Tag Archives: patent

Do patents really kill innovation?

In a recent editorial in the Wall Street Journal entitled Digital Innovators vs. the Patent Trolls, Peter Huber, a senior fellow at the Manhattan Institute, argues that software patents are the shotguns that kill innovation (my analogy) and that non-practicing entities (NPEs derisively referred to as “patent trolls”) are pulling the trigger (again, my analogy). I disagree.

Peter Huber makes some contradictory and misleading arguments where he claims that non-practicing entities are ruining innovation in America. On the one hand, he acknowledges that only a small percentage of patents, roughly 2% by his own estimate, end up court. Yet he also believes that “[o]ur patent laws have drifted way off course.” He states that “[t]he patent office now grants more than 4,000 patents a week” but neglects to mention that the total number of patent applications and the number of patent rejections have both similarly risen. And one major goal of USPTO director David Kappos, appointed in 2009 by President Obama, is to reduce the backlog of 1.2 million patents around the time he took office. Many more patents are being submitted and examined than ever before-—a sign of the vigorous spirit of innovation in America.

Dr. Huber’s logic is equally baffling when he claims that companies rarely sue each other but that companies spend lots of money collecting patents. Why would a company spend so much on worthless patents? Patents are used to protect their investments in technology, and the vast majority of patent lawsuits are between large corporations like the recent ones between Oracle and Google, Apple and Samsung, Dish Network and Tivo, and many, many others.

Dr. Huber claims that the Supreme Court’s decision in Bilski v. Kappos somehow agrees with his view that patentability must be restricted. In fact, this decision did just the opposite. While business method patents were rejected by the court, as expected, the patentability of software was expanded.

Dr. Huber claims that plaintiffs in the Eastern District of Texas almost blindly reward plaintiffs in patent cases, but a recent study by the Stanford
Intellectual Property Clearinghouse
showed that plaintiffs in that jurisdiction win only 40.3% of the time.

Finally Dr. Huber gets to his point. Patent examiners and juries just aren’t smart enough to figure out which patents are good and which are “sketchy.” So instead, he wants the patent system changed to restrict inventors from owning the fruits of their intellectual labor. As an individual inventor I object to his condescension and to his attempt to limit this constitutionally protected driver of American innovation.

Words to fear: I’m from the government and I’m here to help

So the government is finding ways to fix the patent system. One of those fixes is the  Peer-to-Patent program. It seems like a good idea. In order to speed up the granting of good patents and quickly eliminate the bad ones, allow people from everywhere and anywhere to submit prior art. If that’s actually the way it worked, I’d celebrate; it would be a great resource for finding prior art and making the patent office more efficient. Unfortunately my experience is that the program creates more problems than it fixes. The patent office invited me to participate in the program. Two people posted “invalidating prior art” for my patent application entitled “Detecting Plagiarism in Computer Source Code.” This art was related to my invention, but definitely was not invalidating. Here is the first independent claim of my original patent application:

  1. A computer-implemented method comprising:
    • creating, by a computer system, a first array of lines of functional program code from a first program source code file, the first program source code file including the lines of functional program code of a first program and lines of nonfunctional comments of the first program;
    • creating, by the computer system, a second array of lines of nonfunctional comments from a second program source code file, the second program source code file including lines of functional program code of a second program and the lines of nonfunctional comments of the second program;
    • comparing, by the computer system, the lines of functional program code from the first array with the lines of nonfunctional comments from the second array to find similar lines;
    • calculating, by the computer system, a similarity number based on the similar lines; and presenting to a user an indication of copying of the first program source code file wherein said indication of copying is defined by the similarity number.

Here is the only dependent claim of the prior art patent US 7,568,109:

  1. A system for comparing at least a first corpus to a second corpus, comprising:
    • an analyzer identifying concepts in the corpuses, said analyzer determining a frequency rating of each of said concepts in each corpus;
    • for each corpus, replacing each instance of each of said concepts with its respective determined frequency rating to create a frequency file;
    • and a comparator comparing the frequency file for the first corpus to the frequency file for the second corpus, wherein said comparing the frequency file for the first corpus to the frequency file for the second corpus further comprises comparing portions of one corpus against the other corpus.

The second prior art submission was simply a reference to the UNIX diff command. While the diff command is relevant, it is a simple line-by line comparison of text files without any understanding or parsing of programming source code. It doesn’t separate functional lines of code (statements) from nonfunctional lines (comments).

