January 16, 2012, by Mandour & Associates, APC

Los Angeles – With its record number of U.S. patents granted in 2011, for the nineteenth consecutive year IBM held the top patent holder spot in the world. However, IBM now has stiff competition in the rankings from Asian companies who are building their own patent portfolios.

As the world’s leading information technology services provider, last year IBM added 6,180 new patents to its portfolio of 34,000 active patents. Since 1911, the New York based company has been granted 70,000 patents by the United States Patent and Trademark Office (USPTO). Its first patent, granted over a century ago, was for technology related to a perforating machine. Since then the company has developed patents for DRAM cells which became the standard for computer memory. IBM is also known for its patented non-computer inventions, such as a laser technique that went on to become the foundation for LASIK eye surgeries.

Microsoft was the only other American company to place in the top 10, dropping to sixth place in the rankings. There were eight Asian companies in the top 10, with South Korea-based Samsung gaining 4,894 new patents in 2011 and Canon with 2,821 new patents. In total, the USPTO issued a record 224,505 new patents in 2011, a two percent increase from the previous year.

In the coming years, IBM may fall out of its comfort zone as the Asian technology giants take the lead. Information for Industry, Inc. (IFI), a patent data research company, said that Samsung’s eight percent patent growth outpaced that of IBM’s increase of five percent. More importantly, Samsung has overshadowed IBM for the past two years in its number of patent applications. The number of pending patent applications is a good indicator of future patent grants.

A patent attorney for IBM said that IBM has been successful at using its patents to manipulate trends in the technology world. For instance, if it wishes to promote certain standards, it may advise other companies that it won’t bring legal action to anyone innovating in that area even if its patents are infringed in the process. As a result, IBM has managed to avoid costly and time-consuming litigation, allowing it to invest about $6 billion in research and development each year. The company reportedly makes approximately $1 billion annually in royalty fees from licensing agreements.

January 9, 2012, by Mandour & Associates, APC

Los Angeles – Zyprexa (olanzapine) recently lost its patent protection, to be joined by Geodon (ziprasidone) and Seroquel IR (quetiapine) in March 2012. This past October, the U.S. Food and Drug Administration (FDA) approved the first set of generic olanzapine tablets. Patients in the United States can purchase them at most pharmacies. Experts estimate generic versions of all three drugs will enter the market at a 20-50% lower cost.

Prices will not drop immediately because the manufacturers of generic drugs are usually awarded six months of exclusive distribution rights. However, long-term, the availability of generics will translate into substantial savings for Medicaid agencies and for patients who pay out-of-pocket. Patients not covered by insurance may be able to purchase and benefit from these drugs for the first time. Medicaid Part D plan insurers could also realize savings. Since reimbursement rates are adjusted retroactively, insurers could pocketed a price difference when prices drop during the first year.

Prescription antipsychotic drugs rank highly on the list of most expensive medication. They constitute approximately one-third of most Medicaid pharmacy budgets. In 2010, special brand antipsychotics accounted for $5.3 billion of overall bipolar drug sales. Seroquel, Abilify, and Zyprexa lead the market as top revenue-generating drugs.

The pharmaceutical companies that developed these antipsychotic medications may see a large decline in their market share as generics become available. The markets covered will include the U.S., Japan, the UK, Italy, France, Spain, and Germany. In the United States, the market could drop to $3.1 billion, down from $5.8 billion. Globally, the market for bipolar disorder drugs could drop to $4 billion in 2020, down from $6.5 billion in 2010.

Patients that switch to generics may also notice a difference in the way they are being treated. The availability of a large mix of generic products could allow doctors to specifically tailor a treatment plan for a patient by prescribing a larger variety of drugs in more specific doses. Antipsychotics are used to treat disorders such as bipolar depression, schizophrenia and mania, but they have a wide range of efficacy and produce different side effects such as weight gain, diabetes, cardiac disease and sedation. Many doctors prefer to prescribe a mix of medication, such as a sedative combined with a drug with a low weight-gain effect and a drug with a low diabetes link. As generics enter the market, pharmacists will have to keep up with changes in drug combinations. The doctor, pharmacist and patient will need to monitor for side effects and the efficacy of treatment.

