OC Patent Lawyer

Interview with Joe Platnick of the Pasadena Angels

James Yang — Mon, 06 Feb 2012 14:00:51 +0000

This past holiday season, I had the opportunity to ask Joe Platnick of the Pasadena Angels a few questions about his group. I want to thank Joe for taking time out of his busy schedule to answer a few questions and to help educate our community about the benefits that the Pasadena Angels has been providing to our community since its founding in 2000. Click here for Joe Platnick’s professional profiles. The mission of the Pasadena Angels is to:

Our mission is to create a unique investment community of successful business and professional leaders that identifies promising start-up ventures and provides the capital and counsel necessary for success.

(Q1) Does the Pasadena Angels provide funding for all types of businesses regardless of the industry or their vertical market? Do the investors have a preference for a particular type of business such as mobile applications, medical devices, biotechnology, etc.?

The group provides financing for many different types of companies. However, the vast majority of the companies we’ve backed—and probably all but two—have had some sort of technology orientation. We typically don’t do service-oriented businesses, pure content (digital or print), restaurants or retail establishments.

Because the backgrounds of our 100+ members are very diverse and cover many different areas of technology, we tend to cover a very broad spectrum—including life sciences, software, internet/web 2.0, chips and semiconductors, mobile, and digital media. At the end of the day we’re not biased toward any particular types of businesses, just early-stage, local Southern California companies that have the potential to produce favorable (i.e., venture-like) investment returns.

(Q2) On your website, it says that $25 million dollars has been provided to over 65 companies. This comes out to an average of $384,615.38 per company. Can you let us know the max and min range of the funding that the angel investors are willing to invest? What is the preferred range?

Although our typical investment range per round is $300k to $1m, we don’t have any preferred amount. For each investment opportunity, we tend to consider the company on its own merits and do some thorough liquidity planning to determine the optimal amount to invest. In a couple of cases we’ve had very capital efficient enterprises in the Internet space that required only $200k to get to breakeven. Alternatively, we had another company that I was involved with where we raised $10m and co-invested with two Venture Capital firms. By the way, and as of today we’re probably closer to $30 million and over 70 companies.

(Q3) In addition to monetary funding, your blog post also highlights the importance of assembling the right team? Is it better for the company to assemble the right team before pitching the company? Alternatively, will the investors help to assemble the right team?

There’s really a two-part answer to this question, depending on how you define the term ‘right team.’ If you’re referring to having all of the positions filled, that’s not important when approaching the Pasadena Angels. What’s more important is that you thought through what skill sets and experience are required to get your venture to the next level and have identified the critical hires. Since many of the Pasadena Angels members have extensive networks, we can help fill those slots post-investment.

On the topic of ‘right team’, one of the problems we frequently see with early stage companies is having too big a team and/or the wrong backgrounds. For example, I’ve lost track of the number of companies that have come to us for funding that have a CEO, COO, CFO, CTO, VP of Sales, Chief Architect even before they have a product or revenue. For a company at that stage, that’s way too many people. The other thing we sometimes see are people that aren’t a good fit and were given positions because they are a relative, old college roommate, investor, etc. If you’re feeling inclined to do this, please base your hiring on what’s optimal for your company and stage—and not based on who you enjoy working with or who you owe a favor to.

(Q4) I can imagine that founders have strong willed personalities and do not want to give up control of the company. What types of checks and balances do the investors require to ensure that the investment isn’t squandered? Do they get a seat on the board, etc.?

A couple of years ago there was an interesting article in the Harvard Business Review called the Founder’s Dilemma. In this paper the authors divided founders and entrepreneurs into two categories—those that want to be rich and the ones that want to be king. Based on experience, we typically invest in those that want to get ‘rich’, since the ‘kings’ often don’t care about building successful companies and are more focused on how much control they can exert.

In our experience as Angel investors since 2000, this is a pretty accurate description of the two types of personalities we invariably encounter among startup founders. If a founder is so consumed and pre-occupied with control, then they’re probably not a good fit for the Pasadena Angels and are probably a ‘king.’

With respect to the checks and balances, those tend to be unique to each company. However, some of the common ones include board approval of the annual budget, restrictions on taking on more debt or equity investment without board or shareholder approval. In many instances, we’ve taken board seats. However, the decision to do (or not do) that is based on the specific needs of the company at the time of financing.

