Patent Baristas:  Hello, Bob! I’m very interested in your work with intellectual property insurance. It’s one of those things that I’ve “heard” a lot about but really don’t have any first-hand experience with it. Can you explain the basics of IP insurance so that someone like me can understand?

Robert Fletcher:  IPISC wrote the first-ever IP Abatement insurance policy. This enforcement-type policy, for enforcing IP rights against infringers, has become the bed rock of the company and started IPISC on the road to success. At first the Abatement policy was the main focus and most in demand. The IP Defense policy, for defending against allegations of IP infringement, was created and first sold by IPISC in 1996 due to the demand for a defensive IP insurance product, and quickly became in high demand, and continues to be so. This demand in large part is due to the indemnification requirements for IP coverage in contracts, as well as due to the soaring costs associated with defending against IP infringement claims and the potential associated damages. The Multi-Peril policy was introduced in 2005 by IPISC, available as a rider to the Abatement and/or the Defense policies, and is likewise increasing in demand. Over the past few years, concerns about the financial consequences associated with losing a covered IP lawsuit have continued to drive interest in the policy. The Unauthorized Disclosure policy has received more interest due to the high number of companies outsourcing their confidential information to a third party in conjunction with manufacturing.

Baristas:  What seems to be the word on the street is that IP insurance is so expensive that it’s not worth it? Of course, no one seems know how expensive, just too expensive. Can it be worth it to a company? Is there a particular market size for the company that would benefit most? Can you give us some real numbers as to costs?

Fletcher:  Companies that are successful or have innovative IP are more likely to be involved, either offensively or defensively, in an IP lawsuit. According to the most recent survey by the AIPLA, the cost to litigate a patent infringement lawsuit averages $2.8M dollars when the amount in controversy is between $1M and $25M. Damages average close to $9M. With these escalating costs and exposures, insurance cost should not be the issue; it should be the company’s survival- its ability to stay in business.

The high “cost of insurance” argument is at best flawed. The small to mid-sized companies cannot really put a price on the cost of going out of business. Even the insurance underwriting process itself is beneficial and informative. It’s simply good business and legal practice to know the strengths and weaknesses of a patent whether owned by the applicant for insurance or facing him.

IPISC’s policyholders, whether small or large, understand well the value proposition represented by these products. As these products are specialized and complex to underwrite, there is a good deal of discussion with the applicant and agent prior to binding. Thus initial focus on price quickly transforms into focus on value.

There are no typical risks in this business, so it is difficult to talk about a typical premium.  There are many different factors evaluated and formulas employed to determine final risk and associated premium. For example, for the abatement coverage some of the factors affecting the risk include the number of IP to be insured and the particular industry.  Ballpark annual premium estimates for traditional abatement coverage can run from a few thousand dollars to over $25,000. for limits of one million per claim.  An average defense policy may likely be in the range of $35,000 for limits of two million per claim for a standard risk.

Baristas:  When do I need Intellectual Property Insurance? I imagine most companies start thinking about IP insurance right around the time they learn that they might be infringing someone’s IP or someone is infringing their own IP. Can they get coverage if there is already a known infringing/infringed party at the time they ask for the insurance policy?

Fletcher:  In fact, waiting until they “may be infringing” or “someone is infringing their IP” is absolutely the wrong time to think about IP insurance. As the saying goes, “you can’t get fire insurance if your house is already on fire.” The same is true with IP insurance.  Companies cannot get coverage for an existing problem; that is why IPISC encourages the applicant to be proactive about managing their IP risk by insuring early. The Abatement, enforcement, policy uses an objective test when determining infringement. Pre-existing commercial activity, whether known or unknown, is generally excluded from coverage under the enforcement policy. That is why it is important to secure coverage for intellectual property while it is in the application stage. The Defense policy excludes pre-existing “threats” of infringement, not the actual infringing activity itself. We recommend that companies secure coverage well in advance of launching their product lines and/or services.

Baristas:  I understand that there are two types of patent infringement policies: (1) defensive policies that cover you if someone sues you for violating a patent; and (2) offensive policies that help pay your attorney fees and other costs if you sue someone else for violating a patent. Does a company have to buy both? Should they?

Fletcher:  No, companies are not required to carry multiple policies, though it is recommended to fully protect a company’s IP assets. IPISC’s IP insurance Abatement, Defense and Unauthorized Disclosure policies are stand-alone, with separate limits. An insured can opt to purchase a combined policy, Abatement & Defense, but will share the aggregate policy limits (which may be greater than the stand-alone policy). The Multi-Peril policy is available as a rider to the Abatement and/or the Defense Insurance policy, which may or may not share the limits of the underlying policy. It may also be available as a stand-alone policy with separate limits, but still tied to an Abatement and/or a Defense policy.

