Stupid Patent Of The Month: Buying A Bundle Of Diamonds

from the assignor-estoppel dept

This month's Stupid Patent shows what happens when the patent system strays outside its proper boundaries. US Patent No. 8,706,513 describes a "fungible basket of investment grade gems" for use in "financial instruments." In other words, it's a rating and trading system that attempts to turn diamonds into a tradeable commodity like oil, gold, or corn.

Of course, creating new types of investment vehicles isn't really an invention. And patents on newfangled financial techniques like this were generally barred following Bilski v. Kappos, a 2008 Supreme Court case that prevents the patenting of purely financial instruments. Since then, the law has become even less favorable to abstract business method patents like this one. In our view, the '513 patent would not survive a challenge under Bilski or the Supreme Court's 2014 decision in Alice v. CLS Bank.

Despite its clear problems, the '513 patent is being asserted in court—and one of the people best placed to testify against the patent may not be allowed to.

The public's right to challenge a patent in court is a critical part of the US patent system, that has always balanced the exclusive power of a patent. It's especially important since patents are often granted by overworked examiners who get an average of 18 hours to review applications. 

But there are two types of persons that, increasingly, aren't allowed to challenge problematic patents: inventors of patents, and even partial owners of patents. Under a doctrine known as "assignor estoppel," the Federal Circuit has barred inventors from challenging patents that they acquired for a former employer. Assignor estoppel was originally meant to cover a narrow set of circumstances—inventors who engaged in fraud or bad dealing, for instance—but the nation's top patent court now routinely applies it to prevent inventors from challenging patents.

Patent scholar Mark Lemley flagged this problem in a 2016 paper, noting assignor estoppel could be used to control the free movement of employees or quash a legitimate competitor. "Inventors as a class are put under burdens that we apply to no other employee," he wrote. "If they start a company, or even go to work for an existing company in the same field, they will not be able to defend a patent suit from their old employer."

In this case, the Federal Circuit's expansive view of assignor estoppel may prevent a person who owned just a fraction of a patent from fighting back when that patent gets used in an attempt to quash a competing business.

Despite the fact that this gemological trading system should never have been granted a patent, so far, it's being successfully used by its owner to beat up on a competitor—and the competitor could be barred from even challenging the patent by assignor estoppel.

Competing Diamond Companies

GemShares was created in 2008 to market "diamond investment products." The original partners were joined in business by a man named Arthur Lipton, who bought 20% of GemShares in 2013. He struck a deal not to compete with GemShares.

GemShares says [PDF] Lipton broke that deal in 2014, when he started working on his own project, a "secure diamond smart card," and filed for patents related to it. But in addition to breach of contract, GemShares sued for patent infringement. They said Lipton's new business violated the '513 patent.

The litigation also involves breach of contract claims, and allegations of fraud from Lipton's former partner. Without getting into the weeds on all that, the defendant in this case may not even be allowed to argue that the "gem financial product" patent is invalid. Earlier this month, the judge overseeing the case issued an order [PDF] noting that "the Federal Circuit has upheld the doctrine of assignor estoppel, which precludes an inventor-assignor of a patent sued for infringement from arguing the patent's invalidity."

The Federal Circuit has made assignor estoppel so powerful, in fact, that Lipton's 20% ownership contract with GemShares may be enough to stop him and his lawyers from mounting an invalidity defense.

It's bad policy to stop the public from challenging bad patents, and assignor estoppel should only be used in narrow cases, like outright fraud. As it's been applied by the Federal Circuit, it's destined to be used in exactly the way that Lemley warned it would—as an anticompetitive cudgel.

We agree with the brief signed by Lemley and more than two dozen other law professors [PDF] in EVE-USA, Inc. v. Mentor Graphics Corp., arguing that the Supreme Court should take up this issue and keep assignor estoppel within the narrow limits it originally intended.

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

Filed Under: assignor estoppel, diamonds, patents, securitization, stupid patent of the month

DailyDirt: Harder Than Diamond (But Not As Pretty Or Available)

from the urls-we-dig-up dept

Diamond is a fascinating material. We haven't quite perfected how to make diamonds, so they're still rare -- and somewhat valuable, depending on the eye of the beholder. One aspect of diamond that everyone learns in school is that it is really, really hard. However, the title of "hardest" material might have to be awarded to other exotic substances.

