An ounce of prevention is worth more than a pound of cure....Preventing an Intellectual Property China Syndrome

An ounce of prevention is worth more than a pound of cure

Preventing an Intellectual Property China Syndrome

Filing for intellectual property (IP) protection in China, even if you never intend to market or sell your products in China, can be very beneficial, and potentially cheaper in the long run.  If you use or plan to use a Chinese manufacturer to make your products, being proactive in seeking Chinese IP protection for your company’s intellectual property can help avoid a figurative production line meltdown.

A typical unscrupulous scenario is as follows.  You are a law abiding U.S. company, trying to make a buck by selling your products in the U.S.  You contract a Chinese manufacturer to make your products that you sell exclusively in the U.S. (or at the least, you will not be selling the products in China).  You may or may not have applied for U.S. IP protection that will give you the right to prevent others from making or selling your products in the U.S. and to prevent the importation of knock-off (counterfeit/infringing) products into the U.S.  Since you are not marketing or selling your products in China, you do not file for IP protection in China.  All is going great.  The Chinese manufacture is making your products, shipping them to the U.S. and the products are selling like hotcakes.

Next, a nefarious company then enters the scene.  Seeing no Chinese IP filed, the nefarious company submits its own application for Chinese IP protection covering the product that you are manufacturing in China.  China has a relatively simple registration process for some IP (e.g. designs and utility models).  The registration process does not include an independent investigation to determine whether the registrant is the actual, original creator of the IP; China just takes the word of the signed declaration of the registrant.  As a result, the unsavory company gets a Chinese registration covering your company’s IP.

The final blow comes when the ruthless company goes to your Chinese manufacturer with the fraudulently secured Chinese IP registration, and insists that your Chinese manufacturer cease producing your product or be sued for infringement.

Your recourse is relatively simple, but not cheap.  You can request an invalidity proceeding with the Chinese government to invalidate the improperly secured Chinese registration.  To do so, you need to have proof that your product was publically known (e.g. sold or advertised) before the Chinese IP registration was filed.  Oh, you will also need a Chinese attorney and will need to pay a Chinese government fee for requesting the invalidity proceeding, neither of which are inexpensive.

What could the U.S. company have done to prevent its manufacturing production line from being possibly shut down for fear of an infringement lawsuit from the ruthless company?  The U.S. company could have filed its own application for IP protection in China.  The U.S. company’s Chinese IP would act as a shield to prevent the ruthless company from falsely claiming its IP in China.  The typical costs (attorney and government fees) can be as much as 50% less to register your IP in China as compared with the costs for invalidating an improper registration of another.  Depending on the circumstances, being proactive in filing for IP rights in China may be more cost effective and beneficial than waiting to defend your rights against this dishonest practice.

© Stephen J. Weyer, Stites & Harbison, PLLC, 2013

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No © fair use for you...NEXT !

A federal judge found Meltwater U.S. Holdings Inc. and its Meltwater News Service (Meltwater) liable for copyright infringement based on its reposting Associated Press (AP) news items on Meltwater's website The Associated Press v. Meltwater .  Although Meltwater asserted a fair use defense, insisting that its use of AP's copyright material was permitted, the judge was not buying it.

Meltwater operates a "for pay" news aggregate (also known as a clipper service) in which a computer algorithm selects news articles from the Internet, including ones from the AP.  Large portions and in some cases, virtually entire web items are reproduced on the Meltwater site.  Meltwater defends its actions as "fair use" insisting that it is merely reporting the news.  However, the judge found that Meltwater's marketing materials imply that its service is a substitute for AP's new service.  Basically, the judge determined that Meltwater wanted to have its cake and eat it too.  Paraphrasing the Soup Nazi (Seinfeld), the judge found, "No fair use for you!  Next."

What doomed Meltwater's fair use defense claim to copyright infringement?  Summarizing the verbose almost 100 page opinion in a Twitter-friendly, less than 140 characters, Meltwater reproduced too much of AP's content and its service was a substitute for the original.

One might wonder how others may avoid the same fate at Meltwater.  For example, should Yahoo, estimated 30 million purchaser of a 17 year old's app, Summly, be concerned?  Summly is an app which uses an algorithm to automatically summarize news stories posted online, and then present news summaries to its app users.  Since the app does not reproduce the news items it distributes verbatim (or even portions verbatim), it seems unlikely that the Summly app's use infringes another's copyright.  It should be noted that "facts" and the "information" of news stories are not protectable by copyright, just the "expression" of the facts (i.e. word selection, phrases, etc.)

© Stephen J. Weyer, Stites & Harbison, PLLC, 2013

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Top ELEVEN Reasons for filing a U.S. Patent Application by March 15

Top ELEVEN Reasons for filing a U.S. Patent Application by March 15, 2013

11. Beat the U.S.Patent Office (USPTO) fee increases (starting March 19).

10. Tackle the easier task of preparing a patent application before moving on to the more complicated task of preparing your 2012 personal tax return.