(Q5) Great post on The Truth About Early Stage Pre-Money Valuations. The post describes the various factors used to estimate the value of a company for the investor. Is there a mathematical formula that can help the company arrive at a general ballpark max or min value? For example, can you peg the minimum value of a company as a multiple of current gross sales or profit? Are there any other useful formula to estimate value?

For a startup with no, or minimal revenue, the valuation metrics such as multiples or discounted cash flow don’t really apply. At this stage determining valuation tends to be part art and science. One very rough way to calculate valuation is to determine the exit valuation and time horizon and that investors are seeking a 10x return. Based on those numbers, you can then work your way back to the present time (incorporating option pool activity and subsequent funding rounds where dilution will often occur) to determine rough valuation. One of the pitfalls we often see from founders when they do this calculation is that they assume their company will exit via an IPO at a Google- or Facebook-like valuation, which isn’t realistic. The other rule of thumb you can use is to look at valuations for comparable companies (i.e., same sector and stage) that are being funded by VCs and Angels. Some of the other factors that can also influence valuation are strength of the IP, dollars invested to date, founder’s track record (e.g., have they returned money to investors in past ventures), and meaningful customers and/or partnerships with high signal value companies.

Should you have any further questions, please feel free to contact Joe Platnick at the Pasadena Angels or me at (949) 433-0900 or James@OCPatentLawyer.com. Please feel free to forward this article to your friends. As an Orange County Patent Attorney, I serve Orange County, Irvine, Los Angeles, San Diego and surrounding cities.

IP Monthly Roundup January 2012

James Yang — Tue, 31 Jan 2012 14:00:17 +0000

Prioritized Examination

The Patent Office and Congress has responded to the patent user community. Many people were complaining that the examination process took too long. It currently takes about 2 to 3 years before your patent application is examined by the Patent Office. In years past, the Patent Office has given preferential treatment in special circumstances such as when the inventor is over 65 years old or if the invention is directed to an area of technology that the government might have a higher interest in (e.g., green tech pilot program). Other programs were created to expedite examination such as the Accelerated Examination program. In response, Congress through the recently enacted America Invents Act has authorized Prioritized Examination. Put simply, the patent application pays a fee ($4,800 for large entity and half that for a small entity) to obtain either a final rejection or approval within about 12 months after filing of a patent application or a request for continued examination.

Patent Prosecution Highway

On a related note to Prioritized Examination, the USPTO also allows expedited examination when an applicant files a patent application in two or more countries. For domestic clients, this works to expedite examination in foreign countries. For foreign applicants, this works to expedite examination here in the United States. Here is how it works. When an applicant files a patent application in two different countries and the country of first filing allows one of the claims, then the applicant may ask the country of second filing to expedite examination based on the allowed claim in the country of first filing. This is called the patent prosecution highway (PPH). Here is a report on the current state of the PPH.

USPTO Website Gets a Facelift

The United States Patent and Trademark Office has reorganized the look of its website. Personally, I like you. Check it out at uspto.gov.

USPTO Satellite Office

The Patent Office user community (i.e., inventors and businesses) has complained of the length of the time it takes for the Patent Office to examine a patent application after filing. Generally, it takes about 24 to 30 months to obtain a first Office Action on the merits from the filing date of a non-provisional patent application. Part of the reason for the long wait is that the USPTO (United States Patent and Trademark Office) has only one location in Alexandria, Virginia. This makes it difficult to hire and retain qualified personnel since employees must either live or move near to the Patent Office in Virginia. The recent enactment of the America Invents Act authorizes the USPTO to set up satellite patent offices throughout the United States closer to the user community and also to hire and retain qualified personnel.

The first satellite Patent Office will be located in Detroit, Michigan. The USPTO plans on opening at least two more satellite offices in the next three years. You can propose your city by submitting comments to the USPTO.

Propose Rulemaking in Response to AIA

The USPTO has begun implementing various provisions mandated by the recently enacted America Invents Act. As part of the rule making process, the USPTO has published proposed rules in the Federal Register. You may comment on the proposed rules by forwarding any comments to the email address listed in the following links to the Federal Register. The proposed rules relate to:

Required Reports under America Invents Act

The America Invents Act expanded prior user rights greatly. Prior user rights is a defense that can be raised by defendants that have chosen to use a product or implement a method secretly instead of seeking patent protection. Here is the Patent Office’s report of the new expanded prior user rights.

