No Progress on Bio/TK Disclosure for Patents -from I/P UPdates

I/P Updates: TRIPS: No Progress on Bio/TK Disclosure for Patents - News and Information for Intellectual Property Practitioners: "TRIPS: No Progress on Bio/TK Disclosure for Patents According to an article in BRIDGES Trade BioRes, Vol. 4 No. 17 23 September, 2004 , the Council for Trade-related Aspects of Intellectual Property Rights (TRIPS) considered a proposal by Brazil, India, Pakistan, Peru, Thailand, and Venezuela on September 21, 2004 suggesting a checklist of issues to be covered in negotiations on biodiversity, traditional knowledge and folklore. The proposal elaborates on possible disclosure requirements in patent applications relating to the source and country of origin of a biological resource and/or traditional knowledge used in an invention. The US and Japan again voiced their opposition to using the checklist. No substantive progress was made and the meeting closed after one day rather than the scheduled two. The next TRIPS Council is reportedly scheduled for December 1-2. posted at 1:58 PM "

IP leveraging--- A Strategy Article from Mckinsey

The McKinsey Quarterly: Intellectual property: Partnering for profit: " Intellectual property: Partnering for profit Patents and proprietary processes represent an untapped source of revenue for many companies. McKinsey research shows that in lots of cases, companies could earn 5 to 10 percent of their operating income from the sale or licensing of intellectual property, yet most earn less than one-tenth that. Too often, they don't know what they have, what it is worth, or what other industries could do with it. The solution is to build a network of outside specialists who can identify the best market for each asset and use their industry contacts and experience to negotiate a sale. The authors describe the five kinds of specialists needed, their likely terms of engagement, and the keys to managing the network. The take-away Most companies' attempts to make money out of their intellectual property suffer from the mistaken belief that it is an easy source of revenue. But capturing the full value of these assets requires systematic effort, a well-managed network of outside partners, and active senior-management support. "