January 5, 2012, by Mandour & Associates, APC

Los Angeles – Imagine a laptop or cell phone that could run for weeks without recharging. This month, Apple filed for two patents relating to “a portable and cost-effective fuel cell system for a portable computing device.”

The first patent application is entitled “Fuel Cell System to Power a Portable Computing Device.” According to the application, the patent encompasses a fuel cell system that uses a cell stack to produce electrical power. A controller runs the operation of the entire system, which can also include an interface to a portable computing device.
The second application, entitled “Fuel Cell System Coupled to a Portable Computing Device,” encompasses a fuel cell system that can provide power to and receive power from a rechargeable battery in a portable computing device.” The patent aims to eliminate the necessity for a large, heavy battery within the fuel cell system, significantly reducing the cost, size and weight of the fuel cell.

Fuel cells convert oxygen and hydrogen into electricity, creating water as a byproduct. They can hold more energy than a battery, are smaller, and do not utilize fossil fuels. The technology is currently used in certain types of vehicles such as cars, boats, submarines and NASA satellites. The only fuel cells developed to charge electronics require a separate fuel cartridge and are used to recharge a portable device. In contrast, the Apple patents describe fuel cells integrated into the electronics. The technology has the potential to be applied to many types of electronic devices.
Apple’s patent filings propose a fuel source of sodium borohydride powder mixed with water. The sodium borohydride will produce the hydrogen. The hydrogen can mix with oxygen through a membrane to produce electricity and water vapor. In developing these patents, Apple aimed to find solutions to reduce reliance on fossil fuels, offshore drilling, and foreign oil. If approved, these broad patents could allow the company to develop this specific technology without direct competition.

Apple owns approximately one-thousand patents. One study suggests it owns vastly fewer patents than other electronics companies. In contrast, Samsung has at least twelve-thousand patents. Nokia holds about eleven-thousand patents, followed by Alcatel-Lucent, which holds about ten-thousand patents. Thus, Apple’s recent high-profile patent infringement lawsuits against its competitors give it a misleading reputation for owning a large portfolio of intellectual property.

December 28, 2011, by Mandour & Associates, APC

Los Angeles – The phone wars continue. A recent preliminary ruling by a U.S. International Trade Commission (ITC) trade panel judge found that Motorola Mobility infringed on Microsoft U.S. Patent 6,370,566. The patent encompasses methods to synchronize group calendars and schedule meetings on a smartphone. The feature provides an essential organizational function for business users who need to schedule meetings without physically being in the office.

The judge, Theodore Essex, found no violation of six other patents owned by Microsoft. The software company filed the initial complaint in October 2010. The full commission will review and make a final determination on the decision in April 20, 2012. The commission will also review a request to prevent phones that infringe on the patent from being sold in the United States.

If the commission confirms the initial ruling, Microsoft will be in a strong position to stop unlicensed companies from making or importing phones with Android operating systems, and phones with similar features. The handsets in violation include Motorola’s Backflip, Devour, Droid 2, Droid X, and Cliq XT, along with their supporting software.

Microsoft may use the ruling as part of a strategy to obtain licensing fees from Android-based mobile producers. It is seen as a setback for Google, its Android operating system, and Android handset producers. On the other hand, a spokesperson for Motorola expressed relief that only one patent had been infringed upon. At the very least this decision should provide clarity about the contours of Microsoft’s 566 patent to prevent infringement in the future.

Microsoft also has law suits against Motorola for wireless networking and video technologies for up to 30 different patents. Motorola has its own suits against Microsoft for technology underlying the software giant’s key products such as the Xbox game console, Windows Phone 7, Windows Live Messaging, Windows 7, and Bing.

