Cisco a member of the lobbying group Coalition for Patent Fairness, had its effort stalled yesterday to secure a vote on patent reform legislation in the Senate.
In 2007 alone, Cisco faced 30 patent infringement suits.
The opposing sides of the Senate patent reform legislation were unable to come to terms on the issue of damages.
Cisco's lobbying effort will continue with the Coalition for Patent Fairness, which will work with the bill’s Senate sponsors to bring the bill forward for a floor vote.
Do YOU support patent reform legislation?
Advertisement: |
Brad Reese cofounded BradReese.Com Cisco Refurbished which offers one year warranties on Cisco Refurbished and Cisco Repair.
The Leader in Network Knowledge
Patent Reform
Here is my opinion on patent reform since you pose the question. This proposed legislation is simply an attempt to eliminate rights granted to US citizens under the US Constitution. These rights would then be transferred to a small number of international IT firms, including Cisco.
None of the proposed items in this legislation are negotiable and it is a misnomer to suggest, as Leahy does, that those supporting this legislation are engaged in negotiating this proposed legislation. You cannot negotiate "first to invent" versus "first to file". This element in the legislation is simply a matter of "harmonizing" our patent system with other nation's patent system, an aspiration of those supporting Patent Reform. Why would independent American inventor seek to do that? Thus we are strongly opposed to Patent Reform whenever the topic arises.
This includes mandatory publication of patent applications after 18 months and post-grant review which decidedly harm independent inventors. Apportionment of damages? If your product would benefit from using a patented technology then you need to negotiate a license to use it. If you decide to simply appropriate the technology and take your chances in court there needs to be a very serious downside to your doing so. One might suspect that out of the 30 patent infringement cases Cisco currently faces, at least several will be found to violate someone's patent rights. Is Cisco not sufficiently capable of assessing the technology taught by an issued patent that they chose to rely on a court to instruct them in the matter?
Independent inventors and many other professional groups including many manufacturers and labor unions oppose this patent reform legislation and will continue to do so, each and every time it arises.
Hopefully, enough American citizens see the danger in these reforms and will resist allowing Congress to give our patent system to a select group of large corporations.
Rusty Mase
Paisano Industries LP
patent reform boondoggle
RE: S1145 (Patent Reform)
As a small inventor I might concur that our patent system is in need of some reform, but I am very concerned that the bill in its present form picks winners and losers among industries with different business models in a way that has never before been attempted in patent law or practice.
Sen. Jeff Sessions (R-Ala.) has sponsored an unusual provision at the urging of the nation's banks granting them immunity against an active patent lawsuit, potentially saving them billions of dollars. The amendment would prevent a small Texas company called DataTreasury from collecting damages from banks for infringing on its patented method for digitally scanning, sending and archiving checks. The provision introduced by Sessions did not name DataTreasury but was carefully tailored to apply to that company and its "check collection" system. The patents were upheld last summer by the U.S. Patent and Trademark Office after they were thoroughly challenged.
Justification of the Sessions Amendment seems to be that the Check 21 Act forced the banks to adopt new check processing procedures with the “innocent” banks (who were “merely complying” with government regulation) thereby finding themselves opportunistically and indiscriminately sued for infringement by a“patent troll.” This view, however, fails to recognize that:
1). The (Data Treasury) patents in question were filed years before the Check 21 Act.
The Data Treasury patents have withstood the best legal challenges the banks could buy, and that some of the more responsible banks have admitted the validity of the patents by licensing them. And every entity that has been sued almost surely had opportunity to negotiate a license before being sued. That DT approached the Banks as early as 1999 to license its’ technology to them and was rebuffed by the banks.
2). The Check 21 Act legalized “Check Imaging” and does not force Banks to comply with its usage. Banks remain free to process checks the old way or themselves invent a non-infringing new way or license use of the Data Treasury roadmap for a modest portion of the savings it offers. Nothing in the Check 21 Act requires banks infringe the Data Treasury patents.
3). Check 21 made it possible for the banks to dramatically reduce check clearance costs, relative to then current processes. Check 21 was opportunity, not burden!!
4). Immunity would be secured through government compensation to DataTreasury, which would in effect force taxpayers to finance the cost of patent infringement on behalf of banks, to the tune of approximately $1 billion +, according to the Congressional Budget Office. Scarcely any plausible justification has been given.