9.  Avoid new class of foreign patent applications and foreign country use/sales as prior art being used to reject your patent application.

8.  Eliminate the threat that an earlier, oral disclosure of your invention can be used as prior art.

7.  Peace of mind in the more certainty of prior interpretations of the existing patent statute through established case law rather than the ambiguity of how the new patent law will be interpreted.

6.  Thwart the risk that a third party disclosure of your invention (up to a year before you file your patent application), will prevent you from getting a patent.

5.  Avoid new post patent grant review at the USPTO.

4.  Be able to rely on the "first-to-invent" rule to establish an earlier date of invention than that of your patent application filing date (allowing you to prove you were the original inventor before another).

3.  Your patent application filed by March 15 can later be used as the basis for a future continuing patent application which will be examined under the "old"/current patent laws rather than those starting March 16 (e.g. reason #4, above).

2.  Always better to file sooner rather than later.

1.  Frees up time to concentrate on filling out your NCAA March Madness Basketball Bracket.

© Stephen J. Weyer, Stites & Harbison, PLLC, 2013

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Unlocking the Mystery Behind Copyright Laws Preventing Untethering Mobile Phones Even After Contract Ends (UPDATED)

Unlocking the mystery behind Copyright laws preventing untethering mobile phones even after contract ends

The Librarian of Congress has determined that unlocking (a.k.a. jailbreaking) a cellphone (i.e. circumventing restrictions which limit the porting of a cellphone to another carrier) is a now copyright violation.  However, just two years ago, the Librarian of Congress came to a contrary conclusion, finding that unlocking a cellphone was not a violation of U.S. Copyright law.  But how is it that the Librarian of Congress welds such a powerful pen to decide what is and is not a copyright violation?

Constitutional scholars, fifth graders, and arguably the rest of us from ABC television's School House Rock, "I'm just a Bill on Capital Hill" are keenly aware that Congress writes laws (bills) and the bill becomes law if the president signs the bill or Congress overrides a presidential veto.  Seems pretty straight forward, right?  Well what about vesting the Librarian of Congress with authority over whether unlocking a cellphone (i.e. circumventing restrictions which limit the porting of a cellphone to another carrier) is a copyright violation?  The answer lies in the Copyright statute itself and Administrative Law.

The Copyright Act, and in particular, provisions of the Digital Millennium Copyright of 1998 (DCMA) includes provisions which prohibit circumvention of "technological measure[s] that effectively controls access to a copyrighted work" (17 U.S.C. § 1201).  The purpose of this provision is to prevent copying and distributing copyright protected (digital) works, i.e. piracy of works.  However, the Act includes provisions for exemptions to the prohibition against circumvention for designated technologies, thus allowing one to have access without violating the copyright statute.  The Act spells out who shall be the "decider."

(B) The prohibition...shall not apply to persons who are users of a copyrighted work which is in a particular class of works, if such persons are, or are likely to be in the succeeding 3-year period, adversely affected by virtue of such prohibition in their ability to make noninfringing uses of that particular class of works under this title, as determined... 

(C) ... by the Librarian of Congress, upon the recommendation of the Register of Copyrights, who shall consult with the Assistant Secretary for Communications and Information of the Department of Commerce.  §1201. Circumvention of copyright protection systems (emphasis added)

In 2010,  the Librarian of Congress exempted "unlocking" cell phones from the prohibition, allowing one to legally untether a cellphone from one cell phone carrier when the cellphone carrier contract ends and connect it to another.

(2) Computer programs that enable wireless telephone handsets to execute software applications, where circumvention is accomplished for the sole purpose of enabling interoperability of such applications, when they have been lawfully obtained, with computer programs on the telephone handset.   ("Librarian of Congress Announces DMCA Section 1201 Rules for Exemptions Regarding Circumvention of Access-Control Technologies")

In 2012, the Librarian of Congress changed his tune, citing evolving technologies and more options for consumers to purchase unlocked cell phones as reasons for not continuing the exemption.  (See Section 1201 rule making: Fifth Triennial Proceeding to Determine Exemptions to the Prohibition on Circumvention).

What does this mean?  Well, if you own a sporty Apple iPhone 5 on Verizon, no sweat.  It comes unlocked so after your contract expires, feel free to connect it to your favorite CDMA (and possibly GSM) network of choice, here in the US or abroad.  It you have an iPhone anchored to the AT&T network, you will need to get AT&T's permission to unlock the phone or risk copyright infringement if you unlock your iPhone.