Microsoft already collects licensing fees from Samsung and HTC for allegedly infringing technology used in Google’s operating system. By October, it had gotten licensing agreements from over half of all Android device companies, but not Motorola Mobility. Microsoft has chosen to target manufacturers rather than Google. The European Patent Office did not uphold this same patent because it was found to be “obvious.” Microsoft is appealing the decision.

December 27, 2011, by Mandour & Associates, APC

Los Angeles – Research conducted by Thomson Reuters finds that China is the worldwide leader in patent and trademark filings. Thompson Reuters analyzed patent and trademark application filings, examined real-world trademark and copyright infringement issues, compared national government policies, and evaluatedlong-term innovation strategies for intellectual property growth. They concluded that China is not only presently a worldwide center for intellectual property protection, but will continue to be so in the future.

China’s published patent filings have increased by 16.7% between 2005 and 2010. The number of patent applications predicted to be filed in China this year will secure its position as the world leader in patent application volume. By 2015, it’s expected that China will publish 493,000 patent applications a year.

China’s growth in trademarks has swelled since 2000 with a 450 percent increase in trademark applications filed. Global multinational companies have seized upon China’s consumer growth and represent the top 20 trademark fliers since 1976. Since 2006, there has been an 80 percent increase in published scientific literature from China, placing it second to the United States for scientific literature output. Comparatively, during the same time period, the United States has had only a five percent increase in scientific literature output.

However, not all the news is as positive on the intellectual property front in China. While foreign companies have been willing to invest in protecting their intellectual property in China, Chinese companies have been more hesitant. Currently, only 5.6 percent of Chinese companies own global patents to protect their inventions as opposed to the 48.8 percent in the United States and 38.7 percent in Japan. Further, companies in China have been slow in developing their own innovation. Analysis shows that the most innovative companies in the world still reside in the United States, Europe, and Japan.

The research from Thomson Reuters illustrates that while Chinese companies lags behind in creating innovation and protecting their inventions outside of China, the huge potential and growth in the Chinese market has resulted in an intellectual property boom in China. The Chinese government has invested massive financial support in intellectual property to transition China from “Made in China” to “Designed in China.” The Five-Year Plan for Economic and Social Development, announced earlier this year by the Chinese government, focuses on transforming China from a manufacturing economy to an innovation economy.

David Brown, President of the IP Solutions business of Thomson Reuters commented on China’s future,”Intellectual property is the bridge that connects innovation with economic growth. We’ve taken on this research as a means of identifying the point where innovation and creativity meet marketability, thus setting the stage for sustained economic development. By closely examining a wide variety of metrics, we can see China is clearly on that path, but there are significant milestones yet to be attained.”

December 20, 2011, by Mandour & Associates, APC

Los Angeles – NASA signed a patent license agreement allowing Meridian Health Systems P.C., a Los Angeles based company, to use its experimental imaging system to treat atherosclerosis. NASA engineers at the Johnson Space Center originally developed the technology to use millimeter wave electromagnetic energy for experimental imaging. After realizing the millimeter wave radiation would not work for imaging, engineers sought other uses and discovered its usefulness in treating atherosclerosis.

Subsequently, the Johnson Space Center filed and received patent number 6,496,736 for the technology. The patent covers a method to treat atherosclerosis by delivering microwave energy of 3-300 gigahertz in less than a second to specifically targeted arterial locations.

The system uses W-band millimeter wave radiation. When combined with a miniature catheter-antenna and placed into a hardened artery, the wave transmissions penetrate and restore elasticity to arterial lesions without affecting healthy cells.

This selective targeting prevents inflammation and long-term side-effects commonly accompanying angioplasty. Moreover, doctors can customize a temperature profile for each lesion, depending on its size and type.

The Johnson Space Center made the technology available through the JCS’s Technology Transfer and Commercialization Office, to transfer technology from NASA to benefit industry and the space program. It openly invited companies to license the technology for commercial use.

