's fancy belt buckle or a new planter is just sort of ludicrous on its face. But it certainly didn't stop big shot patent lawyer Robert Katz from making the claim at a recent event held by the US Patent and Trademark Office (who, really, should know better).

The event was the USPTO's "Design Day" held a few weeks ago, in which there were a series of discussions on design patents and such. If you go to the Livestream of the event, about an hour in Katz starts out by playing up how crafty infringers are getting, saying that they're getting smarter about how they avoid getting caught:

This is followed up by the other favorite concept that the copyright folks loved to use for years: totally and completely bogus numbers about losses of money and jobs. Notice, first that the "losses" in money lumps in all kinds of infringement, and almost certainly counts every infringement as a lost sale, even though that's clearly not the case. And job loss reports like this have been debunked so many times that it's almost embarrassing that anyone still uses those claims.

Katz goes one better in talking about how "dangerous" products were introduced into the market, he gets to claim that knockoff makeup products were causing people to break out in rashes because they had "feces" in them. Indeed, there was just a seizure by the LAPD of some supposedly counterfeit makeup products, and the whole "feces" claim made a bunch of headlines (though, it's odd that half the stories call it "animal waste" and the other half call it "human feces.") There don't seem to be many details beyond a tweet from the LAPD -- an organization never known for exaggerating anything or making statements that are inaccurate.

He also claims that sex traffickers are using infringement to fund their efforts (I thought they were using the trafficking to fund it, but... who knows?) But that's just the lead in to the really nutty claim. It all comes back to... TERRORISM!

If you can't see that, the slide notes that infringers are "tied to terrorism" and he provides three "real life examples." From the slide:

• Charlie Hebdo shootings: There's a direct link between counterfeits and terrorism... "The sale of counterfeit goods went into buying these guns."
• 2004 Madrid train bombings: Terrorists sold counterfeit CDs to support their activities.
• 1993 World Trade Center bombing: Terrorists raising money by selling counterfeit goods.

Let's leave aside that if this is such a big deal, why do we need to go back a quarter of a century to find three examples (and almost 15 years just to find a second example). Even the supposedly recent claim of the Charlie Hebdo attacks being a "direct" result of counterfeit sales is pretty suspect. You can find lots of headlines claiming this, but when you dig deep into the examples, no one provides any evidence. It's often cited by a trade group advocating for cracking down on counterfeits. After reading through many, many reports, the earliest reporting I can find on the claims about the Charlie Hebdo attackers relying on counterfeits comes from the LA Times story about intelligence lapses that allowed the attackers to go unnoticed. It mentions, in passing, that after getting out of jail for an earlier run-in with the law over possible terrorism, one of the attackers "seemed to be moving into less sinister pursuits, reportedly including trafficking in counterfeit clothing and shoes."

That report also suggests that this counterfeiting activity had basically nothing to do with buying the weapons for the Charlie Hebdo attack. Instead, you get:

U.S. intelligence officials have confirmed that at least one of the brothers traveled to Yemen in summer 2011, received training from Al Qaeda in the Arabian Peninsula and returned with about $20,000 in cash provided by the terrorist group. News reports have indicated that both brothers may have ventured to Yemen.

Right. So, which is it. One of the attackers selling some counterfeit shoes... or getting trained by Al Qaeda and being handed $20,000. I think the latter seems just a bit more likely.

But not to design patent lawyers like Katz. He concludes this slide by saying with a totally straight face:

"It's not like it's something where people just got a little too close. Most of the time, when people are using design patents, it's to stop activities like this."

Whaaaaaaaaaaaat? Most of the time that people are using design patents, it's to stop terrorist attacks like this? What the hell is Katz saying?

No one is saying that counterfeiting of whatever things that are covered by design patents is okay -- though reports by both the GAO and the OECD have shown that claims of losses due to counterfeiting are highly exaggerated, and that in many cases there's little to no real harm, as buyers know they're buying counterfeit products, and it's an aspirational purchase (i.e., they can't afford the authentic version). Other reports have shown that those who buy counterfeits often by the real version when they can afford it.

