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Federal Circuit: Software Not an Abstract Idea—Is Patentable

By Stephen B. Schott

dreamstime_xs_17536982Software patents are alive. Again. Many pundits have been saying it since the Supreme Court’s Alice decision on patentable subject matter in 2014 but there has been little guidance on the topic from the leading courts until now.
On Thursday, the Federal Circuit ruled unanimously that software and data structures were not inherently abstract ideas and were therefore patentable under the Supreme Court’s two-part Alice test. Enfish, LLC v. Microsoft Corp (Fed. Cir. 2016).
The Technology: Self Referential Database
Software and database-related patents have taken a beating in the post-Alice world, so it’s interesting that this case relates to a database, and in particular a self-referential database. To set the technical context, the Federal Circuit explained the more common relational database in contrast to the claimed self-referential one.
With the relational model, each entity (i.e., each type of thing) that is modeled is provided in a separate table. For instance, a relational model for a corporate file repository might include the following tables: document table, person table, company table. The court went on to explain how users and programs populate these tables and relate them to one another through defined relationships between the tables.
 A self-referential database like those described in US Patents 6,151,604  and 6,163,775  at issue, "has two features that are not found in the relational model: first the self-referential model can store all entity types in a single table, and second the self-referential model can define the table’s columns by rows in that same table.”
The Claims in US Patents 6,151,604  and 6,163,775
The Federal Circuit looked at both patents but used the ‘604 patent claim 17 as its example in its analysis:
17. A data storage and retrieval system for a computer memory, comprising:
means for configuring said memory according to a logical table, said logical table including:
a plurality of logical rows, each said logical row including an object identification number (OID) to identify each said logical row, each said logical row corresponding to a record of information;
a plurality of logical columns intersecting said plurality of logical rows to define a plurality of logical cells, each said logical column including an OID to identify each said logical column; and
means for indexing data stored in said table.
This claim has two means plus function elements, which means that it incorporates even more limitations into the claim. Means plus functions claims force a court into a two-step inquiry during claim interpretation: (1) identify the function, for example in this claim one function is “indexing a data stored in said table,” and then (2) identify the structure in the specification that performs the function—which is where the additional limitations may be added to the claim itself.
The Federal Circuit's Analysis
The Federal Circuit, which has been on the wrong side of almost every subject matter case appealed to the Supreme Court, started its analysis by noting that the Supreme Court and Federal Circuit have together grappled with the issues of patentable subject matter, presenting an argument that to an outside observer would almost seem like the two courts are in sync on this topic, contrary to the track record of their differences.
th-enfish-logoThe Federal Circuit introduced the Supreme Court’s Alice two-part test of patentable subject matter: (1) Determine whether the claim is directed to an abstract idea, and (2) If an abstract idea is present in the claim, determine whether any element, or combination of elements, in the claim is sufficient to ensure that the claim amounts to significantly more than the abstract idea itself. Unlike the Federal Circuit's earlier DDR Holdings case that only analyzed the second part of this test, the Enfish court focused solely on the first part.
The Supreme Court has suggested that claims “purport[ ing] to improve the functioning of the computer itself,” or “improv[ing] an existing technological process” might not succumb to the abstract idea exception. While it is true that the Court discussed improvements to computer-related technology in the second step of its analysis in Alice, that was because the Court did not need to discuss the first step of its analysis at any considerable length, (“Petitioner acknowledges that its claims describe intermediate settlement....”).
But then the Federal Circuit offered the quote that will be part of every subject matter case and response to a subject matter rejection for the near future:
We do not read Alice to broadly hold that all improvements in computer-related technology are inherently abstract and, therefore, must be considered at step two. Indeed, some improvements in computer-related technology when appropriately claimed are undoubtedly not abstract, such as a chip architecture, an LED display, and the like. Nor do we think that claims directed to software, as opposed to hardware, are inherently abstract and therefore only properly analyzed at the second step of the Alice analysis. Software can make non-abstract improvements to computer technology just as hardware improvements can, and sometimes the improvements can be accomplished through either route. We thus see no reason to conclude that all claims directed to improvements in computer-related technology, including those directed to software, are abstract and necessarily analyzed at the second step of Alice, nor do we believe that Alice so directs. Therefore, we find it relevant to ask whether the claims are directed to an improvement to computer functionality versus being directed to an abstract idea, even at the first step of the Alice analysis.
 The court then dove a little deeper into the ‘604 patent’s specification to support how the claimed technology improves a computer's functionality.
The specification also teaches that the self-referential table functions differently than conventional database structures. According to the specification, traditional databases, such as “those that follow the relational model and those that follow the object oriented model,” ’604 patent, col. 1 ll. 37–40, are inferior to the claimed invention. While “[t]he structural requirements of current databases require a programmer to predefine a structure and subsequent [data] entry must conform to that structure,” id. at col. 2 ll. 10–13, the “database of the present invention does not require a programmer to preconfigure a structure to which a user must adapt data entry.” Id. at col 2 ll. 27–29. Moreover, our conclusion that the claims are directed to an improvement of an existing technology is bolstered by the specification’s teachings that the claimed invention achieves other benefits over conventional databases, such as increased flexibility, faster search times, and smaller memory requirements.
 The Federal Circuit went on to note that just because the claimed technology could be run on any general computer, it was not doomed by Alice’s warning that well-known business practices carried out on general purpose computers are unpatentable subject matter. “[T]he claims here are directed to an improvement in the functioning of a computer."
Practice Notes for Practitioners
Enfish replaces DDR Holdings as the “must-cite” case when prosecuting patents at the USPTO. It avoids Alice's “substantially more” vagueness as long as the skilled practitioner can convince a court that what is claimed improves a computer’s functionality. Claims and specifications in software-related arts should be carefully crafted with Enfish in mind.
We will keep a watch for any appeal to the Supreme Court.
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April 2016 Patent Law Update