Baristas:  Many people claim that neither type of patent insurance is a good investment. What factors go into figuring if the insurance is a good buy?

Fletcher:  The policies really are game changers, especially when the policyholder is going up against a larger company, either defensively or offensively, as the policies level the playing field and allow the policy holder to get to the decision based on the merits and not on who has the deepest pockets. Many times the best investment is simply holding an IP insurance policy.

In recent years the infringement allegation scenario has been worsened by a common problem, the much publicized NPEs, a.k.a. “Patent Trolls”, who are notorious for suing companies for the sole purpose of extracting royalties, frequently irrespective of the lawsuit’s merit. Defense insurance policy specific to cover IP risk is the only viable solution. The Enforcement policy provides the means to enforce IP rights against infringers. This scenario is frequently triggered by a “grass-hopper” (a term coined by Chief Judge Randall Rader of the CAFC), which refers to entities that leap in and practice an invention, knowing that the patent holder can do nothing about it. The question is; how does failing to invest money on an insurance premium to protect a company’s most valuable asset, IP, avert either the “Troll” or “Grasshopper” disasters? It doesn’t.

Baristas:  Would the Comprehensive General Liability Insurance (CGL) policies typically obtained by businesses provide coverage?

Fletcher:  Obtaining CGL coverage for patent litigation continues to be a difficult and unpredictable endeavor. Companies may turn to their CGL policies for coverage, but most insurance companies exclude any coverage for IP; and, patents are frequently, specifically excluded. Any coverage for IP under a CGL policy is extremely rare and explicitly limited to the cases where “Advertising Injury” involves the patent claims directly covering the act of advertising itself. Otherwise, a Defense insurance policy specific to cover IP risk is the only viable solution. Companies are well advised to proactively obtain insurance coverage specifically tailored to address their most valuable asset, intellectual property rights. Instead of taking the chance on CGL coverage, a company can obtain a dedicated policy where patent infringement allegations can be explicitly insured without the need to litigate coverage through trial and appeals courts. These dedicated IP policies can even cover the cost of pursuing a CGL carrier in those exceptional cases where it should provide coverage.

Baristas:  Are issues that come up during litigation covered by the policy such as invalidity counterclaims, declaratory judgments or anti-trust issues?

Fletcher:  As part of the Insured’s defense, the Defense policy automatically extends coverage to the cost of an invalidity defense to a charge of infringement, the cost of patent re-examination proceedings initiated as a defense arising out of a lawsuit for infringement and coverage for damages are available (IPISC covers damages back to the date the infringing activity began.) The Abatement policy covers retaliatory declaratory judgments as they arise during the course of approved litigation; and, initial DJ actions if the Insured can charge infringement.

Baristas:  Are there any downsides to getting insurance? Does it make it more likely to be sued? Is the review of the intellectual property prior to quoting a premium discoverable in a subsequent trial?

Fletcher:  Holding an IP insurance policy often makes an insured entity less likely to become involved in frivolous litigation, because the potential opponent can be put on notice of the insured’s financial ability to reach a decision on the merits.

IPISC works with applicants and insureds to minimize exposure of communications to discovery, through use of common interest and non-disclosure agreements, and aggressive defensive response to discovery requests on grounds of relevance and privilege.  Recently, a U.S. District Court fully granted IPISC’s motion to quash a subpoena, noting that “it is difficult to determine whether any particular request may be satisfied without violating work-product and/or attorney client privilege,” and that “the unusual nature of the insured/insurer relationship in the patent context also cautions the Court against allowing such an overbroad request.”  American Medical Systems, Inc. v. Biolitec, Inc., No. 3:11-MC-13-H (W.D. Ky. May 24, 2011).

Baristas:  Does the coverage apply just in the US or worldwide? What about changes in the law like the Patent Reform Act? Does the coverage remain the same or do law changes reshuffle the deck?

Fletcher:  Worldwide coverage is available under all of our policies. The companies do not have to be domicile in the US.

As a result of patent reform, patents are expected to become stronger and more valuable, making companies more likely to enforce their rights granted by patents. While the America Invents Act may limit the litigious disposition of some non-practicing entities, companies arbitrarily accused of infringing activity will continue to be the subject of IP litigation disputes. Due to this uncertainty of the outcome of impending patent disputes, companies are realizing now more than ever that it is critical to have protection for their intellectual property assets in place through specialized IP insurance products. Coverage remains the same and is not dependent upon changes in the law.

Baristas:  OK, you must have some really good war stories. Tell us the scary things that have happened — and give us names.