• Diamond is the standard for comparing the upper end of the hardness scale -- and it's a naturally occurring mineral that defines what "ultra-hard" materials are. A newly discovered form of carbon called Q-carbon is harder than diamond (pending verification), and it can be made at room temperature and pressure with lasers (though currently only as a film up to 500 nanometers thick). This synthesis method can also produce diamond-like films, too. [url]
• A material called ultrahard fullerite is difficult to synthesize, but researchers are still looking for better methods to make this stuff. Ultrahard fullerite, made of a 3D polymer of connected fullerenes, can be twice as hard as natural diamond. Similar synthesis methods might also lead to aggregated diamond nanorods -- the least compressible known material (so far). [url]
• Diamond was once the hardest known naturally occurring material, but lonsdaleite (aka hexagonal diamond) was first identified in meteorites in 1967 -- and could be harder than diamond. There are a few other "harder than diamond" candidates, too, but they're not naturally occurring. Lonsdaleite is "theoretically" harder than diamond, but natural samples vary in quality and many are softer than diamond. [url]

After you've finished checking out those links, take a look at our holiday gift ideas for cool gadgets and other awesome stuff.

Filed Under: aggregated diamond nanorods, allotrope, carbon, diamond-like, diamonds, hexagonal diamond, lonsdaleite, materials, q-carbon, ultrahard fullerite, ultrahard materials

DailyDirt: Lots Of Cool Carbon-Based Molecules

from the urls-we-dig-up dept

The history of materials once correlated highly with the development of civilization: the Stone Age, the Bronze Age, the Iron Age, ... the Silicon Age.... However, we seem to have gotten away from huge advances depending on the discovery of new materials. Or maybe we just haven't discovered how to make the right materials yet (e.g., room temperature superconductors, nanotubes, etc). Here are just a few interesting materials that might change the world (if we can make them).

• Diamond nanothread is a stable form of one-dimensional diamond, and it could be a very useful material if we figure out how to make it reliably in large quantities -- with just enough defects to prevent it from being too brittle. Graphene is a similar "wonder material" that promises breakthrough properties, if only we could manufacture it correctly. So far, diamond nanothread can only be made a couple of cubic millimeters at a time, but it could someday make ultra-strong materials for space elevator tethers and other applications that currently remain in the realm of science fiction. [url]
• The potential of graphene has been held back by the expense of manufacturing it, but that might change in the near future. Researchers claim that large-area graphene sheets can be made about 100 times cheaper than ever before, using commercially-available copper foil. Billions are being spent to crack graphene production issues, so we're presumably going to see graphene-based products in our lifetimes. [url]
• A modified buckminsterfullerene molecule called a "buckybomb" (or dodecanitrofullerene) could be a new class of high energy nanomaterials. This stuff actually needs to be synthesized first to determine if it's actually as explosive as the simulations predict it will be, but if anyone dares to make this molecule in significant quantities, it could be many orders of magnitude more powerful than TNT. [url]

After you've finished checking out those links, check out this holiday gift guide for some awesome deals at the Techdirt deals store.

Filed Under: buckybomb, carbon, diamond nanothread, diamonds, explosives, graphene, materials, nanotech, nanotubes, space elevator, tnt

DailyDirt: That Lucy In The Sky... Is A Diamond

from the urls-we-dig-up dept

Diamonds are usually considered expensive rare gems, but they're also just an allotrope of carbon that could be a useful semiconductor material someday. Giant diamonds floating in space could be relatively common, but there's no practical way to go space mining for them. Diamonds aren't easy to make, but some folks are getting better at it.

• There's a star designated BPM 37093 but also known as Lucy. It's a crystallized white dwarf with a diamond at its center about 4,000 km across. In 7 billion years or so, this will also be the fate of our own Sun. [url]
• A super-Earth-sized planet circling 55 Cancri about 40 light years away has been called the "diamond planet" as it was the first known planet thought to be made up largely of diamond. Further study shows that it might not contain as much diamond as once thought, but it's not the only planet that has a lot of diamonds. [url]
• Diamonds might not be as rare in the near future if researchers can make them in a lab... out of peanut butter. Okay, peanut butter isn't the best starting material to make synthetic diamonds, but almost any source of carbon will do. [url]

After you've finished checking out those links, take a look at our Daily Deals for cool gadgets and other awesome stuff.