Any idea that the Sessions Amendment is justified as "relief" is simply preposterous. It is no more or less than the financial lobby buying a "Get out of Jail Free" card from congress and appears to be far less like meaningful reform and much more like a license for infringers to steal.
Overall, this bill with this Amendment is a great disservice to the small technology companies and independent inventors that drive American innovation. Reforms are needed. But this Bill, with or without Sessions, should go back to committee in a Congress with a purer heart.
This is the industry that Sessions champions:
The “innocent banks” and their ilk:
From: Chief Executive (U.S.)5/1/2001 Author: PRINCE, C.J
It's not every CEO who freely admits to swiping other people's ideas--although, truth be told, the vast majority of successful chief executives have probably taken the liberty. But ask Richard Kovacevich, CEO OF WELLS FARGO, whether he prefers inventing ideas or stealing them and he's quick with his response. "Oh, I'd much rather steal an idea," the 57-year-old CEO says matter-of-factly. "Quite frankly, it's much easier mentally. I have no pride about that."
Since the banks have claimed (or at least implied) in making their case for the Sessions Amendment to S1145 that Check 21 legislation has required them to adopt infringing technology and, that consequently, they should be held harmless. Since this is a TOTAL FALSEHOOD, the press should ask the financial industries’ lobbyists to clearly explain those aspects of Check 21 legislation that REQUIRE a bank to do anything that infringes. It would be nice if the press was astute and assertive enough to insist on a clear answer devoid of spin and then actually seek independent verification of any claims. They should then be asked to explain why, exactly, Banks should be immune to patent law that applies to everybody else. This justification should include explanation for why the public should fund any patent royalties when infringing returns billions in operational savings to the banks!!
These are high-quality patents; to not enforce our patent rights would be a discredit to those who fairly and lawfully use these licenses."
Small Inventor?
Give us a break, small inventor?
DataTreasury is obviously a patent pirate.
Using the Eastern District of Texas Court to shakedown big banks.
J.P. Morgan Is Sued Over Patents
Sincerely,
Brad Reese
http://www.BradReese.Com
Members of the Piracy Coalition are Patent Pirates
http://www.networkworld.com/community/comment/reply/26873/180381
"DataTreasury is obviously a patent pirate."
No, Data Treasury is obviously a business built on some very important inventions. These inventions are saving the banking industry a staggering amount of money in shipping and processing costs and the banks are making a killing on float interest as a result of their ability to debit accounts much faster.
Also, you have misused the term "Patent Pirate". A patent pirate is a company who pirates other's patent properties.
Members of the Coalition for Patent fairness & PIRACY are generally example of patent pirates.
Come to think of it, Cisco is a founding member of the Piracy Coalition.
"Using the Eastern District of Texas Court to shakedown big banks."
I am sure that in light of Cisco's and their stooge known as the "Troll Tracker's" conduct that the court will help both understand the meaning of property rights and the error of making derogatory remarks about both the court and the legal eagles riding to the rescue of inventors who are victims of the banking industry's arrogance and greed.
"J.P. Morgan Is Sued Over Patents"
As they and others should be. The banking industry's conduct in the Data Treasury case is atrocious. I a small company operated in as bad a manner someone would end up in jail.
Maybe if we dig deep enough someone will :)
Ronald J. Riley,
Speaking only on my own behalf.
Affiliations:
President - www.PIAUSA.org - RJR at PIAUSA.org
Executive Director - www.InventorEd.org - RJR at InvEd.org
Senior Fellow - www.patentPolicy.org
President - Alliance for American Innovation
Caretaker of Intellectual Property Creators on behalf of deceased founder Paul Heckel
Washington, DC
Direct (202) 318-1595 - 9 am to 9 pm EST.
Patent pirate in the making
Rusty,
Is it possible that you are a patent pirate in the making?
Method and apparatus for crushing glass
Sincerely,
Brad Reese
http://www.BradReese.Com
Patent Pirates? How about the Patent Troll Tracker?
Mr. Reese:
With all due respect, please provide me with one patent you do feel is worth your attention? How about one patent you or any associate actually filed? Defensive patents? Isn't that an oxymoron? You either seek to add value or expense potential litigation? Which is it?