Fletcher:  Sure…Sensormatic Electronics Corp. v. EAS Sensorsense, Inc.  (ED Texas; No. 04-cv-167-TJW) A federal court jury in Marshall, TX rejected the patent infringement allegations of Sensormatic Electronics Corp against WG Security Equipment, Inc. and EAS Sensorsense, Inc. (Insured through IPISC). The plaintiff filed suit in alleging infringement of three patents, one of which related to shoplifting deterrence tags or electronic article surveillance (EAS) tags.  The jury found unanimously that none of the claims of any of the patents were infringed. The jury’s decision was reportedly the first verdict in the Eastern District of Texas for a defendant accused of patent infringement in the past twenty-one cases that have gone to trial. Our Insured stated that the defendants would have been more exposed with less guidance and resources had it not been for their patent infringement defense insurance policy through IPISC that covered the litigation costs and any potential liability. “You never know when you will need insurance,” said Art Fuss of EAS. “Unless you have gone through the experience of defending your company in patent litigation it is hard to identify what is and is not necessary in those circumstances.”

Baristas:  Bob, you’re a good sport. Any other advice for companies already freaked out but this article?

Fletcher:  Intellectual property exposure can be a significant risk to companies, yet many legal and insurance professionals are not proactively advising their clients about the availability of IP coverage. Assessing your IP risk and ensuring companies have the right protection in place for this potentially costly exposure is essential to a company’s overall financial survival. You do not have to be an IP insurance expert, but it is important to work with proven IP insurance experts.

Robert Fletcher is the President and CEO of Intellectual Property Insurance Services Corporation (IPISC).  In addition to founding IPISC 20 years ago, Mr. Fletcher is a patent attorney with more than 40 years of experience in the prosecution of patents and the business and legal phases of patent practice. He holds degrees in Chemical Engineering and Law from the University of Wisconsin and an MBA from the University of Louisville.   He can be contacted at bfletcher@patentinsurance.com or 502-491-1144.  (www.patentinsurance.com)

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At this year’s convention, I met either the most interesting person I’ve ever met or the craziest person I’ve ever met.  Or both.  Meet Robert Cantrell of Think IP Strategy.

PB: Robert, you have been an IP Strategist, MBA, author on business and military strategy, a professional shark photographer and now a documentarian of the world’s most dangerous sharks.  Just what haven’t you done?

RC:  Hi Stephen.  I have not and probably will never go bungee jumping off a bridge.  Every risk needs to have a purpose.

PB: So, you were sitting around one day and you said, “Hey, I could make a movie about swimming with dangerous sharks.”  How did that come about and did your friends and family think this was a good idea?

RC:  This part was easy.  My friends and family are highly supportive because they have seen my still photography work with sharks and have wanted me to combine that with my writing.  They had been encouraging me to do this.

PB: Is there something about the Oceanic Whitetip Shark that made you want to swim with them in the dark?

RC:  Conventional wisdom was that you do not dive with oceanic whitetip sharks at night.  Jacques Cousteau called them “The most dangerous of all sharks.”  These are the sharks that historically have shown up at open ocean disasters such as the sinking of the USS Indianapolis in 1945, made famous by the monologue of Quint (Robert Shaw) about living through the experience in the movie Jaws.

There is a famous night sequence in the 1970 shark documentary Blue Water, White Death, by Peter Gimbel, that showed multiple oceanic whitetip sharks feeding at night.  Peter’s team shot that sequence from within shark cages.  Peter said that he regretted that the team had not left the cage at night…they had been the first team to venture out during the day.  That documentary had an influence on me growing up, and this was an opportunity to answer that regret as best we could with multiple oceanic whitetip sharks at night.

PB: How long did it take to prepare for the project?

RC:  It took ten months from concept approval in August 2010 to wrapping up filming in June 2011.  Post-production is in progress now.

PB: Did you have certain expectations going into this project? Did you have anything specific in mind that you knew you wanted to include in the day you filmed?

RC:  Things happened remarkably as expected, even with challenging weather, which is a big wildcard.  I had been on site with the oceanic whitetip sharks before, so I knew what everything was going to look like and how the sharks were likely to behave.  I also knew everyone I asked to participate in the shoot – 10 people in total from camera to crew – and we had people predisposed to work well with each other and offer creative suggestions.  We had three contingencies: 1. A story line if we succeeded with the night dive.  2. A story line if the night dive did not happen.  3. An alternative tiger shark shoot if we found no oceanic whitetip sharks at all.  As it was, we shot a rather extensive storyboard plan pretty much as written, with only a few additions and deletions as new or better opportunities presented themselves.

