On the final day of the term, the U.S. Supreme Court released its long-anticipated decision in Bilski v. Kappos.  Experts discuss the implications of the decision, and give keen insight into the case.

To listen, please right click on the audio file you wish to hear and then select “Save Link As…” or “Save Target As…” After you save the audio file to your computer, you can then listen to it in your audio player of choice.

Patents in the Supreme Court: Bilski v. Kappos – MP3
Running Time: 01:34:33

Featuring:

• Prof. John F. Duffy, George Washington University Law School
• Prof. David S. Olson, Boston College Law School
• Moderator: Prof. Adam Mossoff, George Mason University School of Law

In this panel podcast — it was sort of a debate, but really more of a friendly discussion — Professors John Duffy and David Olson discuss the meaning and implications of the Bilski decision.  As you probably know, these two professors are highly qualified to be discussing the Bilski decision, as both of them wrote or joined briefs in the case and wrote on it in the popular press, on blogs and in law journals.  In fact, Professor Duffy even participated in oral argument before the en banc panel of the Federal Circuit.  Confirming their important contributions to this area of patent law, Justice Stevens cited to law journal articles by both of these scholars in his in-depth concurring opinion.

Related Links

U.S. Supreme Court Decision in Bilski v. Kappos (PDF)

Brief for Petitioner Bernard L. Bilski and Rand A. Warsaw (PDF)

Brief for Respondent David J. Kappos, Under Secretary of Commerce for Intellectual Property and Director, United States Trademark Office (PDF)

Reply Brief for Petitioner Bernard L. Bilski and Rand A. Warsaw (PDF)

Related posts:

1. Quanta Podcast: Patent Rights in the Supreme Court
2. Free Offer: Bilski Podcast with CLE Credit
3. Supreme Court Ponders Hypotheticals In Bilski

This post contains a summary of the comparison information in table form.  The tables below reference “machine-assisted” and “machine-aided” translations; for an in-depth explanation of what these terms mean, please see my earlier post in this series. This post relates to searchable electronic text coverage; PDF image coverage is not presented here.

Before I get to the comparison, just a quick note: although I have created this post by summarizing publicly available information vendor system help files and, in some cases, statements made from vendor representatives, readers should verify coverage with providers before basing any purchasing decisions on this information.

Coverage for Japanese Published Applications

The next table presents a brief summary of other JP kind codes which are covered by the four databases in question.  TotalPatent currently offers a collection of granted patents, while QPAT and orbit.com offer full text machine translations of utility models.   Thomson Innovation offers full text collections for both granted patents and utility models.

Coverage for Japanese Granted Patents and Utility Models

Additional Notes from Vendors

In addition to the comparison table above, there are several other factors that could influence a decision about which service offers the best coverage to suit a user’s needs.   Below, I’ve compiled some of these additional statements, which have come from the system’s help documentation and in some cases, system representatives.

• Questel’s QPAT and orbit.com platforms: Currently, the time delay from when new JP documents are published to when they appear in the Questel database is as short as 1 week.  Questel representatives have stated that, thanks to the company’s exclusive relationship with the Patolis corp, they are able to provide Japanese F-I and F-term classifications in both their JP full text files, and FamPat family database.  It’s also worth noting that for an extra fee, Questel provides access to Japanese legal status information from Patolis, which will continue even as Patolis undergoes a bankruptcy and re-organization.  Patolis is a unique source of legal status information which goes beyond the EPO’s INPADOC legal status content.

• Minesoft PatBase: Machine translated abstracts for both Japanese applications and utility models are produced for documents which do not have any other English language family member available (e.g. newly published documents); these are replaced with hand translated abstracts if/when they become available.  PatBase also includes F-I and F-term Japanese classification marks in its database, and according to system help documentation, this classification data is updated every two weeks.  The PatBase Japanese collection includes both “clipped” (representative) drawings for each patent document, and embedded in-text images (such as chemical structure images, for example).  Finally,  it’s relevant to this discussion that PatBase’s WO/PCT  collection includes Japanese-language Patent Cooperation Treaty (WO/PCT) applications; this is rare, as most commercial vendors do not include PCT documents published in non-Latin character languages in their collections such as Chinese, Japanese, Russian, or Korean, even though they are designated official languages under the PCT. 

