California Innovations was a Canadian company who applied for a trademark for their name and were turned down by the USPTO. The court cited 15 U.S.C. 2(e)(3) of the Lanham Act and claimed that the name was primarily geographically deceptively misdescriptive. Before the North American Free Trade Agreement, the PTO put primarily geographically descriptive or deceptively misdescriptive marks on the supplemental register until there was a showing of acquired distinctiveness, then they could go on the principal register. After NAFTA a new standard for marks was in play, "if the place [in the mark] is noted for the particular goods, a mark for such goods which do not originate there is likely to be deceptive and not registrable under any circumstances." Loew's Theatres, 769 F.2d at 768, n.6. Also in House of Windsor, 221 USPQ at 57, the instant court cited this sentence, "if there is evidence that goods like applicant's or goods related to applicant's are a principal product of the geographical area named by the mark, then the deception will most likely be found material and the mark, therefore, deceptive." From these cases the court derived two elements of a primarily geographically deceptively misdescriptive mark: 1)mark names a geographic location that is known for producing the goods that registrant seeks to trademark 2)the good-place connection made by the mark would materially influence the consumer. In the end the court adopted a three-prong test, the two prongs already mentioned, and the third prong of "whether the mark is recognizable, at least to some large segment of the public, as the name of a geographical area." In Re California Innovations, Inc., Fed.Cir. opinion 02-1407 at p.5. The court then remanded the case and told the USPTO to look at these new post-NAFTA factors.
Thursday, September 29, 2011
Wednesday, September 28, 2011
General Motors Corp. v. Ignacio lopez de arriortua, 948 F. Supp. 670 (1996)
GM sued: VW of America; the "Lopez Group" including Jose Ignacio Lopez, Jose Manuel Gutierrez, Jorge Alvarez, Rosario Piazza, Hugo Van der Auwera, Francisco Garcia-Sanz, Andries Versteeg, and Willem Admiraal; VW Group including Ferdinand Piech, Jens Neumann, Jaero Wicker, and H.W. Lytle. GM sued because they alleged that the defendants stole trade secrets and conspired against GM. GM alleged that at least as early as August 1992 and until March 1993, while Lopez was still working for GM, Lopez talked with VW and agreed to come work for VW and take confidential GM information with him to his new job at VW. March 1993, the Lopez Group all left GM to go work for VW. The Lopez Group brought 20 boxes of documents with them to VW, spent a month copying the documents, and then destroyed the documents; all while working for VW.
In June of 93' German police found Opel, a subsidiary of GM at the time, documents at the houses of various Lopez Group members and at VW. Alvarez sent a letter to Gutierrez soon after saying that they needed to come up with an explanation for having the documents. At later press conferences the members of the Lopez Group denied taking any documents and Piech publicly claimed that the documents seized from Alvarez's home were planted by Opel. VW hired an outside firm to investigate the activities of the Lopez Group; the firm found that GM documents were brought to VW, copied, and shredded. On March 7, 1996 GM filed the instant case and alleged: RICO violations of wire fraud, interstate and foreign travel to aid racketeering, tampering with witnesses, and transportation and receipt of stolen goods; conspiracy to violate RICO; trademark and copyright violations; fraud; breach of fiduciary duty; conversion; misappropriation of trade secrets; conspiracy and unjust enrichment.
Defendants attempted to dismiss the RICO charges. The RICO statute in question says, "It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt." 18 U.S.C. sec. 1962(c) Racketeering activity is any act or threat involving specified state crimes, specified federal statutes, and specified federal crimes. 18 U.S.C. sec. 1961(1). Defendants moved to dismiss because they claimed that there was no "pattern" of racketeering. The supreme court held that a common sense approach to RICO's "pattern" requirement be used, and reasoned that "pattern" means a relationship between the predicate acts together with the threat of continuing activity. H.J., Inc. v. Northwestern Bell Telephone co., 492 U.S. 229, 109 S.Ct. 2893, 106 L.Ed.2d 195(1989). The court in the instant case went on to hold that covering up the predicate acts is itself a continuation of the scheme, and satisfies the "pattern" requirement. From these holdings, the court was able to hold that GM's predicate acts alleged, if proven, would satisfy the "pattern" element of the RICO statute. The court said that the actual acts of theft coupled with the continuing effort to obstruct justice was evidence enough of a "pattern of racketeering."
Defendants also attempted to claim that GM never proved the "enterprise" element, as required by the statute. The court decided that even if the "enterprise" element had to be plead with specificity, as opposed to notice, GM had adequately plead the element. The court held that participation of a corporation in a racketeering scheme, by itself, is enough to show that there was the necessary organization to satisfy the "enterprise" element. The court reasoned that by GM alleging that VW provided the facilities for the copying and shredding of purloined papers, GM had plead with specificity enough to prove that there was an "enterprise".
