Virtual Patent Counsel for Disk-Drive Technology Company
At its peak, the disk drive industry had more than 50 companies, including major players such as IBM, Samsung, Hitachi, Toshiba and others. Today, however, only three firms remain.
We worked with the company from its initial start-up, serving as its virtual in-house patent counsel, developing its patent portfolio, and helping to broadly license its technology. As the industry faced brutal competition and the technology evolved, we worked closely with our client to ensure its patent strategy helped position it for success.
Improving Efficiency, Reducing Costs for Asia-based Client
Patterson + Sheridan manages the patent prosecution process for one of the world’s top 10 U.S. patent issuers. While other law firms might be deterred by language barriers and travel costs, we meet in person with the client on a monthly basis, traveling to Asia regularly to review the inventions covered in their patent filings.
By patiently listening to their input and making strategic use of diagrams, we’ve been able to overcome the language barrier and greatly improve the quality of our client’s U.S. patent filings while at the same time significantly reducing costs. Working directly with the client has also helped us better understand their business and objectives – a critical component for effective representation.
Our frequent visits and in-person communication have helped us develop closer business and personal relationships with this global technology leader, creating a mutually beneficial model that helps Patterson & Sheridan provide meaningful service to all our international clients.
Helping Pioneering Start-Ups Develop IP Portfolios Worth Millions
Patterson + Sheridan is well-versed in helping start-up companies develop – and maximize the value of – their patent portfolios. During the infancy of online social networks, we helped one of the industry’s early pioneers build its patent portfolio from the ground up. Because our client had no in-house attorneys, we served as their “virtual patent counsel,” playing a key role in their invention mining and patent portfolio development processes. Persevering through the company’s business highs and lows, we drew on our extensive patent prosecution expertise to help them secure pioneering patents and identify new inventions that could be valuable additions to their patent portfolio. Within five years, the portfolio grew to include six issued patents – including one of the pioneering patents in the field of online social networks – and an even greater number of pending patent applications. The result: The entire portfolio was sold to a major player in the online social network space for several million dollars.
Sale of Industry-Leading Patent Portfolio Funds Client’s Next Product
For nearly a decade, we have represented a prominent company in the video analytics space, building a high quality portfolio of patents protecting its industry-leading product.
The portfolio was so strong that, in 2014, it attracted the attention of a potential buyer. At the same time, our client was working on a complete revamp of its first-generation product employing entirely new technology. This would require making a significant investment.
The offer to buy the legacy product’s patent portfolio came at a crucial time in the company’s history and funded the innovations that laid the groundwork for the new product. In negotiating the sale, we also secured several important protections, enabling the client to continue to sell the legacy product while also license it. In short, the company received money for its patents but could continue to operate as if it hadn’t sold them.
Strong Patent Portfolio = Untapped Resource
Our client had worked for nearly a decade to develop a patent portfolio that built value over time — eventually attracting attention from an interested buyer. By building valuable protections into the sale negotiations, the portfolio funded our client’s next product, while not using any of the legacy technology covered by the portfolio.
Using Subject-Matter Eligibility as a Sword and Shield When Protecting Clients’ IP
Patent law is constantly evolving, due in large part to subject-matter eligibility. The latest Supreme Court decision on this subject, known as the “Alice” case (Alice Corp v CLS Bank), held that subject-matter eligibility for claims directed to abstract ideas is based on a two-part test:
- First: determine if the claims are directed to an abstract idea or general principle.
- Second: if so, evaluate all claim elements individually, and in combination, to determine if the claims include an inventive concept sufficient to ensure that the patent in practice amounts to “significantly more” than a patent upon the abstract idea itself.
As this area of patent law remains fluid, patent examiners are actively (and inconsistently) using subject-matter eligibility to examine applications. That’s where our vast experience on both sides of the IP process — preparation and prosecution and litigation — becomes a competitive advantage for our clients in industries ranging from computers, the internet, biotechnology, and oil and gas.
Our team has a deep understanding of the level of detail required to ensure a claim is valid when analyzed under the two-part subject-matter eligibility test — even if what we receive from the clients is a high-level description of the invention. We collaborate and dig deep to deliver a more holistic view of our clients’ inventions on the front end, and have developed an arsenal of strategies when drafting applications, including arguments and amendments should a rejection arise.
We’ve helped many of our clients address this issue for years, and their continued business is a testament to our track record in drafting patent applications that can withstand stringent and ever-changing subject-matter eligibility requirements.
Shutting down a patent troll before a costly trial
Building on our experience in drafting solid applications, we also leverage subject-matter eligibility knowledge to defend clients from frivolous infringement claims.
For example, our team represented one of the oil industry’s largest players as lead defense counsel in a multi-party infringement suit brought by a patent troll. Working alongside 12 other firms to represent more than 20 defendants, our deep understanding of subject-matter eligibility was brought to bear against the plaintiff’s broad claim related to “controlling a device over a network.”
Arguing the broadness of the claim and demonstrating that many everyday activities would infringe the plaintiff’s patent — from printing to a network printer to uploading photos to social media sites — our team successfully leveraged the plaintiff to voluntarily dismiss the case at the pleading stage, saving our client and the other defendants from a costly trial.