• Thomson Reuters Thomson Innovation: Thomson Reuters’ machine-assisted translation collections are updated monthly.   Representative images are included for the published applications collection back to 1980.  Thomson Reuters added Japanese F-I and F-term classifications in a July 2009 update to the system.

• LexisNexis TotalPatent: Full text English machine translations are not yet available for this collection; however, the TotalPatent coverage page lists machine translations present from 1975 for applications and 1996 for grants.  This may refer to machine translations of bibliographic records created to supplement the EPO’s DOCDB file (also sometimes called the INPADOC bibliographic file).  The coverage tables for TotalPatent are generated by algorithm rather than by hand, and their earliest dates of coverage are often quite early – however, their date ranges do not indicate comprehensive coverage over the specified time period; a 1913 start date could indicate data for a single document published in 1913.  This is true for all coverage tables, but is especially important to keep in mind with TotalPatent’s early start dates.

Thanks for bearing with me during this in-depth investigation into the Japanese patent collections offered by these major search providers.  Although the material may seem a bit dry, understanding differences in search system coverage can be critical to performing a thorough prior art search.  For further in-depth information on any of these systems, I hope you’ll stop by Intellogist.com to check out our detailed Search System Reports.  Comparisons of the major features of these systems can also be generated from our Quick Table Comparison feature (free registration is required).

Finally, many thanks to Patent Baristas for hosting this series!

Today’s post is by Guest Barista Kristin Whitman of Intellogist.com.

Related posts:

1. Are your Japanese patent searches complete? (Part 1 of 2)
2. Interactive Fee Calculator for Japanese National Entry
3. Ex-Employee Settles Patent Dispute with Japanese Company for $8.1 Million

Before I get to the comparison, just a quick note: although I have created this post by summarizing publicly available information vendor system help files and, in some cases, statements made from vendor representatives, readers should verify coverage with providers before basing any purchasing decisions on this information.

To start, it’s worth noting that all of these systems contain the EPO’s DOCDB bibliographic and family file (historically known as the INPADOC bibliographic file), which means that they all contain English language abstracts from the Patent Abstracts of Japan (PAJ) collection.  This collection extends back to 1976 for some technology areas (for more information about PAJ coverage, an excellent source is the 2006 work “Information Sources in Patents,” 2^nd edition, by Stephen R. Adams).   The delay from when a Japanese patent application is published to when its hand-translated English abstract appears in the PAJ collection is approximately four months.  Some search systems, including Questel’s QPAT/orbit.com platform, Minesoft’s PatBase, and the JP-NETe system, load machine translated English abstracts into their database soon after publication, to be replaced with hand translated abstracts from the PAJ collection as they become available.

One of the most interesting elements of this comparison is that each of these systems has taken a different approach to providing Japanese data so that it can be searched by native English speakers.   Both Thomson Reuters and Questel have decided to approach this problem by creating full text collections of searchable English-language machine translations of these patent documents.   The benefit to this approach is that users can query the patent full text with English keywords; however, the obvious downside is that machine translation technology can produce wildly imperfect translations in most cases.   Both these collections are referred to as “machine-aided” or “machine-assisted” because of adjustments to the text that are made during pre and post-processing:

• Thomson Reuters has attempted to mitigate machine translation quality problems by employing a team of editors to review each translated document and provide hand corrections to un-translated terms.  In addition, they use in-house machine translation software which inserts multiple synonyms for the major document keywords, which has the effect of making the documents “broader targets” – by inserting keyword variants, it’s more likely that the document will come up in search results over a wide population of searchers.   As a real life example, a standard machine translation service might produce the sentence:

“The wing section which has the first transition section attached in the body.”