By Stephen B. Schott
dreamstime_s_38780059 2
USPTO Subject Matter Guidelines Updated
If you haven’t seen them, the USPTO published patentable subject matter hypotheticals, with an accompanying analysis. The PTO published these examples last year but recently added more examples that include a focus on bio-related technologies.
Courts Cannot “Factor Out” Functional Elements When Construing Design Patent Claims
Sport Dimension, Inc. v. Coleman Co., Inc. (Fed. Cir. April 2016)
For the 3rd time in a year, the Federal Circuit made it clear that while functional elements in a design patent are not protectable, when construing a design patent claim, courts cannot “factor out” or ignore functional elements as if they don’t exist.
The Court summarized this clearly: “[T]he armbands and side torso tapering serve a functional purpose, so the fact finder should not focus on the particular designs of these elements when determining infringement, but rather focus on what these elements contribute to the design’s overall ornamentation."
Patentees Cannot File a Reexamination (or Reissue) to Avoid an Invalidity Judgment
Cardpool v. Plastic Jungle (Fed. Cir. April 2016)
The patentee filed for reexamination of its patent before the district court issued a final judgment. After the district court invalidated the patent’s claims, the USPTO issued a reexamination certificate amending the patent’s claims. The parties jointly moved for the district court to vacate its invalidity judgment but the district court refused and the Federal Circuit affirmed stating, "The Supreme Court counsels that “vacatur must be decreed for those judgments whose review is . . . ‘prevented through happenstance’—that is to say, where a controversy presented for review has ‘become moot due to circumstances unattributable to any of the parties.”
Claim Construction Required Even if Claim Term has Plain and Ordinary Meaning
Clare v. Chrysler Grp. LLC (Fed. Cir. April, 2016)
Even a simple claim term with a plain and ordinary meaning must be construed. Point finale.
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Patents vs. Trade Secret: Which is Right for You?

dreamstime_xs_40094100An Article in Schott, P.C.’s IP Law For Start-ups Series
By Stephen B. Schott
Patents prevent others from using your idea in exchange for you sharing that idea publicly. Trade secrets reward you for keeping your idea secret from others. So interestingly, the legal protection for each originates from different sources: open disclosure (patents) vs. secrecy (trade secrets).
You may face a decision about which one is right for you.
What is the Legal Right?
A patent is a government license to exclude others from making, using, or selling an invention for a set period.
A trade secret is:

  • information, including a formula, pattern, compilation, program, device, method, technique, or process,
  • that derives independent economic value, actual or potential, from not being generally known to or readily ascertainable through appropriate means by other persons who might obtain economic value from its disclosure or use; and
  • is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

table image
 
Considerations When Deciding Between Patents and Trade Secrets
Because trade secrets can be reverse-engineered or disclosed, patents provide a more reliable form of protection. The best trade secrets are things like the formulas for Coca-Cola and KFC's fried chicken recipe, which despite their known ingredients resist people's best efforts to reproduce them.
Patents, on the other hand, provide protection in spite of an invention's simplicity. In fact, the simple, easier-to-copy inventions are ideal for patents. The hair scrunchy (SCUNCI(R)) was easy to copy but the inventor made money because she had a patent. Patents also give a company tangible assets and the ability to market products and services as "patented."
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2 Minute IP: How Can I Get My Patent Faster?

By Stephen B. Schott

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On Octopi and Myths of Claim Drafting: Negative Limitations and Empty Spaces

By Stephen B. Schott
dreamstime_xs_49086497The plural of octopus is a funny word. Ask most people and they'll tell you that it's octopi. That conclusion is born from how to properly make Latin words plural. For example, the plural for the Latin-origin word radius is, when pluralized in Latin, radii. Many people and even the excellent Webster's Third New International Dictionary naturally follow the Latin usage when tackling the plural form of octopus.
But there are at least three problems with octopi. First, besides the moment when some pretentious know-it-all tells you about "octopi," your opportunities to  use a plural form of octopus in your life are seldom. (If you often need the plural for octopus, congratulations Jacques Cousteau--you need not bother with this article--you have a more interesting life than my normal reader.) The second problem with octopi is that no matter how they pluralize in Latin, we are talking about making plurals in English. And in English, the plural of octopus is octopuses.
It's at the third problem of octopi that you can pop the pretentious bubble that surrounds the person with the upturned-pinky-while-drinking-tea. You see, octopus is not a Latin word. Not ever. Octopus is a Greek word. The plural of octopus in Greek is octopedes. An octopus traveling with friends would never would turn to octopi, even in the Mediterranean of 1200 years ago. FN1
Octopi is a myth that's been busted. And the very same grammar-wannabes who advocate for it are probably also pushing claim drafting myths like "You can't claim negative limitations" and "You can't claim holes." While these pieces of advice may be good in specific claim-drafting situations, there's no "can't" attached to them.
The Myth of Claiming Negative Limitations
A negative claim limitation reads like nails on a chalkboard to most claim drafters. There's almost always a better way to draft a claim, but such a limitation is permitted. Take for example the following claim that the Federal Circuit recently considered in Inphi Corp. v. Netlist, Inc.:

1. A memory module comprising: a plurality of memory devices, ...a second number of chip selects equal to twice the first number of chip selects, wherein the plurality of memory devices comprises double-data rate (DDR) dynamic random-access memory (DRAM) devices and the chip selects of the first and second number of chip selects are DDR chip selects that are not CAS, RAS, or bank address signals.

The Federal Circuit found this negative limitation not invalid because the patent's specification supported it. As a claim drafter, the only questions to consider when looking at such a limitation are whether they provide advantageous claim scope and whether the specification supports the limitation. Whether the negative limitation itself is valid on its face is well-settled: Negative limitations are acceptable.
Myth. Busted.
The Myth of Claiming Holes and Empty Spaces
dreamstime_xs_40295571Once upon a time I had to claim a certain kind of nut and bolt combination. When claiming the nut, I recited the "hole" that ran through it. The partner overseeing my work delivered a stern lecture to me that "you can't claim what's not there. It's impermissible in patent law."Charmer that I was, I researched what sounded legally baseless and found it was. I returned the claim to the partner as I had drafted it with the research to support my position.
Grooves, apertures, openings, and similar empty spaces are acceptable elements and may be seen in thousands of patent claims. "Hole" appears in the claims of over 250,000 patents. Groove and aperture appear in almost 200,000 patents' claims each. Opening appears in 640,000 patents' claims.
In spite of this evidence, I don't recommend my approach to dealing with your bosses.
Myth. Busted.
FN1. What then to make of Webster's acceptance of octopi? Octopi pains me to my core. But English evolves over time and sometimes we accept new words and usages. Still, let's beat this one back people.
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What is a Provisional Application's Prior Art Date?