But, nope. According to Katz, "most of the time" design patents need to be used to stop terrorists such as those involved in the Charlie Hebdo shootings (never mind the cash from Al Qaeda).

I don't know if people like Katz think the points he's spewing are accurate. He might. But if that's true, it just goes to show how silly confirmation bias can become. Design patents aren't protecting anyone against terrorism, let alone "most of the time." Saying things like that don't show how important design patents are. They show how silly people get when they get all wrapped up in artificial monopolies.

Filed Under: charlie hebdo, design day, design patents, infringement, patents, robert katz, terrorists, uspto

USPTO Suggests That AI Algorithms Are Patentable, Leading To A Whole Host Of IP And Ethics Questions

from the locking-up-life dept

The world is slowly but surely marching towards newer and better forms of artificial intelligence, with some of the world's most prominent technology companies and governments heavily investing in it. While limited or specialist AI is the current focus of many of these companies, building what is essentially single-trick intelligent systems to address limited problems and tasks, the real prize at the end of this rainbow is an artificial general intelligence. When an AGI could be achieved is still squarely up in the air, but many believe this to be a question of when, not if, such an intelligence is created. Surrounding that are questions of ethics that largely center on whether an AGI would be truly sentient and conscious, and what that would imply about our obligations to such a mechanical being.

Strangely, patent law is being forcibly injected into this ethical equation, as the USPTO has come out in favor of the algorithms governing AI and AGI being patentable.

Andrei Iancu, director of the U.S. Patent and Trademark Office (USPTO), says that the courts have strayed on the issue of patent eligibility, including signaling he thought algorithms using artificial intelligence were patentable as a general proposition.

That came in a USPTO oversight hearing Wednesday (April 18) before a generally supportive Senate Judiciary Committee panel.

Both Iancu and the legislators were in agreement that more clarity was needed in the area of computer-related patents, and that PTO needed to provide more precedential opinions when issuing patents so it was not trying to reinvent the wheel each time and to better guide courts.

On some level, even without considering the kind of AI and AGI once thought the stuff of science fiction, the general question of patenting algorithms is absurd. Algorithms, after all, are essentially a manipulated form of math, far different from true technological expression or physical invention. They are a way to make equations for various functions, including, potentially, equations that would both govern AI and allow AI to learn and evolve in a way not so governed. However ingenious they might be, they are most certainly no more invention than would be the process human cells use to pass along DNA yet discovered by human beings. It's far more discovery than invention, if it's invention at all. Man is now trying to organize mathematics in such a way so as to create intelligence, but it is not inventing that math.

Yet both the USPTO and some in government seem to discard this question for arguments based on mere economic practicality.

Sen. Kamala Harris drilled down on those Supreme Court patent eligibility decisions -- Aliceand Mayo, among them -- in which the court suggested algorithms used in artificial intelligence (AI) might be patentable. She suggested that such a finding would provide incentive for inventors to pursue the kind of AI applications being used in important medical research.

Iancu said that generally speaking, algorithms were human made and the result of human ingenuity rather than the mathematical representations of the discoveries of laws of nature -- E=MC2 for example -- which were not patentable. Algorithms are not set from time immemorial or "absolutes," he said. "They depend on human choices, which he said differs from E=MC2 or the Pythagorean theorem, or from a "pattern" being discovered in nature.

Again, this seems to be a misunderstanding of what an algorithm is. The organization and ordering of a series of math equations is not human invention. It is most certainly human ingenuity, but so was the understanding of the Bernouli Principle, which didn't likewise result in a patent on the math that makes airplanes fly. Allowing companies and researchers to lock up the mathematical concepts for artificial intelligence, whatever the expected incentivizing benefits, is pretty clearly beyond the original purpose and scope of patent law.