The shear number of misguided statements and assertions that the Patent Reform Act (styled, S. 1145) is anything less than an attempt to gut the patent system - is completely and accurately supported by the "facts". Congress is empowered to "promote" the progress of innovation, not retard it.
Press releases and lobbying do not substitute for real, factual debate. If you knew what the "good patents" were, what exactly would the issue be? To specify the exact pay-out of infringements is akin to setting a bar on how to expense infringements into the future. To claim that a first to file system is somehow better than a first to invent system is wrong - or the proponents would be engaged in more interferences (they are not). To say that harmonization with the rest of the world is a worthy goal is simply hubris.
As an inventor and software business owner, I have zero compunction about enforcing my rights. And neither do any of the alleged "reformers".
Sincerely,
Scott Moskowitz
http://www.bluespike.com/
PS Should "captcha" be patentable? What is a "bad patent"?
Lets debate then
Scott,
Lets debate then.
First:
You said zero about how you would resolve the shakedown of America's technology companies by Patent Pirates.
Secondly:
What specific language in the Patent Reform Act of 2007 do you find misguided and why?
Sincerely,
Brad Reese
http://www.BradReese.Com
Debate? Opinion? - Let Solomon Decode
Mr. Reese:
You did not answer my own questions. And, I do not speak for all inventors or all patents, for that matter ...
I am making these comments in the interests of debate, not as any position I or any representative would take in ANY legal proceeding involving me, any affiliated corporate entity, or any associated intellectual property. It would behoove me not to point out that this debate is one for all Americans. It would also be a great thing for more Americans to engage in meaningful discourse over patents: if only because so much was "revealed" concerning copyrights with Napster.
1a) What shakedown? If a company loses many (many) patent suits, at what point is it not said infringer's own practices? Where is the evidence that the resources or costs of these suits constitute anything more than a line item on a balance sheet? When the case does not go your way, it does not constitute a "shakedown".
As a percentage of revenues and given the huge market share of many of the defendants in cases, my faith lies with the folks who litigate the cases and the judges and juries who decide. And, the Appeals Courts, etc.
Each patent has it's own story and each patent is it's own bundle of rights.
FACT I would prefer the patent instrument be viewed as a value, NOT an expense - to promote, not to expense, innovation - that is the Constitutional mandate for the Congress.
FACT Patent litigants only prevail 50% of the time (including appeals) - sounds fairly random - except a large entity has the resources to shell out the $4-5 mil avg cost of a patent case. Are you saying those that finance said $4-5 mil are any different than what private equity firms or venture capitalists do now? Historically? How so?
FACT Do these "pirated" companies participate in patent pools? Litigate each other? That would be - Yes.
1b) Patent Reform Act language? I am not a legal scholar and provide these comments "as is" - NO LEGAL ADVICE NO ADMISSIONS OF ANYTHING
Patent Reform Act does nothing about pendency - some allege it will reduce pendency by discouraging filings, only.
The Patent Office is making money, however. Patent fees, including maintenance, are diverted to other uses by Congress instead of hiring more Examiners and *keeping* the Examiners (reducing attrition - which is over 50%). More pendency creates more uncertainty - for everyone. Specific language (note: you do not have access to the final language, unless I am missing something, it is being held behind closed doors) from what is "known" - the earlier versions were far more draconian.
so, as an additional nit ...
1c) The issue most Americans would cry foul about are "software patents" (not sure what a "software patent" is - please define - re:Bilski is to be heard en banc discussing that issue and many of the amicus briefs were filed by Patent Reform Act proponents - the briefs and the public comments concerning the Act are not quite consistent, as an aside, why is that?) & "business method patents" (not sure what that is? for instance is the RSA patent a business method? a signal or a software?). The Act ignores these concepts completely. But specifics of what is known about the Act - in non-legal discussion terms:
i) First to invent is clearly what was intended by the Founders and the Patent Act of 1790 (yes, they got it right - royals/special interests/industral policy proponents should not give patents, a fair and equitable search and examination should be required that is technology neutral by a nonpartisan agency of the government). Corporations do not "invent". Arguments to the contrary ignore the lack of interference proceedings (at the least). And, the employment contracts and SLAs, etc. that assign all IP to the corporation, essentially, benefit whom exactly? The Public?
ii) Substitution of an oath? Oaths as filed today are fine - they must now include "material to patentability" language but many practitioners already have that language included (this is with regards to what is known as Rule 56 - Duty to Disclose). This aspect is again used to strengthen corporate filers and has nothing to do with establishing that a natural person does the inventing.
iii) Damage provisions? Big companies have plenty of resources to challenge and challenge - Exxon Valdez, while not directed at patents, may be a good example here? Judges and juries in patent cases already have plenty of case law and guidance over how to assess damages - and then there are Appeals.