Accounting intangible patent portfolio

Intangibles Intangible Property is property that has value but cannot be seen or touched. Generally, you can either amortize or depreciate intangible property.You must amortize certain intangible property over 15 years if you meet the following conditions: You acquired the property after 8/10/93, (after 7/25/91, if elected) You use the property in connection with a business or for the production of income If you meet these conditions, amortize the following intangibles: Patents and copyrights Customer or subscription lists, location contracts, and insurance expirations Designs and patterns Franchises Agreements not to compete If you created any of the intangibles listed in item (1) through (3), you can amortize them only if you created them in connection with the acquisition of assets constituting a trade or business or a substantial part of a trade or business.For more information on amortizing these and other intangibles, refer to Amortization in Publication 535, Business Expenses. Generally, you can depreciate any of these intangibles acquired before August 11, 1993, or that do not qualify for amortization. However, they must have a determinable useful life. Agreements not to compete, lists, contracts, and expirations are sometimes confused with goodwill, which is not depreciable. Therefore, you must be able to determine their value separately from the value of any goodwill that goes with the business. If you can depreciate the cost of a patent or copyright, you can use the straight line method over the useful life. The useful life of a patent or copyright is the lesser of the life granted to it by the government or the remaining life. If it becomes valueless before the end of its useful life, you can deduct in that year any of its remaining cost or other basis. Straight Line MethodGenerally, if you can depreciate intangible property, you use the straight line method of depreciation. It lets you deduct the same amount of depreciation each year. To figure your deduction, first determine the adjustment basis, salvage value, and estimated useful life of your property. Subtract the salvage value, if any, from the adjusted basis. The balance is the total depreciation you can take over the useful life of the property. Divide the balance by the number of years in the useful life. This gives you your yearly depreciation deduction. Unless there is a big change in adjusted basis or useful life, this amount will stay the same throughout the time you depreciate the property. If, in the first year, you use the property for less than a full year, you must prorate your depreciation deduction for the number of months in use. Example: In April, Frank bought a patent for $5,100. It was not acquired in connection with the acquisition of any part of a trade or business. He depreciates the patent under the straight line method, using a 17-year useful life and no salvage value. He divides the $5,100 basis by 17 years ($5,100/17=$300) to get his yearly depreciation deduction. Because he only used the patent for 9 months during the year, he multiplies $300 by 9/12 to get his deduction of $225. Next year, Frank can deduct $300 for the full year. Intangible Property That Can Never Be DepreciatedThe following are two types of intangible property that you can never depreciate. Goodwill Trademark or trade name Goodwill is the value of a trade or business based on expected continued customer patronage due to its name, reputation, or any other factor. You can never depreciate goodwill because its useful life cannot be determined. However, if you acquired a business after August 10, 1993 (after July 25, 1991, if elected), and part of the price included goodwill, you may be able to amortize the cost of the goodwill over 15 years. For more information, refer to Amortization in Publication 535, Business Expenses. Trademark, trade name or franchise is a section 197 intangible. In general, you cannot depreciate the cost of a trademark, trade name or franchise. However, you may be able to amortize over 15 years the cost of a trademark, trade name or franchise you acquired after August 10, 1993 (after July 25, 1991, if elected). You must amortize its purchase or renewal cost, other than certain contingent payments that you can deduct currently. For more information, refer to Other Expenses in Publication 535, Business Expenses. If you buy a trademark, trade name, or franchise you can deduct the amount you pay or incur as a business expense only if your payments are part of a series of payments that are: Contingent on productivity, use, or disposition of the item Payable at least annually for the entire term of the transfer agreement, and Substantially equal in amount (or payable under a fixed formula). When determining the term of the transfer agreement, include all renewal options and any other period for which you and the transferor reasonably expect the agreement to be renewed. The tax treatment of goodwill, a covenant not to compete and a consulting agreement can be summarized as follows: Buyer Seller Goodwill Amortize 15 years Capital asset Covenant not to compete Amortize 15 years Ordinary income Consulting agreement Deduct as incurred Ordinary income Additional Resources Publication 535, Business Expenses Publication 946, How to Depreciate Property IRS Code Section 197 From: Crouch, Dennis [mailto:crouch@mbhb.com] Sent: Tuesday, September 14, 2004 3:59 PMTo: PatentLawPractice@yahoogroups.comSubject: RE: [PatentLawPractice] Use of patents I agree, you need more info before he gets the ax. It is likely that the IRS and accounting rules relating to patents do not follow any logic. In terms of being in use, you should also include inventions that have not even been written up as patent applications -- these would be considered trade secrets. -- Dennis -----Original Message-----From: Pyle, Jeffrey [mailto:jpyle@wmalaw.com] Sent: Tuesday, September 14, 2004 2:53 PMTo: PatentLawPractice@yahoogroups.comSubject: RE: [PatentLawPractice] Use of patents You never know…I wouldn’t be surprised if the IRS is sufficiently obtuse about patents to realize there’s even an issue. Or, they might not care, and just assume that for accounting purposes only the “in use” patents can get amortized since you can’t value the patent that are not “in use.” I guess I’d just get a second opinion from another accountant on this narrow issue. -----Original Message-----From: N. Stephan Kinsella [mailto:kinsella@ao-inc.com] Sent: Tuesday, September 14, 2004 2:49 PMTo: PatentLawPractice@yahoogroups.comSubject: [PatentLawPractice] Use of patents An accountant who was trying to decide how to amortize the costs of our patent portfolio for tax or auditing purposes wanted to know how many of our patents "were being used", were "in use". I told him that patents and apps in our portfolio have a variety of classifications: pending, published, allowed, issued, abandoned. But that I don't know what it means for a patent to be "in use". He replied that he assumed "in use" means an issued patent, since "when it issues you start selling product and getting licensing revenue." I cannot believe this is correct. Not all patents cover the owner's products or even competitors' products. And of course not all of them are licensed. It is not even always objectively clear (or at least, the owners don't always have an up to date chart showing which patents do, and do not, "cover" the owner's products; or are generating licensing revenue). I cannot believe IRS or relevant accounting rules require such records to be kept. It seems to me that any issued patent that you own is "in use" since it sits there as potential ammunition or asset, at the ver least. Moreover, it seems to me that at least published apps are also "in use" in a sense given that their claims are published and putting competitors on notice for possible back royalties in the event of a future issuance. My guess is this guy is an idiot. My question is, should I fire our accounting firm?

So you want to monitor a patent%3F %7C IP News Blog

So you want to monitor a patent%3F %7C IP News Blog: "So you want to monitor a patent%3F%0D%0ASubmitted by Carey on Thu%2C 07%2F29%2F2004 - 3%3A35pm. 35 U.S.C. %7C Invention %7C IP News %0D%0AThe folks at Varchars have come up with a neat little perl hack that allows you to keep track of a patent at the USPTO. Set this up as a cronjob%2C and you have an automatic and easy way to keep track of applications as they pass through the patent process. Very neat. Thanks to ResearchBuzz for the link."