Filed Under: 55 cancri, allotrope, bpm 37093, diamond planet, diamonds, planets, space, space exploration, synthetic diamonds, white dwarf

DailyDirt: Useful Diamonds

from the urls-we-dig-up dept

Diamonds are a fascinating and unique material. So far, though, manufacturing large diamonds on a large scale isn't very economical, but there actually are a few processes that do make small, commercial synthetic diamonds. If cheap diamonds could be made to arbitrary dimensions, then all sorts of "Diamond Age" technologies could make things more durable or significantly better. (eg. Diamonds could replace silicon as a semiconducting substrate in electronics, and diamond touchscreens would be pretty scratch resistant.) Here are a few uses of diamonds that could provide a bit more value than gemstones.

• Silk-coated nanodiamonds could be injected into living cells and used for medical imaging. The nanodiamonds fluoresce after being illuminated with particular wavelengths of light, and the silk coating makes the nanodiamonds capable of floating freely inside a cell without getting stuck to the cell membrane. [url]
• A diamond anvil cell can compress samples to extreme pressures -- such as those found in the interior of the earth or on distant gas giant planets. Diamonds can take the pressure and are transparent, which allows researchers to watch what's going on in these tiny diamond pressure chambers. [url]
• Diamond nanocrystals (with small defects) could be useful for molecular imaging -- combining NMR/MRI techniques to detect the structures of single proteins. Diamond nanocrystals could also be placed on a scanning microscope for imaging techniques. [url]

If you'd like to read more awesome and interesting stuff, check out this unrelated (but not entirely random!) Techdirt post via StumbleUpon.

Filed Under: biotech, diamond age, diamond anvil cell, diamonds, medical imaging, microscopy, nanocrystals, nanodiamonds, nanotechnology

DailyDirt: Actual Theft & Underground Economies

from the urls-we-dig-up dept

Economists have a hard enough time trying to figure out economic statistics from legitimate businesses and activities that are honestly reported to the government. But every so often, someone points out that the official numbers for unemployment or GDP are more than just slightly off. Here are just a few interesting stories related to some fairly sizable underground economies.

• An underground economy of off-the-book businesses could account for trillions in commerce and employ nearly half of all workers. This gray market called "System D" could be worth $10 trillion per year, making it the biggest economy after the US (which itself has an underground economy estimated to be about 10-20% of its GDP). [url]
• A real-life heist involving about 8 men posing as police officers made off with about $50 million in diamonds from a plane headed for Zurich, Switzerland. It might be difficult for these robbers to sell these diamonds through legitimate routes, so the jewels will probably become part of an underground currency. [url]
• Surprisingly, Tide detergent isn't just soap; it's also used as a currency for buying drugs. Procter & Gamble hasn't seen much of a negative effect on its brand, so bottles of liquid Tide will likely continue to be part of the black market. [url]

If you'd like to read more awesome and interesting stuff, check out this unrelated (but not entirely random!) Techdirt post via StumbleUpon.

Filed Under: black market, detergent, diamonds, gray market, heist, system d, theft, tide, underground economy
Companies: p&g

DailyDirt: Do Not Pass Go, Do Not Collect $200...

from the urls-we-dig-up dept

Sometimes, a free market doesn't create a thriving bazaar of competition. Occasionally, huge monopolies form, and the result is less competition (and sometimes less innovation). Maybe it doesn't matter if you own Mediterranean and Baltic Avenue, but it could if you have Park Place and Boardwalk. Here are a few examples of monopolies you might run into someday.

• Anheuser-Busch InBev and SABMiller own a lot of beer companies, and Anheuser-Busch InBev wants to buy up Grupo Modelo next. If the deal goes through, 46% of the US beer market would be controlled by a single company. [url]
• Eyeglasses aren't exactly hard to make, but they can be surprisingly expensive for a few grams of plastic. Luxottica is the company behind the glasses that about half a billion people wear, but maybe that will change when Google starts selling its fancy eyewear.... [url]
• If you've ever bought (or tried to sell) a diamond, you've probably run across a little company called De Beers. Chemistry professors should curse De Beers for the broadly held myth that a diamond is forever... diamonds are not the most thermodynamically stable form of carbon by a long shot. [url]

If you'd like to read more awesome and interesting stuff, check out this unrelated (but not entirely random!) Techdirt post.