Judging by their remarks, the posters to the Peer-to-Patent site didn’t understand patents, and didn’t read the patent claims. They should be allowed to post references, but the ultimate decision must be in the hands of those trained in examining patents. However, the patent examiner told me that her supervisor didn’t want to issue a patent that had been publicly noted to be invalid, and so after months of arguments I had to arbitrarily narrow the claims to get allowance, resulting in patent US 7,823,127. So now, anyone from anywhere with any ulterior motive (particularly those who believe no software should be patentable) can bring about the quick rejection of an otherwise useful and valid patent.

The Report Generator (RPG)

The Report Generator (“RPG”) is a new program from SAFE that automatically generates draft expert reports and declarations for litigation. Reports have several generic sections such as an expert’s experience and descriptions of the technologies involved in the examination, which can be shared amongst reports. By automating the compilation of the generic information into a formatted and structured draft report, the expert can focus on performing the analysis and writing the case-specific arguments.

When using the RPG, an expert selects the type of case, type of report, types of technologies involved, types of tools used, and expert background profiles from a GUI. Then a Microsoft Word draft report is generated that includes all of the selected generic information intermixed with blank sections where case-specific information should be filled in manually.

Currently, many experts either dig through their prior works to find specific descriptions or write them from scratch each time. Maintaining a library of generic report elements is a challenge, especially when multiple experts are involved. RPG acts as a version control system between multiple experts who can upload and download detailed descriptions of experts, technologies, and tools from a central server. The reports are generated according to specific formats, so an entire team of experts can easily produce reports that are consistently formatted with the most up-to-date descriptions.

RPG also keeps synced descriptions of CodeSuite, so it can include the most up-to-date descriptions and pricing of the tools without having to search the S.A.F.E. website or CodeSuite help files.

If you’re interested in trying out RPG, contact our Sales Department.

The Supreme Court rules about software patents and business method patents (kind of)

Many in the intellectual property business have been holding their breath waiting for this case to be decided. Many countries don’t allow software patents at all and most countries don’t allow business method patents. The United States allows both, but the lines, limits, and legality have been changing over the past years. The Court of Appeals for the Federal Circuit (CAFC) decided that Bilski’s patent on a method for handling energy hedge funds was not patentable because patents must be tied to a particular machine or transform an article from one thing or state to another. This “machine-or-transformation test” is probably as confusing to you as it is to the thousand of inventors and attorneys who had to understand it. Bilski appealed to the Supreme Court and on Monday the Supreme Court decided. Bilski loses his patent, but not because of the machine-or-transformation test. Abstract ideas have never been patentable and that’s what Bilski’s patent is, according to the Supreme Court. They also ruled that the machine-or-transformation test is only one test for patentability, not the only test as the CAFC had stated. They also ruled that business methods are patentable, as long as they are not abstract ideas.

Still confused? So are many others. Except for Bilski who now knows for sure that he doesn’t have a patent. Looking at it as an inventor, I see that the court has broadened the scope of patentable materials, which is good, but has made the test for patentability muddier which means I will spend even more time and more money arguing with patent examiners. Looking at it as an expert witness for patent litigation, this ruling is sure to cause a lot more disagreements, which means a lot more litigation, which means a lot more business for me.

An excellent discussion of the Bilski ruling can be found at Patently-O, written by Dennis Crouch, Associate Professor at the University of Missouri School of Law. His regular columns on patents are the best ones available anywhere.

The value of corporate secrets

Forrester Consulting just put out a report that I found interesting. According to Forrester, chief information security officers (CISOs) face increasing demands from their business units, regulators, and business partners to safeguard their information assets. Security programs protect two types of data: secrets that confer long-term competitive advantage and custodial data assets that they are compelled to protect. Secrets include product plans, earnings forecasts, and trade secrets; custodial data includes customer, medical, and payment card information that becomes “toxic” when spilled or stolen. Forrester found that enterprises are overly focused on compliance and not focused enough on protecting their secrets. Forrester’s key findings are the following:

  • Secrets comprise two-thirds of the value of firms’ information portfolios.
  • Compliance, not security, drives security budgets. 
  • Firms focus on preventing accidents, but theft is where the money is.
  • The more valuable a firm’s information, the more incidents it will have.
  • CISOs do not know how effective their security controls actually are.

