All Things Patent Blog

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6 Things Startups Need to know about IP

Intellectual property (IP) protection is as important today as it has ever been for start-ups. For beginners, the prospect of where to start can be daunting.

Why do startups need IP protection? Registering IP can do several things, including:

  • Creates an asset that will have value even if the business model fails
  • Creates an asset that can be used as collateral for commercial loans
  • Justifies a higher valuation when seeking venture capital
  • Provide higher value for its products/services when listed in  public market by facilitating licensing or sale
  • Identify  more contribution margin which could reduce the need to raise investment fund
  • Helps in making strategic choices when new opportunities or change of direction is required

Here are a few IP-related approaches a start-up can should consider while formulating strategy.

6 Things Startups Need to know about IPStart early
In 2013, the United States IP system changed to a first-come-first-served basis. So regardless of who actually invented, the first one to file the patent gets all the protection. And more importantly, the one-year grace period given by the USPTO to file an application is not applicable outside the US. Therefore, start-ups planning to seek IP protection abroad should not publicize their invention before filing an application. File early and keep your invention under wraps until you do so.

Additional filing
The initial patent filing is not enough, since  the technology  will evolve as the company goes about refining the product before entering the market.  As the product evolves, the patent protection therefore needs periodic re-evaluation.  Continuations are an effective way to extend the coverage of the initial filing.

Initially, start-ups may not be able to afford broad IP protection. Compared to larger corporations, startups must have a better understanding of the impact that IP can have on their business. In some cases, IP may be their only asset. So prioritizing the revenue spend on IP protection according to the overall business plan may be necessary.

Trade secrets
While all the concentration is on patents, trade secrets can be  an important option, if feasible. Generally, patent protection lasts up to 20 years but, trade secrets continue indefinitely as long as the concerned party decides not to disclose it to the public. Companies like Coco-Cola and KFC are well known to have benefited from their well-protected trade secrets (recipes). However, maintaining secrecy of valuable information could be a challenge.

Worth of the invention
Patents are without doubt intended to protect the assets most valuable to a startup. So startups must assess the potential of the invention through suitable metrics before venturing to protect it.

Types of IP protection
Understanding the benefits, expenses, and the level of protection offered by various forms of IP is crucial. Trademark or service mark protection is necessary to protect each unique business or product identify. Another important area where startups need to have clarity is in ownership of IP assets. The company needs to have well-drafted agreements with its employees as to ownership of IP, non-disclosure of valuable information or avoidance of conflict in the event of separation.

Startups must engage with a skilled intellectual property counsel so that their business can meet the due diligence requirements of investors. This will also prepare them for commercialization of their product or service, when it would be required to ensure freedom from third party conflicts that can jeopardize that step. Being IP-savvy will prepare start-ups for the next phase in their journey.


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Patent: Use of Common Sense in an Obviousness Analysis

patent-use-of-common-senseThe Federal Circuit decided Arendi S.A.R.L vs Apple Inc. in August of this year.  The Court ruled that the Patent Trial and Appeal Board misapplied the law on permissible use of common sense in an analysis. While reversing the PTAB’s final decision, the Federal Circuit held that the PTAB’s application of common sense to supply a limitation missing from a prior art reference was conclusory and unsupported by substantial evidence. The Federal Circuit explained the proper use of common sense in an obviousness finding and helpful guidance for practitioners.

Being sued by Arendi in district court for infringement of US Patent 7917843, the defending parties Apple, Google, and Motorola Mobility filed a petition for inter partes review of the declared claims. The district court proceedings were then stayed pending completion of the inter partes review proceeding.

The claims of the ’843 patent are generally directed to techniques for locating information in a displayed document. Petitioners maintained that a single prior art reference “Pandit” rendered the claims obvious. Pandit discloses methods for recognizing predetermined types of text in a body of text and performing operations pertinent to the recognized text.  Petitioners cited the recognition of telephone numbers as text and the operation performed as adding the recognized telephone number to an address book, in the specific embodiment of Pandit. The PTAB, agreed with Petitioners that, as a matter of common sense, the technique disclosed in Pandit can be presumed to perform a search of the address book using the identified telephone number in order to avoid duplicate telephone number entries.

The Appellees argued that the process of searching for data in a database was well known at the time of the invention. But, they were unable to provide a reason as to why it would be proper to extrapolate from this general knowledge to specifically add a telephone number search to the Pandit reference.