You can also find the USPTO’s report on international patent protection from the small business perspective. You can read through pages 1-3 to get a good overview of the report.

America Invents Act Roadshow

The USPTO announced a series of cross-country roadshows to discuss AIA-related proposed rules.

Date	Venue	Location
Friday, February 17	USPTO Campus	Alexandria, VA
Friday, February 24	Sunnyvale Public Library	Sunnyvale, CA
Monday, February 27	Marriott Library, University of Utah	Salt Lake City, UT
Wednesday, February 29	Dallas Public Library	Dallas, TX
Friday, March 2	Broward County Main Library	Ft. Lauderdale, FL
Monday, March 5	Boston Public Library	Boston, MA
Wednesday, March 7	Chicago Public Library	Chicago, IL

Be explicit about things implicit in your patent application to avoid written description issues

James Yang — Mon, 30 Jan 2012 14:00:41 +0000

Written Description Requirement

To get a patent, an inventor must satisfy the written description requirement. This is accomplished through the preparation of a patent application which describes the invention and shows any drawings if necessary for the understanding of the invention. To satisfy the written description requirement, the discussion of the invention must correspond to the claims. Otherwise, the claims will be deemed invalid for failing to satisfy the written description requirement.

Present Invention

The invention at issue in the following case reduces the amount of aluminum (i.e, metal usage) in a soda can. Crown Packaging v. Ball Metal. . The soda can has a can body and a can end which is attached to the can body. The patent application describes two different areas which can be modified to reduce the amount of aluminum used compared to prior art cans. These two areas are the chuck wall 24 and the reinforcing bead 25. The present invention increased the angle of the chuck wall 24 and narrowed a width of the reinforcing bead 25 compared to the prior art cans. See comparison of present invention and prior art cans below.

Written Description Issue

The claims of the patents at issue had broad claims directed to one of the features but not both. In particular, the independent claims were broadly written so as to be directly only to the large angle chuck wall 24 regardless of the width of the reinforcing bead. The defendant (Ball Metal) argued that the claim did not satisfy the written description requirement because the specification did not describe an embodiment that was directed only to the large angle chuck wall 24 but instead always discussed the invention in relation to both the large angle of the chuck wall 24 and the narrow reinforcing bead 25. The district court agreed but on appeal the Federal Circuit reversed.

Inspection of structure of claim set saves the day

The Federal Circuit reversed based on its review of the specification and the structure of the claim set of the patent application. With respect to the specification, the Federal Circuit stated that “Nowhere does the specification teach that metal saving can only be achieved by increasing the chuck wall angle along with narrowing the reinforcing bead.” (emphasis added). With respect to the claim structure, the Federal circuit noted that the original independent claims were directed to the chuck wall angle without reference to the narrow reinforcing bead and that the narrow reinforcing bead limitation was added as a dependent claim. The claims show that the applicant had in mind the invention as claimed, namely, a large angle chuck wall regardless of the size of the reinforcing bead. Hence, the written description requirement was met by implying such reading through the context of the text and the drawings of the patent application.

Present case distinguished from three prior cases

Furthermore, Ball Metal (defendant) argued that the patent did not satisfy the written description requirement for the same reasons discussed in relation to three prior cases, namely, Tronzo v. Biomet, LizardTech and ICU Med. v. Alaris Med. Sys. The Federal Circuit distinguished these cases with the instant case by stating that the patents at issue in these cases unambiguously limited the scope of the invention. In Tronzo, the patent application discussed a feature as being an extremely important aspect. LizardTech described only one specific method for solving one particular problem. In the patent at issue in the current litigation, the patentee (Crown) described at least two different ways of solving the problem of metal usage. In ICU Medical, the patent application described a feature as necessary.

Divided court

A three panel judge decided the current case. The majority made up by Newman (Circuit Judge) and Whyte (Circuit Judge) reversed the District Court’s decision. However, Dyk (Circuit Judge) dissented from the majority opinion. Dyk opined that the patent application failed to satisfy the written description requirement because it failed to explicitly describe the large angle chuck wall regardless of the width of the reinforcing bead width.