By Stephen B. Schott
dreamstime_xs_49801971Provisional applications have a filing date and a publication date. How do you decide which date to use as prior art when using a provisional to invalidate or challenge a patent claim? Enter the Federal Circuit's recent Dynamic Drinkware v. National Graphics decision.
Claiming Priority to a Provisional Patent Application
The law that governs a priority claim to a provisional patent application is a monster to parse but boils down to this: A nonprovisional patent application is entitled to its provisional application’s filing date if the nonprovisional application:
(1) was filed within 12 months of the provisional filing, and
(2) claims subject matter described in the provisional.
Of course, Congress wrote this out in an endearingly more complicated way.

35 U.S.C. 119 Benefit of earlier filing date; right of priority.
...
(e)
(1) An application for patent filed under section 111(a) or section 363 for an invention disclosed in the manner provided by section 112(a) (other than the requirement to disclose the best mode) in a provisional application filed under section 111(b), by an inventor or inventors named in the provisional application, shall have the same effect, as to such invention, as though filed on the date of the provisional application filed under section 111(b), if the application for patent filed under section 111(a) or section 363 is filed not later than 12 months after the date on which the provisional application was filed and if it contains or is amended to contain a specific reference to the provisional application. The Director may prescribe regulations, including the requirement for payment of the fee specified in section 41(a)(7), pursuant to which the 12-month period set forth in this subsection may be extended by an additional 2 months if the delay in filing the application under section 111(a) or section 363 within the 12-month period was unintentional. No application shall be entitled to the benefit of an earlier filed provisional application under this subsection unless an amendment containing the specific reference to the earlier filed provisional application is submitted at such time during the pendency of the application as required by the Director. The Director may consider the failure to submit such an amendment within that time period as a waiver of any benefit under this subsection. The Director may establish procedures, including the payment of the fee specified in section 41(a)(7), to accept an unintentionally delayed submission of an amendment under this subsection.
(2) A provisional application filed under section 111(b) may not be relied upon in any proceeding in the Patent and Trademark Office unless the fee set forth in subparagraph (A) or (C) of section 41(a)(1) has been paid.
(3) If the day that is 12 months after the filing date of a provisional application falls on a Saturday, Sunday, or Federal holiday within the District of Columbia, the period of pendency of the provisional application shall be extended to the next succeeding secular or business day. For an application for patent filed under section 363 in a Receiving Office other than the Patent and Trademark Office, the 12-month and additional 2-month period set forth in this subsection shall be extended as provided under the treaty and Regulations as defined in section 351.