Filed Under: beer, competition, diamonds, eye wear, glasses, innovation, monopoly
Companies: anheuser-busch inbev, debeers, grupo modelo, luxottica, sabmiller

DailyDirt: Caring For Our Pets

from the urls-we-dig-up dept

People with pets sometimes go a bit overboard when it comes to spoiling their animals. There's nothing really wrong with that, but non-pet people might question how the treatment of animals can trump the treatment of people. Here are just a few pet-related stories to ponder.

• An organization in New Zealand is teaching dogs how to drive cars. Imagine the traffic problems if someone shouts, "Squirrel!" [url]
• Cats and dogs are training their owners to respond to their wishes, just like human babies do. Can you resist a cat's solicitation purr? [url]
• The technology for turning departed loved ones (humans) into diamonds has been around for several years, but pet diamondification is where the synthetic diamond memorialization market is heading. A diamond really isn't forever, but nobody wants to hear about the actual thermodynamic stability of diamonds. [url]

If you'd like to read more awesome and interesting stuff, check out this unrelated (but not entirely random!) Techdirt post.

Filed Under: cats, diamonds, dogs, driving, pets, training

DailyDirt: Diamonds, Diamonds Everywhere

from the urls-we-dig-up dept

Creating artificial diamonds could lead to some really interesting semiconductor materials -- or even some insanely hard touchscreen displays (no more scratches!). Fortunately, synthesizing diamond-like materials is getting cheaper and easier, but at the same time, we've also discovered significantly large diamond deposits. But will diamonds still be included in engagement rings when the market prices plummet? Aluminum used to be the most expensive metal in the world... but it's no longer as highly regarded as it once was. Here are just a few links on one of our favorite allotropes of carbon.

• Forget OxiClean. The "power of diamonds" can help clean away tough stains in every laundry load. Nanodiamond particles in laundry detergents can dislodge dirt from fabrics without using hot water -- saving energy and adding some sparkle. [url]
• There's a recently de-classified deposit of impact diamonds in Russia -- and it's so big that it's estimated that this resource could serve the world's diamond needs for 3,000 years. These impact diamonds are twice as hard as traditional gemstones because they're formed when a carbon-rich meteor collides with the earth and the resulting explosion creates this unique material. [url]
• Diamonds aren't as rare as most people think they are -- if you're willing (or able) to travel a few thousand light years, you can find a whole planet made of diamond. A carbon-rich planet that is probably crystalline (and hence diamond-like) orbits the pulsar J1719-1438, and it's the most dense planet seen so far. [url]

If you'd like to read more awesome and interesting stuff, check out this unrelated (but not entirely random!) Techdirt post.

Filed Under: allotrope, carbon, diamonds, impact diamonds, laundry, nanodiamond, oxiclean, planet, russia

DailyDirt: Bring Out Your Dead...

from the urls-we-dig-up dept

Dying is usually not a pleasant eventuality, but no one has figured out how to live forever yet. So in the meantime, there are all sorts of ways for folks to bury their loved ones. Here are just a few out-of-the-ordinary ways to be laid to rest.

• Elvis Presley's original crypt is being auctioned off, and a really big fan of Elvis will be able to rest in peace where Elvis once did. The bidding starts at $100,000 -- but as the saying goes, "You can't take it with you..." [url]
• There are a bunch of companies that will turn ashes of loved ones (human or pet) into diamonds. Maybe they'll start engraving decoded genomes onto the diamonds, and that'll help preserve even more of our dearly departed. [url]
• Actor James Doohan, who played Scotty on the original Star Trek series, has been launched into orbit to his final resting place -- as (some of) his ashes were aboard the second stage of the SpaceX rocket that met up with the International Space Station. Celestis is the company that provided the service for Doohan, and it usually charges about $3,000 for a gram of ashes to reach Earth orbit. [url]
• To find some more bizarre/crazy stuff, check out some things that other StumbleUpon users have found. [url]  

By the way, StumbleUpon can also recommend some good Techdirt articles, too.

Filed Under: ashes, burial, crypt, diamonds, elvis presley, james doohan, scotty, space, star trek
Companies: spacex