While the Thomson Reuters software would produce the following sentence, with multiple keyword options:

“The blade|wing|shuttlecock part which has the front-edge part attached to the main body.”

• Questel has attempted to mitigate machine translation quality problems by offering “machine-assisted” translations.  Where Thomson Reuters uses human editors, Questel is using a totally machine-based approach designed by longtime partner Lingway, a company that specializes in linguistic technologies.  According to Questel representatives, a number of approaches are used to ensure high-quality translations:
  • The translation software relies on “proprietary, manually built and domain-specific dictionaries that have been enhanced by Lingway’s linguistic technologies.”
  • A mix of different machine translation software is used, with the choice of specific software dependent on the type of text to be translated.
  • The software uses a hybrid machine translation (HMT) approach that “leverages the strengths of statistical and rule-based translation methodologies.”

Questel also states that it replaces machine translations with hand translated information when it becomes available from other sources; we can assume that this refers to the hand translated abstracts from the Patent Abstracts of Japan file.   In addition, Questel produces hand translated assignee names for its Japanese (and Korean) collections.   Finally, Questel representatives have stated that they plan to add a keyword-searchable original-language collection of Japanese full text records in the future.

Minesoft’s PatBase offers the full text of the patent documents in the original Japanese, alongside their English language bibliographic data and abstracts from the INPADOC file.   As the PatBase product also offers a Japanese language interface, it’s reasonable to assume that this decision was made in part to make their product more useful to Japanese consumers.   Although English translations can be produced from this full text “on-the-fly,” the Japanese full text is not keyword-searchable.    Another consideration is that due to the structure of the underlying PatBase data, it is quite easy to perform a search over all the full text collections available in the system, and limit the results to only those with Japanese family members.  Thus, a search through the full text of English-language family members can be used as a substitute for a full text search of Japanese documents, with the obvious drawback that the search will miss any Japanese documents of interest that do not yet have published full text English-language family equivalents.  In addition, because the INPADOC family structure is used, it’s also possible that the JP family member of an English document of interest may be only distantly related with regard to claimed content.

Finally, the LexisNexis TotalPatent product offered only bibliographic and abstract coverage of the Japanese collection until the end of 2009/beginning of 2010, when a full text original language collection was loaded.   Although the coverage page for the TotalPatent product states that some machine translated data is present for these documents, experimental queries show that keyword-searchable full text English machine translations are not yet available for this collection; a call to the LexisNexis Help Desk also confirmed that full text machine translations are not yet available.  In addition, TotalPatent does not yet appear to be able to handle Japanese-language keyword queries; only the English abstracts from the Patent Abstracts of Japan collection are searchable in TotalPatent at this time.

In the next post in this series, I’ll compare the Japanese collections offered by these systems by kind code, available text, language and earliest year of coverage.  If you’d like more information about any of these search products, you might be interested in the Search System Reports and Quick Table Comparisons available on Intellogist.com.

Today’s post is by Guest Barista Kristin Whitman of Intellogist.com.

Related posts:

1. Interactive Fee Calculator for Japanese National Entry
2. Ex-Employee Settles Patent Dispute with Japanese Company for $8.1 Million
3. Changes Possible to Japanese Employed Inventor Law

In truth, however, getting rich merely from a patent is a rare occurrence–maybe not as low a probability as winning the lottery, but the odds are incredibly long that any person can make money from a patented idea alone.  Think about it: if all it took was a patent to make someone wealthy, there would be a heck of a lot more rich people in this country given the huge numbers of patents that are granted by the US Patent Office every year.

There are many reasons why the idea getting rich from patenting an idea is overstated, several of which I have discussed before on this blog.  This posting will specifically address why patent litigation as a business model is a non-starter for making most inventors wealthy.