Now, emulating movie making, we want to make sure that every clip of dialog we use, every narration, and every picture shown has a purpose to drive the story forward.  We have an overabundance of material will help us in this – many documentaries actually find themselves short of material.

PB: What is the most amazing thing you’ve learned working on All Fins On?

RC:  This shoot reinforced several strategy principles I teach in my strategy courses – and itself quite resembled the best part of small unit military planning I used to do, albeit with multiple cameras instead of weapons.  The whole planning and operation was an exercise in, piece-by-piece, reducing the uncertainties I could control so that we could focus on the uncertainties we could not control…such as whether we would find any oceanic whitetip sharks at all.  It became organized flexibility at its best.

PB: It’s clear that you have a genuine appreciation of sharks that seems to come from personal experience. What kind of animals did you grow up with, and what kind of relationship did you have with them?

RC:  We always had a family dog, and I have often had tropical fish.  Since I left college, I have been on the road too much to make keeping a dog practical, however, the fish do fine with an automatic feeder.  The more I see the wild, however, the more I regret that any animal that would not voluntarily stick around should have any confines at all…including people.

PB: Veteran nature film producer Chris Palmer wrote a book entitled Shooting In The Wild.  He takes an in-depth look at the world of wildlife filmmaking to expose the ethical dilemmas faced by filmmakers who manipulate, fabricate, and deceive – all in the name of presenting nature “realistically.” The book has been generating a fair amount of media buzz with its recounting of staged animal sequences to coax certain behaviors, use of captive animals from animal farms or zoos, and even animal abuse – all for the sake of “getting the shot.”  Did you face such dilemmas in shooting All Fins On?

RC:  I read this book just prior to the shoot.  To bring the oceanic whitetips around, we necessarily had to offer them an incentive.  While we did not feed them per say, we did put crates with fish parts in the water to provide a scent for them to investigate.  An occasional scrap would float free that they would snap up.  Given that scent, the sharks were always free to swim in, investigate us, and either stay around or leave as they chose.  One individual shark stayed with us for four days straight and participated in our night dive.

PB: As you know, this is Shark Week on the Discovery channel. Do you think these kinds of ratings boosting, shark as a scary, man-eating menace shows hinder conservation efforts? And do you watch?

RC:  Here you get to a central point of this documentary.  The easiest way to make a shark documentary to generate high ratings is to talk about one or more shark attacks, do a few interviews, recreate the scene, add a few shark clips, and done.  The second easiest is to go to tried and true shark hot spots and see whether sharks will eat this or that.  Discovery’s dilemma is that they are a commercial enterprise, and like it or not, shark conservation movies don’t sell well to the general public.  We hope to offer an alternative anchored on solid storytelling and a cinematic presentation that provides the commercially saleable tension and fear that many people want with their shark stories along with a positive message that we actually need sharks for healthy oceans and our own survival as a species.  Even a survivor of the USS Indianapolis we interviewed who lost a good friend to a shark right beside him thought that for the generations following to understand their story, they also need to see their shark.

PB: Finally, badmovies.org says that Shark Attack 3: Megalodon is the worse shark movie ever.  Your thoughts?

RC:  I have not seen this movie … if it went beyond Jaws 4, that is actually a cinematic accomplishment.  For anyone who does not know, Megalodon is the giant extinct predatory shark known by the hand sized fossil teeth.

I work with a literary manager/producer in California, Ken Atchity, who helped one of his clients sell another Megalodon story, Meg, optioned to Hollywood for 1 million dollars. He is co-owner and manager of the Louisiana Wave Studio where an upcoming 3D shark thriller was filmed that will no doubt pack theaters called Shark Night 3D. In contrast, a single night showing of the well-done shark conservation movie, Shark Water, in Washington D.C. attracted all of four people, including me. That is the challenge that makes this project particularly exciting and important. I don’t think it has to be an either or proposition … I believe you can succeed with sharks commercially if you offer a realistic presentation of the shark and build it around a compelling and true story. Sharks are not monsters out to get us, nor are they benevolent beings. They are just sharks. Shark Night 3D may be so over the top, then, that people can enjoy the terror of the movie without seeing it as real life … a factor in Jaws since that movie did make it all seem too real for many people.

PB: Robert, thank you so much for your time today.  Good luck with your movie.

RC:  Thank you.

—–

Robert Cantrell has written a number of articles and papers on intellectual property.  This includes his recently published book, Outpacing the Competition: Patent-Based Business Strategy (Robert Cantrell: Wiley 2009).  This book blends patent strategy, business strategy, and classical strategy into a comprehensive whole, with the overall theme that those businesses capable of proficiently assessing their situations, deciding on courses of action, and taking action, win most competitive contests.