Download the report to report to get the details.

Once again, Congress considers patent reform

With all the uncertainty surrounding politics, there is one thing I can be certain of every year. Congress will attempt, or claim to attempt, to reform the U.S. patent system. Patrick Leahy, the chair of the US Senate’s Judiciary Committee, recently announced that reform is around the corner, just as it has been every year for many, many years. Fortunately that corner is always pretty far away. As you can tell, I’m not a fan of so-called patent reform. Here’s a brief explanation why.

Background

Though each attempt at patent reform is slightly different, the major points are usually the same. Those who support the bill tend to be large engineering companies. Those who do not support the bill tend to be universities, small inventors, and pharmaceutical companies.

Proposed changes to which I object:

  • First to File: Right now the person who invents something (“first-to-invent”) has the rights to the patent. The bill would change the law so that the rights belong to the first person to file the patent (“first-to-file”), as it works in every other country. However, the US is the most innovative country in the world and the rest of the world should look to us not the other way around. This change will favor the large company with lots of lawyers and money to file patents quickly over the small inventors and the universities that don’t have as many resources to file patents. Pharmaceutical companies do have a lot of lawyers and a lot of money, but they spend so much money on research and development that on the small chance that some other company files for a patent first, they have a lot to lose.
  • Additional Post Grant Review: Within 12 months of issuance, a third party can file a cancellation petition based on any ground of invalidity. This means that even after a patent is filed, there is a one year period where the patent owner must defend his patent. Any large company can simply request a review of the patent by the USPTO that the patent holder must fight. This will waste resources of the small inventor. Once a patent is issued it should be valid and should be difficult to overturn. The cost of overturning it should rest with the organization that objects to it, not the patent holder. The problem that reform should really be addressing is making the patent examination more efficient so that good patent applications get issued quickly and bad patent applications get rejected quickly.

Proposed change that I like:

  • Pre-Issuance Submissions: Third parties can submit prior art during examination of the patent as well as a statement regarding the relevance of the art. This means that those organizations that believe that patent is invalid should submit invalidating reasons before the patent is granted, not after. This will be useful only if it is used to speed up the patent process, not slow it down. I’m in favor of anything to speed up the process and make sure that innovative inventions are issued patents quickly and poor inventions are detected and rejected quickly.

Proposed changes that about which I don’t have enough information
to evaluate:

  • Damages: When a party is found to infringe on a patent, the damages are limited based on the importance of the invention to the infringer’s overall business.
  • Patent Litigation Venue: Some areas of the country are believed to be more friendly to plaintiffs (e.g. the Eastern District of Texas). This provision limits the ability to bring a case in a district unless there is some legal connection to that district.

There are other provisions about which I don’t hold strong opinions and don’t seem particularly controversial, but almost everyone involved
with patents has strong opinions about patent reform. It will be interesting (and possibly scary) to see what, if anything, eventually happens.

Who really invented the computer?

The digital computer is usually credited as the invention of two professors at the University of Pennsylvania, J. Presper Eckert and John Mauchly. Funded by the United States Army, the ENIAC computer was designed to calculate tables for launching artillery shells accurately in World War II, but was not completed until after the war in 1946. Unlike earlier computers that had a fixed purpose, ENIAC (meaning “Electronic Numerical Integrator And Computer”) could be reprogrammed to handle many different purposes. But were Eckert and Mauchly really the pioneers of today’s modern digital age?

Actually no. The real inventors of the digital computer were physics professor John Atanasoff and his student Clifford Berry who created the first digital computer in a laboratory at Iowa State College. The ABC (“Atanasoff-Berry Computer“) was built in 1939, yet by the time of ENIAC’s introduction to the world, the ABC had been forgotten. What had happened? World War II broke out and  Iowa State as well as Atanasoff and Berry simply didn’t realize the power of what they had created. Atanasoff was called up by the Navy to do physics research, eventually participating in the atomic bomb tests at Bikini Atoll.

When Atanasoff returned to Iowa State he found that his invention was gone to make room for other equipment—because the ABC was built piece-by-piece in the laboratory, it was too big to move out and so it had to be dismantled. Iowa State had decided that a patent was too expensive and so never filed one. John Atanasoff went on to gain recognition for a number of inventions involving physics, but the ABC was mostly forgotten.