Patent drafting strategy

Although not required by the majority, it is recommended to make explicit statements of aspects which are considered to be implied by the text of the patent application with the goal of trying to avoid litigation. Accordingly, the patent drafting strategy is to meet the higher standard put forth by the dissent and if anything is missing from the patent application, rely on the reasoning put forth by the majority. For example, a brief paragraph that states that elements 1, 2 and 3 may be practiced in any combination with each other or individually may be made explicitly in the patent application to explain that the inventor contemplates the following combinations 1 and 2, 1 and 3, 2 and 3, or 1, 2 or 3 individually. Oftentimes, this is the area which is deficient in patent applications prepared by laypersons. The simple rule is to try to make explicit things that are implicit in the text.

I invite you to contact me with your patent questions at (949) 433-0900 or James@OCPatentLawyer.com. Please feel free to forward this article to your friends. As an Orange County Patent Attorney, I serve Orange County, Irvine, Los Angeles, San Diego and surrounding cities.

What is the fuss about patent trolls?

James Yang — Tue, 10 Jan 2012 14:00:25 +0000

The broadest definition of a patent troll is a patent holding company that does not make products but asserts its patents against companies that make products. In legalese, a non practicing entity that sues a practicing entity.

History of the term

The term patent troll was used as early as 1993 and popularized by Peter Detkin, former general counsel of Intel. The term was used to describe a company whose sole purpose was to hold patents and assert them against companies that make products. Over the years, people have tried to move away from the negative connotation of the phrase patent troll and came up with other phrasing for patent trolls such as non practicing entities and patent assertion entities. The problem with these other terms is that they include “good” non practicing entities.

For example, a solo inventors obtains a patent but the business model fails for one reason or another. In an attempt to recoup costs, the solo inventors asserts the patent against a successful competitor and derives substantial revenues. Is this solo inventor a patent troll? How about a University that asserts its patents.

Use requirement

Under U.S. patent laws, a patentee need not make a product or provide a service covered by its patent. Rather, patentees have the option to pay the maintenance fees and merely sit on the patent until the patent term expires. It is their perogative. The patent system is analogized to a contract with the government. The inventor discloses the invention to the public. The government grants an exclusionary right for a limited period of time in exchange for such disclosure of the invention. Provided that this contract is acceptable, then no problem exists with merely holding and asserting a patent. Eventually, all patents are pushed into the public domain and is free for all to use and exploit after the term of patent protection. The U.S. government does not require patentees to make and use a patented invention. Opponents of patent trolls, non practicing entities or patent assertion entities want more than just a public disclosure of the invention.

Hybrid patent trolls

If the definition of a patent troll hinged on whether the company made products or provided a service covered by the patent, then many large companies would be considered patent trolls. Large companies with a substantial patent portfolio may not make products covered by all of their patents. Are they hybrid patent trolls? They would be susceptible to all of the criticisms of pure patent trolls.

Why would these companies maintain these patents? Mainstream small businesses are primarily interested in obtaining patents which protect their products. However, patent are valuable beyond its ability to exclude competitors from making and selling a particular product. Patents are also used as a deterrent against patent litigation. When one company sues another for patent infringement, the other company looks into its patent portfolio to see if they can make a counter claim of patent infringement.

Patent Freedom

Patent Freedom refines the definition so that only non practicing entities that derive substantial revenue from their licensing activities would be considered a patent troll. This would exclude the inventor with the failed business scenario above. However, it seems odd that a patent holder is labeled a non practicing entity (i.e., patent troll, wink wink) merely because it is successful in its licensing activities.

Patent assertion entities

Colleen Chien recharacterizes patent trolls as patent-assertion entities. This implies that a non practicing entity that merely asserts its patent classifies the entity as a patent troll.

Troll patent

Professor Chiang moved the focus away from the entity and toward identifying patents which are used in a trolling manner. In my opinion, it appears that he is moving in the right direction. Interestingly, he points out that one of the characteristics of a troll patent is one where the patent is asserted against a non-copier of the patented technology. This raises an important point. Patents are meant to facilitate the spread of technology. If the non practicing entity, patent troll or patent assertion entity asserts a patent against a defendant who learned something new from the patent’s disclosure or the patentee, then the practicing entity has received a benefit from the patent’s disclosure and should not cry fowl when sued by the owner of the patent. The patent system has worked perfectly in this situation. The inventor was granted a patent on his/her invention in exchange for public disclosure of his/her invention. The public or in this case the defendant learned something new from the patent’s disclosure. The patent system worked as it should.

