Top Republican Presidential Candidates sued for their allegedly infringing use of Facebook

In what appears to be a politically-motivated and/or attention-seeking stunt, the patentee of two web patents has sued Rick Santorum, Mitt Romney and Newt Gingrich (and a 1,000 Does to be named later from amongst the millions of Facebook users). The complaint alleges that the defendants (and Facebook) infringe the claims of US7,644,122 through their use of Facebook’s business accounts. The complaint appears to be frivolous, at first blush, but may cause some turmoil in the campaigns of the named politicians. Incidentally, Facebook initiated an inter partes reexamination of the ‘122 patent in 2010 (95/001,411), after being approached by the patentee. The reexamination is in progress having gone through a few rounds between the patentee, PTO and the requester (Facebook).

In what appears to be the start of a litigation trend that will blow up after Facebook’s forthcoming IPO…

Facebook and Yahoo are in (pre-litigation) licensing discussions

Yahoo and Facebook met earlier this week for what is seen as a discussion relating to licensing revenue that Yahoo is seeking from Facebook based on the latter’s use of patented methods from a dozen or so Yahoo patents. Yahoo is looking to monetize its patents and Facebook appears to have deep pockets (as of now). A search of US patents and applications assigned to Yahoo, brought up 1,020 issued patents and 2,130 applications. Facebook has 20 issued US patents and about 40 published applications – although it has stated it has 56 patents and 410 applications in its IPO prospectus. Facebook’s market cap may be around $100B at IPO, while Yahoo has a market cap closer to $18B.

Litigation in the Mobile Telephony Space

Assumptions

Below is a quick summary of a study of litigation in the mobile phone/apps space.  The case set included about 415 cases filed between December 2004 and August 2011. This newsletter points out a few of the analysis results.Party names have been normalized and cases have been grouped by family where consolidation and transfers have occurred. The report used data from MaxVal’s litigation database, the LMI patent litigation database, and publicly available information.

Case volume and duration of litigation

The number of cases filed has increased year upon year since 2007. The number of cases filed in 2010 was more than double of that filed in 2007. And, the cases filed in the first eight months in 2011 almost equaled all the cases filed in 2010.

FIG. 1: Cases filed per year.

Patent litigation has been estimated to last upwards of 2 years (plus a year where there is an appeal). If the bottleneck in the resolution of a case is the court’s calendar, then this would suggest that a backlog of cases would build up if the filings increased and the number of judges was not increased. Our data shows that over ninety percent of cases filed between 2005 and 2007 have been closed. Compared to this, about two-thirds of the cases filed in 2008 and 2009 have been resolved. Forty-four percent of cases filed in 2010 and twenty-seven percent of the cases filed in the first eight months of 2011 have been closed. Overall, about sixty percent of the cases in this set have been closed with an average time to termination of about 13 months. Where a case has been closed administratively having been stayed pending reexamination, the case has been treated as closed for this analysis.

FIG. 2: Case status report.

Transfers and Consolidations

Not surprisingly, more cases were transferred out of the Eastern District of Texas (TXED) than any other court. More cases were transferred into the Northern District of California (CAND) than any other court.  Since many of the mobile technology companies involved in litigation are based in the Silicon Valley and TXED is considered a plaintiff-friendly venue for litigation, predictably patent infringement cases against mobile phone manufacturers are filed in Texas while the defendants attempt to move to a venue closer to home. Fewer than 2% of the cases were consolidated during the course of litigation.

Plaintiffs and Defendants

Apple has been named a defendant more often than any other mobile technology company (107 cases). Apple has also filed 8 infringement lawsuits against competitors. The other notable mobile technology companies who top of the list of alleged infringers are Samsung (90), Motorola (83), Nokia (81), LG (78), RIM (78), HTC (73) and Sony (73). The high counts are indicative of these companies being grouped together often as co-defendants.

The top five non-practicing entities (NPEs) appearing as plaintiffs are Tony Colida (12), Helferich Patent Licensing (HPL) (11), St. Clair IP Consultants (9), SPH America (8) and Olympic Development AG (8). On a related note, since August of 2011, HPL has filed a dozen or so lawsuits targeting companies that are not in the mobile space (retailers, automobile manufacturers, sports leagues, publishing houses, etc.) accusing them of infringing HPL patents by operating websites and social networking sites.

The mobile telephony space has a lot of repeat players. Only sixty two cases (~15%) involve plaintiffs that have filed just one lawsuit.

FIG. 3: Top 15 Party Analysis.

Patents of interest

The patent family that has been asserted most often names Richard Helferich as the sole inventor. The patents are assigned variously to Richard Helferich, Thompson Trust, The Thompson Investment Group, LLC and Wireless Science, LLC. There are about 20 patents in this family and they have been asserted in one or more combinations. In one of the recently filed complaints, HPL claims to have licensed its patent portfolio to almost a hundred companies including Apple, HP, Microsoft, Motorola and RIM.

