Patents for Humanity

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The Obama administration recently announced a renewal of Patents for Humanity, a USPTO program promoting the use of patented technologies to address worldwide humanitarian needs.  Patents for Humanity is part of the President’s program to strengthen the patent system and to promote innovation by recognizing patent owners and licensees who using their patented technology to improve global health and living standards for the less fortunate.  In addition to public recognition for their contribution to humanitarian needs, the winners will receive an acceleration certificate that gives expedited processing of select matters (e.g. moving patent re-examination proceedings to the front of the queue) before the USPTO. The first Patents for Humanity was implemented in February 2012 as part of an initiative to solve long-standing development challenges.  Participants described in their applications how they've used their patented technology or product to address humanitarian issues (defined as issues “significantly affecting the public health or quality of life of an impoverished population”) in one of the four categories: medical technology, food and nutrition, clean technology and information technology.  The first 1,000 applications that met the competition requirements were considered, and the applications were independently reviewed by three judges selected from academia for their expertise in medicine, law, science, engineering, public policy, or a related field.  The judging process applied three neutrality principles – technology-neutral, geographically-neutral, and financially-neutral.  The program considered inventions from any field of technology that met the competition criteria. The targeted impoverished population may be located anywhere in the world.  And any means of getting technology to those in need may qualify without regard to financial consideration.  Lastly, the program considered the diversity of contributions in order to highlight global humanitarian contributions across all types of technology, organizations, and practices. The 2012-2013 program recognized 10 winners and 6 honorable mentions.  The medical technology category was divided into a category for medicine & vaccines and a category for diagnostics & devices.  The winners of the pilot program include research institutions like University of California, Berkeley and industry leaders, such as Microsoft and Proctor & Gamble.  USPTO expects to open applications for the 2014 Patents for Humanity program in April.  The latest USPTO announcement states that the 2014 program will be structured similarly to the pilot program that was introduced in 2012, with a few changes based on the feedback from the pilot program.

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March 11th, 2014 at 9:33 am

Give Me A Break [From Litigation]

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Litigation and trademark registration decisions throughout the world are now struggling with an important question: should Nestlé be permitted to have a trademark in their Kit Kat candy bar shape? It seems that the answer varies by country. Recently, Nestlé has become embroiled in litigation in South Africa over its trademarked chocolate Kit Kat bars. IFFCO, a United Arab Emirates company created and sold candy bars in the same shape under its Quanta Break and Tiffany Break names. Nestlé claimed that these delicious candy bars are “virtually identical” to their Kit Kat candy bars. IFFCO then sought to annul Nestlé’s Kit Kat trademarks in South Africa. [1] In November 2013, the South African Court determined that, although the Kit Kat finger-shaped candy bar is a well-known and fully valid trademark, IFFCO was not seeking to pass their candy bars off as Kit Kat bars. Nestlé, upon appeal, seeks to argue that their use of essentially identical chocolate finger shapes amounted to trademark infringement and dilution. [2] Furthermore, despite receiving European-wide protection last year for the candy bar, Nestlé may not receive trademark protection for the Kit Kat in the United Kingdom either. Their attempt to trademark the shape of their Kit Kat bar was opposed by Cadbury, likely as a response to Nestlé’s earlier opposition to Cadbury’s registration of their purple wrapper color. [3] This case was recently referred to the European Union Court of Justice for additional guidance .[4] Surely, the shape of the Kit Kat bar is distinctive; but the distinctive packaging, in addition to the Kit Kat imprint upon each chocolate wafer, should be enough to prevent consumer confusion. Is it appropriate for trademark law to give Nestlé an effective monopoly on a particular candy shape? Clearly the South African Court did not think so and it will be interesting to see how this plays out in the United Kingdom.

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March 8th, 2014 at 5:35 pm

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Is Netflix Safe?