But let's say the USPTO and other governments ignore that argument. Keep in mind that algorithms that govern the behavior of AI are mirrors of the intelligent processes occurring in human brains. They are that which will make up the "I" for an AI, essentially making it what it is. Once we reach the level of AGI, its reasonable to consider those algorithms to be the equivalent of the brain function and, by some arguments, consciousness of a mechanical or digital being. Were the USPTO to have its way, that consciousness would be patentable. For those that believe we might one day be the creators of some form of digital life or consciousness, that entire concept is absurd, or at least terribly unethical.

Such cavalier conversations about patenting the math behind potentially true AGI probably require far more thought than asserting they are generally patentable.

Filed Under: ai, algorithms, alice, math, patents, uspto

Supreme Court Says Of Course The Patent Office Can Admit It Made A Mistake And Dump Bad Patents

from the phew dept

For the second time in two years, the Supreme Court has needed to weigh in and note that, of course, the US Patent Office can take another look at the crappy patents it already granted, recognize its mistake, and void the patents. A little less than two years ago, it looked at what standards could be used by the Patent Trial and Appeal Board (PTAB) using the Inter Partes Review (IPR) system created by the America Invents Act of 2010. The latest case was much more broad: challenging whether the IPR/PTAB process itself was Constitutional.

The basic idea behind the IPR process was an admission that the USPTO is historically bad at properly reviewing patents before granting them. It grants a lot of bad patents. The IPR process allows anyone to present evidence to the PTO that it made a mistake and granted a patent that should never have been granted. If the PTAB is convinced, it can invalidate the patent. Seems pretty straightforward. Except that the usual patent lovers (mainly patent trolls and big pharma) insisted that this was some sort of unconstitutional taking of property, without the review of a court. This is wrong for a whole bunch of reasons -- starting with the incorrect view of patents as traditional "property."

The Supreme Court ruled on the issue, in a case called Oil States Energy Services v. Greene's Energy Group, and basically said that of course the PTAB can invalidate patents this way. Justice Thomas wrote the majority opinion with a 7 - 2 split (Gorsuch and Roberts dissented). The key issue was whether or not invalidating patents is reserved only for the courts, and most of the Justices don't see any support for that. In short, the majority opinion says what the Patent Office gives, the Patent Office can take away...

This Court has recognized, and the parties do not dispute, that the decision to grant a patent is a matter involving public rights—specifically, the grant of a public franchise. Inter partes review is simply a reconsideration of that grant, and Congress has permissibly reserved the PTO’s authority to conduct that reconsideration. Thus, the PTO can do so without violating Article III.

The majority opinion points out that the Constitution doesn't require the Judicial branch to weigh in on the granting of patents, and thus it need not weigh in on the invalidating of those patents either.

Inter partes review is “a second look at an earlier administrative grant of a patent.” ... The Board considers the same statutory requirements that the PTO considered when granting the patent.... Those statutory requirements prevent the “issuance of patents whose effects are to remove existent knowledge from the public domain.” ... So, like the PTO’s initial review, the Board’s inter partes review protects “the public’s paramount interest in seeing that patent monopolies are kept within their legitimate scope,”... Thus, inter partes review involves the same interests as the determination to grant a patent in the first instance.

The court reasonably compares it to other administrative processes where the government can grant things, such as franchises, and later revoke or amend those franchises.

An important part of the ruling is that patents are not property in the traditional sense, and this isn't case of removing someone's property without the Judicial Branch. Specifically, the court says that patents are really more similar to a franchise right, than a traditional property right:

Patents convey only a specific form of property right—a public franchise.... And patents are “entitled to protection as any other property, consisting of a franchise.” Seymour, 11 Wall. at 533 (emphasis added). As a public franchise, a patent can confer only the rights that “the statute prescribes.” Gayler, supra, at 494; Wheaton v. Peters, 8 Pet. 591, 663–664 (1834) (noting that Congress has “the power to prescribe the conditions on which such right shall be enjoyed”). It is noteworthy that one of the precedents cited by Oil States acknowledges that the patentee’s rights are “derived altogether” from statutes, “are to be regulated and measured by these laws, and cannot go beyond them.”

