Google is really a wonderful tool. The depth that lies below that simplistic interface is truly amazing. This bit of Friday Food is a great example.

Did you know that you can analyze search trends on Google? Take a look at this trend history for the search term ‘patent.’ It’s interesting to me for several reasons. First, under the ‘Regions’ tab, look at the lead India currently enjoys. Where does the United States rank? Fourth (currently), behind India, South Korea, and Singapore. Very interesting.

Second, note that English barely has a lead over Turkish for search language (look under the languages tab). This despite the fact that both US- and India-based searches would be conducted in English (presumably, searches from several other areas would be conducted in English as well).

Third, take a look at the graph. Searches for the term ‘patent’ have been on a steady decline for years, despite an overall increase in news reference volume. Several things could explain this decline, including the possibility that people are performing more narrow patent-related searches these days (e.g., ‘patent reform,’ ‘patent legislation,’ etc.).

Keeping things in perspective is, of course, critical to all good trend analyses. Get some perspective on the patent issue with this report comparing ‘patent’ and ‘Paris Hilton.’ We can only hope to be as popular as her someday.

Happy Friday.

Yesterday, the Supreme Court delivered its long-awaited decision on the writ of certiorari in the KSR v. Teleflex case. There was little drama in the answer, as the Solicitor General had recently recommended that the Court hear the case and, usually, those recommendations are followed. There’s plenty of drama ahead, though. Expect oral arguments in the fall with a decision in Spring of next year.

With the granting of certiorari, the Supreme Court, for the second time, has agreed to hear a case that touches directly on patent reform. The case deals with the motivation/suggestion/teaching test developed by the Federal Circuit for dealing with questions of obviousness. While a change to the obviousness standard has yet to be included in any legislative proposal for patent reform, one of the two catalytic reports underlying the reform movement recommended a tightening of the standard and many groups have called for such a reform.

So, once again, patent reform has left the Capitol and walked across First Street to the Supreme Court.

Dennis Crouch already has a fantastic collection of documents from the case thus far.

Visit the KSR v. Teleflex archives for more.

We held the “Bloggers’ Corner” event earlier this week at the Spring meeting of the Intellectual Property Section of the American Bar Association. The Corner was a tremendous success by any measure, and a lot of fun to boot. As a follow-up post for people who weren’t at the meeting or just didn’t get a chance to step into the Corner, I thought I’d present a summary of some of the more interesting questions people asked me, along with the answers I gave.

What do you consider to be the most interesting issue in patent policy today?

I can’t pick just one. I really think we are in the midst of an historical time in patent law and policy, and several interesting issues are developing. I think it’s fascinating that all three branches of our government are currently working on various aspects of “patent reform.” As for the “most interesting issues,” though, I’d leave Congress out of it for now considering the current stalemate on legislative change. I’d rank the Supreme Court’s decision in eBay v. MercExchange at the top for several reasons. The case opens the door for the development of varied district court law on the controversial injunctive relief issue (which we’ve just seen the beginning of with the z4 decision). Also, I believe it throws down a gauntlet for Congress on the same issue…does Congress intend a patent to carry an absolute right to exclude? Lastly, it ensures that patent trolls will stay in the limelight for the foreseeable future.

I’d rank the PTO’s proposed rules as the second most interesting issue. Not so much for the substance of the rules per se (although the substance is pretty darn interesting), but more for the symbolic nature of the rules. The Office is undergoing a significant shift in culture, becoming more aggressive in its control over the patent process. It has become very clear over the last several months that the current administration is willing and able to test the bounds of its authority to regulate its own house. It’s admirable that the Office wants to do what it can to add efficiencies to the patent process. I worry, though, as many others do, that this newly aggressive approach will damage the environment of cooperation that has developed between the Office and the bar over the last several years.

Is Patent Reform dead?

Yes…and no. We won’t see a change come from this Congress. From a purely logistical standpoint, we’re at the point where it’s nearly impossible for this Congress to pass anything meaningful. I do think it’s a real possibility that something relatively small could get lobbed into an appropriations bill or another suitable vehicle that has some momentum and/or pressure behind it. Representative Issa’s bill to develop patent expertise in district court judges seems a likely candidate. Overall, though, I’d say that patent reform in the broad sense is dead in this Congress.

That said, you can bet it will show up in the next Congress, and the next, and the next. Patent legislation often takes many years to develop. So, in that sense, it’s not dead..it’s just entering the next stage of life.