FIG. 4: Top 10 litigated patents.

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PATENT OFFICE AND PATENT SYSTEM IN INDIA

India is a major market with a population of 1.21 billion people (2011 census), the second most populous country in the world and is a rapidly growing economy. Starting with the Patents Act of 1970, India had opted for strong protection to its industry and particularly to its pharmaceutical industry.  Consequent to India becoming signatory to TRIPS in 1998, the patent laws and rules have been amended with the latest amendments taking effect from May 5, 2006. The Annual Report of the Indian Patent Office (IPO) (June 2011[i]) states that “the TRIPS compliant intellectual property laws in India coupled with strong enforcement mechanism and judicial system created the best investment opportunities and conducive environment for protection of IP rights in order to enable the business community to diversify their commercial activities.” In addition to the legal improvement, the functioning of the IPO has been streamlined[ii], and the availability and reliability of information has seen continual improvements. This article discusses some nuances of patent filing and prosecution in India that require special consideration arising from certain country-specific provisions.

FILING PROCEDURE

The Office of the Controller General of Patents, Designs & Trade Marks (CGPDTM) is located in Mumbai. The Head Office of the Patent office is in Kolkata and its Branch offices are located in Chennai, New Delhi and Mumbai. The Patent Office receives applications at each of the four offices according to a determination of jurisdiction. For international applicants, the appropriate office is the one closest to the address for service in India, which practically goes down to the place of business of the patent agent.

Electronic filing is possible with the use of a Class III digital signature through the Patent Office’s Website, but requires a specific browser (Internet Explorer) with custom changes to the security settings, for the registration procedure and to set up the software. Fees can be electronically transferred at the end of the file upload, through one of two payment gateways. The Indian Patent Office charges a filing fee of Rs.4000 (~80 USD, Rs.1000 (~20 USD) for individual applicants “1 USD equals about Rs. 49”) for each application, which is good for up to 30 pages and up to 10 claims. Any additional are charged at Rs.400 per page and Rs.800 per claim (Rs.100 per page and Rs.200 per claim for individual applicants “1 USD equals about Rs. 49”). Multiple dependent claims are not charged extra, unlike in the US. However, the electronic filing system is not yet very user-friendly and it could be challenging to complete the filing process correctly.

Filing on hard copy is still the most popular way of communicating with the IPO and requires payment through demand draft or bank pay order. Acknowledgement and filing reference number are only sent by mail and may take up to a month to be mailed to the applicant. In order to obtain an immediate acknowledgement it is currently necessary to file in person at the patent office. A filing receipt is usually issued over the counter. It is not possible to make electronic payment for a hard copy submission of patent documents. The office accepts submissions of scanned or printed versions of declaration of inventorship and power of attorney (a requirement to submit original signed copy within one month of filing was deleted in a 2006 amendment to Rule 6(1)).

DISCLOSURE FORMALITIES

The IPO imposes disclosure requirements that are not found in most jurisdictions. The IPO requires that under section 8(1), information regarding any related foreign applications to be filed periodically with the IPO.  Specifically, the IPO requires that “up to the date of grant of patent in India, he [the applicant] would keep the Controller informed in writing, from time to time, of detailed particulars as required under clause (a) in respect of every other application relating to the same or substantially the same invention, if any, filed in any country outside India subsequent to the filing of the statement referred to in the aforesaid clause, within the prescribed time.” The time period within which the applicant is required to notify the IPO regarding any related foreign application is currently six months according to Rule 12(1A). In addition the applicant is mandated, within six months of receipt of communication to that effect from the Controller, to furnish information relating to objections or rejections in respect of novelty and patentability during prosecution of corresponding applications elsewhere. Not furnishing information according to Section 8 is one of the grounds of invalidation of a patent (section 25[iii]). The Section 8 disclosure requirements can be complied with by scheduling six-monthly filings in Form 3 with details of prosecution progress of related applications elsewhere.

PUBLICATION AND EXAMINATION 

India Patent applications are automatically published after an 18-month delay from the priority date, without payment of any additional fee. However, early publication can be requested on payment of Rs.10,000 (~200 USD, Rs.2,500 or ~50 USD for individual applicants), which will result in publication of the bibliographic details and abstract of the application in the Patent Office Journal that is published weekly on every Friday on the Patent Office Website. The application will be published within a month of the 18-year deadline (rule 24). Full text including claims of published applications is accessible online via the “Application Status” button on the IPAIRS Website, but figures and tables are currently not available online. Alternatively, a copy of each application of interest can be requested on payment of a fee of Rs.4 per page at the appropriate patent office where the application was filed. Examination of published applications can be requested anytime after publication, but within 48 months of the earliest filing date.

PROSECUTION TIMELINE

Like many other patent offices around the world, the IPO is currently experiencing a backlog of application to be examined. The number of applications filed, examined and the year-wise backlog for patent filings at the Indian Patent Office between 2003 and 2010 are shown in Fig. 1.