Compensation

Opponents of non practicing entities say that patent trolls do not benefit society. They do not make products or provide services. Their only function is to sue practicing entities and collect a rent (i.e., royalty) on the use of the patent. However, these non practicing entities paid for the rights granted in these patents. The monies paid went to inventors or creditors who are pleased to have received payment even if small. Ipauctions.com sells patent portfolios. Some may argue that the monies paid is not a meaningful amount. The open market is meant to bring the value of the thing being sold to its current market value. It appears that the argument is that this isn’t the most efficient system.

Fuzzy patents

Professor Bessen from Boston University School of Law recently published a paper regarding the costs imposed on society due to patent trolls. (The private and social costs of patent trolls). Whether you agree with his analysis or not, he raises an important point that the key problem with patent trolls is that the patents asserted by non practicing entities are fuzzy in scope.

I agree that patents are fuzzy in scope. Every patent has an inherent built in fuzziness which the law considers important. The scope of patent protection afforded under a patent is defined by the claims. The claims are construed literally. However, even if patent infringement is not found by a literal reading of the claim language, patent infringement may still be found under the doctrine of equivalents which states that infringement may still be found if there is an insubstantial difference between the alleged infringing product and the claims. The insubstantial difference standard is inherently fuzzy and is designed so that patents are harder to design around.Examiners at the United States Patent and Trademark Office must cite to prior art references in rejecting a patent. For new technology such as the Internet, Examiners at the Patent Office had less prior art available to them to reject these new technology inventions. As a result, patents that should not have been granted a patent did receive a patent. The Patent Office recently stated in its yearly report that patent quality is at 95%. This means that 5% of the patents should not have been granted. The Patent Office admits that there are questionable patents out there. The question is whether the patent system has achieved an acceptable level of quality patents that still spurs innovation.

Change the rules, don’t name call

Labeling an entity a patent troll is more name calling and is not really dealing with the systemic problems with our patent system. It detracts from the real discussion of identifying unfair rules.

The America Invents Act(AIA) includes a provision which partly deals the problem of patent trolls. Before the AIA, non practicing entities would sue multiple defendants and hail them all into court in a single lawsuit. This is very efficient for the non practicing entity. Unfortunately, this would pressure small defendants to settle out rather than go through the expense of defending a law suit. The AIA prohibits joining multiple defendants when the commonality between the defendants is solely the patent. This makes lawsuits less efficient for non practicing entities and facilitates a more level playing field.The courts have also worked to resolve the problem with patent trolls. During Blackberry litigation from NTP, service of Blackberries were threatened because NTP (i.e., patent holding company) could demand an injunction against RIM the makers of Blackberries. This would have affected numerous businesses and government offices that relied on the security of the blackberry in delivering emails. Such an injunction would have been very detrimental to consumers. Thereafter, in a different but seminal case, the court held that the general rule that an injunction is granted after patent infringement is proven was struck down. Now, injunctions in patent infringement cases are granted after considering four different factors one of which includes an analysis of the public interest. Ebay v. MercExchange. The holding in Ebay reduced the power of patent holding companies to force defendants to settle for fear of being enjoined.

Defense to patent infringement based on prior commercial use under AIA

James Yang — Tue, 03 Jan 2012 14:00:21 +0000

Choice between patents or trade secrets

Inventions may be protected either through trade secret or patent. Inventions that are accessible to the public and can be reversed engineered cannot be protected through trade secrets. Trade secret protection requires that the information remain a secret. In these cases, the invention must be protected through patents. However, inventions for internal use only or are difficult to reverse engineer may be protected through trade secrets. The benefit of trade secret protection is that as long as the information remains a secret, the trade secret may last indefinitely. Think of the Coca-Cola formula.

Downside to trade secret protection

The downside to protecting one’s invention through trade secret is even though you are the first inventor, you can be sued at a later date for patent infringement by a second inventor that applies for and receives a patent on the invention. Your use of your own trade secret will not bar the second inventor from receiving the patent.