Resolving a Reissue Standoff: Proving Patent Eligibility in the Face of the ‘Abstract Idea’ Argument
The owner of a 3D printing company found himself in a bind when applying for a reissue of the patent central to his business. Originally filed a decade earlier before the widespread growth of 3D printing, the patent now had some issues that required correcting. However, the view of the law had since changed, and the reissue process hit a standstill.
Fighting for patent eligibility in a changing technology landscape
Statutory law (§35 U.S.C. 101) and case law is limited in defining qualifications for patentable subject matter, particularly in a digital age dominated by software and intangible technology. Legal precedent is scarce, the issue is fluid and examiners are hesitant to pass muster on software-related patents.
In the case of this 3D printing company, the United States Patent Office (USPTO) examiner argued that the basis of the business was too general of an abstract idea to qualify for a patent. (The company offers a user-friendly software that allows consumers to design items to be 3D printed.) The application for reissue stalled — and that’s where the Patterson + Sheridan team came in.
Collaboration, research and a team of uniquely experienced IP lawyers seal the deal
Our attorneys took over the case and got to work immediately, spending hours on the phone with the USPTO examiners. We continually monitor case law to stay on top of new rulings and present new arguments accordingly, and this matter was no different.
This particular patent was a blend of both software (the design program) and manufacturing (the 3D printing), which made it unique. Despite its manufacturing component, the application was still rejected under §35 U.S.C. 101, which is typically reserved for abstract ideas, software and algorithms. Therefore, this type of technology was outside the wheelhouse of the traditional 101 examiners, and it wasn’t the typical patent most manufacturing-focused IP attorneys handle.
However, thanks to our firm’s deep bench of attorneys across a wide range of disciplines, we were able to collaborate and convince the examiners that our client’s idea was indeed patentable subject matter. The patent was allowed and has now been twice examined by the USPTO, making it that much stronger if it’s ever litigated in the future.
Protecting AI-Based Inventions Despite Recent Legal Hurdles
The next wave in technological advancement
Artificial intelligence (AI) is redefining the next technological age. It’s estimated that 38 percent of all businesses are implementing AI in some form, and that adoption rate is expected to increase to 62 percent in 2018. Plus, global revenue from AI-based systems is forecasted to grow from nearly $8 billion in 2016 to more than $47 billion in 2020.
Interest in protecting these inventions is skyrocketing as well. From 2012 to 2017, the USPTO saw a 500-percent increase in the number of patents issuing to class 706 — a classification exclusively designated for AI. But how do you ensure this emerging technology is protected properly?
Overcoming legal hurdles with tailored, detailed patents
Despite recent hurdles put in place by the Supreme Court’s decision in Alice Corp. Pty. Ltd. v. CLS Bank Int’l, AI-based inventions can be protected if you have a knowledgeable, experienced IP legal team focused on this developing market.
At Patterson + Sheridan, we protect AI-based technology by drafting strong patents tailored for these unique inventions. For example, new applications should specifically address the technical problem and technical solution. This is critical to overcome the “significantly more” hurdle in Alice.
Also, when describing the invention in the application, it is crucial to be means-oriented, not only ends-oriented. We avoid the “black box” logic of “input data, processing data, output data,” and instead, provide practical implementation details, such as specifics of the model design. It’s also important to include claim elements that recite specific uses of resulting data, not just the generation of the data.
The right patent attorney makes all the difference
Some are already referring to AI as the “Fourth Industrial Revolution.” This is a pivotal time for software and technology companies who are pioneering in this space — safeguarding those inventions is crucial. Like the revolutionaries who have come before, the leading innovators of this coming revolution should continue to pursue protection of their AI-based intellectual property.
The IP lawyers at Patterson + Sheridan understand the unique challenges of protecting AI technology, and clients appreciate our relentless, hands-on approach. For more of our detailed insights into this topic, read "Smart Strategies for Protecting AI-Based Inventions."
How we helped a tech company protect a new revenue stream with a design patent
A Fortune 100 technology company was preparing to release a new wireless access point (WAP), and wanted to ensure they had filed patent applications that covered the various improvements over the state-of-the-art product before its launch deadline. Our lawyers worked with the development engineers to mine more than a dozen applications, but the engineers also wanted to patent an expansion interface that would allow users to customize the WAP by plugging in additional expansion modules that could include additional antennas, memory or power supplies.
The company wanted to prevent competitors from selling their own expansion modules for our client’s new WAP, but using expansion modules for customizing a computing system is a widespread practice — securing a utility patent on this general idea would be difficult. How could we legally protect this revenue stream?
Our creative solution was to seek a design patent for the expansion interface. While the interface itself is functional, its design is ornamental. If a competitor sold an expansion module to plug into the WAP’s unique interface, they would infringe the design patent.
The client liked our approach, and we successfully filed the utility and design applications for the new product in time for its launch. Not only was the company able to protect its intellectual property, but our strategy gave them the exclusive ability to sell expansion modules for the new WAP.