Several of his written works are in use at the national and service war colleges as well as in the intellectual property field to include the top selling book Understanding Sun Tzu on the Art of War.

Robert is the founder of Center For Advantage, a provider of tools for strategy, innovation, and sales workshops, training, and problem solving. He is on the faculty of Patent Resources Group, where he teaches Patent Strategy for Business. And he was last seen developing a cure for cancer.

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1. Blogging #BIO2011

The book publisher announced it has submitted a patent application for the “Essential Romantic Kiss” to the United States Patent and Trademark Office.  The application serial number is 61/438360, indicating it was filed as a provisional application.

The Harlequin kiss patent application describes its proposed kiss as:

A method is provided for two individuals to reciprocate their romantic feelings toward one another.

During Step 1 (“The Prelude”), the kissers deploy the muscle around the mouth (the orbicularis oris, or “kissing muscle”) to shape their lips in a manner conducive to kissing (i.e. to “pucker the lips”, or “pucker up”).

In Step 2 (“The Approach”), they bring their faces into close proximity and tilt their head in opposite directions.

During Step 3 (“The Seal”), the lips touch with varying degrees of pressure and intensity. The lips remain attached for an indeterminate period of time.

While Step 3 may be considered as completing the method or “sealing” The Kiss, there is an optional Step 4 (“The Embrace”) for those kissers who are caught up in the passion of the moment and thus feel compelled to go beyond Steps 1, 2 and 3.

It involves deploying additional body parts, such as hands or arms, on the neck, shoulders or back of the other kisser, thereby drawing them into an interlocked position.

To find out more about the kiss patent application, I spoke with Michelle Renaud, head of the Preservation of the Kiss office, a “division of Harlequin that exists to celebrate all things related to kissing.”

Michelle Renaud: I’m thrilled to be talking with you.

Patent Baristas: Well, I have to admit I was surprised to hear about the application so I went to your website and downloaded a copy of your patent application.

MR: Yes.

PB: I understand it is a provisional so it doesn’t actually have claims in it.  But, it was fairly complete with drawings and included the various steps to the method.

MR: Oh, great.  I’m glad that you were able to take the time to look at it.  That’s fabulous.

PB: Yeah.  So, I don’t want to go through the legal aspects of it but I’d like to just get the background information on how this came about.

MR: Sure.  Definitely.  Harlequin.  We every year launch our annual romance report.  And that is something that we have been doing for about 22 years now.  It’s usually a magazine that we send out to the media around Valentine’s Day.  And the one moment that Harlequin knows best.  It really is the kiss. That moment’s really the cornerstone of all romance, and really the turning point of a really good story.  At Harlequin, we’ve been doing this for over 60 years, which is really exciting.  We thought, by focusing on the kiss, you know, we would be able to create some excitement and create this website that you were on, which is patentyourkiss.com.

PB: Okay.

MR: In doing that, we thought we were looking at a patent.  It really is kind of fun, you know, a tongue in cheek way to kind of stake ownership of that moment but yet share it with the world and really have some fun with it.  That is what we did through the Harlequin office for the preservation of the kiss and that was kind of our main idea for the program.

PB: Basically, Harlequin has been, we’ll say, in the kiss business for 60 years.

MR: Yes

MR: For over 60 years in North America and everything we do is about romance.  We publish 110 books a month.

PB: Wow.

MR: The majority of those books are focused around romance, and they all have that kiss moment.  We feel that we really know that moment better than anyone else in the world.

PB: Well, I have to admit that I would never have guessed that it was 110 a month.

MR: Yes.

PB: I have a feeling that your target audience is not men.

MR: We do have a lot of men that read our books.  Absolutely.  And they’re probably picking up some really good pointers on how to really treat their girlfriends or wives.

PB: So maybe they just don’t admit it.

MR: Exactly.

MR: Our target audience is definitely women.  And our goal really is to provide really great reading entertainment for women.

PB: Well, I wanted to talk about “the essential romantic kiss.”

MR: Yes.

PB: Obviously, a method.

MR: Yes.  A method.

PB: What I’d like to ask is:  What is new?  You know, for the essential romantic kiss over say all the kisses before like with Katherine Hepburn.

MR: Definitely! I know where you’re coming from.

PB: All those iconic kisses.

MR: Yes, yes.  And we did look at a number of iconic kisses.  What we looked at was the kind of the essential romantic kiss.  It’s that everyday form of affection.  We’re thinking that the kiss has become this kind of mundane sort of sign of affection.  We really wanted to bring the romance back to kissing.  And I think that was really the inspiration behind the patent application.