Existing defense to infringement based on prior commercial use

Prior to the America Invents Act, the law limited protection in this situation to business method patents. First inventors that secretly used the invention could raise a defense of patent infringement based on his/her use of the invention.

Enlargement of scope of defense under America Invents Act

The America Invents Act enlarges the scope of the defense to patent infringement to include any commercial use of any process or machine, manufacture, or composition of matter used in a manufacturing or other commercial process. See § 273(a) below.

No significant impact because of potential penalties and limitations

Regardless of the expansive scope of this defense, it isn’t expected to have a significant impact on patent litigation. The old and new version of the defense potentially opens the door for increased liability if the defense is raised. The patentee could demand attorney fees from the defendant which may dwarf any damages award. Under the AIA, if the defense is unreasonably raised, then the patentee may request that the case be made exception, thus opening the door for the attorney fees award. See § 273(f) below.

Moreover, the defense has other significant limitations. For example, the defense can only be raised by the person who performed or directed the performance of the commercial use. See § 273(e)(1)(A) below. The person cannot transfer the defense to another except as part of a sale of a business. See § 273(e)(1)(B) below. If the person abandons the commercial use, then activities prior to the date of abandonment cannot be used to prove up the defense. See § 273(e)(4) below. These limitations are significant. The full text of the defense is shown below.

Preserving the status quo

This defense to infringement based on prior commercial use preserves the status quo. If the defendant had been utilizing a particular method or device for more than one year prior to the filing date of the patent being asserted, then this defense allows the defendant to continue doing whatever the defendant was doing.

Effective date

Applies to any patent being asserted and matured into a patent on or after September 16, 2011.

Download (Section273PatentDefense.pdf, PDF, 97.31KB)

Large, small and micro-entity patent Fees

James Yang — Thu, 29 Dec 2011 14:00:41 +0000

Most governmental patent fees are based on whether the applicant is a large entity or a small entity. Small entities are entitled to a 50% discount of the large entity fee. Under the America Invents Act, Congress created an additional category of entities identified as micro-entities which are entitled to a 75% discount of the large entity fee. Current USPTO Fee Schedule.

Large entity

By default all applicants for patent are considered to be a large entity unless otherwise claimed.

Small entity

A small entity is a business that has less than 500 employees. 13 CFR 121.801 through 121.805. If you are on the borderline, it is safer to pay the large entity fee and not worry about whether you are satisfying the definition of a small entity. Moreover, even if you have less than 500 employees, you could still be considered a large entity, if you are licensing the patent pending technology to a company that has more than 500 employees. You are also considered a small entity if you are university or non profit organization under Section 501(c)(3) of the Internal Revenue Code.

Micro-entity

Under the America Invents Act, Congress allowed for a micro entity defined as an entity that has not previously filed more than four patent applications and has a adjusted gross income of less than 3 times the median income which is about $150,000. If you are near the cut off, it is better to file as a small entity than jeopardize validity of your patent. Micro entity fee schedule is still not in effect.

Change of status

The patent applicant’s status as a micro, small or large entity may change during pendency of the patent application or term of the patent. At the time of filing the patent application, the patent applicant may be considered a small or micro entity. However, if the patented technology is licensed to a large entity or small entity, then for the purposes paying governmental fees for the patent application or patent, the patent applicant or patentee is considered to be a large or small entity and must pay the higher fee set forth by Congress.

America Invents Act

James Yang — Fri, 23 Dec 2011 05:55:08 +0000

The America Invents Act (AIA) which changes major sections of the current Patent Laws became law on September 16, 2011. Certain provisions become effective immediately while others become effective at a later date. Click the following link for a schedule of effective dates. Click the following link for the actual text of the America Invents Act. More commentary and recommended best practices will follow in the coming months.

Sec. 3. First inventor to file: Previously, the United States awarded the patent to the first-to-invent. Under the AIA, the first-inventor-to-file will be awarded the patent. In other words, the first inventor to “win the race” to the Patent Office in filing a patent application will be awarded the patent. The AIA has provisions that allow a junior filer to fight and win over a senior filer provided that the junior filer can prove through a “derivation” proceeding that the senior filer “derived” the claimed invention from the junior filer. This section of the AIA become effective in 18 months.