The court held that because violations of RICO were sufficiently plead, intentions to violate RICO were sufficiently plead, so the court denied a motion to dismiss the conspiracy charge. In response to Defendants assertion that GM was only harmed indirectly, the court held that a theft of a trade secret is a direct injury, and outlined how the damages could be calculated. The defendants tried to argue that because the injury would be felt in Western Europe, that this complaint was complaining of extraterritorial causes and effects, which U.S. courts do not have jurisdiction to hear. The court reasoned that because the predicate acts were part of a larger scheme, that enough predicate acts happened within the U.S. to make the whole scheme and its effects under U.S. jurisdiction. VW sought to dismiss the RICO claim against them saying that they did not "participate, directly or indirectly, in the conduct of" the enterprises affairs. The court held that VW had given direction to the Lopez Group and that was more than enough to satisfy the participation element. So the court denied the motion for dismissal of the RICO claims.
In June of 93' German police found Opel, a subsidiary of GM at the time, documents at the houses of various Lopez Group members and at VW. Alvarez sent a letter to Gutierrez soon after saying that they needed to come up with an explanation for having the documents. At later press conferences the members of the Lopez Group denied taking any documents and Piech publicly claimed that the documents seized from Alvarez's home were planted by Opel. VW hired an outside firm to investigate the activities of the Lopez Group; the firm found that GM documents were brought to VW, copied, and shredded. On March 7, 1996 GM filed the instant case and alleged: RICO violations of wire fraud, interstate and foreign travel to aid racketeering, tampering with witnesses, and transportation and receipt of stolen goods; conspiracy to violate RICO; trademark and copyright violations; fraud; breach of fiduciary duty; conversion; misappropriation of trade secrets; conspiracy and unjust enrichment.
Defendants attempted to dismiss the RICO charges. The RICO statute in question says, "It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt." 18 U.S.C. sec. 1962(c) Racketeering activity is any act or threat involving specified state crimes, specified federal statutes, and specified federal crimes. 18 U.S.C. sec. 1961(1). Defendants moved to dismiss because they claimed that there was no "pattern" of racketeering. The supreme court held that a common sense approach to RICO's "pattern" requirement be used, and reasoned that "pattern" means a relationship between the predicate acts together with the threat of continuing activity. H.J., Inc. v. Northwestern Bell Telephone co., 492 U.S. 229, 109 S.Ct. 2893, 106 L.Ed.2d 195(1989). The court in the instant case went on to hold that covering up the predicate acts is itself a continuation of the scheme, and satisfies the "pattern" requirement. From these holdings, the court was able to hold that GM's predicate acts alleged, if proven, would satisfy the "pattern" element of the RICO statute. The court said that the actual acts of theft coupled with the continuing effort to obstruct justice was evidence enough of a "pattern of racketeering."
Defendants also attempted to claim that GM never proved the "enterprise" element, as required by the statute. The court decided that even if the "enterprise" element had to be plead with specificity, as opposed to notice, GM had adequately plead the element. The court held that participation of a corporation in a racketeering scheme, by itself, is enough to show that there was the necessary organization to satisfy the "enterprise" element. The court reasoned that by GM alleging that VW provided the facilities for the copying and shredding of purloined papers, GM had plead with specificity enough to prove that there was an "enterprise".
The court held that because violations of RICO were sufficiently plead, intentions to violate RICO were sufficiently plead, so the court denied a motion to dismiss the conspiracy charge. In response to Defendants assertion that GM was only harmed indirectly, the court held that a theft of a trade secret is a direct injury, and outlined how the damages could be calculated. The defendants tried to argue that because the injury would be felt in Western Europe, that this complaint was complaining of extraterritorial causes and effects, which U.S. courts do not have jurisdiction to hear. The court reasoned that because the predicate acts were part of a larger scheme, that enough predicate acts happened within the U.S. to make the whole scheme and its effects under U.S. jurisdiction. VW sought to dismiss the RICO claim against them saying that they did not "participate, directly or indirectly, in the conduct of" the enterprises affairs. The court held that VW had given direction to the Lopez Group and that was more than enough to satisfy the participation element. So the court denied the motion for dismissal of the RICO claims.
Monday, September 26, 2011
Russo v. Ballard, 550 F.3d 1004
Ronald Russo is an inventor. Ballard Medical Products is a subsidiary of Kimberly-Clark. Ballard Medical Products has six subsidiary companies: Medical Innovations Corporation; Ballard Real Estate Holdings, Inc.; Ballard International, Inc.; Ballard Medical Products (Canada) Inc., dba Preferred Medical Products; Mist Assist, Inc.; Plastic Engineered Products Company. (http://www.fundinguniverse.com/company-histories/Ballard-Medical-Products-Company-History.html) Ballard had one product line that allowed for sucking fluid from a patients airway while simultaneously giving the patient air to breath. Russo designed this device for Ballard. When Ballard couldn't get the FDA to approve the device for use for longer than 24 hours, Russo was contacted again about improvements to the device. Russo agreed to show Ballard the improvements he had made but conditioned the disclosure on a confidential disclosure agreement. After signing the confidential disclosure agreement, Ballard and Russo were not able to come to an agreement about licensing Russo's innovations. Russo asked for his materials back and Ballard told him that the materials could not be found. Ballard was actually using the materials and patented inventions based on Russo's materials, they also used Russo's materials to introduce a new product to the market. Ronald Russo sued Ballard Medical Products because he said they misappropriated his trade secrets and breached the parties' confidentiality agreement by incorporating some of Russo's innovations into Ballard's medical devices without Russo's consent.