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Just as Frank Underwood turns to you to share his secret plan to become president of the United States, a buffering signal pops up on your computer. 2% then 23% then 68% then 2% all over again. All you want to do is finish this one episode so you can go back to work and actually get some sleep! But, the hour-long episode has already taken up an hour and a half of your time, so do you stick it out or give up? If the Comcast-Time Warner merger is finalized this dilemma could become a non-issue for about one-third of the country’s broadband subscribers. [1]. On Sunday, Comcast and Netflix announced that Netflix would be streamed directly to Comcast subscribers, which should give them “faster and more reliable access” to Netflix. [2]. This change in streaming strategy may have been partially motivated by Netflix recently reporting that the “delivery speed of its content to Comcast subscribers had declined by more than 25 percent.” [3]. Although we should applaud the ability to watch a one hour show seamlessly, some consumer advocates are worried that customers will be the ones paying for this increased speed. [4]. In the announcement, neither Netflix nor Comcast explained the details, except to note that Netflix “receives no preferential network treatment.” [5]. As of now, it appears that Netflix is in a very strong position for the foreseeable future. However, this may be fool’s gold. There is no guarantee that the Comcast-Time Warner merger will go through. [6]. But even if the deal is approved, Comcast will have much more bargaining power during the next round of negotiations with Netflix. Netflix’s policy was to not pay broadband providers for access to their network, but their recent agreement with Comcast could signal a shift. [7]. Furthermore, last month the Court of Appeals for the District of Columbia limited the FCC’s power to regulate the Internet, giving providers much more freedom in designing their service offerings. [8]. During oral arguments Verizon suggested that it would pursue various service models. [9]. This could lead to different pricing structures which could potentially harm Netflix’s relations with its customer. [10]. This combination of events shows that Netflix must continue to strengthen its content and customer bases to ensure that it will have enough leverage to reach favorable terms with broadband providers.

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March 7th, 2014 at 3:08 pm

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“Dumb Starbucks” and The Parody Defense

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In February, the Los Feliz neighborhood of Los Angeles, CA found itself at the center of national media attention when a new local business by the name of “Dumb Starbucks Coffee” opened its doors to the public. Patrons waited in line for hours  to purchase a cup of coffee from this “parody coffee shop,” which is not affiliated with Starbucks but uses the name and logo of Starbucks, and is “nearly identical to a typical Starbucks location.”  Before being shut down by LA County health inspectors for operating without a valid permit, the shop caught the attention of Starbucks, which stated in an email that the company “appreciates the humor” but would be “evaluating next steps” to ensure that the new shop could not use its name. “Dumb Starbucks” claims it is not a regular coffee shop, but rather an "art gallery", and that the coffee it sells (which received mixed reviews from patrons) is “actually the art.”  But what difference does this proclamation of artistic purpose make to Starbucks’ contention with the shop’s use of its protected trademark? The answer is that US trademark law provides a fair use exception to trademark infringement/dilution. Under this exception, it is legal to use a famous mark if such use is done in connection with “identifying and parodying, criticizing, or commenting upon the famous mark owner or the goods or services of the famous mark owner.” “Dumb Starbucks” claims it is living and breathing the exercise of that fair use exception, considering itself “a work of parody art.” There can be some social benefit derived from allowing such parody and commentary, which is likely why the exception was carved out in the first place. Though many would easily write “Dumb Starbucks” off as going too far to be considered a parody within the meaning of the fair use exception, it could be argued that the shop is providing “a legitimate political statement about consumerism”, or just that it’s mocking “Starbucks culture” and brand obsession in today’s world. However, the issue in this particular situation may soon be moot anyway because, as previously mentioned, the shop is not currently operating, and additionally, a Starbucks spokeswoman has stated that the company handles the majority of its trademark disputes informally. If "Dumb Starbucks" were to find its way into a court room over this conflict, it doesn't seem likely that its parody defense would pass muster, as by its own admission in the FAQ posted on its premises, the shop was “simply using [Starbuck’s] name and logo for marketing purposes . . . .” In fact, the man behind “Dumb Starbucks” has revealed himself to be Nathan Fielder, a comedian who was planning to use footage of this stunt for his television show. These revelations detract from the credibility of the store’s claim that it is “technically "making fun" of Starbucks and is considered parody art. The case law on fair use exceptions does not lend any solid answer to this inquiry, as there are no hard lines used by the courts to determine when the defense will succeed, and similar situations have led to different results. What is clear from the case law is that parody is “not an automatic defense," and if this matter somehow finds its way into court, "Dumb Starbucks" will have to do more than just toss around the right words.