As a practical matter, the USPTO only checks if the nonprovisional application’s filing date is within 12 months of the provisional’s—it rarely checks whether the provisional application provides a written description of what is claimed in the nonprovisional. The USPTO leaves that task for the time when another party challenges a priority date in post-grant proceedings or litigation.
The Complication of Using a Provisional as Prior Art
The Dynamic Drinkware case brings up a wrinkle: When and how can a provisional application be used as prior art?
National Graphics Lenticular Lens ExplanationDynamic Drinkware cited a patent called the Raymond patent as prior art against a National Graphics ‘196 patent involving lenticular lenses. The Raymond patent could only effectively be used as prior art against the ‘196 patent by going back to Raymond’s provisional filing date. FN1
As background to the non-patent attorney, provisional patent applications are not available to the public until a nonprovisional that claims priority to them publishes. Because of this provisional application unavailability, provisionals cannot be used as prior art against another patent or application until publication of the priority-claiming nonprovisional.
In this case, the Federal Circuit faced the question of whether the Raymond provisional could be used as prior art as of the provisional filing date against the ‘196 patent and took a route not seen before to answering “no.” The Federal Circuit adopted a two-step inquiry about whether the Raymond provisional application (on its filing date) was prior art to the ‘196 patent: (1) Determine whether the Raymond provisional provided written description to the Raymond patent claims and thus whether the Raymond patent had a proper priority claim, and (2) compare the provisional application disclosure to the ‘196 patent claims to determine invalidity (this second step was not necessary in this case).
In the first step, the Federal Circuit determined whether the Raymond provisional application had a written description that supported the Raymond patent claims. This inquiry looks to 35 USC 112’s requirement that “[t]he specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same.” In comparing the Raymond patent claims with the Raymond provisional, the Federal Circuit found no such support existed. The court then concluded that the Raymond patent was undeserving of its provisional priority filing date.
That the Raymond patent was undeserving of its priority claim is not a point of particular interest for practitioners but the Federal Circuit’s conclusion based on it may be. The court went on to conclude the following: "A provisional application’s effectiveness as prior art depends on its written description support for the claims of the issued patent of which it was a provisional.” This conclusion has created some confusion in patent circles  and needs the following insert to be exactly proper: "A provisional application’s effectiveness as prior art [as of the provisional’s filing date] depends on its written description support for the claims of the issued patent of which it was a provisional.” The reason for the insert there is that the moment a provisional becomes publicly available, that is, on the nonprovisional publication or grant date, the provisional application becomes potential prior art on that publication—not its own filing—date.
The Federal Circuit supports my revision because it did not care about whether the Raymond provisional showed every element in the ‘196 patent:

Dynamic failed to compare the claims of the Raymond patent to the disclosure in the Raymond provisional application. A reference patent is only entitled to claim the benefit of the filing date of its provisional application if the disclosure of the provisional application provides support for the claims in the reference patent in compliance with § 112, ¶ 1. In re Wertheim, 646 F.2d 527, 537 (CCPA 1981). As Dynamic acknowledges, it provided charts to the Board comparing the claims of the ’196 patent to the disclosure of the Raymond patent and claim 1 of the ’196 patent to the disclosure of the Raymond provisional application. See, e.g., Appellant’s Br. at 22. Nowhere, however, does Dynamic demonstrate support in the Raymond provisional application for the claims of the Raymond patent. That was Dynamic’s burden.

This case will be fodder for future patent law class exams. Sorry in advance, law students.
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FN1: Only a patent practitioner would care to read this footnote. There is a little more to this because this is a Pre-American Invents Act case. The actual date conflict was between the Raymond provisional date and the ‘196 patent's "reduction to practice" date.

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Can You Get an International Trademark? The Madrid Protocol

An Article in Schott, P.C.’s IP Law For Start-ups Series
By Stephen B. Schott
dreamstime_s_33927980If you have valuable intellectual property, you may want international protection. For your patents, you can file an application under the Patent Cooperation Treaty or with the European Patent Office. For trademarks, you will want to consider a filing under the Madrid Protocol.
The Madrid Protocol permits a trademark owner to use their registered trademark or a pending application in their home country as a basis to request registration of the mark in one of the Madrid Protocol countries.
Here is a short summary of the requirements and prosecution steps for a trademark filing under the Madrid Protocol.
Madrid Protocol Filing Requirements
(1) The applicant must have a registered mark or application in its home country.
(2) The applied-for mark in the International Application must be identical to the home country mark.
(3) The goods in the International Application and home country application/registration must be identical.
(4) The goods identified in the International Application must be the same as the goods in the home country application/registration.
(5) The named owner of the International Application must be the same named owner of the home application/registration.
(6) Of course, the applicant must pay appropriate fees.
Madrid Protocol Trademark Prosecution
Here’s a simplified flowchart of how the Madrid Protocol works:
Slide2
Applicants will want to note the following:
- Application is filed with the World Intellectual Property Organization (WIPO).
- If the application meets all formal requirements, WIPO grants international registration and forwards a request to all the country trademark offices designated by the applicant.
- Each country identified by an applicant will review the application in its own trademark office and grant or deny registration according to its own laws.
- Applicant can claim priority to the home country application if filed within 6 months of the home country filing.
- Applicant will save substantial money if there are no office actions issued against the mark (applicants may not have to engage attorneys in each country).
- Applicants cannot amend the drawing in an image mark during prosecution.
- Applicants cannot broaden the good/services beyond what was described in the home country application.
- Applicants cannot take any time extensions.
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The Happy Birthday Song, Batmobile, and Copyright Law