To this end, I was recently contacted by an inventor with several issued and pending patents covering an innovative solution for homeowners.   The patents and applications were well-written and, unlike many other patents I have reviewed lately, the innovation was well-covered such that it would be difficult for someone to make the same product without infringing my client’s patents.  My client had spent much money over the years on this solid patent coverage, but, due to health issues, he lost his ability to continue working on bringing the product to market.  The client believed that infringement was occurring, and he and his patent attorney were under the impression that they would be able to get an investor to fund patent infringement litigation or have an attorney take the lawsuit on a contingency basis.

Like many inventors, my client assumed that he could make money from a patented idea by suing people using his patented idea without permission.  However, this is probably the least likely way someone can make a profit from their patent.  The average patent litigation lawsuit with from $1 to $25 Million at risk costs each side more than $2.5 Million through trial. Even if the case does not go to trial, it is unlikely that the lawsuit will settle prior to completion of the pre-trial or “discovery” phase where evidence is collected, analyzed and argued in attorney briefs.  For cases that go only through this discovery phase, costs are around $1.8 Million. With most patent litigation attorneys costing upwards of $400 an hour, and patent cases generally incorporating several attorneys per side on a regular basis, I have seen patent litigation attorneys bill their clients several $100K per month starting immediately after the case is filed.  Thus, even if a case settles relatively early, both sides must expect to incur substantial attorneys fees.  Accordingly, patent owners cannot expect to generate any revenue from suing an infringer without significant cash outlays.

Assuming that the defendant’s product infringes my client’s patents and his patents stand up to the inevitable invalidity attack, what could my client expect to obtain if he wins?  Notwithstanding large damage awards reported in the press, such as the more than $600 Million ruling against the manufacturer of the BlackBerry(R), most patent damage awards are much lower.  Patent damages are awarded on the basis of how much value the defendant is obtaining as a result of its infringing activity.  As a result, damages are awarded in large part on the royalty rate the defendant would likely pay my client license to the patent at issue.  (Apologies to patent litigation experts on this broad generalization of patent damage calculations, as there certainly is vast and complex case law on how to calculate damage awards.  Certainly, much legal effort and cost is spent trying to increase or decrease the damage award in each particular lawsuit.  But, at the end of the day, most damage awards likely come down to the reasonable royalty rate in the particular industry in which the patent falls.)

So, let’s now talk about royalty measurements; that is, how much can my client expect from licensing his patent rights?  While the rate varies markedly among industries and situations, most royalties are in the relatively modest range of 4-8 % of gross sales (of course, gross sales is a broad measure, but we’re being very generous for the purposes of this discussion).  I generated this royalty rate range as a result of many discussions over the years  with fellow patent practitioners.  For more information on royalty rates, this Wikipedia entry is helpful.

Taking a very conservative patent lawsuit cost of $1 Million, my client would need to obtain $1 Million from the defendant to break even.  To obtain this amount, the total gross sales of the infringing product upon which the royalty calculation is made would have to be $25 Million for my client to recover his costs.  For an 8 % royalty, the total sales would have to be $12.5 Million to break even.  Of course, for my client to make a profit, the gross sales of the infringing product would have to be more.  The reader should also note that these hypothetical sales figures ignore sales write downs that reduce the gross sales upon which the royalty amount would be based.

Certainly, there are many products with markets of $25 Million or more.  Also, there are many technologies that are used as central aspects in a single product made by many manufacturers.  Smart phones are an example of an area where a core technology is used by several manufacturers, so a patent owner in this area could possibly generate mutliple large damage awards, settlements or licensing fees for a single patent.  However, most patents cover products that have fairly limited market potential and, as a result, there is a low probability that the patent owner will break even from patent litigation costs, let alone make a profit.  This is the case with my client’s patent rights.

For the product covered by my client’s patent rights, total market potential is probably no more than $50 million over the life of the innovation.  This is a solid number, and certainly a reason to build a business around the product.   However, the current market is small and it will grow only slowly over the next several years.  Infringement of his patent rights may be occurring today.  Nonetheless, the reality is that, even if my client could afford to bring a patent lawsuit today, the costs of bringing and maintaining the lawsuit far outweigh any financial recovery that my client could obtain by prevailing.