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March 6th, 2014 at 7:28 pm

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Smart Licensing Lifts Lego to the Top of the Toy World

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So when exactly did the brightly colored building blocks we played with as kids transform into a wildly successful multimedia entertainment platform? On February 7, the Lego Movie stormed theaters and notched one of the top opening weekends ever for a non-sequel animated film. Outside the cinema, Lego-themed video games and building sets featuring licensed properties have become incredibly popular with both children and adults. The most obvious indicator of the company’s recent success is its new position as the most valuable toymaker in the world. So how did they do it? Some of the success can be attributed to a forward-thinking business model that managed evolve the brand while honoring tradition. But mostly the new Lego is the product of lucrative licensing. Lego’s breakthrough with licensed intellectual property began in 1999 with an agreement to license Star Wars characters and vehicles. Since the closing of that deal, Lego has sold over 200 million Star Wars Lego boxes and negotiated a new deal in 2012 that will allow the company to produce Star Wars themed products until 2022. On the heels of the Star Wars success, Lego smartly committed itself to obtaining licensing arrangements with established brand universes, including Harry Potter, Lord of the Rings, DC Comics, Marvel and Disney. The move paid off. In 2012, royalty expenses amounted to $263 million while profits reached $4 billion. Licensing intellectual property has been a backbone of the toy business for decades, so why is Lego’s model making such a huge difference to its bottom line? For starters, the screening process for determining which properties Lego licenses is incredibly detailed, and its managers turn down far more licensing opportunities than they accept. By partnering exclusively with brands of wide global appeal, Lego has been able to ensure that the quality of its own brand isn’t diluted via association. Smart property selection helps, but what really sets Lego apart from other toymakers is the way it blends licensed properties with its own style to create what are essentially new properties. As a result, Lego’s Star Wars platform is more than mere reproductions of iconic Star Wars characters and vehicles in Lego form. It has become its own brand, Lego Star Wars. Additionally, many Lego interpretations of classic characters have assumed their own personality, and are often far different than their film or comic book counterparts. For example, the original Batman is dark and brooding, but Lego Batman is comedic and suitable for children. Lego has also been able to secure separate licensing deals from brands that are themselves fierce competitors. While Warner Brothers and Disney engage in an arms race of intellectual property acquisition to order to bring ensemble blockbusters to the big screen, Lego works behind the scenes knowing that it stands to benefit from the success of both companies. In 2015, Disney will launch Avengers 2: Age of Ultron, and Star Wars Episode VII, two of the most highly anticipated movies of all time. In the same year, WB--who distributed the Lego Movie --will launch the tentatively titled Batman v. Superman, it’s own long-gestating ensemble act featuring a slew of globally recognized comic book characters from the DC comic book universe. With the necessary licensing agreements already in hand, Lego will be ready to capitalize on the success of all three, suggesting an even brighter future for the brightly colored building bricks.

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March 5th, 2014 at 2:40 pm

Oops–fraudulent data behind recent patent grant

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Patent-seeking inventors may spend countless hours perfecting that grand idea that sparked its way into their brains while returning from a hunting trip--in the case of that useful adhesive we know as velcro--or while watching a cat pull feathers through a cage--as in Eli Whitney's cotton gin (read more here).  And individual inventors rush to file patents knowing that the system will likely protect their ideas. They may or may not be prepared, however, for the length of time a patent application is pending before issuance. They might end up spending countless more hours negotiating with the patent office. This is the modern reality for patent holders. The sheer number of patent application filings each year coupled with an insufficient number of qualified examiners means that the USPTO is overburdened. Depending on the field, patent procurement can take several years (See USPTO's Performance and Accountability Report and Patently-O's post).  The backlog of patent applications at the patent office has even led a prestigious federal judge to declare that the system is broken. In spite of these problems, the USPTO is attempting to right the ship. The patent office has opened several satellite offices across the country and has hired more examiners to meet the onslaught of application filings, and has churned out record numbers of patent grants each successive year since 2008. So, credit where credit is due--it seems like the patent system is improving after all. But then it comes to light that the USPTO has granted a patent based on fraudulent work. On February 18th a patent was awarded to Hwang Woo-Suk for his work creating an human embryonic cell line through cloning. In short, Dr. Woo-suk claimed that an individual's genes - say from a skin cell - when extracted from its differentiated cell could combine with an egg cell to yield a stable embryonic cell line that has the individual's DNA profile - in effect, a clone. It sounds plausible enough. Plausible enough to get a patent. However, the work was fraudulent. In other words, the science behind the patent was wrong. While it is true that actual reduction to practice is not necessary to get a patent, the utility requirement should ensure that useless inventions are not patented. The USPTO's manual further states that fraud is grounds for patent invalidity. It seems clear that Dr. Woo-suk's patent will be invalidated, but what about the patent office? Is our patent system too lax? Was this just a one time mishap, or is this the cost of increasing the number of patent grants? Hopefully, something like this won't happen again.