And while Oil States points to some earlier rulings saying that only the courts can invalidate a patent, the Supreme Court correctly notes that the cases it points to were decided under the Patent Act of 1870 -- and under that Act, courts were necessary. But there is no Constitutional prohibition on Congress setting up different rules for the patent system, and since 2010 with the America Invents Act, Congress decided to allow for this administrative review.

Amusingly, the court also takes Oil States to school for a history lesson. The company had argued that historical principles have established that only a court could invalidate a patent, and points to cases decided in 18th century England. But, the Supreme Court, citing Mark Lemley, points out that Oil States not only gets its history wrong, but that the actual history shows that England had something quite similar to an Inter Partes Review process:

But this history does not establish that patent validity is a matter that, “from its nature,” must be decided by a court.... The aforementioned proceedings were between private parties. But there was another means of canceling a patent in 18th-century England, which more closely resembles inter partes review: a petition to the Privy Council to vacate a patent. See Lemley, supra, at 1681–1682; Hulme, Privy Council Law and Practice of Letters Patent for Invention From the Restoration to 1794, 33 L. Q. Rev. 63 (1917). The Privy Council was composed of the Crown’s advisers.... From the 17th through the 20th centuries, English patents had a standard revocation clause that permitted six or more Privy Counsellors to declare a patent void if they determined the invention was contrary to law, “prejudicial” or “inconvenient,” not new, or not invented by the patent owner. ... Individuals could petition the Council to revoke a patent, and the petition was referred to the Attorney General. The Attorney General examined the petition, considered affidavits from the petitioner and patent owner, and heard from counsel.... Depending on the Attorney General’s conclusion, the Council would either void the patent or dismiss the petition....

The Privy Council was a prominent feature of the English system. It had exclusive authority to revoke patents until 1753, and after that, it had concurrent jurisdiction with the courts.... The Privy Council continued to consider revocation claims and to revoke patents throughout the 18th century.

Just a note: if you're going to cite English legal history at the US Supreme Court to try to establish some sort of general and accepted rule, it's best if you don't skip out on the fact that the actual history supports the other side. Just saying.

The final argument from Oil States that the court rejects, is that the PTAB is a violation because it looks too much like an Article III court, without being an actual court. But the majority opinion basically says "so what?"

But this Court has never adopted a “looks like” test to determine if an adjudication has improperly occurred outside of an Article III court. The fact that an agency uses court-like procedures does not necessarily mean it is exercising the judicial power. See Freytag, 501 U. S., at 910 (opinion of Scalia, J.). This Court has rejected the notion that a tribunal exercises Article III judicial power simply because it is “called a court and its decisions called judgments.”

The dissent from Gorsuch (with Roberts signing on) is all over the place. They seem taken in by the myth of patent greatness, kicking off the dissent with the following:

After much hard work and no little investment you devise something you think truly novel. Then you endure the further cost and effort of applying for a patent, devoting maybe $30,000 and two years to that process alone. At the end of it all, the Patent Office agrees your invention is novel and issues a patent. The patent affords you exclusive rights to the fruits of your labor for two decades. But what happens if someone later emerges from the woodwork, arguing that it was all a mistake and your patent should be canceled? Can a political appointee and his administrative agents, instead of an independent judge, resolve the dispute? The Court says yes. Respectfully, I disagree.

But... that makes no sense. Congress, which has the power to set up the patent system to "promote the progress of the useful arts" has determined (reasonably) that since the Patent Office grants lots of bad patents, it can also review and invalidate its mistakes. That's not a "dispute that needs to be resolved." It's an administrative function that doesn't end once the patent is granted.

Gorsuch seems to think people will read the narrow ruling of the majority to more or less decimate the courts and move lots of disputes into administrative processes. That's silly. The majority opinion is quite clear that it is narrowly focused on the issue before it concerning Congress's authority to enable the Patent Office to invalidate patents. As for the history lesson mentioned above, Gorsuch claims it no longer applies because the English Privy Council stopped invalidating patents in the 18th Century. That's true, but meaningless. The whole reason English patent history is brought up in the first place was because Oil States tried to argue that it was the natural order of patents that only courts could remove them. What they really meant is that it was the natural order starting in the late 18th century... which is a lot less convincing if you're trying to argue a form of "we've always done it this way." The point is... we haven't.