At district court a jury found for Mr. Russo and gave him $20 million in damages. The Jury awarded $17 million in unjust enrichment and $3 million in damages for the breach of the confidentiality agreement. To make a point: Ballard was forced to pay $20 million for innovations that Russo offered to license to Ballard for 3% of sales and a guarantee of $50,000 a year. Ballard appealed and argued that Russo's state law claims were pre-empted by federal patent law. On appeal Russo claimed that the district court made a mistake by not adding pre-judgment interest to his award. This court affirmed both decisions.
The court said that although there was a substantial issue of patent law involved in the case, having a substantial issue of patent law does not pre-empt the trade secret complaint. They held that this logic was true for Russo's trade secret claim and his breach of contract claim. The court went on to say that there are three types of pre-emption: explicit, field, and conflict pre-emption. The court held that conflict pre-emption applied in this case but that "[c]onflict preemption[sic] arises when state law [']stands as an obstacle to the accomplishment and execution of the full purposes and objectives of congress,['] as expressed in this case in the Patent Act... When it comes to assessing this question, two particular doctrinal strands bear upon our analysis, one illustrated by Kewanee Oil, the other by Bonito Boats..."
In Kewanne Oil, the court in that case concluded that patent law and state trade secret law usually complement each other. The court in that case held that no one would run the risk of losing exclusive rights to their invention, guaranteed by the patent system, in favor of the much more circumventable rights of a trade secret. In Bonito boats the court held that as long as the trade secret protection requires secrecy there is no conflict with a patent law system that requires commitment to the public or application for patent protection on disclosure of that trade secret.
The court considered Ballard's assertion that Russo's complaint challenged patent law's presumption of inventorship. The court held that Russo's complaint didn't attempt to be named the inventor of the patent or seek any of the rights granted by the patent. The court felt that this showed that there was no need for pre-emption of the state claims by federal patent law. The court went on to say that the only reason Russo even brought the subject of patents up, was to show that Ballard had misappropriated Russo's trade secrets.
So in the end the court, once again, held that there is no inherent conflict between trade secret law and federal patent law. I think what is also important is that the court went on to say what might cause a conflict, citing that the complaint didn't ask for a reassignment of patent rights as a remedy for a state law trade secret cause of action. That's important because it gives practitioners a fairly clear way to allege conflict pre-emption for trade secret cases in the future.
At district court a jury found for Mr. Russo and gave him $20 million in damages. The Jury awarded $17 million in unjust enrichment and $3 million in damages for the breach of the confidentiality agreement. To make a point: Ballard was forced to pay $20 million for innovations that Russo offered to license to Ballard for 3% of sales and a guarantee of $50,000 a year. Ballard appealed and argued that Russo's state law claims were pre-empted by federal patent law. On appeal Russo claimed that the district court made a mistake by not adding pre-judgment interest to his award. This court affirmed both decisions.
The court said that although there was a substantial issue of patent law involved in the case, having a substantial issue of patent law does not pre-empt the trade secret complaint. They held that this logic was true for Russo's trade secret claim and his breach of contract claim. The court went on to say that there are three types of pre-emption: explicit, field, and conflict pre-emption. The court held that conflict pre-emption applied in this case but that "[c]onflict preemption[sic] arises when state law [']stands as an obstacle to the accomplishment and execution of the full purposes and objectives of congress,['] as expressed in this case in the Patent Act... When it comes to assessing this question, two particular doctrinal strands bear upon our analysis, one illustrated by Kewanee Oil, the other by Bonito Boats..."
In Kewanne Oil, the court in that case concluded that patent law and state trade secret law usually complement each other. The court in that case held that no one would run the risk of losing exclusive rights to their invention, guaranteed by the patent system, in favor of the much more circumventable rights of a trade secret. In Bonito boats the court held that as long as the trade secret protection requires secrecy there is no conflict with a patent law system that requires commitment to the public or application for patent protection on disclosure of that trade secret.
The court considered Ballard's assertion that Russo's complaint challenged patent law's presumption of inventorship. The court held that Russo's complaint didn't attempt to be named the inventor of the patent or seek any of the rights granted by the patent. The court felt that this showed that there was no need for pre-emption of the state claims by federal patent law. The court went on to say that the only reason Russo even brought the subject of patents up, was to show that Ballard had misappropriated Russo's trade secrets.
