Month: January 2014

New Report Offers Insight Into Patent Valuation

It can be difficult to put a price tag on intellectual property. Therefore, a new report published by IPOfferings LLC may be useful to patent holders considering selling, buying, or licensing a patent.

The company’s recently published Calendar Year 2012 Patent Value Quotientincludes a wealth of information about patents sold during the prior year. It incudes the seller and buyer of the portfolio (unless they requested that they be anonymous), the technology of the patents, the number of issued U.S. Patents, and the quotient, which is determined by the total sale divided by the number of patents to produce the average paid per patent. For the 35 patent transactions included in the report, the median selling price per issued U.S. Patent was $220,588, and the average selling price per issued U.S. Patent was $373,573.

While the report offers insight into prior patent deals, there are a number of factors that can impact a patent’s value. Below are just a few examples:

  • Invention Significance: Innovative patents that represent a significant breakthrough in an industry (i.e., Thomas Edison’s light bulb) are the most valuable. While not every patent is a game changer, patents that give the owner a monopoly in a specific corner of the market or force competitors to license the technology are often more valuable than incremental patents that represent small changes to existing products or processes.
  • The Strength of the Patent: The quality of the patent itself is also taken into consideration. Factors that may be evaluated include the qualifications of the law firm that prepared the patent and the examiner that granted it, the number of inventors listed, and the amount of prior art.
  • Patent Term: The business life of a patent is another key consideration. In general, a patent will be less valuable if it is approaching the expiration of its term. Similarly, a patent that was recently issued may also be less desirable because its validity is likely untested.
  • Market Conditions: A patent buyer wants to make sure that the patent will generate money, either through product sales or licensing revenue. Therefore, the markets condition in the particularly industry often become important. In highly competitive markets, a buyer may even overvalue a patent that allows it to block a competitor or bolster an existing patent portfolio.

Even taking all of these factors into account, it is important to recognize that all patents and their underlying inventions are unique. Therefore, it is imperative to consult with an experienced patent attorney before embarking on the valuation process.

Stay up-to-date on the latest Intellectual Property Law news from Sheldon Mak & Anderson.

Trademark Registration in China Brings Challenges and Rewards

Trademark registration in China is becoming increasingly important for U.S. companies. Even if you are not quite ready to enter the market, it is imperative to begin the registration process as soon as possible. If not, you may find that someone else has already beaten you to it.

Several high-profile U.S. companies, including Starbucks, Apple and Dell, have sought trademark protection in China only to discover that their marks have already been “hijacked” by an unrelated entity. In these cases, the third party can actually allege that U.S. company is infringing.

To avoid the costly process of regaining trademark ownership, companies need to be proactive. Since China has a first to file system, filing a trademark application will help prevent third parties from using your mark. Companies are also not required to use the mark in China for three years, which allows trademark registration to take place before official product launches are planned or distribution agreements are executed.

To achieve maximum protection, companies should not only register their U.S. brand name but also a Chinese equivalent. The Chinese version can take several forms, a transliteration, a translation, or even a distinctive Chinese mark.

As this post highlights, it can be more difficult to protect trademarks and other IP rights overseas. In China, the first to register owns the mark even against the legitimate U.S. trademark owner who was first to use the mark in that country. Therefore, it is imperative to consult with an attorney experienced in foreign intellectual property concerns.

Stay up-to-date on the latest Intellectual Property Law news from Sheldon Mak & Anderson.

“Sunrise” Period for Trademark Owners to Seek New Domains Now Open

The International Corporation for Assigned Names and Numbers (ICANN), the not-for-profit entity which administers top-level domain names, has approved the first wave of generic top-level domains (gTLDs) for release. This triggers a 30-day “Sunrise Period” during which trademark holders can register their marks in the new domains.

A top-level domain name (TLD) is the part of a domain name found to the right of the last dot.  It can be a “generic” TLD such as .com. or .net or a country code such as .uk.

Before 2013, there were only 22 gTLDs.  Now, more than 1000 new gTLDs are expected to be available soon.

The new gTLDs include names designated in Arabic, Chinese, and Russian characters.

In order to take advantage of the Sunrise Period opportunity, trademark holders must register their marks with the Trademark Clearinghouse.

Registration with the Trademark Clearinghouse gives trademark owners the first option to purchase domain names in the new gTLDSs that match their trademarks.  During the Sunrise Period and for 60 days afterward, anyone who attempts to register a domain name for a mark that is already registered with the Trademark Clearinghouse will receive a notice that the mark has already been registered.  If the applicant then proceeds to attempt to register the domain name, the Trademark Clearinghouse will send a notice to the trademark holder.