This is a big and important win, protecting everyone from bad patents. The IPR process has been shown to be a tool that is at least somewhat effective in dumping bad patents. We should all strive for a situation in which the PTO doesn't grant bad patents in the first place, but given that it does, it should be able to acknowledge its mistakes and correct them.

Of course, that won't stop patent trolls and big pharma from flipping out. Even the site FiercePharma seems to be completely off its rocker in calling this ruling a "blow for pharma" and describing the IPR process as "hated." Except that's silly. IPR is only hated by those with junk patents. If pharma hates it, it's because they know their patents are junk.

As that article makes clear, though, the powerful Pharma lobby intends to pressure Congress to still kill the IPR process as quickly as possible:

In a statement, PhRMA spokesperson Nicole Longo said the "narrowly tailored decision" found only that IPRs are constitutional, not "efficient or fair." The arguments and a Tuesday ruling in another case—SAS Institute v. Iancu—mean it's "clear there are problems with the IPR process that need to be addressed," she added.

Amusingly, the article also notes that most of the big pharma companies have used the IPR process themselves to invalidate the patents of others, suggesting that maybe they don't actually "hate" it that much after all...

Filed Under: america invents act, bad patents, franchises, inter partes review, ipr, patent reform, patent trolls, property rights, supreme court, uspto
Companies: oil states

Shocked, Shocked To Learn The Patent Office Is Structurally Designed To Approve Shit Patents

from the and-to-create-problems-for-innovators dept

The book Innovation and Its Discontents, by Adam Jaffe and Josh Lerner, was first published in 2004. We've cited the book frequently around here, as it did a bang up job describing structural problems with our patent system (and the judicial review of patents). There were a few big points that it made about why our patent system was so fucked up, and a big one was the incentive structure that heavily incentivized approving patents rather than rejecting them.

Specifically, there were two big ideas mentioned in the book about the US Patent & Trademark Office: (1) that because Congress forced the USPTO to fund itself from fees, it had the direct financial incentive to encourage more patent applications, and a good way to do that is to approve a lot more patents and (2) individual examiners were rated and reviewed based on productivity scores on how many patent applications they completed -- and it is much faster and less time consuming to approve a patent, rather than reject one. That's because once you approve a patent it's completed and gone from your desk (and into the productivity metrics as "completed"). But, if you "reject" a patent, it's not done. Even though the USPTO issues what it calls "Final Rejections" there's nothing final about it. The patent applicant can keep going back to the well over and over again, making minor tweaks on the application, requiring the examiner to go through it again. And each time they do, that hurts their productivity ratings. As an additional "bonus" -- the USPTO actually makes significantly more money when it grants a patent, because in addition to application fees, there are also issuance fees and renewal fees.

In the years after that book came out, the USPTO actually seemed to pay attention. It changed how it measured examiners' work and, magically, fewer patents were approved. For a bit. When President Obama appointed David Kappos to head the Patent Office, he decided that the number one problem that the Patent Office had was its huge backlog of patent applications. And, there's no denying that was a problem -- but it was a problem the USPTO created itself by spending the previous dozen years or so agreeing to issue patents on all sorts of crazy things, leading to more applications and more filers hoping to get their own golden patent trolling lottery ticket. So, it was little surprise when soon after Kappos took over, the USPTO started approving patents much more quickly, and a study from 2013 found that (surprise, surprise) it did so by drastically lowering the standards for approving patents.

Now there's a new study with even more empirical evidence showing how the Patent Office's entire structure is designed to incentivize the approval of crap patents (first highlighted by Tim Lee over at Ars Technica). The paper is by professors Michael Frakes and Melissa Wasserman, and they used FOIA (yay!) to get data on millions of patent applications between 1983 and 2010. The key point with that date range is that Congress only switch the USPTO over to funding itself off of fees in 1991 -- so the researchers could look at before and after data. It also allowed them to look at different cross sections within the data.