So in the end the court, once again, held that there is no inherent conflict between trade secret law and federal patent law. I think what is also important is that the court went on to say what might cause a conflict, citing that the complaint didn't ask for a reassignment of patent rights as a remedy for a state law trade secret cause of action. That's important because it gives practitioners a fairly clear way to allege conflict pre-emption for trade secret cases in the future.
Tuesday, September 20, 2011
Red Herring: comparing income tax to corporate tax or capital gains tax
Raising capital gains tax, payroll tax, or corporate tax is not comparable to raising income tax. There are two different types of math and public policy going on there. If someone compares the two they are throwing you a red herring and playing you for a chump.
Capital gains tax is a percentage paid on positive returns on investments for capital expenditures, investments in items whose benefits are to be gained beyond the taxable year.(house, long term stocks, new kitchen, research and development of a new product etc.) The public policy is to tax people and corporations on money they make off of good investments that they didn't deduct for.
Payroll tax is a percentage paid by a corporate entity that is based on how much they are paying their workers. This can include the amount that they are required to withhold for soc. sec. and unemployment, but in some states and nations it also includes a percentage of tax paid based on the salary that the company pays a worker. The public policy is that the government can generate revenue based on how much their economic ecosystem can afford to pay people.
Corporate tax is a percentage of corporate taxable income paid to the government by a corporation. The percentage paid is based on the taxable income of the corporation and here are the brackets
taxable income:
<50k 15%
50k<>75k 25%
75k<>100k 34%
100k<>335k 39%
335k<>10M 34%
10M<>15M 35%
15M<>18.333M 38%
18.333M< 35%
That is just the federal corporate tax; there is still a state corporate tax in most states. The public policy is to tax corporations for making money and not paying it out or reinvesting it in non-capitalized ways.
Income tax is something paid by individuals which is a percentage of their taxable income. The U.S. system is currently bracketed meaning you pay a different percentage based on what your taxable income is for the taxable year. The public policy is to tax people for their use of the federal government's services.
All these taxes come at different times, have different requirements, and different implications. Comparing them shows a lack of understanding of the tax code at best and a intention to deceive at worst.
Monday, September 19, 2011
Copyright Lifespan
Works created on or after January 1, 1978: Life of the artist plus 70 years, from point of creation. For anonymous work, 95 years from first publication or 120 years from creation, whichever is shorter.
Works created before January 1, 1978, but not published or registered by that date: same as above. Also can't expire before December 31st, 2002.
Works created and published before January 1, 1978: 28 years from the time that it was published with a copyright notice or registered with the copyright office with an option to renew, in the 28th year, for another 19 years. For works that existed between 1976 and 1978, or works that were restored under the Uruguay Round Agreements Act, they could get an 67 year renewal term, which would mean a total of 95 years of protection. And if you think 95 years is ridiculous you can thank Mr. Sunny Bono.
Works created before January 1, 1978, but not published or registered by that date: same as above. Also can't expire before December 31st, 2002.
Works created and published before January 1, 1978: 28 years from the time that it was published with a copyright notice or registered with the copyright office with an option to renew, in the 28th year, for another 19 years. For works that existed between 1976 and 1978, or works that were restored under the Uruguay Round Agreements Act, they could get an 67 year renewal term, which would mean a total of 95 years of protection. And if you think 95 years is ridiculous you can thank Mr. Sunny Bono.
Louis Vuitton Malletier v. Akanoc Solutions Inc., US app 9th circuit, slip opinion Nos. 10-15909, 10-16015
This case dealt with Contributory Copyright and Trademark infringement, and damages. Defendant rented server space to website hosts that had websites with links to an email address that would let people buy fake Louis Vuitton gear. LV sent cease and desist letters to the website hosts and the company that leased server space. When the cease and desist letters didn't do anything Louis Vuitton sued for contributory copyright and trademark infringement. The lower court found for VL but the appeals court took it up to decide if the jury instruction was wrong, if the judgement as a matter of law was wrong, and whether or not the damages were wrong. Most importantly to me, though, was the court's holding regarding the trademark infringement, which I discuss below.
The court said that LV had to show that defendant continued to supply its services to someone who the service provider knew or had reason to know was engaging in trademark infringement. Inwood Labs, Inc. v. Ives Labs., Ince., 456 U.S. 844, 854 (1982). Also, because the defendant was a service provider, LV had to show that defendant had "[d]irect control and monitoring of the instrumentality used by a third party to infringe". Lockheed Martin Corp. v. Network Solutions, Inc., 194 F.3d 980, 984 (9th Cir. 1999). The court reasoned that the defendant had control because it had direct control over the "master switch" that kept the websites online. The court further held that Defendants contribution to infringement doesn't have to be intentional for liability to exist. The court decided that LV only had to show that defendant had actual or constructive knowledge that the services they provided were being used for trademark infringement.