PB: Okay.  I can understand the impetus, let’s say.  But what I was getting at was:  What part do you think is new?

MR: What do I think is new about this kiss moment?

PB: Yes.

MR: I’m not really quite sure if there is anything that is new.  I’m not sure I may be able to answer that.

PB: Okay.

MR: But I think that if we look at Harlequin, and we look at that kind of kiss moment that’s in our book.  I think that’s where we drew the inspiration from.  I don’t think that we’re trying to say that there is a new kiss out there or what not.  But, you know, it really is kind of that essential kiss and how Harlequin feels that it should take place.

PB: I like how you use scientific terms for the kissing muscle.  Like the orbicularis oris for the mouth.  That was very nice.  And laid it out into the various steps.

MR: Yes.  It was fun.  It was really fun to work on.

PB: So, I would take it that you are probably not going to sue your readers if they actually perform this method.

MR: No.  No.  Absolutely not.  I think our intention is to really, like I said, really bring the romance back to kissing.  And, you know, inspire our readers to kiss more.  Maybe, you know, replicate the kisses that they are reading about.  And really have fun with it.  That was definitely our intention.

PB: I can understand where you are coming from.  I think human touch, in general, is quite important.  Whether it is a parent with a baby or your friends or your significant other. I think there’s been a lot of proven benefits to the whole release of oxytocin.  Right?

MR: I agree.

PB: So, what do you think is next?

MR: You know, right now we are having so much fun watching people have so much fun on our website.  I think there’s almost a thousand kisses in there now.

PB: Wow.

MR: But we’re really seeing that people are liking the tool that we have on our website.  They’re interacting with it and really having an appreciate for, for not only the program, but you know, just being inspired to kind of have that kissing moment around Valentine’s Day.  I think it’s great to see the reaction from readers, even new readers that we’re engaging with the Harlequin brand.

PB: Okay.

MR: So, everything has been great so far.

PB: Well, so I guess you can say that if I’m terming this correctly, the kiss creator.  Sort of proves that new kisses can be developed.  You know.

MR: Exactly.  You know, we’re seeing people go on our website that are recreating their kiss moment be it, you know, on a beach or in Paris or maybe even, you know, dreaming about a kiss moment with, you know, a possible significant other or even a celebrity.  So, you know, definitely lots of really unique kisses and their unique names.  And, it’s been a lot of fun.

PB: Can I ask just one last question:  Are you the inventor on this patent application?

MR: Yes.

PB: How long did it take to come up with the essential romantic kiss.

MR: We actually have been working on this program for several months and every year around Valentine’s Day, like I said, we launch it.  We usually close out kind of the big chunks of the program by the end of March, and then we start thinking about the following year.  So, it’s definitely taken a long time to really get this right and just get the feeling right when it comes to the patent and really to insure that people understood where we were coming from.  We knew that that was really important and something that we took very seriously.

PB: Well, I really appreciate your time.

MR: Okay.  Thank you.

Harlequin has created an online interactive Kiss Creation tool, which allows people to create their own kissing styles.  Renaud said over 1000 kisses have been submitted since the site’s launch, including one by Kim Kardashian labeled “The Kim Kardashian Classic Sneak Kiss!”

I prefer something more like Alfred Eisenstaedt’s famed photograph of “The Kiss”, which captures an unknown sailor planting a surprise kiss on Nurse Edith Shain in Times Square on VJ Day, August 14th, 1945.

Michelle Renaud is Senior Public Relations Manager at Harlequin Enterprises Limited in Toronto, Canada

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BulletproofBlog has now interviewed Chris Hansen, staff attorney with the ACLU First Amendment Working Group, which scored a major victory on November 2 when the United States District Court for the Southern District of New York ruled the suit can go forward after denying a motion filed by the US Patent and Trademark Office, Myriad Genetics, and the University of Utah Research Foundation to dismiss a lawsuit for lack standing to sue the USPTO, lack of subject matter jurisdiction, and because the action is barred by the sovereign immunity.

What will be the impact of this case?

Chris Hansen: That depends on whether we win it or lose it. The next step is to try it in the U.S. District Court for the Southern District of New York. After that I would expect appeals all the way to the Supreme Court, which might well agree to hear a case of this magnitude.

The issue of whether human genes can be patented has been around a long time and it seemed the Patent Office had concluded the debate was resolved in favor of patent-holders. At the very least, Judge [Robert] Sweet’s decision not to dismiss should disabuse them of that notion.

If we succeed, the potential impact can best be measured by the fact that 20% of the genes in the human body are now patented. Among them are genes associated with Alzheimer’s disease, muscular dystrophy, colon cancer, asthma, and many other illnesses

Success in this case will encourage new lawsuits regarding any or all of those patents. Theoretically, the facts in each instance are sufficiently different so that there would be no across-the-board invalidation of the patents. Each case would be separate.