In sum, the Appellees’ conclusory statements and unspecific expert testimony were insufficient to invoke common sense to supply this key limitation.

The Federal Circuit’s opinion provided guidance regarding the application of common sense in an obviousness analysis for patent prosecution lawyers and patent litigators.

On the patent prosecution front, an applicant confronting an obviousness rejection based in part on common sense can use this case as leverage and press the patent examiner to explain, specifically, and with evidentiary support and the reason of  limitation absent from the prior art. For patent litigators, the decision is a helpful guide for parties on both sides of an invalidity case.

Criticality of claims in an infringement case

Preparing the claims comparison chart is a primary step in studying a patent infringement case. MaxVal’s Claims Set Comparison tool and Claim Chart Generator help in analyzing and especially illustrating the elements of the claims.  Claim charts are automatically generated in a ready-to-use format.

Patent and litigation attorneys have relied on MaxVal’s Claim Set Comparison and Claim Chart Generator tools for several years.

Key features of the Claim Chart tools:

  • Automatically creates a downloadable claim chart for a U.S. patent or published U.S. application.
  • View the Independent claims separately for a better view
  • Compares two sets of claims and highlights the difference between them
  • Helps figuring out the difference between the U.S. claims and the foreign counterpart claims
  • The claim charts (including PCT and EP patent/publications) can be generated in three different formats: Word, Excel or HTML.

The illustration below shows a comparison of claims sets and patent drawings for the patent #791843

Claims Set Comparison - Patent US7917843.PNG

Fig-1: Snapshot shows comparison of the claims at publication and granted stages for patent #791843

Patent drawings-843.PNG

Fig-2: Patent drawings of ‘843

Create your Max-Insight account today to start your free trial and access a bundle of patent tools trusted by hundreds of patent professionals.

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Media Outlets Including Forbes Hit With Lawsuit

Many reputed media stations including, Forbes, Inc., American Broadcasting Companies, Inc., and Discovery Communications, Inc. have been targeted with a lawsuit for willful patent infringement filed by Texas-based Bartonfalls LLC.

The lawsuit was filed with the US District Court of EDTX on October 11, 2016, where Bartonfalls claims that the companies have infringed the US patent 7,917,922.  The patent relates to a method that integrates a plurality of television signal sources into a cohesive audio/video environment.

Claim 1 of the ‘922 patent describes a “method for automatically changing from a first TV program to an alternate TV program at a TV viewer location.” The accused companies in the suit either sell or provide a method for automatically changing from one TV program to another.

Bartonfalls stated that the companies have willfully infringed claim 1 of the ‘922  patent, “with knowledge of the patent and in spite of an objectively high likelihood that its actions constituted infringement.”

According to the USPTO and MaxVal’s own research, the accused companies haven’t given any indication as to how they are going to tackle the alleged infringement.  Below are the details of the cases.

Case Number Court Lawsuit URL
2:16-cv-01126 Texas Eastern District Court Bartonfalls, LLC    v.  American Broadcasting Companies, Inc.
2:16-cv-01127 Texas Eastern District Court Bartonfalls, LLC    v., Inc.
2:16-cv-01128 Texas Eastern District Court Bartonfalls, LLC    v. Bloomberg, L.P.
2:16-cv-01129 Texas Eastern District Court Bartonfalls, LLC    v. CBS Interactive, Inc.
2:16-cv-01130 Texas Eastern District Court Bartonfalls, LLC    v. Turner Broadcasting System, Inc.
2:16-cv-01131 Texas Eastern District Court Bartonfalls, LLC    v. Consumers Union of United States, Inc.
2:16-cv-01133 Texas Eastern District Court Bartonfalls, LLC   v. Forbes, Inc.
2:16-cv-01134 Texas Eastern District Court Bartonfalls, LLC    v. Advance Publications, Inc.
2:16-cv-01135 Texas Eastern District Court Bartonfalls, LLC    v. Scripps Networks Interactive, Inc.
2:16-cv-01136 Texas Eastern District Court Bartonfalls, LLC    v. NBCUniversal Media, LLC
2:16-cv-01137 Texas Eastern District Court Bartonfalls, LLC    v. Viacom, Inc.
2:16-cv-01138 Texas Eastern District Court Bartonfalls, LLC    v. New York Times Company
2:16-cv-01139 Texas Eastern District Court Bartonfalls, LLC    v. Ziff-Davis, LLC