Meridian Health Systems will begin clinical trials with NASA designed prototypes and aims to obtain approval from the Food and Drug Administration for the technology application. The company has already completed experiments on pig arteries to measure microwave and millimeter wave band operation with the Johnson Space Center under a Space Act Agreement to obtain data on an optimal antenna size, pulse repetition rate, and level of transmitted power.

Atherosclerosis occurs when cholesterol and fat deposits cause hardening of arterial walls, constricting blood flow. Cardiovascular disease is the leading cause of death in the United States.

December 15, 2011, by Mandour & Associates, APC

Los Angeles – On December 13, 2011, the United States Patent and Trademark Office granted Google, Inc. a patent (U.S. Pat. No. 8,078,349) that allows a mixed-model car to transition from a human driver to an automous, self-driving car. Google believes this technology will allow for optimal fuel efficiency in cars and reduce traffic accidents by half.

In developing its self-driving car technology, Google employs a multi-layered approach to prevent the self-driving car from being reliant on just one component. First, the self-driving car is equipped with a roof-mounted range finder, a Velodyne 64-beam laser device that has a navigation system built in. Next, the car contains front and rear radar systems to calibrate the car’s movement in relation to other cars on the road and a camera inside the rear-view mirror to read traffic lights. Finally, the car is equipped with a GPS system that continuously monitors the car’s movement and location. Google contends this “multi-layered” approach constantly gives feedback between the car’s old and current position and ensures safety for the driver and passengers. Google believes that the computer-operated systems in the self-driving car will allow it to react to any sudden changes on the road faster and more effectively than its human counterpart.

The ultimate test for self-driving cars will be up to consumers and how safe they feel. During testing of Google’s self-driving car at its Mountain View headquarters, Google reported that an accident occurred with another human-driven vehicle. While no injuries occurred and Google quietly placed the blame on the human-driven car, it does show that there will be some speedbumps in the future for the development of self-driving cars. How do insurance companies insure a self-driving car? By the driver or the company whose technology drives the self-driving car? In an accident between two self-driving cars, who becomes responsible, especially if injuries result? These questions and others will certainly play out in the coming years as we embark on the world of the hands free car.

December 8, 2011, by Mandour & Associates, APC

Los Angeles – On Monday, December 5, 2011, the Supreme Court heard opening arguments regarding a generic drug manufacturer’s attempt to narrow the description of a method of use patent submitted to the Food and Drug Administration (FDA) by a pharmaceutical company.

Novo Nordisk produces a drug called Prandin (generic name: repaglinide), a type II diabetes drug, that has been approved for three separate uses to help patients control their blood sugar. The main patent for Prandin for two of those uses has expired. However, Novo Nordisk has another patent with Prandin for use with Metformin, another diabetes drug that expires in 2018. Novo’s description to the FDA for the use of Prandin in this current patent has been held broad enough to cover all three of these uses in the original Prandin patent. Under the Hatch-Waxman Act, the FDA uses the description given to it from patent holders, in this case – Novo Nordisk, to decide whether to approve a generic version when the drug’s patent expires.

Caraco, a unit of Sun Pharmaceutical Industries, wants to produce a generic version of Prandin for its two expired uses. They argue that Novo Nordisk’s patent on Prandin with Metforin is too broad because it covers all three uses, excluding it from producing Prandin for two of its expired uses. They have asked the Supreme Court to “carve out” the two expired uses from the current Novo Nordisk patent on Prandin with Metforin. The Obama administration has sided with Caraco and in its brief to the Court contends that the strong patent protection could “preclude generic [drug] competition by [patent holders] submitting an overbroad description of its method-of-use patent to FDA.” In 2010, the FDA approved 11 generic drug manufacturers to “carve out” uses otherwise covered by descriptions to the FDA by patent holders.

During questioning, several justices alluded to the original intent of Hatch-Waxman to get generic versions of patented drugs to consumers in a more efficient and efficacious manner. Justice Sonia Sotomayor questioned whether generic drug manufacturers would be “boxed out” by overly broad FDA descriptions by patent holders and asked, “Do you actually think that that’s what Congress intended?”