Again, in a world of innovators, my preference is for patents to be viewed as value not expense ("defensive patents" currently exist - what exactly do they represent? Incremental improvements for patent pools? Reactions to the publication of patent applications by "true" innovators?).
If you knew the value of a patent in advance, you would be a very wealthy person.
If you simply carve out a limit, well, big companies simply budget for infringement.
That is NOT a deterrent to infringement. Merely an irritant. Who is the alleged "patent pirate"?
Limit damages to two years before the infringement? Huh? Again, pendency averages several years in many arts - why two years? The patent has already been limited to 20 years from the date of filing (effectively eliminating submarine patents in the harmonization with GATT in 1995 - though many uninformed folks still rail against submarine patents) and patents are published after 18 months (except if a request to not publish is made) - so, what exactly is this provision doing but further limiting damages? All of the subject matter that could be claimed is available to all upon publication. This would include folks making derivations or "improvements".
Sec. 5 Post grant review? When is the patent presumed valid? After more time tolls? Why is that? One and done - we have interferences; publication of pending applications and any one who wants to challenge can do so then.
Sec. 6 Replace the BPAI? Chief Judge Michel and others are correct - we can barely keep up now, replacing the BPAI will simply increase cost and reduce certainty over examination. Plus, it is not clear anyone can staff this properly - this was done primarily, according to some analysts, in anticipation that the Final Rules would stand (they did not - Judge Cacheris ruled against the USPTO)
Sec. 7 All patents will publish? Why, the Applicant pays, not the public, so the Applicant should decide whether to publish as per existing statute. Any person can already submit information. Problem is not many people understand what a patent is. Perhaps that is the lesson that is more important - Educate people about patents.
Sec. 8 Venue revision? Why is that? The rocket dockets were set up to speed patent cases. Just like the CAFC hears all patent appeals before anyone can go to the Sup Ct. If there is one CAFC why is there an issue with 2 rocket dockets and leaving venue alone?
Sec. 9 USPTO already sets fees and is the only agency that makes money. A money making agency of government, imagine that? But the fees and operations that these fees cover come from applicants not the public. Any additional funding to the PTO is over and above what already covers its operations. In 10 years the cost of prosecution (besides pendency) has gone up 5-10X and yet the number of allowances has fallen from 70% to 45%. How is that a measure of success? Would 10% allowance mean anything in particular? What is a "good patent" again?
Sec. 10 Repeals residency for a judge? Why is that? Must all copyright cases go to the So. District of Manhattan? Invention is the provence of all Americans (and, people, in general, including judges and juries). The pool of existing district judges would seem to be a fair pool to work with. Plus, don't we want even distribution of wealth around the country?
Sec. 11 If the Patent Office shifts the burden to the Applicant, replace it with a registration system. Having an applicant do the work of the Office is ripe with all kinds of issues. There is no system I am aware of or any facts supporting any efficacy in this provision. It is a trap for Applicants and comes at odds with all precedent. Do you believe research on Wall Street was any different in that regard? Can an Applicant do the work of the Patent Office and not affect the validity or value of all existing patents? How is that equitable to all of us who agreed to file under rules and case law that existed at the time of filing and now the rules are changed?
Sec. 12 Inequitable conduct. Actually, I am more inclined for the judges themselves to clear this up. I am not an agent or a lawyer and would like to see how this works. Many of the big, public cases appear to have these issues - why is there a repetitious pattern, if any?
Sec. 13 Delays. The Office is rarely inclined to do anything that is not spelled out. We have unintentional delay petitions currently. Not sure how this is any different.
