It is no secret that the USPTO is overwhelmed with patent applications. Indeed, this was the motivation behind the now abandoned rules changes the office proposed recently. Inherent in an overburdened system is the likelihood of errors, especially by omission. Therefore, it is possible that prior art that should have been found by an overburdened examiner never comes to light and an easily invalidated patent could grant.
Even if the USPTO was not so overworked, it could not possibly find all of the prior art that may be germane to a particular application. However, it is not like that art cannot be found. Indeed, when parties really want to find good art they spend money doing so and usually can find the needed references. This explains why new prior art frequently pops up during the course of litigation (recall the facts on Graham v John Deere). Ultimately, however, while there is a presumption of validity on issued patents, if prior art is out there is can invalidate a patent. Therefore, it is in everyone’s best interests to get all the prior art out there during the patent prosecution process
One interesting approach to solving these problems was tried recently during a two year (2007-08) pilot program conducted by the USPTO and New York Law School’s Institute for Information Law and Policy. The so called “peer to patent program” added a peer review element to the examination procedure. But, this was not the usual peer review of scientific journals, namely sending the matter to a few experts for their opinions. Rather this system opened the process up to everyone who sought to contribute.
Basically the program worked in the following way. Examiners and applicants in the computer and business methods arts could volunteer to take part in the program (I’ll leave the ironic Bilski issues out of this for now). Tagged applications were posted on the web and whoever was interested could read the materials and discuss them with others. Then individuals searched for prior art and posted it to the site. Individuals were asked to annotate how the art addressed particular claims in the application. After some time elapsed, the top ten references were forwarded to the examiner who then reviewed them and proceeded with the examination process. In this way, the hope was that the examiner would spend less time having to search for art and would not miss obviously relevant references.
The program ended last year and is being evaluated by the USPTO. A promising note is that the program was recently identified by the White House Open Government Initiative as one of the innovations in Open Government. Is this a feasible system for solving some of the problems in our current way of examining patents?
What can $60 do in copyright infringement cases? Google thought this can be the settlement amount. Since Google launched Google Books, its online digital library service (www.print.Google.com) in 2004, the company has overcome quite a few hurdles in obtaining authorization to publish copyrighted works, including reaching settling agreement with the American Society of Composer, Authors and Publisher (ASCAP) in 2008. It recently got into a similar situation in China, after it scanned and placed 17,922 manuscripts belonging to 570 Chinese authors into its database without securing their authorization, according to the allegation. The authors’ joint protest against the infringing conducts through the China Writer Association prompted Google to make a statement of settlement. In the statement, Google offered the authors a sixty-dollar compensation for each infringed work, subject to a timely filing of claims (before June, 5th, 2010). The agreement also provided that Google would remove the work(s) from its online library at the author’s option, or a 63% of the future sales income would be paid as royalty if the author chooses to license the work to Google. The settlement offer was posted on the website of the official Chinese Writer Association website (www.chinawriter.com.cn). Individual authors may accept the resolution by signing the agreement, or further pursue their relieves individually. It can be predicted that many litigations will arise there, as put by Mr. Changtian Zhao, one of the authors whose works were copied: “Why doesn’t Google scan Harry Porter and put it online, then offer J. K. Rowling $60.00?”
Rock Art Brewery owners Matt and Renee Nadeau received a cease and desist letter from makers of Monster Energy Drink (Hansen Beverage Company) to stop selling its Vermonster beer and drop its efforts to get a federal trademark for the name. Hansen claims use of the name Vermonster beer “will undoubtedly create a likelihood of confusion and/or dilute the distintive quality of Hansen’s Monster marks.” Although several lawyers have advised Rock Art that they would likely prevail in the legal battle, it is unclear whether the small brewery will have the funding to go up against a company like Hansen who has revenues of around $600 million per year.
UPDATE: Monster and Rock Art came to an agreement that Rock Art may continue to use the name “Vermonster” as long as it stays out of the energy drink business. LINK
The USPTO announced today that it will file a motion to dismiss in Tafas v. Kappos, the case regarding the validity of a controversial rules package proposed by the USPTO. This effectively marks the end of the rules proposed to help make the USPTO reduce its application backlog. In short these rules would have restricted the capacity of inventors to prosecute applications: setting limits on the number of Continuations and RCEs that applicants could file. Also, applications would be limited as to the number of claims that could be included. See the Patent Office press release for more information: http://www.uspto.gov/news/09_21.jsp
As everyone well knows, the USPTO faces a gigantic backlog of patent applications (around three quarters of a million applications) that leads to significant wait time for inventors. In view of this, USPTO director David Kappos announced some encouraging news last week in the form of changes to the examination system.
First, examiners are allotted an additional hour to read and review the application. The hope being that this time will be used not in examination but in conducting substantive interviews with the inventor’s counsel early in the process.
Second, the new guidelines make slight changes to the “count” system. Patent examiners are required to bank a certain number of “counts” per two week period. This quota system is a measure of productivity similar to the billable hour amongst attorneys. The examiner receives one count for issuing the first office action and another for disposing of the case (therefore, two counts per distinct case). However, Examiners can bank more counts for the same case if they reject and cause the inventor to seek an RCE, which is treated as if it is a new application. This has led some to accuse the USPTO of “forcing” RCEs at the cost of time and money to inventors. To solve this, the USPTO has decreased the value given to RCEs- to 1.75 for the first RCE and 1.5 for subsequent RCEs. Also, the proposed change the point distribution in the counts to decrease the value of rejections.
Are these changes going to be effective? Is this too little or at least a step in the right direction?
There is a business dispute with IP ramifications currently ongoing in the San Francisco area. This dispute centers on duck tours. Everyone here in Boston is probably familiar with the duck tours that use WWII-era amphibious vehicles (or replicas) to tour the city both on land and water. This is a pretty lucrative business that is common in large cities across the U.S. One of the leading companies in this field is Ride the Ducks, which operates these tours in many cities (for those wondering, Ride the Ducks does not own Boston Duck Tours but does partner with it). It seems that Ride the Ducks has recently come in the San Francisco market where it is looking to displace a local duck tour company, Bay Quackers. For all of the juicy, “business is war” details see: http://www.sfweekly.com/2008-11-12/news/clash-of-the-quackers/1.
Ride the Ducks has filed a trademark infringement suit against Bay Quackers regarding a sound mark it registered for the quacking sound its duck kazoos make (!). For those not familiar, tourists can obtain kazoos that make ducks sounds to use while on one of these tours. Sound marks are a type a trademark that work in roughly the same manner as normal trademarks. For example, NBC has received a trademark for not only its visual logo (the peacock) but also its auditory logo (the chimes). Similarly, AOL has sound marked “You’ve Got Mail”; the Harlem Globetrotters have a sound mark on the whistled version of “Sweet Georgia Brown”; and even the Pillsbury Doughboy’s giggle is protected. To obtain protection of sound marks, the USPTO requires first, that the mark be a source identifier, i.e. when a person hears the sound, she associates it with a company. Secondly, the sound must be distinct, a property that can be either inherent to the sound or acquired through usage. Lastly, the sound must not be functional. Sound marks are very rare, with the USPTO database showing only about one hundred and fifty live marks.
While a lawsuit over quacking kazoos seems inherently ridiculous, it has major business ramifications, especially for the alleged infringer, Bay Quackers. Should Ride the Ducks receive the injunction it has sought, it would receive a commercial advantage in a very competitive market. Such an advantage, regardless of how small it may be, could be enough to tip the scales.
News | Stephen Altieri | 
October 29, 2009 1:38 pm | 
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