The system only works with exact matches.  Thus, a trademark owner will not be notified if a mark is only deceptively similar but not identical.

After the Sunrise period, domain names in the new gTLDs will be available for sale to the general public.

  • The Sunrise Period ends January 24, 2014 for the following gTLDs:  .bike, .clothing, .guru, .holdings, .plumbing, .singles, and .ventures.
  • The Sunrise Period closes January 31, 2014 for .camera, .equipment, .estate, .gallery, .graphics, .lighting, and .photography.
  • The Sunrise Period closes February 7, 2014 for .construction, .contractors, .directory, .kitchen, .land, .technology, and .today. 
  • The Sunrise Period ends February 14, 2014 for .diamonds, .enterprise, .tips, and .voyage.

Registration with the Trademark Clearinghouse takes up to 21 days, so it’s advisable for trademark owners to move quickly if they wish to take advantage of the Sunrise Period for any of the above gTLDs.

Stay up-to-date on the latest Intellectual Property Law news from Sheldon Mak & Anderson.

Google Expands Patent Search Tool

Google’s Patent Search engine is a valuable and underutilized tool for inventors and businesses. It allows users to search several patent offices at once for granted patents, published patent applications, and even prior art.

While the search engine previously only covered the United States Patent and Trademark Office (USPTO) and the European Patent Office (EPO), Google recently announced a significant expansion. Patents are now available from the World Intellectual Property Organization (WIPO), China, Germany, and Canada.

As detailed by Google, users can search by several criteria such as patent number, inventor, classification, and filing date. The documents originate directly from the applicable patent office. They are available in their native language and can also be converted to English using Google Translate.

Google’s Patent Search tool also offers free bulk downloads of patent and trademark data from the USPTO. Documents were previously only attainable on a file-by-file basis from the USPTO website, or in bulk via CDs, DVDs, or digital tape for a sizable fee.

Finally, Google’s Prior Art Finder is another useful tool. It identifies key phrases from its database of patent documents creates a search query, and provides results from Google Patents, Google Scholar, Google Books, and the rest of the Internet.

Stay up-to-date on the latest Intellectual Property Law news from Sheldon Mak & Anderson.

Will Other Tech Companies Follow Google’s Patent Pledge?

Google Inc. recently pledged that it would not pursue legal action against open source developers that use its patented technology. It also expressed hope that other high-tech companies would follow suit.

Under the Open Patent Non-Assertion (OPN) Pledge, Google agrees not to sue any user, distributor, or developer of open-source software on specified patents, unless first attacked.  According to post on its blog, the OPN pledge will initially cover 10 patents relating to MapReduce, a computing model for processing large data sets first developed at Google. Over time, it plans to expand the set of Google’s patents covered by the pledge to other technologies.

As outlined by Google, the pledge may be terminated, but only if a party brings a patent suit against Google products or services, or is directly profiting from such litigation. The agreement also remains in force for the life of the patents, even if Google transfers its rights.

Google’s pledge follows a similar initiative announced by Twitter last year. Twitter Innovator’s Patent Agreement (IPA) promises that it will not use the patents from employees’ inventions in offensive litigation without their permission.

Like Twitter’s IPA, it will be interesting to see how Google’s patent pledge plays out in the real world. While it may help curb the negative criticism surrounding the so-called “patent wars” among competitors in the tech industry, there are still circumstances where it is necessary for companies to use patents offensively to protect themselves from litigation.

Stay up-to-date on the latest Intellectual Property Law news from Sheldon Mak & Anderson.

Are Old Trade Secrets Now Patentable?

The America Invents Act’s first-inventor-to-file system has created a lot of questions in the patent community. One of the most intriguing is how the new prior art rules impact the protection of long-standing trade secrets.

As amended, 35 U.S.C. 102 (a)(1) now states: “A person shall be entitled to a patent unless—(1) the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention…”

Questions have centered on the interpretation of the phrase “or otherwise available to the public” and whether it limits the application of secret prior art. Under existing precedent, offers-for-sale and sales in the U.S. did not need to be public in order to invalidate a patent claim.

According to the U.S. Patent and Trademark Office’s (USPTO) interpretation of the new language, “Residual clauses such as ‘or otherwise’ or ‘or other’’ are generally viewed as modifying the preceding phrase or phrases. Therefore, the Office views the ‘or otherwise available to the public’ residual clause of the AIA’s 35 U.S.C. 102(a)(1) as indicating that secret sale or use activity does not qualify as prior art.”