Sec. 14 The Sessions Amendment .... This was removed. I will not delve into this too deeply - except to say $1.4 Bil this year and 10 years forward? Sounds like a 5th Amendment Takings without naming the party. How is this helpful - shift infringement expense to taxpayers from financial institutions? VALIDITY of the allegedly related patents IS NOT AT ISSUE.
Sec. 15 Sounds like the fee diversion over the past decade has caught up with the Office. But, all Americans should have a chance to file a patent at reasonable cost, period. A copyright filing is, what, 50 bucks?
Again, in the interests of debate, I have provided off-the-cuff observations. This is meaningful discussion and should be had by all Americans. That 45% of all patent filers are small entities and foreigners (which is interesting but a separate topic) is a solid testament to the perception that the US Patent system is fair and equitable.
With a 50% rate of success in patent case, how much is fair?
Thank you for the opportunity to reply (with non-legal binding mishisgah)
Sincerely,
Scott Moskowitz
http://www.bluespike.com/
Patent pirate in the making?
Brad:
Thanks for the reference to my research project. But you will need to point out to me why having an issued patent carries the potential for propelling me into patent piracy.
Logic infers the opposite; a person with a patent covering their area of research interest has little need to steal patented technologies from other patent holders. If I find a patent covering a technology useful in the area I am investigating it would be in my best interest to acknowledge that contribution and license that if it became useful within my project. It would certainly behoove me contact the patent holder to investigate future collaboration.
However, there are those who see patents as a form of technology piracy. That is, a patent precludes others from using technology defined by a patent. A pharmaceutical company develops a new drug, patents it, and subsequently precludes others from manufacturing and marketing that drug. This interpretation is usually accompanied with the concept that all technologies will ultimately come to light and allowing the government, through the patent system, to issue a monopoly does not serve the public good.
I will let others speculate as to how that interpretation applies to Data Treasury. From a "patents are useful" approach, Data Treasury developed a technology in the 1990's for digital transfer of funds between banks replacing the actual paper transfers the banks were using. They marketed this technology to various financial institutions to no avail. The banks saw little need to cease relying on tried and true procedures.
Times changed after 9/11 and the government required banks to initiate digital transfers. Banks, instead of approaching Data Treasury and acquiring a license to use the technology Data Treasury had developed, simply started using it.
I am ignorantly hopeful that the Data Treasury patents actually define a mature system of digital transfer of funds and not simply the concept of digital transfer. Someone else can speak to that.
This is, however, reminiscent of the Research in Motion issues with NTP over technologies used in integrating cellular phones and email messaging. Here we find a far-sighted individual, Thomas Campana, who prior to 1990 recognized the benefits of such technologies, systematically developed them, and patented them in a series of patents in the US and in some instances other countries. Campana, later a principal in NTP, was not successful in marketing this technology and later discovered the technology had been appropriated by RIM in their Blackberry products. What transpires then is common knowledge that unfortunately is frequently misinterpreted with NTP portrayed as the ultimate patent troll.
I personally hope the Data Treasury episode follows the same course as what transpired with NTP. I trust financial institutions will be as adept as RIM was in making fools of themselves. The US patent system deserves to have strong teeth and seeing them exercised here would be a blessing.
Patent Troll vs. Patent Pirate
Addendum:
Patent pirate may be used as a synonym for patent troll per Wikipedia.
http://en.wikipedia.org/wiki/Patent_pirate
I was not aware of that usage and resorted to the traditional use of the term as:
"There are patent pirates, however, men who, with money, care not for the rights of any patentee, but would violate them with a light conscience, were it not for fear of the law"
Cited and linked in above as quote by Junius Redivivus, 19th century patent columnist for Scientific American
However, your consistent definition of a troll, aka pirate, as a patent holder lacking the means of large-scale manufacture of the technology described in a patent and lacking a portfolio of patents to cross-license with others having extensive patent portfolios then you are correct in referring to me a patent pirate. I am also no different from most independent inventors who cannot step up to your definition of "good actors" (for want of a better word) like Cisco and the other members of the Coalition.
I prefer clearer use of terms than this. If you are proposing, as you appear to, to modify the patent system such that it becomes accessible to only large manufacturers then I am distinctly against it.
Patents protect citizens rights, first and foremost, and not directly the financial interests of large corporations. However, this has been the strategy behind patent reform all along and also the reason it has developed strong opposition.