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February 24th, 2014 at 11:02 am

“Deleting” Memories

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At a mere three pounds, the brain is the most complex organ in the human body. It contains 100 billion neurons and is capable of storing roughly 2.5 petabytes of data. This functionality is mind boggling--as is the fact that despite all this capacity, I can’t even remember where I put my phone. [1] Some of the memories stored by the brain, such as childhood abuse and atrocities of war, can have a traumatic and negative impact on our lives.  A handful of recent studies have shown that it may be possible to get rid of or even reshape some of our memories.  One obvious motivation for this research is the potential that it will lead to treatments for depression, addiction, and post-traumatic stress disorder (PTSD). [2] One study used electro-convulsive therapy immediately after memory recall to reshape memories.  The researchers were able to effectively eliminate the memories of a story told to the study participants in the experimental group. [3] Other studies have shown that it is possible to delete and manipulate the memories of rodents through chemical intervention.  [4] [5]. The idea that scientists can manipulate and delete our memory raises some ethical and legal questions.  There definitely are some potential positive applications such as the treatment of PTSD.  It also seems unlikely that someone could delete our memories against our will, although this may become an ethical concern in the future.  However, there may be some cases where involuntary treatments are ethically ambiguous.  For example, a parent might want to protect their child from the memories of a traumatic event. On the other hand, consider what would happen if mass groups of people chose to forget parts of our history such as war atrocities that have shaped who we have become.  While there is an obvious interest in relieving people from suffering, there is also an interest in preserving history. [6]  These hypotheticals raise difficult questions that the law will need to address as the research into shaping memories continues.

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February 19th, 2014 at 1:27 pm

As Patent Litigation Reaches “DEFCON 1,” Tech Companies Look for Alternatives

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Non-practicing entities (NPEs) are nothing new in the world of patent litigation, but this past October, NPE litigation reached a new level when the Rockstar Consortium filed an infringement suit in the Eastern District of TexasRockstar Consortium (not to be confused with Rockstar Games, a videogame developer) is not a well-known name to the public: the company doesn’t actually make anything. Instead, Rockstar makes money by licensing its large (approximately 4,000 strong) portfolio of patents and enforcing its intellectual property through legal action. Rockstar employs a small cadre of engineers and technicians to reverse-engineer consumer electronics products to determine whether they might infringe one of its patents. When an engineer identifies a potentially infringing product, Rockstar’s attorneys approach the alleged infringer, likely threatening legal action if a settlement isn’t reached. However, what distinguishes Rockstar from a run-of-the-mill NPE is the support that it has received from traditional technology giants. Rockstar was formed shortly after the bankruptcy of the former Canadian telecommunications giant Nortel Networks. Nortel auctioned off its stash of patents, and “Rockstar Bidco,” backed by the unliely alliance of Apple and Microsoft (among others), won the auction with a bid of $4.5 billion, beating Google after many rounds of bidding. After distributing approximately 2,000 patents directly to its sponsors, a newly minted “Rockstar Consortium” remained with a cache of 4,000 patents to enforce. Two years of anticipated litigation was finally realized when Rockstar asserted patent infringement contentions against Google, Samsung, and a number of other companies who manufacture Android smartphones. Technology industry commentators called the act “DEFCON 1” in the patent wars. Google now faces a well-funded opponent, supported by Google’s direct competitors, with a large cache of high-quality patents. While the exact implications of this litigation have yet to be determined, Google is certainly facing potential disruptions to the distribution of its Android mobile operating system, possible licensing deals that could seriously damage its future profitability, and the near-certainty of spending many millions of dollars in legal costs. Google’s recent cross-licensing agreement with Samsung suggests that it may be looking for alternatives to litigation, and it would probably make good business sense for Google to explore options for resolving this dispute out of court.
 