© Stephen J. Weyer, Stites & Harbison, PLLC, 2013
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The Art of Patenting Science

The Art of Patenting Science

 



Patents protect novel and non-obvious functional aspects of an invention (i.e. the physical embodiment or practical application of a new idea, namely a machine, article of manufacture, process, or chemical composition).  In other words, patents protect the application of science (leaving methods of doing business method aside for this discussion).  The way in which patents protect the application of science is through the "claims" in a patent.  Patent claims define the scope of what is covered by the patent.  Many recent U.S. Supreme Court cases and Federal Circuit Court of Appeals cases relating to patent validity and enforcement underscore the fundamental principle that patent claims must be carefully drafted in order to provide the desired patent scope.  While a patent protects applications of science, drafting patent claims is more of an art than an exact science. 

From the protection of pesticide resistant soybean plants and cultivations methods in the patent dispute between Monsanto and an Indiana farmer to subject matter eligibility and indefiniteness issues with regard to computer-implemented methods/software (e.g. Function Media, L.L.C. v. Google and CLS Bank v. Alice Corp (Fed. Cir. 2013)), enforcement and validity turn on the language in the patent claims.  Appeals in all of these cases are currently pending at the U.S. Supreme Court of the Federal Court of Appeals.  Time will tell whether the subject patents have claims which will withstand scrutiny and be found enforceable and infringed or whether the claims, for whatever reason, fail to be sufficient. 

Patent attorneys are the artists who translate inventors' work to patent claims.   However, changing patent laws, judicial decisions interpreting the patent laws and every changing U.S. Patent Office interpretation and examination procedures all lead to uncertainty in what patent claims will be valid and enforceable today and over the 20 year patent term.  Therefore, patent claims must be composed using ones creative mind to envision how the law, the courts, and the Patent Office will act over the next twenty years.

Like forecasting the weather, while patent claims are based on historic data, models and real-time facts, patent claims writing requires ingenuity, creativity and inventiveness, i.e. the skills of an artist.  Creativity in claims drafting helps to ensure enforcement and validity of patents.  The best patent attorneys are true artists taking an inventor's work and molding it into a defendable patent.

© Stephen J. Weyer, Stites & Harbison, PLLC, 2013

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Love Affair with the Fax Machine is Cultural

Bloglet- Japanese Love affair with the Fax Machine is Cultural

On this Valentine's Day, we reflect on the long standing attraction of tech-savvy Japan for the 200 dpi, monochromatic transmission of paper documents.  In the Washington Post article, "In Japan, Fax Machines remain important because of language and culture", reasons for the lasting affection include the Japanese language with kanji characters that were not easily handled by computers of the day, i.e. the 1970's and 80's when the facsimile technology was created.  As a result, Japanese businesses, government and around 50% of the households adopted the fax machine rather than computers/email for electronic transmission of documents.  The New York Times' article, "In the High-Tech Japan, the Fax Machine Roll On", provides additional insights into the abiding embrace of the facsimile including tried and true, reliable business practices in which paper faxes are integral to their success, as well as the joy and pleasure of receiving handwritten faxed notes and greetings.  In the U.S. where many public elementary schools are considering dropping cursive handwriting, the art of penning a handwritten greeting may soon be a thing of the past along with the fax machine.  However, for now, in Japan, the love affair with the fax machine endures!

© Stephen J. Weyer, Stites & Harbison, PLLC, 2013

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The Big Bang Theory of Economic Development

The Big Bang Theory of Economic Development

   Move over Keynesian and classic supply-side theories of economics.   Here comes revenge of the nerds and the geek squad.  A recent Brookings Institution Report finds that patents are very relevant to an area's economic health and growth.  Patents, the product of scientists and engineers (sometimes affectionately referred to as geeks), protect inventions.  However, patents, alone, do not provide a guarantee that patents generated in a specific area will actually lead to wealth in that area.  What is needed is an environment or ecosystem which includes patents as part of a system for economic growth.

Yet there is no guarantee that patents generated in a specific location will generate wealth in that same location—a set of conditions (the presence of a skilled and diverse labor force, an “ecosystem” of businesses providing complementary goods and services, financing and marketing capabilities among them) have to be met for invention to be commercialized. Research has established that patents are correlated with economic growth across and within the same country over time.  Brookings Institution Report 

    The Report confirms what many commentators have opined as well as the thesis of one of my prior articles, "Biotechnology fuels drive for economic development," Medical News, May 2011 pages 12-13.  Several factors are necessary for realizing economic development including strong educational institutions, government investment (local, state and national); and trained professional such as intellectual property attorneys, marketer and venture capitalists.  Patent attorneys, scientists and enginers, who are also lawyers, are an invaluable resource that work with inventors (researchers, scientists, engineers), companies and investors.  These attorneys take inventors' work from the lab to the Patent Office.

In conclusion, a healthy growing economy relies on scientists and engineers supported by strong universities and government invectives and corporate investment to create an entrepreneurial ecosystem that functions as an engine of economic growth.Th

© Stephen J. Weyer, Stites & Harbison, PLLC, 2013

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