In the 1970s there were a handful of companies that saw the great potential in the electronic computer. Sperry Rand Corporation, which was formed through a series of mergers and acquisitions including the Eckert–Mauchly Computer Corporation, held U.S. Patent 3,120,606 for the digital computer. In 1973, Sperry Rand sued Honeywell, Inc. and Honeywell reciprocated. Thus began one of the most important intellectual property cases in history.

During the research for this case, Honeywell found out about John Atanasoff and the ABC, which became pivotal information. The case was tried for 7 months after which Judge Earl R. Larson handed down his decision that stated, among other things, that the Eckert-Mauchly patent was invalid.

Some people have disputed this finding, arguing that this was a “legal” finding or a “loophole” or that a lawyer or a judge simply couldn’t understand the complex engineering issues involved. Here’s my take on this.

  1. Both sides had a lot of time, and access to technical experts, to make the best case they could.
  2. So much was at stake, and a huge amount of money was spent to bring out the truth. Both sides had very significant resources. If a case with this much at stake could not convince a judge after seven months, then there is little hope for any IP case.
  3. Evidence was found and witnesses verified that John Atanasoff had attended a conference in Philadelphia where he met John Mauchly and described his work. He then invited Mauchly out to Iowa where Mauchly spent several days examining Atanasoff’s computer and many late nights reading Atanasoff’s technical specifications. Letters were produced, signed by Mauchly, that thanked Atanasoff for his hospitality and for the tour of his amazing invention.
  4. Mauchly testified at the trial. He admitted that he had met Atanasoff and eventually admitted that he had examined the ABC and read its specification.
  5. Mauchly and Sperry Rand Corporation were challenged to produce a single piece of evidence that Mauchly or Eckert had written about or researched digital electronics before Mauchly’s meeting with Atanasoff. The best Mauchly could do was produce a circuit for a model railway flasher that he claimed was a binary counter—it counted from 0 to 1 and then back to 0.

In fact, it became clear that Mauchly and Eckert attempted to claim much more credit than they deserved and tried to deny credit to others. They had actually greatly improved on Atanasoff’s original design. Had Eckert and Mauchly been more humble, had they added Atanasoff’s name to their patent, had they patented their own improvements instead of the entire invention, they may have given Sperry Rand the most powerful IP in technology history. Instead the invention of the computer entered the public domain without restriction, and the rest is history…

For a good book on the subject, read The First Electronic Computer: The Atanasoff Story by Alice R. Burks and Arthur W. Burks.

Interesting software IP cases of 2009

Here is my list of the most interesting software IP cases of 2009,
in chronological order:

SAFE Corporation is looking for great ideas

There are a lot of unanswered questions about source code, and we want to work with you to figure them out. We realize that currently accepted algorithms for analyzing, comparing, and measuring source code leave a lot to be desired in many cases. Also, there are a lot of techniques that have never been studied on large bodies of modern code. For example, measurement techniques developed in the 1970s were probably tested on assembly languages and older programming languages like BASIC, FORTRAN, and COBOL. Do they still hold on modern object oriented languages like Java and C#?

If you have a research idea relating to code analysis, and you can use the SAFE tools, let us know. Email Larry Melling, VP of Sales and Marketing with your ideas. If they pass our review process you’ll get free licenses to our tools, free support, and help getting your results published. This could be the beginning of a beautiful friendship.

Trade secrets vs. patents

When you have a useful invention should you file for a patent or maintain it as a trade secret? A comparison of the advantages and disadvantages of patents and trade secrets are given in the table below.

Characteristic

Patents

Trade secrets

Public or private?

Public. A patent can be kept secret for 18 months after it is filed, after which it must be published.

Private. Trade secrets must never be made publicly available.

Owner’s legal action

Easier. The government has put its stamp of approval on the invention.

Harder. The owner must prove that the invention qualifies as a trade secret and that the defendant did not independently invent it.

Cost

High. There is a significant cost to “prosecute” a patent, which includes the attorney costs, filing costs, and costs to address all patent office rejections and actions.

None.

Protection from theft

Harder. The invention is described in detail to the public.

Easier. The invention is kept secret.

Time

Limited. The government grants rights for 17 to 20 years after which anyone can produce the invention.

Unlimited. As long as the invention is kept secret.

Ownership

Restricted. The owners are only the patent holders who are on record with the patent office.

Unrestricted. If the invention is created independently, any number of inventors and owners can exist.