FIG.1: Number of patent applications filed, examined and pending for examination at the Indian Patent Office between 2003 and 2010

The backlog numbers shown above do not include the number of applications pending prior to 2003. From the filing data, the cumulative number of applications unexamined at the end of 2009-10 is estimated to be 110,515. As Fig. 1 shows, there is a steady drop in number of applications examined and a steady increase in the backlog for the period 2003 – 2010. Currently the IPO is examining applications that were requested to be examined in 2008 or earlier. This backlog in examination is a result of attrition at the IPO and because no new recruitment for examiners was carried out for a number of years. The shortage is being addressed by recruiting new examiners. Currently over 250 new examiners are being appointed and will begin a training program in 2012. These developments are expected to result in faster examination and disposal after 2013.

WORKING OF PATENTS

After an applicant obtains a patent or obtains a license to a patent in India, he is required furnish statements of “working of patents on a commercial scale in India”. Currently the Patent Office Procedure calls for a statement from the patentee/licensee to be filed every year. Section 83 (b) of the Patents Act states that “(patents are) not granted merely to enable patentees to enjoy a monopoly for the importation of the patented article”. This section, along with section 83(g) that stipulates that patents “are granted to make the benefit of the patented invention available at reasonably affordable prices to the public,” have attracted considerable attention and concern internationally. Section 146(2) requires every patentee and every licensee furnish statements of “working of patents on a commercial scale in India”. The patentee/licensee needs to file such a statement every year within three months of the end of each year (rule 131(2)). This information is published or made available through the Patent Office Website. If a patent is “not worked in the territory of India”, any person interested may make an application for a compulsory license after a period of 3 years from the grant of patent. This provision is clearly intended to drive manufacturing activity within India based on patented inventions. The filing under section 146(2) must be complied with annually for patents granted in India.

COMPULSORY LICENSING

The compulsory licensing provisions according to section 84 are contingent on a determination: (a) that the reasonable requirements of the public with respect to the patented invention have not been satisfied, or (b) that the patented invention is not available to the public at a reasonably affordable price, or (c) that the patented invention is not worked in the territory of India. A request by the Indian pharmaceutical company NATCO against Bayer Corporation regarding patent No. IN 215758 is currently under consideration at the Mumbai High Court and before the Controller of Patents, Mumbai. The applicant, a generic drug manufacturer, cites the high cost of treatment using the drug Nexavar in their application. The case law on compulsory licensing is still undeveloped in India and no compulsory license has thus far been granted under the above provisions. In addition to section 84 provisions, Indian law provides for compulsory licensing on public health considerations a) licensing by the government in case of national emergency (section 92), and b) for export of patented pharmaceutical products in certain exceptional circumstances to any country having insufficient or no manufacturing capacity according to section 92A.

SERVICE REQUESTS

Service requests pertaining to filings at each of the four Patent Offices must be routed to the respective office where the application was originally filed. Service requests that can be made include queries pertaining to assignments or proprietorship, status of application, filing, withdrawal or abandonment particulars, etc. Currently the fastest way to obtain information would be to make a direct request for a copy of the record at the respective office. There are various considerations the requester needs to consider when requesting information from the IPO. For example, to obtain assignment information, the requester may request for inspection of the Register of Patents under section 72 (application to be made on plain paper with fee of Rs.800/200). Thereafter, copies of an individual record can be requested at Rs.4 per page. Alternatively, the requester may request a certified copy of the record on payment of Rs.4000/1000. The certified copy is preferred when the document is required for evidence before a court.

Other information concerning patent filing include status of application, dates of filing various documents including request for publication or examination, filing information, date of filing complete specification after provisional, etc. This information may be obtained in plain paper with payment of Rs.1200. Each item of information required must be requested by separate application. Documents relating to a published application such as provisional specification, drawings, etc. may be inspected and copies obtained. Similarly, documents relating to grant of a patent may be obtained after making a request for inspection. As stated earlier, certified copies, if required can be obtained on payment of Rs.4000/1000.

CONCLUSION

The patent landscape in India is fast evolving. The IPO continues to improve and with the recent hiring spree of new examiners, the capacity of the IPO to resolve pending applications will increase significantly. Furthermore, the availability and reliability of information from the IPO will help to create greater certainty in the Indian patent system. However, with four patent offices, specific disclosure requirement and statement of working requirement, getting and maintaining a patent or even getting information on a patent in India can still be a maze to navigate. Maxval with patent attorneys and agents both in the U.S. and India can help you understand the issues and implement your patent strategy.

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[i] Annual Report 2009-10, Annual Report Of The Office Of The Controller General Of Patents, Designs, Trade Marks And Geographical Indication June 2011.
[ii] http://ipindia.gov.in/PatentOfficeProcedure/PatentOfficeProcedure_2009.pdf

[iii] http://www.managingip.com/Article/2897223/Patentability-More-than-a-filing-formality.html