ANDA filing doesn't constitute Willful patent infringement

"Glaxo Group Limited v. Apotex, Inc., 2004 U.S. App. LEXIS 15489 (Fed. Cir., July 27, 2004) Apotex, Inc. ('Apotex') appeals the judgment of the United States District Court for the Northern District of Illinois, which found that Apotex's filing of an Abbreviated New Drug Application ('ANDA') for a generic version of the antibiotic CEFTIN willfully infringed U.S. Patent No. 4,562,181 (the ''181 patent') and U.S. Patent No. 4,820,833 (the ''833 patent') owned by Glaxo Group Limited and SmithKline Beecham Corp. (collectively 'Glaxo'). The Federal Circuit affirmed the district court's determination that Apotex's ANDA infringes both the '181 and '833 patents pursuant to 35 U.S.C. � 271(e)(2), and also affirmed that the patents at issue are not invalid. The Federal Circuit, however, reversed the district court's finding that Apotex's ANDA filing constituted willful infringement. The Federal Circuit held that the mere filing of an ANDA cannot constitute an act of willful infringement compensable by attorney's fees under the Drug Price Competition and Patent Term Restoration Act of 1984, also known as the Hatch-Waxman Act. The Federal Circuit explained that 35 U.S.C. � 271(e)(2) and 35 U.S.C. � 271(e)(4) create only an 'artificial' act of infringement for a 'very limited and technical purpose that relates only to certain drug applications.' This purpose is to permit patent holders to bring suit against generic companies despite the fact that the generic companies have not yet infringed the patents at issue. The Federal Circuit eloquently wrapped up its analysis by saying: '[t]he district court therefore erred in hanging a finding of willfulness on such a special-purpose peg.'"

WAR FOR DRUGS........

Drug Wars: six lawyers discussing genrics Vs big Pharma drug war In our roundtable, pharma lawyers dissect the changes in Hatch-Waxman, the costs of patent litigation, and the blurring line between generic and branded drug companies. IP Law & Business/August 2004 "

Profiting from Patents--anyway-whether ethical or ....

"Submarine Patents Sunk: One of the frequent criticisms I hear of the U.S. patent system in particular is the existence of 'submarine' patents. This term refers to patents that issue very long after their filing. So a company or organization that has been happily proceeding along a path of commercialization of their product is blind-sided by a patent issuance, the existance of which was secret. For several reasons, the number of submarine patents is diminishing: the U.S. now has a patent term of 20 years counted from the date of filing, and for the most part, patent applications are published 18 months after filing. Because these changes only took place in 1995 (patent term) and 2000 (publication), a few submarine patents have been lurking stealthily along, grandfathered in under the old rules. The most prolific user of the old U.S. patent system has to be Jerome Lemelson. Patent applications he filed in the mid-1950s and that were granted between 1978 and 1994 are now being asserted against manufacturers of bar code readers and machine vision systems. While this strategy has netted Lemelson and the Lemelson Foundation as much as $1 billion in royalty payments, the gold mine is being shut down. A U.S. District Court recently ruled that 14 patents of Lemelson's are invalid because 'Lemelson's delay in securing the asserted patent claims is unexplained and unreasonable'. While this is good news for the manufacturers, it is not the end of the story as the Lemelson Foundation is expected to appeal the decision. In the opinion of yours truly, Lemelson Foundation is going to be sunk for good on this one. In the last few years, the Federal Circuit Appeals Court has not looked favorably on delays initiated by the patent applicant. "

Who lost it.... plant breeder or farmer or we

Navigating the patent maze: Court Decisions: "Schmeiser v Monsanto By this time, most of you have heard that 'Monsanto won' over Percy Schmeiser in the Canadian Supreme Court. Actually, Mr Schmeiser was found to have infringed Monsanto's patent but no damages were assessed. It was a close decision and a momentous one for two main reasons. Several commentators have written about how genetically-engineered plants are essentially, if not expressly, protectable because of the gene introduced. In another blog entry, I will discuss that issue. For this entry, however, I raise the possibility that the Court has defined 'use' of a patented invention in such a way that that there may now be an exemption for basic science research in Canada. Monsanto Canada Inc v Schmeiser 2004 SCC 34. In particular, the court defined 'use' as utilization with a view to production or advantage. The use then that interferes with the rights granted to the patent owner is infinging. Amazingly, the Court characterized deprivation of their rights when 'another person, without licence or permission, uses the invention to further a business interest.' Does this imply that a use that is not commercial or furthering a business interest is non-infringing? Would a research use in the confines of a non-profit or educational institute be non-infringing? There are several ways that the Canadian Courts can go. For example, the Canadians, like their southern neighbor counterpart court, may say that essentially all uses have a business purpose, even universities who may 'use' in furtherance of their business of education and money raising. Or, they may hold that that commercial use is not the only use that can be infringing. The Canadian Supreme Court hints that the latter route is appropriate when they write 'Even in the absence of commercial exploitation, the patent holder is entitled to protection." In Schmeiser's case, Mr Schmeiser contended that he didn't use the patented gene, which conferred resistance to roundup, because he didn't spray the canola crop with the herbicide. But, the court still found 'use' of the invention because Mr Schmeiser's business was growing canola, and he grew canola containing the patented seeds. Furthermore, he had the advantage of the stand-by use, meaning that he could have sprayed Roundup (tm) or could have sold the seed to other farmers who didn't want to pay the fee to Monsanto. Where does this leave those who may use a patented invention in the context of research? Without clarification of this issue by the Canadian courts, I wouldn't assume that there is now a research exemption. That said, despite what is likely a huge amount of infringment of patents in university settings, very rarely are universities and scientists there ever stopped from using a patented invention. For more on this subject, I refer you to this article: "Accessing other people's technology for non-profit researchAJARE.pdf Australian Journal of Agricultural and Resource Economics 46:3 389-416 (September 2002).