US v. Pendelton, US 3rd cir. slip opinion No. 10-1818
Pendleton had sex with a 15y/o boy in Germany. He was convicted by a German court and served 19 months in a German prison. When he was released the German government deported him to the United States, where he was charged with engaging in noncommercial illicit sexual conduct in a foreign place, in violation of 18 U.S.C. sec. 2423(c) and (f)(1). This law was part of the PROTECT act that criminalize sex with minors in foreign places.
Pendleton was convicted and sentenced to 30yrs in prison. He appealed the decision saying that venue was improper in Delaware and that congress doesn't have the authority to regulate non-commercial activity in a foreign land.
Defendants in a criminal trial have the constitutional right (art. III sec. 2 cl. 3) to be tried in the district where the crime was committed. Pendleton claims that because he left for Germany from the Eastern District of New York, Venue was only proper in the Eastern District of New York. The court disagreed with this assertion saying that "[a] court must initially identify the conduct constituting the offense (the nature of the crime) and then discern the location of the commission of the criminal acts." The court noted that travel to Germany, although part of the crime, was not the main part of the act that congress sought to outlaw. The court then cited 18 U.S.C. sec. 3238's venue provision, that stated venue will be proper in the district where the defendant was arrested, which for Pendleton, was the district of Delaware where he was tried.
After the Jurisdictional element was solved the court, at length, discussed the constitutional element of Pendleton's defense. The court decided that Congress had the constitutional authority to pass such a law and allowed the conviction to stand.
This shows a liberal reading of venue provisions in international criminal cases. The decision also didn't rule out making venue proper in another district, like the one Pendleton left America from. So, venue is proper where you left from or where you came back to, absent some part of your crime being committed in America or a statute stating otherwise.
Pendleton was convicted and sentenced to 30yrs in prison. He appealed the decision saying that venue was improper in Delaware and that congress doesn't have the authority to regulate non-commercial activity in a foreign land.
Defendants in a criminal trial have the constitutional right (art. III sec. 2 cl. 3) to be tried in the district where the crime was committed. Pendleton claims that because he left for Germany from the Eastern District of New York, Venue was only proper in the Eastern District of New York. The court disagreed with this assertion saying that "[a] court must initially identify the conduct constituting the offense (the nature of the crime) and then discern the location of the commission of the criminal acts." The court noted that travel to Germany, although part of the crime, was not the main part of the act that congress sought to outlaw. The court then cited 18 U.S.C. sec. 3238's venue provision, that stated venue will be proper in the district where the defendant was arrested, which for Pendleton, was the district of Delaware where he was tried.
After the Jurisdictional element was solved the court, at length, discussed the constitutional element of Pendleton's defense. The court decided that Congress had the constitutional authority to pass such a law and allowed the conviction to stand.
This shows a liberal reading of venue provisions in international criminal cases. The decision also didn't rule out making venue proper in another district, like the one Pendleton left America from. So, venue is proper where you left from or where you came back to, absent some part of your crime being committed in America or a statute stating otherwise.
Burning the Ships by Marshall Phelps and David Kline
Marshall Phelps was the leader of the Intellectual Asset(IA) team that led to $2 billion in one year. In addition to the ear catching sound of two followed by a billion, the achievement was important because it gave the business leaders of the day an idea about what effective IA management could accomplish in dollars and cents. In his and David Kline's book, "Burning the Ships", Phelps takes the paradigm of effectively managing IA to the next level and explains how IA can be used to cement deals, earn industry respect, and the like. In Burning, Marshall talks about the ideas and influences that went into Microsoft's trend setting deal with Toshiba, the recovery from antitrust suits, dropping non-assertion of patents clauses from all of their supplier agreements, and the push for Microsoft to become more open. I think the most interesting part of the book has to do with his philosophies and different management practices though. As far as usefulness, It's not; At least not to me. This book reminded me of "The world is flat" by Thomas Friedman, Where any 20 something who has been involved in any kind of technology field will immediately recognize the tenants of the book as forgone conclusions.
One of the first things that Mr. Phelps talked about was how you have to collaborate with other companies to make your customers happy. His insight was rare in the business environment where customer satisfaction was seen in a quarterly dollar and cents light. Mr. Phelps was able to get outside the corporate bubble and make the case that making Microsoft products play nice with other products would increase market share in the long run and make other industry segments more likely to use Microsoft's products. For instance, server side software is a classic example of a mish mash between Microsoft and Linux suppliers for software. Mr. Phelps, while at Microsoft, made it a priority to work out a deal with one of the leading Linux service providers, Novell. He went on to explain the benefits of this as being both customer satisfaction and better standing in the industry. He also strongly hinted that a Microsoft-Red Hat deal was in the works, but confidentiality agreements kept him from divulging more information.