The IP community appears to agree with the USPTO’s interpretation. The American Bar Association’s IP Law Section considered the issue and concluded:

The passage “otherwise available to the public” reflects the touchstone of what constitutes prior art under the AIA under section 102(a)(1). This section requires availability to the public or public accessibility is an overarching requirement. Such accessibility is critical to provide a simpler, more predictable and fully transparent patent system. As such, for a “public use,” for a determination that an invention is “on sale,” as well as to assess whether an offer for sale has been made, the statutory requirements under the AIA require a public disclosure. Thus, non-public offers for sale (and non-public uses) would not qualify as prior art under the AIA.

The American Intellectual Property Law Association and the Intellectual Property Owners Association adopted a similar position in comments submitted to the USPTO. While these interpretations seems to suggest that old trade secrets would no longer be considered prior art when filing a patent application, this issue will likely need to be resolved by the courts or clarified by Congress in a technical amendment.

Stay up-to-date on the latest Intellectual Property Law news from Sheldon Mak & Anderson.

Art World Applauds Landmark Copyright Decision

The Second Circuit Court of Appeals recently issued a key ruling in a closely watched copyright infringement case. The decision in Cariou v. Princerevolved around the application of the fair use doctrine in modern art.

The Facts of the Case

In 2000, Patrick Cariou published Yes Rasta, a book of photographs taken over the course of six years spent living among Rastafarians in Jamaica. Richard Prince altered and incorporated several of Cariou’s Yes Rastaphotographs into a series of paintings and collages, called Canal Zone. They were exhibited publicly at New York’s Gagosian Gallery. Gagosian also published and sold an exhibition catalog that contained reproductions of Prince’s paintings and images from Prince’s workshop.

Cariou subsequently sued Prince and Gagosian, alleging that Prince’s Canal Zone works and exhibition catalog infringed on Cariou’s copyrights in the incorporated Yes Rasta photographs. The defendants asserted a fair use defense.

The United States District Court for the Southern District of New York granted the plaintiff’s motion for summary judgment and entered a permanent injunction. On appeal, the defendants argued that the district court imposed an incorrect legal standard when it concluded that, in order to qualify for a fair use defense, Prince’s work must “comment on Cariou, on Cariou’s Photos, or on aspects of popular culture associated with Cariou or the Photos.”

The Court’s Decision

The Second Circuit ultimately agreed that the district court applied the incorrect standard to determine whether Prince’s artworks make fair use of Cariou’s copyrighted photographs, holding that “the law does not require that a secondary use comment on the original artist or work, or popular culture.” Rather, a reasonable observer must only find the work to be transformative.

With regard to the majority of the photographs at issue, the appeals court found that Cariou’s work was protected under the fair use doctrine, finding that the modern art constituted a “new expression.”

“Where Cariou’s serene and deliberately composed portraits and landscape photographs depict the natural beauty of the Rastafarians and their surrounding environs,” the decision explained, “Prince’s crude and jarring works, on the other hand, are hectic and provocative.”

Stay up-to-date on the latest Intellectual Property Law news from Sheldon Mak & Anderson.

Understanding the Basics of Design Patents

While design patents are not as popular as their utility patent peers, they still offer a number of benefits for inventors, particularly when seeking to protect the unique appearance of an item.

In simple terms, a “design patent” protects the way an article looks, as opposed to how it is used or how it works. The specific subject matter of adesign patent application may relate to the configuration or shape of an article, to the surface ornamentation applied to an article, or to the combination of configuration and surface ornamentation.

Unlike a utility patent, a design patent only has one claim. It relies largely upon the drawings to designate what the patent protects. As explained by the U.S. Patent and Trademark Office (USPTO), “As the drawing or photograph constitutes the entire visual disclosure of the claim, it is of utmost importance that the drawing or photograph be clear and complete, that nothing regarding the design sought to be patented is left to conjecture.”

A design patent application must be examined the USPTO and subjected to a prior-art search. Under U.S. patent law, a design patent will be granted to any person who has invented any new, non-obvious, original and ornamental design for an article of manufacture. However, it is important to note that the design patent protects only the appearance of the article and not structural or utilitarian features. Once granted, design patents have a term of 14 years.

Proving infringement of a design patent also differs. The “ordinary observer” test is used to determine whether a design patent has been infringed. As first explained by the Supreme Court in 1871, the primary question is “if, in the eye of an ordinary observer, giving such attention as a purchaser usually gives, two designs are substantially the same, if the resemblance is such as to deceive such an observer, inducing him to purchase one supposing it to be the other, the first one patented is infringed by the other.” The “ordinary observer” is not an expert, but defined as “a purchaser of things of similar design” or “one interested in the subject.”

Stay up-to-date on the latest Intellectual Property Law news from Sheldon Mak & Anderson.