So, for example, the researchers looked at whether or not there was evidence that the USPTO approved more patent applications when there was a big backlog. The answer: hell yes!

Specifically, we compared the Agency’s patent grant rate across different groups of applicants based on the tendency of their associated technologies to file repeat applications; importantly, we performed this across technology comparison for two groups—defined by their average tendency to file repeat applications—before and after periods of budgetary shortfall and increases in application backlog. Our findings suggested that when the Patent Office begins to face mounting backlogs, it appears to act on its incentive to grant patents at higher rates for technologies that are associated with higher rates of repeat application.11 In figure 1, we replicate a figure from Frakes and Wasserman (2015), demonstrating that the Patent Office indeed began to grant at differentially higher rates for high repeat-filing technologies during the mid-1990s, a moment in time when the Patent Office’s application backlog began to increase considerably year-by-year. Again, this analysis is alarming because it suggests that factors other than the underlying quality of applications are affecting the Patent Office’s decision to allow patents.

Then there's a separate question of whether or not the USPTO has a higher approval rate for "profit-maximizing" patents. That is: not all patent fees are the same. Smaller entities get to pay reduced fees. Big companies pay full freight. If the USPTO is being incentivized by fees... then it's likely to approve big company patents faster. And... that's what happened. The study also looked at whether or not the USPTO more readily approved patents in categories where there were higher renewal rates -- meaning a much higher likelihood of generating future fees from renewals. Take a wild guess what they found in both of those studies?

As theory predicts, the Patent Office does indeed grant patents at notably higher rates to large entities and applicants from high renewal rate technologies when it finds itself in a position of insufficient fee revenue.9 More broadly, the parameters of its fee schedule appear to affect the way in which the Patent Office applies the legal patentability requirements. This is concerning, given that the granting decision should be based solely on whether the application meets the legal patentability standards. If the fee structure were to encourage more patent grants overall (or more grants during times of budgetary shortfalls), the result could be the issuance of patents lacking legal validity, potentially leading to substantial social harms.

Of course, patent system (and patent troll) supporters will cry foul at this for all the usual reasons -- insisting that this is all a conspiracy to take away their patents. But that's ridiculous. Everyone should agree that we're all better off if the Patent Office is not approving low quality patents. I guess everyone... except those with low quality patents. Basically if people are complaining about the results of this study, there's a half decent chance that it's because they hold crap patents.

The report suggests some ways to try to fix these incentives -- or at least to minimize the social cost of them. One is to stop making the PTO so reliant on fees. You can understand why it was appealing for Congress to make the PTO funded by fees in the first place: not having to allocate taxpayer money to an agency seems like a good thing. But it's important to pay attention to what kinds of incentives that can create -- and how it could create serious problems, as it has here. The report suggests raising patent filing fees -- such that they cover the costs of the actual examination, thus making it less likely for there to be budgetary shortfalls that create these warped incentives.

Because the actual fees paid to the Patent Office for the examination of a patent application are a fraction of the overall cost of securing a patent (which includes attorney fees), there is reason to believe that even a two-fold or three-fold increase in examination fees will not substantially impede access to the U.S. patent system. As a bonus, increasing examination fees will likely also result in raising the quality of patent applications filed with the Patent Office, as applicants become more judicious in selecting those inventions for which they choose to pursue patent rights.

While that increase in filing fee may feel unfair to some, they also propose doing away with the issuance fee -- so there won't be additional expense for actually getting the patent upfront (there are still renewal fees, but that's much further down the road). As for renewal fees:

Instead of eliminating renewal fees, we recommend that Congress decouple the renewal fee income from the revenue stream that the Patent Office can immediately access for funding. While this decoupling goal could be achieved in various ways, we propose the most straightforward approach: Congress would abolish the requirement that the Agency’s aggregate fee income not exceed its operational costs. Renewal fees would then be allocated to a separate fund, similar to the Patent and Trademark Fee Reserve Fund, and earmarked for Patent Office use only. This fund would then be used to provide rebates to small and micro-entities. As a replacement for the guaranteed fee discount for any given small- or micro-entity application, the Agency’s excess renewal fee income would be used to subsidize the small- and micro-entity examination fee.