By Stephen B. Schott
Copyright law doesn’t change a lot but a pair of interesting cases came out recently involving some pop culture.
The Happy Birthday Song
dreamstime_s_17627706Are you one of those people who hears a story that sounds too interesting or curious to be true and just assumes it’s an urban legend? Do you hear a tall tale and immediately run it through Snopes? Me too. And the old “Happy Birthday” copyright tale definitely has the feel of an urban legend. It usually goes something like this:
“Did you know that every time someone plays Happy Birthday, they have to pay the guy who wrote it a dollar? And if they use it in a movie, they have to pay him a million dollars? It’s true. You can look it up.”
Ran that one through Snopes and you’ll get an article titled “HAPPY BIRTHDAY, WE’LL SUE” and an indication that the song is copyright protected. But a recent case changed that.
Good Morning to You Productions, owned by Jennifer Nelson, was working on a documentary about the song’s history when Warner/Chappell Music attempted to charge her $1,500 for the song’s use. Nelson argued the song is not protected by copyright and filed a class action lawsuit.
Federal Judge George King traced the copyright in the song. It started in 1893 when a school teacher named Patty Hill wrote a song with her sister. The song was called “Good Morning to You” and you can imagine the tune that goes along with it. The sisters gave their copyright to the Summy Company that published it in a song book.
At some point in the early 1900s, people started using the Hill sisters' melody under the now-common “Happy Birthday” lyrics. No one knows who wrote these lyrics but in 1935, Summy Co. received a copyright for a version of the happy birthday song with the happy birthday lyrics.
Warner/Chappell acquired the rights to the copyright in 1998. Since then, the Happy Birthday copyright has generated $2 million annually in licensing fees. (Warner/Chappell donates a portion of these fees to a charity chosen by the Hill family.)
Considering Nelson's case, Judge King ruled that “The Hill sisters gave Summy Co. the rights to the melody, and the rights to the piano arrangements based on the melody, but never any rights to the lyrics” and concluded that the copyright in the Happy Birthday lyrics was thus invalid.
Warner/Chappell can appeal the case so you can't start using the song royalty-free in your blockbuster movie yet.
The Batmobile Lost Its Wheel
I would be happy with this for my car:
melfalc
But if you want to really trick out your wheels, you should go to Mark Towle’s Gotham Garage. The Gotham Garage recently got a court-induced makeover, however, and can’t offer any more Batmobile retrofits.

1941-pre-batmobile

(c) DC Comics 1941


The Batmobile’s history dates back to 1941, when it first appeared in a Batman comic book as a red car sporting a bat-shaped hood ornament. Since its introduction, it's been Batman’s primary ride when he’s on the ground, making appearances in comic books, TV shows, and movies.
DC Comics, which owns the IP around Batman, sued Gotham Towle for copyright infringement in 2011, and the Ninth Circuit Court of Appeals recently held that the Batmobile is indeed a “character” protectable under copyright law.
The court held that the Batmobile “has varied in appearance over the years,” but it has certain identifying features such as (1) serving as Batman’s primary vehicle, (2) having features that give it a a bat-like appearance, (3) it is a vehicle that stands ready “to leap into action to assist Batman in his fight against Gotham’s most dangerous villains” (I can’t make these quotes up), and (4) hi-tech weapons and gadgets. The court concluded that these features render the Batmobile a “sufficiently distinctive” element of the overall Batman universe that is protectable under copyright law, and Towle’s Batmobile replicas infringed DC Comic’s copyrights in it.
In closing, the court quoted the caped crusader himself : "As Batman so sagely told Robin, 'In our well-ordered society, protection of private property is essential.’”
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Prop Head Reads: What is Life: How Chemistry Becomes Biology