Mr. Phelps saw the litigious nature of current IA planning as a drawback. He made his point with a quote from Steve Ballmer, Microsoft CEO, "The company has made it a priority to do all we can to end these legal issues and to do so in a way that increases collaboration with other companies." Mr. Phelps also talked about how he started to internalize a lot of services that they used to farm out to external firms, like patent drafting. He said that by internalizing things like patent drafting it saved them money, raised patent quality, and also gave them more flexibility with their filing procedures. He instituted "forward invention sessions" in the company where patent researchers would prepare reports for technology heads telling them what sort of technologies were in the market and available for use. This got the Tech leads thinking about different ways to collaborate with other companies and different ways to leverage their own technologies in the market. Mr. Phelps said of his collaborations with entrepreneurs, "the biggest benefits is that we got a lot of entrepreneurs and companies looking at the fact that Microsoft can be a good partner, a good collaborator. that's key."
The point of IA acquisitions is not to "produce a profit -- at least not directly, or in the short-term -- but rather to acquire needed technologies, build partnerships, achieve strategic objectives, and/or resolve disputes." This is a direct quote that I think hits the nail on the head. Companies have to play well with others but most importantly a company has to have a goal in mind; like Google's "organize the world's information". When IA is 80% of your assets, as it is with lots of technology companies, then you have to effectively leverage that asset to meet your business goals, or you are not doing your job. He used that point to make a second point: if you ran a concrete factory and you didn't know where 80% of your assets were you would be fired. Somehow, though, it is almost common place for a technology manager not to know or understand where his IA is. I think this was the most important part of the book, saying that companies not only need to look at IA as something more than just a legal issue, but also an asset; as the name says. By collaborating with other companies new applications and know how are inherently brought in and it make the idea worth more. If the idea has been protected, patent, copyright, trademark etc., then the idea brings more value to the company.
So, like I said in the beginning the ideas and procedures outlined in this book are not really ground breaking to me, but it articulates the sort of ethos an IA manager should bring to his/her work. Know what IA you have, use your IA to build value. To give credit where credit is due, Mr. Phelps figured this out when his equally tenured colleagues were still bumbling about in the old-world IA mindset.
One of the first things that Mr. Phelps talked about was how you have to collaborate with other companies to make your customers happy. His insight was rare in the business environment where customer satisfaction was seen in a quarterly dollar and cents light. Mr. Phelps was able to get outside the corporate bubble and make the case that making Microsoft products play nice with other products would increase market share in the long run and make other industry segments more likely to use Microsoft's products. For instance, server side software is a classic example of a mish mash between Microsoft and Linux suppliers for software. Mr. Phelps, while at Microsoft, made it a priority to work out a deal with one of the leading Linux service providers, Novell. He went on to explain the benefits of this as being both customer satisfaction and better standing in the industry. He also strongly hinted that a Microsoft-Red Hat deal was in the works, but confidentiality agreements kept him from divulging more information.
Mr. Phelps saw the litigious nature of current IA planning as a drawback. He made his point with a quote from Steve Ballmer, Microsoft CEO, "The company has made it a priority to do all we can to end these legal issues and to do so in a way that increases collaboration with other companies." Mr. Phelps also talked about how he started to internalize a lot of services that they used to farm out to external firms, like patent drafting. He said that by internalizing things like patent drafting it saved them money, raised patent quality, and also gave them more flexibility with their filing procedures. He instituted "forward invention sessions" in the company where patent researchers would prepare reports for technology heads telling them what sort of technologies were in the market and available for use. This got the Tech leads thinking about different ways to collaborate with other companies and different ways to leverage their own technologies in the market. Mr. Phelps said of his collaborations with entrepreneurs, "the biggest benefits is that we got a lot of entrepreneurs and companies looking at the fact that Microsoft can be a good partner, a good collaborator. that's key."
The point of IA acquisitions is not to "produce a profit -- at least not directly, or in the short-term -- but rather to acquire needed technologies, build partnerships, achieve strategic objectives, and/or resolve disputes." This is a direct quote that I think hits the nail on the head. Companies have to play well with others but most importantly a company has to have a goal in mind; like Google's "organize the world's information". When IA is 80% of your assets, as it is with lots of technology companies, then you have to effectively leverage that asset to meet your business goals, or you are not doing your job. He used that point to make a second point: if you ran a concrete factory and you didn't know where 80% of your assets were you would be fired. Somehow, though, it is almost common place for a technology manager not to know or understand where his IA is. I think this was the most important part of the book, saying that companies not only need to look at IA as something more than just a legal issue, but also an asset; as the name says. By collaborating with other companies new applications and know how are inherently brought in and it make the idea worth more. If the idea has been protected, patent, copyright, trademark etc., then the idea brings more value to the company.
So, like I said in the beginning the ideas and procedures outlined in this book are not really ground breaking to me, but it articulates the sort of ethos an IA manager should bring to his/her work. Know what IA you have, use your IA to build value. To give credit where credit is due, Mr. Phelps figured this out when his equally tenured colleagues were still bumbling about in the old-world IA mindset.