Patent reform is also “not dead” because it has moved beyond Congress and into other venues, including the Supreme Court and the Patent and Trademark Office. All three branches of government are now looking quite closely at the patent system and considering various “reform” issues. This aspect of “reform” is likely to continue for some time as, for example, KSR v. Teleflex looms at the Supreme Court and the Office’s proposed rules hang in the balance.

What’s the legacy of eBay going to be?

I see two potential “legacies” of this landmark case. The first is Congressional action. I think eBay is a gauntlet, thrown down by the Court as a challenge to Congress. Congress needs to re-read the Constitution and think about the way in which it has exercised the Patent Power. Is the status quo acceptable or is a rethinking warranted? We know that Representative Berman believes the Court got the issue right, but we do not yet know how any other Members feel about the case. Time will tell if Congress accepts or ignores the challenge.

The second potential legacy depends on the first. If Congress does nothing…eBay will live on…and pockets of district court law will develop around the issue of the proper circumstances for awarding injunctive relief. Who is entitled to it? Who isn’t? When? In this scenario, the concurring opinion of Justice Kennedy will become quite significant as district court judges use its permissive language to deny injunctive relief in all types of scenarios. If this legacy develops, the wise patent stakeholder will watch it closely…and leverage it, whether they are a patent owner or otherwise.

Is fee diversion here to stay?

I’ve been asked this question many times, and my answer is always the same. “Looks that way.” I’m encouraged by the action of the House Appropriations Committee this week, but am concerned about the apparent unwillingness to adopt a permanent end to diversion. The current approach of temporary fixes is better than nothing, but it does continue the current environment that makes it difficult for the Office to effectively budget and plan for the future.

So who wins…Software/High-Tech or Biotech/Pharma?

I don’t know who “wins” or even that a “battle” is at hand, per se. But, I do think the software and high-technology industries are using the patent quality and application pendency issues very effectively to advance their agenda.

What’s the legacy of the 109th Congress relating to patent law and policy?

This Congress has done a wonderful job at documenting various viewpoints on our patent system and on several proposed reforms. The House conducted an amazing number of hearings and has established a decent record for going forward. I think it will have a legacy of laying foundation, and not one of implementing change.

I do note, however, that it’s still not too late for this Congress to enact meaningful reform on PTO funding issues (i.e., fee diversion). It’s unlikely, but possible. There are a couple of proposals with vastly different approaches that are looming in Congress. Perhaps they’ll see some action during the appropriations process, perhaps not.

Do I need to worry about patent reform?

No less than four different people asked me this question (in one form or another). I didn’t know how to answer it then, and I don’t know how to answer it now. I guess the only thing to say is that you need to assess your individual situation and consider patent reform in all of its glory (which, today, includes all three branches of government). Change is coming, be sure of that. Hopefully, the goal of improving the patent system will remain the focus of the various reform efforts.

Why do you blog?

This one’s easy…Passion. See the ‘Why?’ section in the ‘About’ page.

What are you doing with an Oklahoma-based firm?

There’s a short answer and a long answer to this one. Here’s the short answer – Family brought me home from Chicago and a similar mindset regarding the business of law took me to Oklahoma.

Want the long answer? Ask me in person sometime.

Yesterday, the House Appropriations Committee held a markup hearing on the Commerce-Justice-State (CJS) appropriations bill for fiscal year 2007. The Committee approved an appropriation for the Patent and Trademark Office of $1.77 billion. This is slightly more than the funding level for fiscal year 2006 and slightly less than the amount requested by the President. Importantly, the Committee set the appropriation at an amount equal to the Office’s estimated fee collections for 2007, signalling a desire to keep all patent and trademark fees under the control of the Office.

So far, so good. Committee markup of the CJS appropriations bill is just the beginning, though. The bill must wind its way through the entire legislative process. Changes to funding levels and other amendments can be made at various points along the way.

We’ve been having a bit of fun with the eBay v. MercExchange case over at IP Memes, the Technolawyer newsletter that I write with Steve and Doug. A few weeks ago, we posted a tongue-in-cheek look at the case from a patent troll’s perspective. In this week’s edition of Memes, we present the case from an infringer’s point-of-view.

The folks at Technolawyer are kind enough to allow me to reproduce this particular meme below. If you’d like to read the newsletter regularly, head over to Technolawyer to sign up for your free account and select the ‘IP Memes Newsletter’ when configuring your account.

We hope you’re able to laugh as much as we have at these brief interludes of humor. Comments are open…so let me know if you laughed or cried. Enjoy!

eBay, from an infringer’s perspective

The setting is a telephone interview between a beat reporter looking for a few “money quotes” from an infringer following the Supreme Court’s decision in eBay v. MercExchange.