By Stephen B. Schott
41xeCImG44L._SX317_BO1,204,203,200_What is Life: How Chemistry Becomes Biology
Addy Pross
My friend Manoj recently said, “In 5 billion years, an atom learned to talk.”
This observation begs the question: How did the atom learn to talk? How did non-life become life?
Pross sets out to answer this question and in so doing addresses many obstacles, the largest of which is Newton’s second law of thermodynamics. If you’re unfamiliar with the second law of thermodynamics, it states that "In any cyclic process, the entropy will either increase or remain the same." Some simplify it to state that ordered things tend towards chaotic over time and its inverse: Things that are chaotic will not tend towards order.
Take your kitchen. At some time, it is ordered: Every glass in the cupboard, every plate in its place. Over time, this ordered state (low entropy) will give way to more chaotic state (high entropy), where the plates have moved, cups shifted—and that’s even if your kids don’t move them around. Another way to think about the state of entropy in your kitchen is that there are only a few ways that it can be set up in an orderly way, while there are an infinite number of ways it can be in a chaotic state. Thus, there is a really small chance of a low entropy ordered state.
And yet living organisms are like the clean kitchen: Ordered and arrived at from an earth of 5 billion years ago that was a bundle of happy chaotic atoms. What would motivate, drive, or otherwise suddenly bring order to these atoms, swimming against the tide of the second law of thermodynamics, which is immutable in other contexts?
dreamstime_s_58460123Pross’s theory is that life is a natural consequence of the second law. Remember that the second law of thermodynamics permits low entropy ordered states, however improbable they may be. And what’s more, some of these low entropy ordered states may be highly persistent.
Pross discusses the example of certain chemical replicators. RNA, for example, is a nonliving complex chemical compound with an incredible property: It can create copies of itself. What’s more, in creating these copies, it also creates RNA variants of itself. Some of those RNA variants are better at replicating than the original, and thus may replicate faster and cause the original RNA copies to disappear over time, leaving the RNA variants as the stable form of RNA.
What does RNA, this nonliving chemical do? Replicate, vary, compete, and stabilize. It evolves.
Evolution into something highly replicable and stable may thus be a natural manifestation of chemistry. And from this it is Pross’s theory that one of the natural steps in chemistry is that nonliving chemicals can form replicable and stable chemicals that we call life.
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How To Tell Someone to Stop Infringing Without Getting Sued

By Stephen B. Schott
An Article in Schott, PC's IP Law for Startups Series

dreamstime_xs_4693108Dear Dr. Jones,
It has recently come to my attention that your product, the Gadgetron, may infringe our client’s [patents, trademarks, copyright]. In order to avoid a costly lawsuit, during which you would have to pay large sums of money and which could result in the loss of your business, my client is willing to offer you a nonexclusive license under the attached terms. If you execute the license and send the payment mentioned in section 4, we will consider this matter closed...

No one wants to receive a cease and desist letter like this and few people are all that excited about sending them. But if you send a cease and desist letter, it’s good to know the risks and how to craft one to avoid getting yourself hauled into court before you’re ready.
Sue me? No, I’ll sue you [for punitive damages you’re giving me]
It may seem unfair that someone who is infringing your intellectual property could sue you—but the Declaratory Judgment Act allows a party to bring an action for non-infringement or invalidity when “a case of actual controversy” exists between parties. The rationale is that the accuser should be allowed to clear their name and the declaratory judgment action (or DJ action as they are often called) allows a person accused of infringing to do just that.
The accused infringer has at least two advantages in a DJ action: (1) The DJ action allows the accused infringer to pick the court most convenient or advantageous to it, and (2) The accused infringer is suddenly on the front foot and may take the accuser by surprise.
What can you write in your cease and desist letter to avoid a DJ action?
If you own IP and want to send a cease and desist letter but avoid a DJ action, you must tread carefully: The courts have set a low threshold for what constitutes enough conduct to invite a DJ action. The Supreme Court’s Medimmune DJ test asks whether “the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” That’s a mush-mouth full of dependent clauses but the critical language is whether the accuser’s conduct creates “sufficient immediacy and reality” about a legal controversy. In layman’s terms: Are you afraid that you might get sued?
The courts have left a few breadcrumbs signaling how to avoid writing a letter that gives rise to a DJ action. The Supreme Court left a helpful hint in Medimmune:

[A] communication from a patent owner to another party, merely identifying its patent and the other party’s product line, without more, cannot establish adverse legal interests between the parties.