Perhaps an even more important modification -- and one that's been obvious for many, many years -- is to actually have final rejections of bad patent applications, so people and companies can't just keep refiling over and over again without end. As the paper notes, it's not at all clear what societal benefits allowing repeat filings creates. It overburdens the system, creates incentives for bad patents to get approved, and provides no benefit to anyone other than the entity applying for bad patents. The specific proposal in the paper is that filers can get just one chance to refile the application.

It's good to see more research being done on all of this -- and to see more empirical evidence. What's troubling is that almost all of this was clearly shown more than a dozen years ago, and Congress still hasn't done a damn thing to fix any of it.

Filed Under: bad patents, incentives, patents, uspto

Stupid Patent Of The Month: JP Morgan Patents Interapp Permissions

from the do-patent-agents-not-have-smartphones? dept

We have often criticized the Patent Office for issuing broad software patents that cover obvious processes. Instead of promoting innovation in software, the patent system places landmines for developers who wish to use basic and fundamental tools. This month's stupid patent, which covers user permissions for mobile applications, is a classic example. 

On August 29, 2017, the Patent Office issued U.S. Patent No. 9,747,468 (the '468 patent) to JP Morgan Chase Bank, titled "System and Method for Communication Among Mobile Applications." The patent covers the simple idea of a user giving a mobile application permission to communicate with another application. This idea was obvious when JP Morgan applied for the patent in June 2013. Even worse, it had already been implemented by numerous mobile applications. The Patent Office handed out a broad software monopoly while ignoring both common sense and the real world.

The full text of Claim 1 of the '468 patent is as follows:

A method for a first mobile application and a second mobile application on a mobile device to share information, comprising:

the first mobile application executed by a computer processor on a mobile device determining that the second mobile application is present on the mobile device;

receiving, from a user, permission for the first mobile application to access data from the second mobile application;

the first mobile application executed by the computer processor requesting data from the second mobile application; and

the first mobile application receiving the requested data from the second mobile application.

That's it. The claim simply covers having an app check to see if another app is on the phone, getting the user's permission to access data from the second app, then accessing that data. 

The '468 patent goes out of its way to make clear that this supposed invention can be practiced on any kind of mobile device. The specification helpfully explains that "the invention or portions of the system of the invention may be in the form of a 'processing machine,' such as a general purpose computer, for example." The patent also emphasizes that the invention can be practiced on any kind of mobile operating system and using applications written in any programming language. 

How was such a broad and obvious idea allowed to be patented? As we have explained many times before, the Patent Office seems to operate in an alternate universe where the only evidence of the state of the art in software is found in patents. Indeed, the examiner considered only patents and patent applications when reviewing JP Morgan's application. It's no wonder the office gets it so wrong.

What would the examiner have found if he had looked beyond patents? It's true that in mid-2013, when the application was originally filed, mobile systems generally asked for permissions up front when installing applications rather than interposing more fine-grained requests. But having more specific requests was a straightforward security and user-interface decision, not an invention. Structures for inter-app communication and permissions had been discussed for years (such as here, here, and here). No person working in application development in 2013 would have looked at Claim 1 of the '468 patent and think it was non-obvious to a person of ordinary skill.

JP Morgan's "invention" was not just obvious, it had been implemented in practice. At least some mobile applications already followed the basic system claimed by the '468 patent. In early 2012, after Apple was criticized for allowing apps to access contact data on the iPhone, some apps began requesting user permission before accessing that data. Similarly, Twitter asked for user permission as early as 2011, including on "feature phones", before allowing other apps access to its data. Since it didn't consider any real world software, the Patent Office missed these examples.

The Patent Office does a terrible job reviewing software patent applications. Meanwhile, some in the patent lobby are pushing to make it even easier to get broad and abstract software patents. We need real reform that reduces the flood of bad software patents that fuels patent trolling.