Ring … Ring …

Reporter: C’mon … please pick up, don’t send me into voicemail again …

Infringer: Hello?

Reporter: Ah … hello Mr. Bin. My name is Jones, Cub Jones. I’m with the Times … I’ve left you several messages over the last several weeks. I’d like to ask you a few questions about the recent Supreme Court decision in eBay v. MercExchange. Do you have a few minutes?

Infringer: Oh, yeah. Sure. I did get your messages and have been planning to call you back. Sorry. It’s just been so hectic around here. I’m the Chief Operating Officer of this outfit, and I’ve been a little busier than normal since that decision was announced.

Reporter: Busier? How so?

Infringer: How so? Oh man, if only you knew. I had marathon meetings with the lawyers immediately after the decision was announced. Two days later, I signed off on no less than six (6) memoranda ordering plant retoolings and general ramp-ups in production for projects that were, ummm, on hold.

Reporter: What do you mean by “on hold?”

Infringer: Um … let’s just say that they’re not on hold any more. Do the math, kid.

Reporter: So, eBay comes out, and several projects are “not on hold anymore.” Is my math correct? Can I quote you on that?

Infringer: Yep. 2+2 is 4. And, yes, you can quote me. After all, it’s the law of the land.

Reporter: You seem pretty confident. Seems odd, since eBay doesn’t explicitly give anyone permission to infringe. I don’t get it.

Infringer: They must not teach you journalists the math that they gave us in B school. Here goes … It’s not about permission … it’s about the penalty. Listen up … those six projects … they each had, um, patent issues, let’s say. We didn’t want to retool and ramp-up because the patent holder might have been able to shut us down with a pesky injunction. Infringement wasn’t crystal clear, but the threat of the injunction was scary enough that we didn’t want to invest the cash in new equipment and people only to lose the investment in that product later. Get the math now?

Reporter: I do. Thanks for the lesson. But you could still be found guilty of infringement and have to pay damages, right? Doesn’t that concern you?

Infringer: Ahhh … the math lesson is not complete, grasshopper. Damages we don’t care too much about. We’ve done a risk assessment on the infringement issue for each project. The projects that get a, uh, high score have a hidden royalty priced into the product. We build a war chest, so to speak. When, er, I mean if we’re found guilty of infringement, we just write a check from the chest. No skin off our back. But the shut-down … now that peels skin off of our back. It hurts, bad.

Reporter: How so?

Infringer: Believe me, I’ve had to explain to some of your colleagues about plant shut downs and layoffs, all while ducking questions about executive compensation. That, my friend, is not fun. Like I said … it hurts. Do Not Quote Me on That!

Reporter: Got it. I appreciate your candor. Time for a couple more questions?

Infringer: Sorry, kid. I can’t stand around and teach you business math all day. I’ve got those six projects rolling, and two new ones have surfaced. The lawyers told me they “walked away from the bargaining table” with some patent holder and that “we’ve got the green light” on those projects as well. Not sure what it means yet, other than I’ve got to write two more retooling orders, higher another several hundred people to manufacture the things, and ask the Chief Financial Officer to open another coupla chests.

Reporter: Ok … thanks. I’ll be sure to show you the article before it goes live.

Infringer: Don’t bother, kid. I’m too damn busy. We’re making stuff, here.

House appropriators saved the best funding bill for last.  Late last week, a House subcommittee set the final FY 2007 spending bill in motion by sending the Commerce-Justice-State (CJS) funding bill to the full Appropriations committee, which is set to consider and markup the bill on Tuesday, June 20th.  The President’s proposed CJS budget requests over $1.8 billion for the Patent and Trademark Office, an increase of over $150 million from the amount initially requested last year.

Aside from the overall funding request, the proposed budget includes several important provisions relating to the Patent and Trademark Office.  First and foremost…it gives the Office full access to the fees it collects from its customers during fiscal year 2007, up to the requested amount.  Also, it maintains the statutory changes made in 2005 that divided filing fees into separate filing, search and examination fees.  The bill also grants the Director authority to reduce filing fees by regulation for documents filed electronically and removes the current ban on payment of travel expenses for Office employees by Office customers.

Several issues relating to the Patent and Trademark Office could receive attention as the CJS bill winds its way through the appropriations process, the hottest of which, of course, is fee diversion.  Will the appropriators grant the President’s request that the Office have access to all of the fees it collects?  Or will the PTO cash cow prove too tempting to pass up for other purposes?

