Tuesday, September 2, 2014
Monday, September 1, 2014
Chinese patent trolls are now attacking US-based entities
There has been a recent surge of cases involving Chinese non-practicing entities suing US companies for violating broad and vague patents that they claim to hold. These NPEs, often known as patent trolls, are companies that don't actually invent or innovate, but just buy up patents for the purpose of making money through litigation. In essence, patent trolls are manipulating the legal system for their own personal gain.
One example of this is Personal Audio LLC, a Chinese patent troll, which used extremely complicated legalese to deliver a nonsensical court case to many large media companies in the US. One of these cases was based on the vague and complicated claim that a company that creates podcasts violated their patent on podcasting technology.
As I wrote about in a previous blog post, this is becoming an increasingly large problem because state-sponsored patent trolls are now interfering in the market for intellectual property. A technology hub in China known as Zhongguancun recently received a $15 million grant to create a patent-troll entity known as Ruichuan IPR Funds. This would mainly be designed to buy up patents and then use these to litigate against foreign companies.
China has an interesting system known as the Utility Model Patent system (UMP), wherein applicants can basically have a cheap, fast-track to getting a patent, without much examination or review. This is problematic because it leads to situations where non-practicing entities can quickly get patents that they don't deserve to have and use it to litigate against perfectly legitimate companies. Even if they don't actually have a claim to their patent and are ultimately invalidated, they cost the legitimate company a huge sum in legal fees having to defend their fair practices. China is now using this as an offensive technique to cripple US businesses operating in China, and in doing so, give Chinese companies a chance.
Source: http://www.commdiginews.com/business-2/chinese-patent-trolls-attack-us-entities-24936/
One example of this is Personal Audio LLC, a Chinese patent troll, which used extremely complicated legalese to deliver a nonsensical court case to many large media companies in the US. One of these cases was based on the vague and complicated claim that a company that creates podcasts violated their patent on podcasting technology.
As I wrote about in a previous blog post, this is becoming an increasingly large problem because state-sponsored patent trolls are now interfering in the market for intellectual property. A technology hub in China known as Zhongguancun recently received a $15 million grant to create a patent-troll entity known as Ruichuan IPR Funds. This would mainly be designed to buy up patents and then use these to litigate against foreign companies.
China has an interesting system known as the Utility Model Patent system (UMP), wherein applicants can basically have a cheap, fast-track to getting a patent, without much examination or review. This is problematic because it leads to situations where non-practicing entities can quickly get patents that they don't deserve to have and use it to litigate against perfectly legitimate companies. Even if they don't actually have a claim to their patent and are ultimately invalidated, they cost the legitimate company a huge sum in legal fees having to defend their fair practices. China is now using this as an offensive technique to cripple US businesses operating in China, and in doing so, give Chinese companies a chance.
Source: http://www.commdiginews.com/business-2/chinese-patent-trolls-attack-us-entities-24936/
The new patent on the block: anti-piracy patenting
A new patent awarded to a company known as Verance seeks to disrupt digital media piracy through the use of embedded watermarks. The brilliance of the invention lies in the fact that watermark will allow the digital content to be identified without being decrypted, making for easier recognition of pirated content.
There are a few important patent-related observations I would like to make regarding this case. I think that the Verance technology serves as a great example of the principles of filing for a patent discussed in some earlier posts. It is clearly patent-eligible and has a great deal of utility, it is definitely novel and non-obvious, and finally, the patent was extremely technical and lengthy, indicating that it was certainly an adequate description.
The patent demonstrated satisfaction of these requirements through showing the steps involved in the creation of this invention, as well as the unique instances in which this technology would be useful to fill the gap that the previous technology does not fill. It demonstrated that there were important times when this product would be uniquely useful, thereby fulfilling the utility requirement.
Source: http://torrentfreak.com/patent-allows-watermarking-of-already-encrypted-movies-140831/
There are a few important patent-related observations I would like to make regarding this case. I think that the Verance technology serves as a great example of the principles of filing for a patent discussed in some earlier posts. It is clearly patent-eligible and has a great deal of utility, it is definitely novel and non-obvious, and finally, the patent was extremely technical and lengthy, indicating that it was certainly an adequate description.
The patent demonstrated satisfaction of these requirements through showing the steps involved in the creation of this invention, as well as the unique instances in which this technology would be useful to fill the gap that the previous technology does not fill. It demonstrated that there were important times when this product would be uniquely useful, thereby fulfilling the utility requirement.