You may also be interested in the following posts:

Sec. 6. Post-grant review proceedings: A person who is not an owner of a patent may file a petition for post grant review of the patent within 9 months of the grant of the patent or reissue patent. Different standards are applied depending on whether a petition for an inter partes review or a post grant review is requested.

Sec. 16. Patent marking: False marking lawsuits are now limited so that only the United States or a person who has suffered a competitive injury may file a false marking lawsuit. The AIA also provides for virtual patent marking.

Read also: Virtual patent marking and false marking claims

Other provisions of the AIA relate to:
Sec. 5. Defense to infringement based on prior commercial use;
Sec. 8. Preissuance submissions by third parties;
Sec. 12. Supplemental examination;
Sec. 14. Tax strategies deemed within the prior art;
Sec. 17. Advice of counsel.

Season’s Greetings

James Yang — Wed, 21 Dec 2011 14:00:24 +0000

Thank you for making 2011 such a wonderful year! May your holiday season be filled with much joy and laughter. May your new year be more prosperous and satisfying than the last.

James Yang

OC Patent Lawyer

James@OCPatentLawyer.com

(949) 433-0900

Recordation of assignment resolves ownership issue

James Yang — Mon, 19 Dec 2011 14:00:52 +0000

Patent attorneys and employment lawyers are becoming creative when crafting invention assignment agreements. When I worked as an engineer, my employer’s invention assignment agreement was straight forward. I aassigned all inventions created on the job to my employer. Back then, this was a typical invention assignment clause.

In the following case, an employer had its employees execute an invention assignment agreement in which the employees assigned all inventions related to the employer even after the employees went to work for another employer. One of its employee eventually went to work for another employer. During the new employment, the employee obtained a patent on an invention and assigned the invention rights over to his new employer. When the new employer asserted the patent, the defendant attempted to avoid liability by arguing that the new employer did not own the patent. In particular, the defendant asserted that the invention belonged to the former employer and not the new employer due to the employee’s invention assignment agreement.

The Court held that recordation of the assignment of the invention from the inventor to the new employer (i.e., Global Locate) provides a presumption of validity of the assignment. The burden of proving otherwise, fell on SiRF (i.e., defendant) which they could not do.

There are two lessons to be learned. First, get patent assignments and file them as early as possible, and preferably with the filing of the patent application. Second, record the assignments since presumptions are advantageous. The opposing party may not be able to rebut the presumption. Plus the cost to record the assignment are nominal compared to the cost to prepare and file a patent application. SiRF Technology v. ITC 2009-1262 (April 12, 2010).

What types of inventions are LA and OC inventors patenting?

James Yang — Thu, 15 Dec 2011 05:02:31 +0000

Los Angeles companies have been transitioning from communications to bio-tech. In contrast, Irvine has consistently been inventing in the areas of surgery, bio-tech and prosthesis.

As the chart below shows, Los Angeles companies were inventing and patenting inventions in the field of communications. However, over the past decade, they have transitioned to bio-tech inventions.

In Orange County, the story is a bit different. Irvine is the patent hub for patenting activity in Orange County although there are other notable cities such as Santa Ana, Lake Forest, Newport Beach and Aliso Viejo. Nonetheless, Irvine still outpaces every other city by a factor of four. Hence, I’ll focus my analysis to Irvine since it would most represent Orange County. Here is the evolution chart for Irvine.

At first glance, it appears that Irvine companies are heavily patenting in the areas of telecommunications. However, a deeper look reveals that the numbers are a bit skewed because of Broadcom, Inc. which is the patent king, not only of Irvine but Orange County. In fact, they obtain more patents than all companies in Irvine. Here is the evolution chart for Broadcom, Inc.

Based on the prior two evolution charts, if you back out the data for Broadcom, Inc., Irvine companies invent and obtain patents in the areas of surgery, bio-tech and prosthesis.

The data has been graciously provided by Cobalt IP. They are doing some amazing analysis as Cobalt IP. Check them out. I plan on doing a blog post on various online DIY patent search engines. Currently, I use a mixture but freepatentsonline.com, which is related to Cobalt IP is the one that I use to retrieve and print patent documents.