The Invent Blog: Software Patents

The Invent Blog: Software Patents: "EU software patents a reality Via Bill Heinze, The European Council approved the Software Patents Directive which will now be sent back to the European Parliament for another vote in the Fall where reversing the Council's vote may be difficult. The Community Patent Regulation, on the other hand, died when Spain demanded all 20 translations of the claims be considered legally binding and ministers would not compromise by leaving the issue for courts to decide. For still more, see http://zdnet.com.com/2100-1104-5215020.html and http://www.siliconvalley.com/mld/siliconvalley/news/editorial/8695760.htm"

Vote on Software patent directives in EU EurActiv.com Portal - News nr 1507687

Tension grows as Council prepares to vote on software patents directive Background:On 20 February 2002, the Commission presented a proposal for a Directive on the Patentability of computer-implemented inventions. These are defined as inventions "involving the use of a computer, computer network or other programmable apparatus". Currently, patents for computer-implemented inventions are granted by the European Patent Office (EPO), but are not enforceable in all Member States because of diverging legislation. The Commission argues that the directive would provide more certainty for businesses, encouraging them to innovate and profit from their work. At the same time, it said its objective was to avoid stifling competition in the internal market and to favour small businesses. To achieve this, the Commission argued patents should be awarded only to inventions "which make a 'technical contribution'- in other words which contribute to the "state of the art" in the technical field concerned". Computer programmes as such, it said, would not fall under the proposal. Issues:The Irish presidency has tabled a compromise deal on the software patents directive which is scheduled to be voted on by EU ministers at the 18 May Competitiveness Council. According to the Council press service, Germany (abstaining), Belgium (opposed) and Denmark (unpronounced as of yet) are the only countries who have not accepted the compromise. Because there is so ittle opposition among the Member States, the Irish presidency is considering tabling the text without debate. But the draft is already stirring much criticism from anti-patent campaigners. They claim that the amendments introduced by Parliament in September last year have been scrapped almost entirely. And MEPs themselves have expressed dismay at the Council's choices. If approved by EU ministers, the Irish compromise will have to return to Parliament for a second reading as not all of the MEPs' amendments were taken on board. The directive was voted on by Parliament on 24 September 2003 (see EurActiv, 25 September 2003). MEPs introduced numerous amendments, reflecting concerns by critics from diverse backgrounds who claimed the Commission proposal would introduce a US-style regime under which large companies can acquire unlimited software patents to protect them from competition. MEPs in particular insisted that the directive should not lead to "any drift towards the patentability of unpatentable methods such as trivial procedures and business methods". To them, the technical contribution referred to in the Commission proposal has to offer an "inventive step" defined as something "new, non-obvious, and susceptible of industrial application". They recommended applying a test in order to verify this. In addition, they claimed that a mathematical algorithm in itself should not be patentable unless it its used to solve a technical problem. The Parliament was also wary not to damage provisions of an existing directive (91/250/EEC on the legal protection of computer programmes) under which rights holders are forced to disclose information to ensure interoperability with other applications. Positions:MEPs from all major political parties have expressed discontent at the Irish presidency compromise for ignoring the Parliament's position. MEP Arlene MC Carthy (PES, UK), the Parliament's rapporteur on the dossier, told EurActiv she is not surprised at the Council's position: "Member States have been heavily lobbied by industry. The Parliament's vote was clear - we do not want software per se to be patented. We want strict interpretations and criteria for genuine inventions. The Council Common Position is not the final word. The new Parliament will have a second reading and I expect there to be some tough talking and negotiations". Speaking to EurActiv, a spokesperson at the Irish Department of Enterprise, Trade and Employment said the compromise merely reflected the position of Member States' experts at the Council's Working Party on Intellectual Property (Patents). The spokesperson indicated the second reading in the Parliament would provide another opportunity for MEPs to move away from the Council's common position. European Industry Association for Information Systems, Communication Technologies and Consumer Electronics (EICTA) says it is "quite satisfied" with the Irish compromise