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February 18th, 2014 at 11:24 am

Coalition for Patent Fairness Attempts to Curb Inefficient Patent Litigation

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On February 5, 2014, Google and Cisco announced a long-term cross-licensing deal. The agreement permits either company to utilize the other company's patent portfolio. That day, Cisco also agreed to a similar cross-licensing agreement with Samsung. Last week, Google also reached a cross-licensing agreement with Samsung. Why are there so many of these cross-licensing agreements? It begins with intense competition in the technology sector. Companies with large patent portfolios have a financial incentive to sue other infringing companies to either procure licensing fees or protect market share. Of course, other companies may have large patent portfolios as well, and they can counter-sue for infringement of their patents. Thus, we have a form of mutual deterrence. Each company is infringing on patents of the other, and it is often impossible to predict how a judge or jury will decide the case. Companies don't deal well with uncertainty and often choose not to roll the dice. As a result, very few of these cases go to court. The cases that we do see involve highly sophisticated markets such as the smartphone battle between Samsung and Apple, which resulted in a near $1,000,000,000 judgement to Apple. There is another aspect to the patent litigation game. As mentioned above, large companies are deterred from suing each other because of the risk of countersuit. However, a large company could contract with a patent assertion company (or "patent troll") to sue the other corporation on its behalf. The company maintains anonymity and gains the desired market advantage. In these proxy lawsuits, it is often hard to determine the actual interested parties. Companies can in effect hire paid guns to do their dirty work. Fittingly, this practice is called "patent privateering." And to many, this is seen as inefficient and undesirable for the economy. The Coalition for Patent Fairness is such a group that believes that the current method of doing business  is broken. As stated on their website, the Coalition is "a diverse group of companies dedicated to enhancing U.S. innovation, job creation, and competitiveness in the global market by modernizing and strengthening our nation’s patent system." Google, Cisco, and Samsung are companies in the Coalition. By negotiating long-term cross-licensing agreements, these companies are announcing that they are tired of the gamesmanship and shadow tactics common in the technology industry, and they are choosing to compete in the marketplace. Hopefully, in time, more companies will follow their lead.  

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February 17th, 2014 at 11:55 am

Free Taxi to Rick’s? The Exciting Future of Google’s Automated Cars.

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In January, the Google patent machine churned out this latest patent entitled “transportation-aware physical advertising conversions.”  The patent describes a method of weighing the profit an advertiser could expect to make from a potential customer, the likelihood of that sale being made, and the cost of transporting the customer to their location.  With that information, a kiosk or phone app could then determine whether it would be cost-effective to offer that particular customer a free (or low-cost) ride to an advertiser’s location. The abstract notes that “the calculation may consider various factors including a consumer's current location, the consumer's most likely route and form of transportation (such as train, personal car, taxi, rental car, or shared vehicle), the consumer's daily agenda, the price competing advertisers are willing to pay for the customer to be delivered to alternate locations, and other costs.” Notably, the program would take into account alternative transportation options, as well as integrating bidding among multiple advertisers.  Consumers looking to purchase high-end clothing, for example, might lead to dueling offers between Saks Fifth Avenue and Bloomingdale’s. What's most exciting  is that this patent foreshadows the future integration with Google's driverless car.  Google is not alone in its development of driverless cars; several major car companies have recently unveiled their own vehicles with an “auto-pilot” feature.  While this technology is still far from perfect – the cars often require driver “intervention” to change lanes and navigate other situations - it has made great strides just in the past year alone. One obstacle to getting driverless cars on the road, aside from issues with public perception, is the legal reform that will have to take place before driverless cars are allowed to operate freely on public roads.  Our home city of Ann Arbor is taking a front seat in the development of this technology with a commitment to introduce 2,000 driverless cars to its roads over the next eight years. The DMV is currently reviewing changes to rules to allow for the testing and driving of driverless cars on public roads by private companies, and those changes are expected to be adopted by January of next year.  Despite these regulatory complications, the general consensus is that automated cars are the way of the not-so-distant future, and Google's latest patent provides a glimpse into the world of exciting technological innovations that will come along with them.

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February 11th, 2014 at 12:16 pm

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