My client cannot fund his own litigation expenses, and was interested in identifying possible alternate sources of funding.  Given the real numbers involved in my client’s situation, it would make little sense for a lawyer to take his case on contingency.   While the case may be a “winner” in the end, the lawyer would be fronting fees and costs for my client, and he likely would be investing several years in the lawsuit only to share in a relatively modest damage award in the end.  It is therefore doubtful that any patent litigation attorney would give my client’s case a second look on a contingency basis.

It is even less likely that my client could obtain an investor to pay the costs of litigation on his behalf.  Given the risks involved in patent litigation (see these estimates where the patentee prevails only 25% of the time), as well as the time and cost involved in winning, patent litigation is a poor choice for an investor.  So, my client is out of luck in getting someone to fund his patent litigation as an investment vehicle.

In summary, even though my client owns strong patents covering a great innovation that will succeed in the market, it is doubtful that he will ever be able to generate an income by merely enforcing his patent rights.  His best hope for earning money from his innovative product is to sell his patents outright to a company that wants to make and sell the covered product.  This company will be in a much better position to build the market for the product and would likely be more motivated to police the patent rights in order to keep its competitors at bay.

In other words, by patenting an innovative product, my client obtained the right to prevent others from copying his invention, but not the means to do so.  A stark reality, certainly, but a critical thing for inventors to understand.

Today’s post is by Guest Barista Jackie Hutter, Proprietor of the IP Asset Maximizer Blog and Chief IP Strategist at The Hutter Group, LLC, and was first published on the IP Asset Maximizer Blog.

Related posts:

1. Patent Strategy Focused On Lowest Cost May Reveal a Company’s Future Inability to Remain Viable
2. Open-Source’ Biotech Initiative
3. Is the Tide of Willful Patent Infringement Litigation Receding?

In a review of several dozen randomly selected US national-stage application, Carl Oppedahl has identified some factors within the applicant’s control can affect the number of months of USPTO delay.

In one example US application, the national-stage papers were missing the inventor’s Oath. The USPTO did not get around to looking at the national-stage papers until seven months later, at which time the USPTO mailed a Notice of Missing Requirements. The actual completion of the US national-stage requirements happened about two months after that when the missing Oath was filed. And then … the USPTO didn’t get around to looking at the Oath until ten months later, on January 9, 2009 when the official Filing Receipt got mailed.

If the applicant does not leave out any parts, the delays within the USPTO prior to mailing the official Filing Receipt are often in the range of four to eight months. If, on the other hand, the application is missing any items on filing the national–stage papers, then the delay within the USPTO can be substantial.

So, here is the practice tip from Carl:

When entering the US national stage, it is very much to the applicant’s advantage if every possible missing requirement is eliminated. Make very sure that the Oath was on file prior to the 30-month date. Make very sure that all the correct fees have been paid prior to the 30-month date. Try to give USPTO no possible excuse at all for withholding the official Filing Receipt. Stated differently, the applicant that leaves out something important from the national-stage papers is likely to see additional delays of a year or more (in addition to the already striking delays in USPTO ‘ s handling of national–stage papers even when nothing is missing) in progress or cue application toward the examining corps.

It might be argued that it doesn’t matter since the pendency for examination can be longer than a year or two anyway. Since the Examiners take up cases based upon when the national-stage requirements were met (and not based upon when the case was released to the Examining Corps) then the applicant is not prejudiced in when the Examiner takes up the case.

While there are plenty of art units with pendency that exceeds the delays in the USPTO’s handling of national-stage papers, some art units have shorter pendencies. In such an art unit, the USPTO delays in handling national-stage papers can cut into the substantive rights of the applicant, by delaying the eventual grant of the patent.

Thanks to Carl Oppedahl of the Oppedahl Patent Law Firm LLC for the practice tip.

Related posts:

1. USPTO Announces it will Reduce Some Fees for PCT National Entry
2. Interactive Fee Calculator for Japanese National Entry
3. Patent Office Budget Shortfall Will Have Long-Term Effects