Tuesday’s markup could begin to shed light on these questions.

The Antitrust Modernization Commission, charged by statute to analyze and report on the question of whether a need exists for the modernization of the antitrust laws, is holding a public meeting today to discuss merger enforcement and patent reform issues. You can view and/or download .pdf version of the Discussion Outline and the Discussion Memorandum from the Commission’s website.

Yesterday, the House Subcommittee on Courts, the Internet and Intellectual Property held a patent oversight hearing, dubbed “Patent Trolls: Fact or Fiction.” Perhaps not surprisingly, the Subcommittee essentially ignored the “fact or fiction” question and focused its efforts on patent reform in the broader sense, including considerable attention to the recent Supreme Court decision in eBay v. MercExchange.

The hearing revealed the true divisive nature of the eBay decision. Ranking member Berman, long a proponent of injunctive relief reform, flatly stated that eBay brings a “return to the standard originally intended” and that “it is not necessary to further legislate on the issue of injunctions.” If it wasn’t clear before yesterday’s hearing, it certainly is now – Representative Berman believes the Supreme Court got it right in eBay and that the law of injunctive relief is now in good order. It is safe to assume that he believes injunctive relief reform is officially off the table.

Rep. Berman clearly believes the Supreme Court got it right and that further injunctive relief reform is not neededDean Kamen, professional inventor and self-professed patent troll, views eBay a bit differently, though. Indeed, it’s fairly clear that he believes Congress should accept the challenge and pick up the Supreme Court’s eBay gauntlet. Mr. Kamen is in the business of inventing and makes his living by licensing inventions to big companies that, he believes, are better able to produce, deliver and support the products. The eBay decision clearly changes his business environment. He summarized his post-eBay world quite succinctly: “I can’t do business with big companies if the injunction provision includes a ’sometimes’ modifier.”

Patent reform, in Mr. Kamen’s eyes, now includes a legislative response to the eBay decision. He shrewdly suggested that he might be willing “to accept a higher standard for patentability in exchange for the certainty I had in the past” (referring to a tightening of the nonobviousness standard balanced against a strengthening of the injunctive relief provision post-eBay).

Mr. Kamen may be signaling the post-eBay shift of patent reform efforts predicted here earlier – the losing side in eBay might be beginning to focus its legislative resources on changing the law of injunctive relief as it stands after eBay. It’s very interesting to see the gauntlet used as a bargaining chip.

So what does ‘patent reform” mean in Congress now? It’s perhaps as muddied as it’s ever been. A response to eBay may be involved, but it’s still not clear if any Subcommittee member is willing to pick up the eBay gauntlet. Changing the obviousness standard might be involved. We may learn more about this in a proposed oversight hearing that promises to bring us full circle by reviewing the catalytic reports underlying the reform movement, one of which recommends a tightening of the standard. Remember, though, the Supreme Court may steal the spotlight on this issue as well if it grants certiorari in the KSR v. Teleflex case.

What about the troll issue? The definition of the term ‘patent troll’ was given a bit of lip service in the hearing and everyone assured Mr. Kamen that they wouldn’t sign on to a definition that categorizes him as a troll, despite his reaffirmation of his famous “I am a patent troll” pledge and repeated assertions that he meets most of the proposed definitions. Are patent trolls “fact or fiction”? That question was completely ignored.

Several peripheral and very interesting issues were touched upon….more to come on these in future posts.

Dennis Crouch has a detailed analysis of what appears to be the first denial of injunctive relief under the guidance of eBay v. MercExchange. Approximately one month after the Supreme Court issued it’s decision, Judge Leonard Davis of the Eastern District of Texas issued an order denying a permanent injunction following a finding of infringement and survival of a validity challenge. Quite appropriately, Microsoft is the benefactor of eBay’s first progeny.

The House Subcommittee on Courts, the Internet, and Intellectual Property continues its record pace of oversight hearings on the patent system today with “Patent Trolls: Fact or Fiction?” The hearing is scheduled to begin at 9AM Eastern. You can view a live webcast of the hearing here.

Dean Kamen, the professional inventor behind the Segway human transporter and DEKA Research & Development and who famously quipped “I’m Dean Kamen…I’m a patent troll,” returns to the patent reform debate as a witness in the hearing. Dean certainly brings the perspective of the professional inventor to the hearing. Unfortunately, the witness list doesn’t appear to include a representative of the university sector or a representative of individual inventors, two groups that have a vested interest in the patent troll debate. (Note: It is not clear yet on who’s behalf Mr. Reines is testifying)

I’ll have a detailed report soon.