Practically, however, the impact would be even more decisive. A favorable decision upheld throughout the appeals process would effectively establish a guiding principle that no one should be able to patent a part of the human body.

What if you lose?

Chris Hansen: One of the purposes of filing cases like this is to gain visibility for an idea. The idea behind this lawsuit won’t go away.

Meanwhile, the Patent Office under Obama could conceivably change its mind on this issue. Or, Congress could simply pass laws prohibiting patents on genes. There are influential voices on our side of this debate, including the American Medical Association, the March of Dimes, and the American Society for Human Genetics.

What would be the impact on the biotech industry if Congress were to change the law, or if you eventually prevail in your lawsuit? Might it devastate the industry?

Chris Hansen: Quite to the contrary. The industry itself, and the public, needs to realize that, by invalidating patents on human genes, we actually create significant competitive advantages for biotech companies.

On the one hand, Myriad now has the exclusive right to perform diagnostic tests on the patented genes. It’s a monopoly that makes it impossible for women to have access to alternate tests or to even get a second opinion about their results. Myriad can also charge a high rate for its tests.

For the broader biotech industry, invalidating the patents would provide opportunity to do a much greater volume of testing and treatment because they would obviously not be prevented by existing patents. Of course, they could still patent specific tests and drugs. It would be a free market.

Yet based on a few initial reactions I’ve seen to Judge Sweet’s ruling, the industry does not seem aware that it is very much in their interests for us to finally succeed.

This was originally posted at Bulletproof Blog.  You can see the entire article here.

What is left unsaid?

The impact of the case on future patent challenges is not addressed.  More significant than one crazy suit regarding gene patents is the fact that the suit names the US  Patent & Trademark Office as a defendant, and then asks the court to issue an affirmative injunction requiring the USPTO to revoke the patents in suit.

While the Patent Office moved to dismiss because there is no “case or controversy” involving the USPTO — because the USPTO hasn’t threatened anyone with an infringement suit — the judge felt the court had jurisdiction.  Presumably, the court felt that gene patents sound really scary and this case should be heard.

If this case stands, then anyone could sue the USPTO — and not the actual patent owner — in any Federal District Court, in any jurisdiction, to challenge any patent. It would seem that such a suit could now go forward without participation of the patent holder. his would leave the USPTO to uphold the validity of all patents.

Related posts:

1. ACLU/PUBPAT Gene Patent Challenge Moves Ahead
2. Representatives Introduce Bill to Stop Gene Patents
3. What Is the Impact of Gene Patents and Licensing Practices?

The Center for Patent Innovations at New York Law School has now unveiled a new program, the Post-Issue Peer to Patent project.  Post-Issue elicits previously unidentified prior art that may invalidate or narrow the claims of issued patents – all parties are invited to request posting of patents to Post-Issue for review.  We caught up with Professor Mark Webbink, the Executive Director of this new public-sector initiative, to ask him about the project.

Q: You are currently the executive director for the Center for Patent Innovations at New York Law School, which manages the Peer to Patent and Post-Issue Peer to Patent projects. Can you tell me a little about yourself and how you got involved with these projects?

I am attaching a short bio that should provide work background.  At the end of August 2007 I retired from Red Hat with the full intention of doing some part-time teaching and consulting.  In February 2008 Beth Noveck called me.  The Peer-to-Patent project was growing, and NYLS had decided to look for a professional manager to come in and run it.  Red Hat had been one of the sponsors of P2P, and Beth and I had met before, but I think the suggestion of getting me involved came from Dave Kappos and Manny Schecter at IBM.

Q: The Peer to Patent project is operated by New York Law School in conjunction with the U.S. Patent and Trademark Office. Is Post-Issue Peer to Patent also being operated in conjunction with the U.S. Patent and Trademark Office?

Since Post-Issue is focused on already issued patents, there is no association with the USPTO.  Some of our steering committee members believed there was a logical step to be taken from building a community to help find prior art to support the examination efforts of the USPTO to tapping into that same community to help find prior art relevant to issued patents that may contain claims of questionable merit.  Open Invention Network was certainly interested from the perspective of the Linux environment, but they also agreed the platform needed to be neutral and be available to all.  To date our focus has been on so-called software patents.

Q: The Peer To Patent pilot was launched with the support from big technology companies and patent holders such as GE, HP, IBM, Microsoft and others. Are there tech companies backing the current Post-Issue Peer to Patent project?  What about the claim that these public interest projects are being used to help defend these large corporations when they are perfectly capable of paying their own way?