Friday, September 16, 2011
America Invents Act -- Patent Reform(bullet points)
- Also called the patent reform act of 2011
- It used to be that the first applicant to invent the subject matter of the patent would win in a competition with another inventor for the same subject matter. So, If Leibniz and Newton weren't dead, and they both came up with the same idea again, only this time it was patentable, they would just argue in front of the patent office about who invented it first; showing evidence to prove their point. Now, whoever files their application first will win. So, Leibniz and Newton would have to race to the patent office and file an application for a patent to see who would get the patent rights on their idea.
- Sometimes there are rules of procedure in a court room that help the judge decide how he will reward the winning party. Before, Judges in patent cases had more lee-way in determining how winnings would be calculated in patent infringement suits. With the new legislation, Judges have to decide on a set of factors for calculating winnings; prior to hearing evidence about those factors. So, judges will have to hear evidence on what factors should be considered when calculating how much money is to be paid, and then, and only then, can they start to hear evidence proving or disproving the factors that they laid out.
- Damages or winnings are the reason you sue. When you seek damages, you seek to get back whatever money you lost as a result of the person-who-you-are-suing's infringement of your patent rights. Willful infringement is the plaintiff's ticket into the realm of "enhanced" damages. The new law sets a higher standard for willfulness. That means it will be harder for plaintiff's attorneys to show that a defendant was "willful" in his/her infringement of the plaintiff's patent rights.
- There are three new ways that a regular person can challenge the validity of a patent or patent application.
- Sometimes people lie and claim they have a patent by putting a mark on their product saying there is a patent on the product, when there is no patent on the product; that is called a false marking. Regular people used to be able to sue somebody who used false markings. Now, only the government or a competitor of the person who uses false markings can sue the person who is falsely marking things.
- It is now easier for a corporation to file an application when the inventor of the subject matter in the application is not cooperating with the application process.
- In the old patent laws, if an inventor didn't explain what he thought was the best way of practicing his invention (best mode) in the patent application, and the application became a patent, then the patent could be invalidated because the inventor didn't explain the best mode in the application. Inventors can file their application and not talk about the best mode now, without fear of invalidation of their patent.
- There used to be a fee break for "small" entities, now there is a class of fees below that; and it gives further fee breaks to "micro" entities.
- Finally, the USPTO now has the authority to set it's own fees. The USPTO can set their own prices for examining applications.
Monday, September 12, 2011
In Coca-Cola Bottling Co. of Shreverport, Inc. v. Coca-Cola Co., 107 F.R.D. 288 (D.Del., 1985), there was a dispute between the bottlers and the soda maker as to whether the soda maker's soda was covered in the bottling syrup pricing agreement. The bottlers moved for the court to compel the soda maker to turn over formula information for several sodas. The court held that the formula information was a trade secret, but that being a trade secret doesn't preclude it from discovery. The court decided that any discovery request for the information was subject to strict protective orders.
The case dealt with the secret formula for Coca-Cola, known by only two people in the company. The only written record of the formula is kept in a security vault at the Trust Company Bank in Atlanta, Georgia. Coca-Cola Bottling Co of Shreveport, Inc v Coca-Cola Co, 107 FRD 288, 289; 4 Fed R Serv 3d 1291 (D Del 1985). Coca-Cola bottling's attorney was Edmund N. Carpenter, II. Carpenter was an attorney in Delaware at the time. Carpenter held several positions with the Delaware Bar until his death in 2008. His funeral was covered by the Wall Street Journal. The attorney for Coca-Cola was Richard Allen of Morris, Nichols, Arsht & Tunnell LLP. The plaintiffs said that Coca-Cola had to give up the formula for discovery as a part of a contract dispute, which was directly related to the formula for diet Coke. Coca-Cola argued that the formula was not relevant and that giving up the formula would cause too much damage to the company. Id. at 290.
In ruling on the matter, Judge Murray M. Schwartz, said that he was well aware of the risks posed to Coca-Cola in divulging their formula and that exposing trade secrets is a powerful tool in the hands of plaintiffs to force settlements that might not do justice for the defendant; because the defendant would rather settle than let the plaintiff gain access to the defendant's trade secrets. Id. at 290. Despite this finding, Judge Schwartz held that trade secrets are not absolutely privileged information. Id. at 292. The holding was that when trade secrets are "sought during discovery, the governing relevance standard that the movant must satisfy is the broad relevance standard applicable to pre-trial discovery, i.e., the movant must show that the material sought is relevant to the subject matter of the lawsuit." Id. at 293. The reason Judge Murray cited for this standard came from Covey Oil Co. v. Continental Co., 340 F.2d at 999. In Covey, it was held that in the absence of an applicable privilege "[j]udicial inquiry should not be unduly hampered." Id. at 999. Further, Judge Murray cited Judge Learned hand in his opinion saying that disclosure of trade secrets may damage defendants; "[t]hat is, however, an inevitable incident to any inquiry in such a case; unless the defendant may be made to answer, the plaintiff is deprived of its right to learn whether the defendant has done it a wrong." Coca-Cola Bottling Co of Shreveport, Inc v Coca-Cola Co, 107 FRD 288, 293; 4 Fed R Serv 3d 1291 (D Del 1985).
