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On December 19, in a filing regarding the ex parte reexamination of patent number 7,884,915—the patent that presumably allowed for touch typing and pinch-to-zoom—the U.S. Patent and Trademark Office (USPTO) rejected all 21 claims on the grounds they were either obvious or invalidated by prior art as described in three earlier patents and four published documents. The patent is still valid, and Apple has two months to respond.
In October, the USPTO stated that it intends to reject Apple patent 7,469,381, the “overscroll bounce” patent, again because in the hearing evidence of prior art was convincing.
Both of these patents were part of the huge Apple v. Samsung case, which resulted in a $1 billion-plus verdict for Apple.
Unfortunately, such developments are not surprising; that’s not to say they are logical. If (according to USPTO’s own statistics) 92% of all the requests to USPTO to reexamine patent claims are granted and 78% of the reexaminations find a problem with the original claims, then some of Apple’s patent claims will likely be invalidated. Why go to the expense of commercial litigation before bringing ex parte hearings on validity? Why are initial examiners not finding the prior art that would disallow a U.S. patent application? Why is obviousness clear in an ex parte hearing but not at initial examination? Does the USPTO intent to shorten the time to initial action work against quality examinations? Are the tools available to examiners appropriate for the tasks?
From a valuation or investment standpoint, the risk of having a patent invalidated is real, and high (if a challenger has the financial resources to pursue it), and must be factored into any analysis.
The America Invents Act (AIA) expanded the prior commercial use defense in patent litigation from applying just to business methods to now including other categories of patents. The defense also now requires commercial use more than one year prior to the patent’s filing or disclosure date. The defense has been broadened to include affiliated companies. W. Edward Ramage, of Baker Donelson Bearman Caldwell & Berkowitz PC, writes in IAM magazine that “the broadening of its scope should exert a downward pressure on patent values by making the defense available to more defendants.”
Here it gets interesting. AIA provides that the prior commercial use defense cannot be used in cases where “at the time that the claimed invention was made, it was owned by or subject to an obligation of assignment to either a higher education institution or a technology transfer organization.” Therefore, patents will be more valuable (comparatively) if a research institution or a technology transfer department owns them.
Carnegie Mellon sued Marvell Technology Group Ltd., a Bermuda-based, Santa Clara, Calif.-headquartered (see here for why, perhaps) chip manufacturing company in 2009 in the federal court for the Western District of Pennsylvania. The suit alleged the company had infringed patents covering technology associated with “increasing the accuracy with which hard disk drive circuits read data from high-speed magnetic disks,” according to a statement released from K&L Gates, the law firm for the university.
This week the jury assessed damages totaling $1.17 billion, upheld the validity of the patents, and found that Marvell knew or should have known that its actions would infringe the patents. The finding of willful infringement means Judge Nora Barry Fischer can award up to three times the jury award.
In its most recent 10Q filing, Marvell described its position in the litigation:
The Company strongly dispute[s] their liability and the damages claimed by CMU, and further believe that they do not infringe any valid and enforceable claims of the asserted CMU patents in suit and intend to litigate this action vigorously (including any potential appeal, as necessary).
Melbourne, Australia-based Flippa bills itself as the number-one marketplace for buying and selling websites. It is essentially an auction house, designed to bring together buyers and sellers, the kind of thing valuators love.
It appears to be working. In its own words, last year, “Flippa buyers placed over 413,000 bids on auctions in 2012, and 29,022 websites and domains were sold since January.… The total value of those sites and domains was over $22 million.”
Importantly, the “Just Sold” tab leads analysts to a listing of the last 2,000 transactions, complete with the URL, the sale price, the date established, visitor metrics, etc.
Licensed goods are able to command a retail price premium in the U.S. despite the fact that licensed merchandise sales have been relatively weak since the mid-2000s, says a new study.
The 2012 research used a baseline study conducted in 2009, followed up with ongoing monitoring. The Licensing Letter concludes that the overall average price differential is 32.9%, suggesting overall strong brand value. The study also points out stark differences between product categories, with health and beauty brands the top value generator, and property types, with sports licensing on top.
The study examined 338 pairs of products, comparing licensed items to their closest nonlicensed equivalents. This methodology may understate the average difference and may not reflect some product types accurately. For example, as the researchers point out, “it is difficult in the designer apparel sector to compare a licensed designer item to a non-licensed equivalent,” due to unique design elements.
The proprietary research is available from EPM Communications. Ask for more information.
On Monday, Dec. 17, 2012, and effective Jan. 16, 2013, Instagram, a photo sharing utility now owned by Facebook, announced to its users on its blog: “you hereby grant to Instagram a non-exclusive, fully paid and royalty-free, transferable, sub-licensable license to use the Content that you post on or through” Instagram.
Jenna Worthman and Nick Bilton of the New York Times Magazine explained the new policy:
- “You agree that a business or other entity may pay us to display your username, likeness, photos (along with any associated metadata), and/or actions you take, in connection with paid or sponsored content or promotions, without any compensation to you,” the new terms say;
- In effect, underage users are not exempt; and
- Instagram users “acknowledge that we may not always identify paid services, sponsored content, or commercial communications as such.”
Don’t want to agree to such a license? Then don’t use Instagram.
One day later, Instagram started backtracking in a letter from Kevin Systrom, co-founder, but with troubling phraseology. “As we review your feedback and stories in the press, we’re going to modify specific parts of the terms to make it more clear what will happen with your photos.… The language we proposed also raised questions about whether your photos can be part of an advertisement. We do not have plans for anything like this and because of that we’re going to remove the language that raised the question.”
Whether or not Instagram currently has plans for using members’ photos in ads without permission or compensation does not address the question of whether it believes it can.
Design patents are garnering more interest with Apple’s significant patent infringement win over Samsung in the U.S. earlier this year. As a result, their collective value is increasing. Analysts with engagements to value design patents should make note of a new mini-treatise written by Matthew A. Smith of Foley & Lardner LLP.
Contents include a general background on the legal underpinnings of design patents, how design patents differ from other forms of intellectual property, drafting a design patent application and a review of how it will be examined, proving infringement, tests for validity, and damages and injunctive relief.
Patently-O first alluded to the work, and you can download a copy from its website.
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