The Federal Circuit gave another helpful piece of advice when it advised that an accuser may avoid a DJ action if it conducted pre-filing discussions under a confidentiality agreement, since discussions under such an agreement would be inadmissible. (3M Company v Avery Denison Corp.)
Thus, a letter written something like this could well avoid creating a “sufficient immediacy and reality” of a threat:

Dear CEO,
Our client is the owner of US Patent 6,332,840. While reviewing your website, we recently came across your product, the Awesome Toy.
We would like to discuss the patent and this product line and suggest that doing so would be best done under a confidentiality agreement [the confidentiality agreement should include a clause prohibiting either party from filing a lawsuit during some term—see Biomet, Inc. v. Bonutti Skeletal Innovations, LLC.], attached hereto. Please let us know if this is acceptable by returning the signed agreement to us, and we will countersign it and arrange a time to discuss this further.
Sincerely,
Matlock

Even a toothless letter like this might not avoid a DJ action because whether a case or controversy exists is decided on a case-by-case basis. But the above letter follows courts’ specific advice on how to craft a letter to avoid a declaratory judgment lawsuit, namely:

Cease and Desist Letter Ingredients to Avoid a DJ Action
(1) It identifies a patent and a product line, without accusation of infringement.
(2) It includes a nondisclosure agreement, which would mean that any conduct after the nondisclosure agreement’s signing (and during its term), such as a specific allegation of infringement, would not be admissible to support a DJ action.
(3) It might include a provision to specifically not sue for a period of time.

A letter that includes these may be safe to send, although I can’t say it enough: The bar for a DJ action is low and each case is decided on its own set of facts.
How low is the threshold to support a DJ action? Oh, it’s low alright.
dreamstime_xs_51369762Take the case of Hewlett-Packard Company v. Acceleron LLC as a warning when crafting your cease and desist letters.
On September 14, 2007, Acceleron sent a letter to HP identifying its patent and certain products of HP. So far, so good under Medimmune. Acceleron also requested an agreement that “all information exchanged between the parties will not be used for any litigation purposes whatsoever...or [that it] otherwise created any actual case or controversy regarding the enclosed patent.” Acceleron gave a two-week deadline for reply but did not specify what it would do if HP failed to respond.
On October 1, 2007, HP responded and suggested that it would not file a DJ action for 120 days in exchange for Acceleron agreeing not to file any action against HP during the 120 days.
On October 5, 2007, Acceleron responded with its own letter arguing that HP had no basis for a DJ action and again requested that HP respond within 2 weeks—again without threat of what it would do if HP failed to respond. Acceleron appears to be trying hard to avoid the DJ action in these letters, nevertheless, on October 17, 2007 HP filed a declaratory judgment action for non-infringement and invalidity of Acceleron’s patent.
Weighing all the facts, the court held that “it was not unreasonable for HP to interpret Acceleron’s letters as implicitly asserting its rights under [its] patent.” According to the court, Acceleron’s conduct permitted HP’s right to bring the DJ action:

  • Acceleron asserted that a patent is “relevant” to the other party’s specific product line
  • Acceleron imposed a “short deadline" for a response
  • Acceleron insisted that HP not file suit
  • Accelerant ignored HP’s request to not sue for 120 days
  • Acceleron is a licensing entity (i.e., a patent troll)

As was suggested in Medimmune, the Federal Circuit noted that “a communication from a patent owner to another party, merely identifying its patent and the other party’s product line, without more, cannot establish adverse legal interests between the parties,” which supports the guidance that the toothless letter proposed above may avoid a DJ action.
What to do if you don’t want to write the toothless letter
dreamstime_xs_32521830If you don’t want to write the nonthreatening letter above but also don’t want your accuser to choose the forum in which to file a DJ action, you can file your own lawsuit first in the forum of your choosing. You don’t have to serve your complaint immediately, so if the accused infringer files a DJ action after your filing but before your filing expires, you will be in a lawsuit, but at least in a forum of your choosing.
If you have questions, contact me.
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