Judge Murray went on to balance the harm done to Coca-Cola against the harm done to the defendant by not having relevant information disclosed, and decided that the formulae had to be disclosed. This result is not too surprising given the invocation of a right of the plaintiff "to learn whether the defendant has done it a wrong." Id. at 293. Full disclosure: I never won an award for the best grade in my evidence class, I am also not a practicing attorney. That being said, I don't remember a right of the plaintiff "to learn whether the defendant has done it a wrong." Id. at 293. When Judge Learned Hand says this in his decision in Grasselli Chemical Co. v. National Aniline & Chemical Co., 282 F. 379, the Judge does not cite a source for this right. This right has materialized through the writings of a famous judge; and now it is law.
The problem with this new right is that it flips the process. First, you complain that you have been wronged, in a complaint. Second, you discover evidence that is relevant in tending to prove or disprove the matter at hand. I have never heard, until Judge Hand told me, that first you start a trial by filing a complaint, and then you learn whether or not you have been wronged; further, you have a right to learn if you have been wronged. I can't say that I disagree with the result but the reasoning makes me very uncomfortable, especially when it comes from such a noted judge as Learned Hand.
The case dealt with the secret formula for Coca-Cola, known by only two people in the company. The only written record of the formula is kept in a security vault at the Trust Company Bank in Atlanta, Georgia. Coca-Cola Bottling Co of Shreveport, Inc v Coca-Cola Co, 107 FRD 288, 289; 4 Fed R Serv 3d 1291 (D Del 1985). Coca-Cola bottling's attorney was Edmund N. Carpenter, II. Carpenter was an attorney in Delaware at the time. Carpenter held several positions with the Delaware Bar until his death in 2008. His funeral was covered by the Wall Street Journal. The attorney for Coca-Cola was Richard Allen of Morris, Nichols, Arsht & Tunnell LLP. The plaintiffs said that Coca-Cola had to give up the formula for discovery as a part of a contract dispute, which was directly related to the formula for diet Coke. Coca-Cola argued that the formula was not relevant and that giving up the formula would cause too much damage to the company. Id. at 290.
In ruling on the matter, Judge Murray M. Schwartz, said that he was well aware of the risks posed to Coca-Cola in divulging their formula and that exposing trade secrets is a powerful tool in the hands of plaintiffs to force settlements that might not do justice for the defendant; because the defendant would rather settle than let the plaintiff gain access to the defendant's trade secrets. Id. at 290. Despite this finding, Judge Schwartz held that trade secrets are not absolutely privileged information. Id. at 292. The holding was that when trade secrets are "sought during discovery, the governing relevance standard that the movant must satisfy is the broad relevance standard applicable to pre-trial discovery, i.e., the movant must show that the material sought is relevant to the subject matter of the lawsuit." Id. at 293. The reason Judge Murray cited for this standard came from Covey Oil Co. v. Continental Co., 340 F.2d at 999. In Covey, it was held that in the absence of an applicable privilege "[j]udicial inquiry should not be unduly hampered." Id. at 999. Further, Judge Murray cited Judge Learned hand in his opinion saying that disclosure of trade secrets may damage defendants; "[t]hat is, however, an inevitable incident to any inquiry in such a case; unless the defendant may be made to answer, the plaintiff is deprived of its right to learn whether the defendant has done it a wrong." Coca-Cola Bottling Co of Shreveport, Inc v Coca-Cola Co, 107 FRD 288, 293; 4 Fed R Serv 3d 1291 (D Del 1985).
Judge Murray went on to balance the harm done to Coca-Cola against the harm done to the defendant by not having relevant information disclosed, and decided that the formulae had to be disclosed. This result is not too surprising given the invocation of a right of the plaintiff "to learn whether the defendant has done it a wrong." Id. at 293. Full disclosure: I never won an award for the best grade in my evidence class, I am also not a practicing attorney. That being said, I don't remember a right of the plaintiff "to learn whether the defendant has done it a wrong." Id. at 293. When Judge Learned Hand says this in his decision in Grasselli Chemical Co. v. National Aniline & Chemical Co., 282 F. 379, the Judge does not cite a source for this right. This right has materialized through the writings of a famous judge; and now it is law.
The problem with this new right is that it flips the process. First, you complain that you have been wronged, in a complaint. Second, you discover evidence that is relevant in tending to prove or disprove the matter at hand. I have never heard, until Judge Hand told me, that first you start a trial by filing a complaint, and then you learn whether or not you have been wronged; further, you have a right to learn if you have been wronged. I can't say that I disagree with the result but the reasoning makes me very uncomfortable, especially when it comes from such a noted judge as Learned Hand.
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