text. Speaking to EurActiv, it expressed satisfaction at the removal of a proposal from the Luxembourg delegation concerning Article 6a on interoperability. This, EICTA said, would have rendered it "impossible" for European companies to develop and protect innovations that depend on data communications. To EICTA, the Irish compromise would implement the status quo of the European Patents Office "with clarification and tightening", as adovated by the industry association. The Foundation for a Free Information Infrastructure (FFII) is leading a campaign against the directive. It says the compromise agreement clinched by the Irish Presidency discards all the Parliament amendments aimed at limiting patentability. It says that the rejection of the Luxembourg delegation's attempt to ensure interoperability leaves the door open to unlimited patentability of computer programmes, data structures and process descriptions. Major European companies including Nokia, Philips, Siemens, Ericsson and Daimler Chrysler have issued a joint statement on 13 April 2004. They call for all EU ministers to support the text proposed by the Irish Presidency: "We commend the Irish Presidency for presenting a balanced text which preserves the incentives for European innovation (...) while responding to the European Parliament’s call for limitations to ensure that patentability does not extend into non-technical areas or unduly hinder interoperability in our increasingly networked society," the statement reads. Internal Commissioner Frits Bolkestein is strongly opposed to the Parliament's amendments which he thinks are "unacceptable". He threatened to withdraw the proposal altogether and go another route: "If I may be blunt (...) the process of renegotiation of the European Patent Convention would not require any contribution from this Parliament," Bolkestein told MEPs before they voted on the text in September last year. Next steps: The EU Council of ministers will vote on the directive on 18 May The Parliament will examine the text for a second reading after the June elections, probably under the Dutch presidency Links: Official documents: EUR-Lex: Proposal for a Directive on the patentability of computer-implemented inventions, COM(2002) 92 final, [FR] [DE] (20 Feb. 2002) PreLex: Proposal for a Directive on the patentability of computer-implemented inventions [FR] [DE] Parliament OEIL: Patent law: patentability of computer-implemented inventions [FR] Parliament: Texts Adopted - European Parliament legislative resolution on the proposal for a directive on the patentability of computer-implemented inventions [FR] [DE] (24 Sept. 2003) Parliament: Press release - Patentability of computerised inventions [FR] [DE] (24 Sept. 2003) Parliament: Report on the proposal for a Directive on the patentability of computer-implemented inventions, Arlene MC CARTHY (PES, UK) [FR] [DE] (18 June 2003) Commission: Proposal for a Directive on the patentability of computer-implemented inventions - frequently asked questions [FR] [DE] Commission press release: Patents: Commission proposes rules for inventions using software [FR] [DE] Cordis: Proposal for a Directive on the patentability of computer-implemented inventions EU Actors' positions: Foundation for a Free Information Infrastructure (FFII): Software patents in Europe FFII: EU Council plans to scrap parliamentary vote without discussion (7 May 2004) FFII: EU Council 2004/01/29 "Presidency Compromise Proposal" on Software Patents (5 May 2004) European Industry Association for Information Systems, Communication Technologies and Consumer Electronics (EICTA): Proposal for a Directive on the patentability of computer-implemented Inventions - EICTA Response on the Irish Presidency Consolidated Text (24 Mar. 2004) EICTA: Industry Calls on Council to Correct Damage Done by the European Parliament -- European R&D Will Be Jeopardised If CII Patents Are Eliminated (26 Nov. 2003) EICTA: Analysis of Amendments adopted by the European Parliament at the First Reading (23 Oct. 2003) Nokia, Ericsson, Daimler Chryseler & others: Joint statement on the proposed directive on patentability of computer-implemented inventions (13 Apr. 2004) Campaign for creativity: The Software Patents Directive [FR] Electronic Frontier Finland: Open Letter by Linus Torvalds and Alan Cox to the European Parliament (21 September 2003) EuroLinux: Petition for a Software Patent Free Europe Research in Europe: An Open Letter to the European Parliament Concerning the Proposed Directive on the Patentability of Computer-Implemented Inventions Research in Europe: A Critique of the Rapporteur’s Explanatory Statement accompanying the JURI Report to the European Parliament on the proposed Directive on the Patentability of Computer-Implemented Inventions

Software Patents in EU

The Invent Blog: Software Patents: "Software patents in Europe Arnoud Engelfriet e-mailed me to some links on his site about software patents in Europe: Examples of granted European business method patents The patentability of business methods at the European Patent Office Software patents under the European Patent Convention