We have received financial support for Post-Issue from the technology sector.  Are primary condition, mentioned above, was that we have the freedom to make the platform vendor and technology neutral.  Our financial sponsors have recognized the benefit of that approach and have supported it.  While some of the initial patents posted are being asserted against major technology companies like Microsoft and Google, to some extent they are the canary in the coal mine.  Because they are wealthy companies, litigious patent holders believe them to be an attractive target.  However, the patents being asserted are likely to apply to many other (smaller) technology companies.  The best time to address the validity of the patent claims is when they are first being asserted (or even before they are asserted) not after the patent holder has already obtained a judgment against one party.

Q: How does the Post-Issue Peer to Patent project work? I mean, there are over 7 million issued patents. Do you plan to have all of them peer reviewed or do you intend to have a system to identify those in need of review? Any successes so far?

Other than the amount of server space, there is no practical limit to what we could maintain.  That said, not every patent is going to be perceived to be of questionable validity or is being actively asserted against others.  So we are starting with those of greatest interest (either to us or to another party) and working from there.  On each of the patents posted to date the community has identified at least some prior art.

Q: Do you think the current scenario — where interested parties can look for art and bring the art before the Patent Office through re-examination — fails to provide an adequate system for weeding out “weak” patents? If not, how could it be improved so that the Post-Issue Peer to Patent project would not be necessary?

One of the things Post-Issue is intended to support is reexamination (not just litigation), so I don’t view Post-Issue as addressing the merits of re-examination one way or the other.  Post-Issue is about identifying prior art that (a) is relevant and (b) was not considered during the examination process.

Q: Do you think the Post-Issue Peer to Patent project will encourage a lot of non-interested parties to find marginally relevant references after the patent is out of the patent office just to hamper competitors? What about the concern that such projects unfairly imply that Patent Office is incompetent?

To the extent that the community identifies prior art that is of marginal relevance, I think parties wishing to use that prior art will be dubious about doing so and parties against whose patents such prior art may be asserted will likely be able to dispense with it easily.  One of the things we are contemplating is how we bring the same system of peer ranking to Post-Issue that we use in Peer-to-Patent.  We at the Center have certainly never taken [the position that such projects unfairly imply that Patent Office is incompetent].  In fact, all evidence is that the examiners, when provided with all relevant prior art, do a good job.  The problem is not in the examiners, it is in their ability (by rules, by knowledge, etc.) to get to good, relevant, non-patent prior art.

Q: What do you say to those that claim these projects are more about getting the public to do the examiner’s job than about getting better quality patents?

With respect to Post-Issue, such a claim has no merit since patent examiners are not asked to find prior art relevant to issued patents.  With respect to Peer-to-Patent, the claim amuses me.  Patent examiners, investors, and others would always (at least in theory) make perfect decisions if they had perfect information.  But perfect information does not exist in capital markets and it doesn’t exist in the patent examination process.  When, as in the patent process, we (the public) are prepared to hand an inventor a 20-year monopoly, we should want to be as certain as reasonably possible that the inventor has actually created something new and non-obvious.  To the extent patent examiners cannot get to all of the best, relevant prior art, we have a significant gap between the ideal (perfect information) and the actual.  It is in everyone’s interest to help close this gap.  To the extent citizen-experts are willing to do so, then Peer-to-Patent makes a contribution.

Bonus Q: Are we going to see any other projects from your group?

There are a couple of other things cooking.  One is a project called Open Patent, which has received an NSF grant, to test whether patent databases could be improved and made more accessible through the use of tagging and visualization technology.  A second has to do with a further expansion of Peer-to-Patent that we will likely announce in early June.

You can view more about the project at the Community Patent Blog.

Mark Webbink is a Visiting Professor of Law and Executive Director of the Center for Patent Innovations at New York Law School.  Webbink has also served as an Adjunct Professor at NCCU Law School and a Senior Lecturing Fellow at Duke Law School.  From 2000 to 2007 Webbink served in various capacities with Red Hat, Inc., including General Counsel, Deputy General Counsel for Intellectual Property, Senior Vice President and Secretary. Webbink has written and spoken extensively on the subjects of open source software, software patents, and patent reform, including testimony before the U.S. House of Representatives Subcommittee on Courts, the Internet, and Intellectual Property, the Federal Trade Commission and Department of Justice, and the National Academy of Sciences.  You can view his blog at Walking with Elephants.

Related posts:

1. Should Peer-To-Patent Review Be Made Compulsory?
2. Seven Questions in Seven Minutes with USPTO Director John LeGuyader
3. Patent Office Director: Patent Allowances Down, Hoorah!