Reposted from EFF's Stupid Patent of the Month series.

Filed Under: obviousness, patents, permissions, prior art, stupid patent of the month, uspto
Companies: jp morgan

State Dept. Enlists Hollywood And Its Friends To Start A Fake Twitter Fight Over Intellectual Property

from the um,-guys? dept

For all the talk of "fake news" going around these days, you'd think that the federal government would avoid creating more of its own on purpose. And you'd think that the MPAA and RIAA would know better than to join in on such a project. However, the following email was sent to some folks at Stanford Law School asking the law school to join in this fake news project promoting intellectual property via a fake Twitter feud:

Good Morning! My name is H------, and I am reaching out to you from the State Department’s Bureau of Economic Affairs. I gave you call a little earlier this morning, but I thought I would follow up with an email as well.

Currently, I am working on a social media project with the Office of Intellectual Property Enforcement. This summer, we want to activate an audience of young professionals- the kind of folks who are interested in foreign policy, but who aren’t aware that intellectual property protection touches every part of their lives. I think the law school students at your institution may be the type of community that we would like to engage. Additionally, we know that your law school is ranked among the top schools in Intellectual Property law, and thus our campaign may not only be fun, but relevant for you all as well.

So a little bit of a recap from the message that I left you this morning. The Bureau of Economic and Business Affairs wants to start a fake Twitter feud. For this feud, we would like to invite you and other similar academic institutions to participate and throw in your own ideas!

The week after the 4th of July, when everyone gets back from vacation but will still feel patriotic and summery, we want to tweet an audacious statement like, “Bet you couldn’t see the Independence Day fireworks without bifocals; first American diplomat Ben Franklin invented them #bestIPmoment @StateDept” Our public diplomacy office is still settling on a hashtag and a specific moment that will be unique to the State Department, but then we invite you to respond with your own #MostAmericanIP, or #BestIPMoment. Perhaps it will an alumni defending intellectual property in the courts or an article that your institution has produced regarding this topic.

Some characters from the IP community here in DC have agreed to participate with their own tweets: US Patent and Trademark Office, the Copyright Alliance, the Motion Picture Association of America, the Copyright Office, and the Recording Industry Association of America. We hope to diversify this crowd with academic institutions, sports affiliations, trade associations, and others!

Please give me a call or email me with any questions, comments, or concerns. I look forward to hearing from you soon!

Sincerely,
H--------
Official
UNCLASSIFIED

So, let's break this down. This is literally the State Department, working with the IP Enforcement Coordinator (normally called the "IP Czar") to team up with the MPAA, RIAA and Copyright Alliance (a front group for the RIAA and MPAA), along with the Patent & Trademark Office and the Copyright Office to create a fake Twitter feud over who likes copyright and patents more.

Everything about this is crazy. First, the State Dept. should not be creating fake news or fake Twitter feuds. Second, even if it were to do so, it seems to have picked one side of the debate, arguing that greater copyright and patent enforcement is obviously a good thing (how far we've come from the time when it was the State Department that fought back against SOPA and told the White House not to support it).

Separate from that, why are the MPAA, the RIAA and the Copyright Alliance agreeing to team up with the US government to create fake stories? That seems... really, really wrong. I get that they are obsessed with always pushing a misleading and one-sided message on copyright law, but creating out and out propaganda with the US government?

Also, even if the geniuses at IPEC -- an office that was set up in 2008 under another anti-piracy copyright law -- falsely believe it's their job to push Hollywood's message out to the world, how could they possibly have thought it was a bright idea to engage in outright propaganda using Twitter... and to try to enlist law school professors and students in these shenanigans?

I've put out a request for comment from the State Department's Bureau of Economic Affairs, and will update this post if I hear back.

Filed Under: #bestipmoment, bestipmoment, bureau of economic affairs, copyright, copyright office, fake news, fake twitter feud, ip czar, ipec, patents, state department, uspto
Companies: copyright alliance, mpaa, riaa