Patently Obvious: MBHB Patent Law Blog: Patent Explosion

Patently Obvious: MBHB Patent Law Blog: Patent Explosion: "Aug 02, 2004 Patent Explosion The past twenty years has seen increadible increases in the number of patents both applied for and issued. In her most recent paper (PDF), Berkeley professor and empirical whiz, Bronwyn Hall, examines patenting data and arrives at some interesting conclusions. 1) Although patenting has increased in most technological fields, the explosive growth is largely accounted for by electrical and computing fields. 2) The explosion is drivin, for the most part, by U.S. firms, with some contribution from Asia and Europe. 3) Patenting has become a critical signal of viability for new entrants in many industries. Professor Hall's data shows that in most industries, increases in patenting were drivin by new entrants. However, patenting increases in electrical and computing industries were accomplished by a shift in patenting by industry stalwarts. The figures reveal the following interesting fact: although the jump in patent applications within the U.S. occurred in all technology classes, when we look by broad industry class, we find that it occurred only in firms that are in the electrical, computing and instruments industries. That is, the increase in chemicals, mechanical and other technologies appears to have been driven by increasing patenting activity by firms that were not traditionally in these industries. This result is consistent with the view that there has been a major strategic shift in patenting in the electrical/computing industries, but not in other industries. UPDATE: Professor Hall provided a correction to my original interpretation of her results. She interprets her results as showing 'that patents held by new entrants in the electrical and computing industries became more valuable post-1985 than those"

India: the big outsourcing hub of patent ideas

this is how the world is changing around us... India: the big outsourcing hub of patent ideas - The Economic Times: India: the big outsourcing hub of patent ideas NONA WALIA TIMES NEWS NETWORK[ SUNDAY, JANUARY 04, 2004 01:04:38 AM ] NEW DELHI: Sample this - the Intel team in Bangalore is developing microprocessor chips for high-speed broadband wireless technology, to be launched in 2006; at GE's John F Welch Technology Centre in Bangalore, engineers are developing new ideas for aircraft engines, transport system and plastics. Be it Bangalore, Hyderabad, Chennai, Gurgaon, a 'weighty' amount of intellectual property is being created for US companies here. Indian units of Cisco Systems, Intel, IBM , Texas Instruments, GE have filed 1,000 patent applications with the US Patent Office. Texas Instruments has 225 US patents awarded to its Indian operation. It's the Year of the Idea, and the newest and busiest hub for innovations and intellectual property is India. Indians are parenting patents like never before in 200 R&D labs. (Can India become the R&D backyard for global MNCs?) "India is the new hub for patents, and soon, the world will be outsourcing R&D from India," says P Gopalakrishnan, director, IBM India Research Lab, IIT. Here's a list of patents passed in India: a moulded toothbrush with flexible bristles; a process for preparing a cell culture composition; a safety device for motorised two-wheelers with shock absorption; a process for isolation and purification of protein P17 for HIV. Intel, Bangalore has photographs of company engineers who have applied for patents hanging on the wall of fame. "We're making innovations in Bangalore, like we would in the Silicon Valley," says Siddhartha Das, Intel Technology India Pvt Ltd. "Our 1,400 engineers are constantly innovating chip hardware design, communication technologies. Now, we even have a well-developed Intellectual Property strategic program. In 2003, we made 125 invention disclosures and several patent filings from India," he says. There's even a BPO for patents - Evaluserve in Gurgaon. "We file patents for Fortune 500 companies across the world. But even Indian companies are waking up to the Big Idea. More and more companies are inviting us to evaluate innovations and file patents," says Ashish Gupta, COO, Evaluserve. "Indians want to be creators of intellectual property and not just own it."

How about it??

Patently Obvious: MBHB Patent Law Blog: "ANDA Filing is not per se willful patent infringement Glaxo v. Apotex (Fed. Cir. July 27, 2004) Apotex appealed the district court judgment, which found that Apotex's filing of an Abbreviated New Drug Application (ANDA) for a generic version of the antibiotic Ceftin� willfully infringed Glaxo and SmithKline Beecham's patents. (U.S. Patents 4,562,181 and 4,820,833). On appeal, the Federal Circuit (GAJARSA) affirmed the infringement holding, but refersed the the district court's finding of willful infringement. We hold that the mere filing of an ANDA cannot constitute an act of willful infringement compensable by attorney�s fees under the Drug Price Competition and Patent Term Restoration Act of 1984, also known as the Hatch-Waxman Act. Because, the ANDA filing did not constitute an 'exceptional case,' the willfulness holding was reversed In dissent, DYK argued that the case was moot and thus should not be decided. The questions of infringement and invalidity are moot since, as the parties conceded at oral argument, there are no past damages being sought for infringement, and the patents have expired. I dissent from the majority�s decision to address the issues of infringement and invalidity in the absence of a live case or controversy."