Source: http://torrentfreak.com/patent-allows-watermarking-of-already-encrypted-movies-140831/
United Therapeutics reaffirms the fight for pharmaceutical patents
This Friday, United Therapeutics scored an important win in the fight against generic pharmaceuticals by blocking Novartis from selling a generic version of UT's drug Remodulin. Remodulin is a massive money-maker for United Therapeutics, so they were loath to allow generic manufacturers to copy their formula and create cheaper versions of the drug.
One interesting aspect of the outcome of this court case was that it caused United Therapeutics' shares to spike. This is perfect proof that patent litigation affects company's profit margins and by transitive connection, the entire economy as a whole. There must therefore be a lot of thought put into the patent litigation process since it does have the ability to affect economics so much. The implication of this is that there is a lot of interest on all sides of patent litigation, so there must be care taken to prevent the powers that have money from influencing the outcome of legislation and litigation regarding intellectual property. Unfortunately, we have already seen this materialize somewhat as money does have a huge impact on the outcome of court cases today in the United States.
Another interesting observation is that Novartis will still eventually be able to market a generic version of Remodulin; they just have to wait until 2017 when the patent expires. At that point, there is clearly a question of what the patent is for -- is it really protecting the inventor and the consumer, or is it just allowing these giant pharmaceutical companies to make more money?
One interesting aspect of the outcome of this court case was that it caused United Therapeutics' shares to spike. This is perfect proof that patent litigation affects company's profit margins and by transitive connection, the entire economy as a whole. There must therefore be a lot of thought put into the patent litigation process since it does have the ability to affect economics so much. The implication of this is that there is a lot of interest on all sides of patent litigation, so there must be care taken to prevent the powers that have money from influencing the outcome of legislation and litigation regarding intellectual property. Unfortunately, we have already seen this materialize somewhat as money does have a huge impact on the outcome of court cases today in the United States.
Another interesting observation is that Novartis will still eventually be able to market a generic version of Remodulin; they just have to wait until 2017 when the patent expires. At that point, there is clearly a question of what the patent is for -- is it really protecting the inventor and the consumer, or is it just allowing these giant pharmaceutical companies to make more money?
China joins the patent war -- on the side of the patent trolls.
Today, I want to discuss the topic of state-funded or state-controlled patent operations. It has long been the case that several countries, including France, Japan, and Korea, have state-operated patent administrations. These patent operations function the same way as private trolls do, in that they buy up and own patents, then use those to deter other businesses from competing.
This is extremely problematic because it is harmful to competition and prevents innovation from happening. It is an abuse of what patents are meant for, in that they are no longer protecting inventors and innovators, but rather just harming other companies that may want to compete. In fact, this is the exact reason that China is joining this patent game -- because they want to protect domestic businesses against international competition. This protectionist attitude is harmful to competition and ends up hurting domestic consumers by denying them access to better products at cheaper prices.
Patent trolls, as we have discussed several times before, are extremely harmful to the economy. A Boston University Law study quantifies the impact that patent trolls have on the American economy, quoting a $29 billion impact to businesses last year from direct costs, such as legal fees. This figure does not even take into account all the losses associated with hindered innovation and productivity.
The problem of patent trolling is even further magnified when the actor is a state government. Many state governments have admitted that they use these tactics maliciously to hurt foreign companies in favor of domestic ones. Since the government of the country in question is the one adjudicating any international patent conflicts, it has a huge ability to bend the law in favor of the domestic companies. This is a violation of justice and is a serious impact to American businesses as well.
Source: http://www.washingtontimes.com/news/2014/aug/31/roff-the-frightening-emergence-of-government-paten/
This is extremely problematic because it is harmful to competition and prevents innovation from happening. It is an abuse of what patents are meant for, in that they are no longer protecting inventors and innovators, but rather just harming other companies that may want to compete. In fact, this is the exact reason that China is joining this patent game -- because they want to protect domestic businesses against international competition. This protectionist attitude is harmful to competition and ends up hurting domestic consumers by denying them access to better products at cheaper prices.
Patent trolls, as we have discussed several times before, are extremely harmful to the economy. A Boston University Law study quantifies the impact that patent trolls have on the American economy, quoting a $29 billion impact to businesses last year from direct costs, such as legal fees. This figure does not even take into account all the losses associated with hindered innovation and productivity.
The problem of patent trolling is even further magnified when the actor is a state government. Many state governments have admitted that they use these tactics maliciously to hurt foreign companies in favor of domestic ones. Since the government of the country in question is the one adjudicating any international patent conflicts, it has a huge ability to bend the law in favor of the domestic companies. This is a violation of justice and is a serious impact to American businesses as well.
Source: http://www.washingtontimes.com/news/2014/aug/31/roff-the-frightening-emergence-of-government-paten/
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