Segway Inventor to speak at Inventors Conference

Patently Obvious: MBHB Patent Law Blog: Segway Inventor to speak at Inventors Conference: "Segway Inventor to speak at Inventors Conference The USPTO has announced that Dean Kamen, one of the world�s best known and most successful inventors, will be the keynote speaker at the opening session of the USPTO�s annual Independent Inventors Conference in Concord, N.H. on Friday, August 20. Dean Kamen is Chairman of Segway LLC, an inventor and a physicist. 'His inventions include a portable dialysis machine and the Segway� Human Transporter.' Registration is available online. "

Ousourcing Patent Serches

Publishing Technology News: "Wednesday, March 10 Quality Assured Patents The US government has approved a bill that allows outsourcing of prior art searches as part of the patent examination process - sounds like a good idea? I don't think so. The bill stipulates that the maximum that can be paid for searches is $500 and that small companies should be favored when placing the searches (US companies/nationals only need apply). So we're likely to have a raft of new patents granted whilst the patent examiners figure out who can do decent searches and the quality is likely to be even more erratic than it has been to date. Rather than go through all this, why not just require that patent attorneys ensure, to the best of their determination, that patent applications are novel? I do not believe this happens at the moment; doing so would greatly reduce the burden placed on patent examiners and shift some of the costs of the search filtering onto those applying for patents. "

IQ matters!

The Bell Curve revisited

Driving back and forth to Nashua, NH yesterday I listened to The Bell Curve as an abridged book on tape (picked it up for $5 in a used bookstore in San Diego).  This book created quite a stir in 1994 because of its discussion of average IQ differences among races but I had never read it.  It turns out that even if you leave out all the controversial stuff about race the book is potentially very relevant to our times.

The Bell Curve starts out by talking about how we live in an era where people get sorted by cognitive ability into socioeconomic classes.  In 14th century England if you were a peasant with a high IQ or a noble with a low IQ it didn't affect your life, reproductive potential, or income very much.  In our more meritocratic and vastly more sophisticated economy a smart kid from a lower middle class might make it to the top of a big company (cf. Jack Welch, who paid himself $680 million as CEO of GE) or at least into a $300,000/year job as a radiologist.  For the authors of the Bell Curve the increasing disparity in income in the U.S. is primarly due to the fact that employees with high IQs are worth a lot more than employees with low IQs.  They note that we have an incredibly complex legal system and criminal justice system.  So you'd expect people with poor cognitive ability to fail to figure out what is a crime, which crimes are actually likely to be punished, etc., and end up in jail.  (A Google search brought up a report on juvenile justice in North Carolina; the average offender had an IQ of 79.)  If they stay out of jail through dumb (literally) luck, there is no way that they are ever going to be able to start a small business; the legal and administrative hoops through which one must jump in order to employ even one other person are impenetrable obstacles to those with below-average intelligence.

The trend that the decade-old Bell Curve book misses is telecom and outsourcing.  The authors assume that an American with high IQ will have a higher income and better standard of living than an American with low IQ.  That's the sorting function of an advanced economy.  They don't get into the question of whether it is sustainable that an American with low IQ should have a higher income than someone in India or China with a high IQ.  Statistically, due to their sheer hugeness, you'd have to expect that there are more really smart people in India and China than the total population of the U.S.  If the sorting-by-IQ process were efficient across international borders you'd expect that an American with an IQ of 100 should be making less than an Indian with an IQ of 120.  Given that a lot of brilliant well-educated people in India are getting paid less than $5,000 per year, this is a bit worrisome those of us here who are fat, dumb, and happy.  [Imagine that you were running a company.  Would you rather employ a local high school graduate with an IQ of 90 or an Indian college grad with an IQ of 130 via Internet link?]

For us oldsters, one unexpected piece of cheerful news from this book is that younger Americans are getting genetically dumber every year.  Even if you ignore the racial and immigrant angles of the book that created so much controversy back in 1994 it is hard to argue with the authors' assertion that smart women tend to choose higher education and careers rather than cranking out lots of babies.  As a middle-aged (40) guy whose own cognitive abilities are beginning to fade due to neuron death I felt sure that there would be no place me for in the America of 2050.  Our population is predicted to reach 450 million or so, i.e., the same as India had back when we were kids and our mothers told us about this starving and overpopulated country.  An individual person's labor in India has negligible economic value--the American firm Office Tiger gets 1500 applicants, many of whom are very well qualified, on a good day in Chennai.  It would seem that no enterprise would need an old guy's skills in a country of 450 million; why bother when there are so many energetic young people around?  And how would we be able to afford a house or apartment if there are 450 million smart young people out there earning big bucks and putting pressure on real estate prices?  But if the book is right most of those young people will be dumb as bricks.

[Update:  The Sunday New York Times has a long article in the Business section "Hourly Pay in U.S. Not Keeping Pace With Price Rises" about how American workers in jobs that don't require high IQs are losing ground compared to the middle class and compared to inflation.  Raw labor isn't worth very much right now.]

# Posted by Philip Greenspun on 7/16/04; 4:18:31 PM - Comments [20] Trackback [1]

Software patent---- for whoes benefit

Will Software Patents Destroy The U.S. Software Industry? :: Manageability ::

There's a pretty disturbing thread going on a TheServerSide.  It was supposed to be a discussion about Hibernate, unfortunately its degenerated into an extremely heated and personal shouting match between the Ward Mullins (CTO of ThoughtInc) and Gavin King (co-author of Hibernate).  Apparently, Ward is taking the playbook out of SCO, and playing the Patent FUD game.  That is, if you're not a commercial entity, then the software you're distributing hasn't been cleared by the lawyers and it just might be possible that you might be violating someone's intellectual property (i.e. IP).  Software Patents is now a weapon of choice to spread Fear, Uncertainty and Disinformation against a competitor.  It doesn't matter that your patents will hold up in the court of law, it doesn't matter if you can extract compensation, what seems to matter is that you can make customers of a competitor think twice.  It's an extremely bad situation, where business is won, rather than competing on merits, but on mudslinging. 

In fact the trend looks like it's turning for the worse as evidence by two recent articles from CNET.  Overture's business strategy to leverage its patent portfolio. Pinpoint, a company who's sole business model is suing other companies for patent infringement.  We are now seeing the horrible consequences of the US patent office misguided policies to allow the patenting of software and business practices and to compound it with turning the office into a money making business rather than a public trust.  The US software industry could eventually consist mostly of intellectual property lawyers trying to untangle the patent mess.  The reality is, the rampant approval of questionable software patents has made it impossible for any software written to avoid infringing on an existing patent. 

The only reason why we don't see even more rampant lawsuits is that its simply not worth it to sue someone without deep pockets.  That however doesn't prevent companies for making unsubstantiated threats.  So far things have remain relatively sane, that's because the bigger companies don't risk suing each other, afterall they all have something to lose.  However, what happens if you've got companies with nothing to loose, that is companies whose sole business is not making software but rather suing companies.  They aren't worried about a counter suit, you can't sue a lawyer for suing you. 

The future looks pretty grim, it doesn't help that a lot of companies are already outsourcing IT work outside the US, maybe that's just the only place to legally do innovative software development.  U.S. Software firms for all intents and purpose would end up as subsidiaries of law firms.  The consolation maybe that you can still make a living programming only using "standards".  Just make sure you don't innovate, that's something you either have to clear with the lawyers or done offshore!

Outsourcing Knowledge Processing

India is putting more values yo it BPO service chain and a concept of Knowledge Process Outsourcing is coined specially for the advantage india. Here is an article pointing such changes in favor of india. Outsourcing Business: Evalueserve provides services for patent writing, evaluating and assessing the commercial potential for law firms and entrepreneurs. Its market research services are aimed at top-rung financial services companies, to which it provides analysis of investment opportunities and business plans. Another major product is multilingual services--Evalueserve trains and qualifies employees to communicate in Chinese, Spanish, German, Japanese and Italian, among other languages. That skill set has opened market opportunities in Europe and elsewhere, especially with global corporations. Experts say these new trends are significant, and they will continue to grow over time. "Activities considered for 'offshoring' have moved up in value and begun to touch core functions, such as highly analytical processes," says Stefan Spohr, a principal in the financial institutions group of A.T. Kearney, a global management consulting firm in Chicago. "More complex customer services are substituting simple data processing and call center activities." Spohr adds that the higher-end functions being performed offshore these days include information research, financial portfolio analysis, customer data mining, statutory reporting and inbound insurance sales, among others. . . . Cutting costs is not the only reason why outsourcing such tasks makes sense for its clients; it’s also about higher quality of work, says Aggarwal. "Among the more unusual emerging developments is that business process offshoring is not merely a way to reduce cost by migrating core functions," adds Spohr of A.T. Kearney. "It is also a strategic initiative to take advantage of technological advances and the human capital available offshore to fundamentally restructure an organization's operating model." Evalueserve's model works on a mixed system where anywhere between 50 percent and 80 percent of the work is handled out of an Indian facility, while the rest is done at the client's location. For example, a patent filing assignment from a U.S. corporation may involve the Indian staff writing the patent in English or say, Japanese, and evaluating its commercial potential. But the client or its law firm would do the actual filing in the United States. Us coders carp about outsourcing/offshoring all the time. Among other things, we always think it's witty to suggest outsourcing CEO's, managers, and other business positions. Well, there ya go. Yay capatalism!

New rules of US patent practice

New Rules for US patent Practice this is quite an Interesting artice by William F. Heinze mailto:Bill.Heinze@tkhr.com Effective December 28, 2001, the U.S. Patent and Trademark Office has changed its Rules of Practice in Patent Cases with regard to claiming the benefit of prior-filed applications. The changes were made in order to implement provisions of the American Inventors Protection Act of 1999 for eighteen-month publication of patent applications. Here is a brief analysis of these changes announced in the Federal Register Notice of December 28, 2001.