Novo Nordisk contends that allowing Caraco to “carve out” FDA descriptions would likely lead to increased litigation over FDA descriptions submitted by patent holders and delay the delivery of generic drugs to the public, ultimately defeating the purpose of Hatch-Waxman. The case is Caraco Pharmaceutical Laboratories v. Novo Nordisk, 10-844.

November 29, 2011, by Mandour & Associates, APC

Los Angeles – Eleven-time world surfing champion Kelly Slater was recently issued a patent by the USPTO for a wave pool. Slater’s Kelly Slater Wave Company applied for patent protection with the USPTO in 2008 after developing a donut shaped wave pool creating a barrel wave. According to Slater, the USPTO issued the patent after a three year application process.

Slater’s application was initially denied by the USPTO because Australian surf company owner Greg Webber already owned a patent for a donut shaped wave pool that produced a barrel wave. The initial denial of Slater’s application forced Slater’s legal team to focus on the differences between the two pools. Granting the patent application, the USPTO agreed that Slater’s wave pool was sufficiently novel and non-obvious for patent protection.

In order to receive patent protection, an invention must be useful, non-obvious, and novel. The novelty requirement necessitates that the invention not already exist in the prior art. In this case, Slater was originally denied patent protection when the USPTO found that his application for a donut shaped wave pool was already the subject of a patent owned by Webber.

Slater, however, managed to convince the USPTO that his pool design was distinct from Webber’s existing patent. Slater focused on the two main differences between the Slater pool and the Webber Pool. First, the two pools differ in the source of the waves. Webber’s pool uses a hull or foil to displace the water toward the surfer. The effect is similar to the wake of a power boat. Slater’s wave, on the other hand, simulates a groundswell, a naturally occurring phenomenon. Second, the Webber pool creates two successive waves while the Slater pool creates only a solitary wave.
Webber and Slater each recognized that the two pools create a different type of wave and experience for surfers.

November 14, 2011, by Mandour & Associates, APC

Los Angeles – The Supreme Court recently clarified the standard of proof required to prevail in an action for indirect patent infringement by intending to induce infringement in a recent case, Global-Tech Appliances v. SEB S.A., 131 S. Ct. 2060 (2011). Prior to the ruling, it was unclear whether the inducing party must have acted only to induce the infringing act or whether the inducing party must have also intended that the infringing act actually infringe the patent at issue. The Supreme Court recently held that to be liable for inducing patent infringement under 35 U.S.C. § 271(b), the defendant must have knowledge that the infringing act it induced constituted patent infringement.

The case arose when Respondent SEB invented a deep fryer, obtained a patent for the invention, and began marketing the fryer. Sunbeam Products then requested that Pentalpha, a Hong Kong based subsidiary of Petitioner Global-Tech Appliances, supply Sunbeam with a deep fryer meeting specifications set forth by Sunbeam. Pentalpha then obtained a SEB fryer and provided Sunbeam with deep fryers based on that SEB model, changing only aesthetic features of the SEB fryer.

SEB sued Sunbeam for patent infringement and subsequently brought an action against Pentalpha’s parent company Global-Tech for intentionally inducing Sunbeam’s patent infringement under 35 U.S.C. § 271(b). The jury found that Global-Tech’s subsidiary had indeed induced patent infringement and the court entered judgment for SEB which was affirmed by the Federal Circuit.

Unlike actual patent infringement which does not require intent to infringe, inducing patent infringement under § 271(b) requires that the defendant act with intent to induce infringement. The standard applied by the federal circuit and upheld by the Supreme Court in this case requires that the defendant knew or should have known that its actions would induce actual patent infringement.

In this case, the Supreme Court found that the evidence was sufficient to find knowledge on Pentalpha’s behalf under the theory of willful blindness. Though “deliberate indifference” to the existence of a patent would not satisfy the knowledge requirement, willful blindness to the existence of a patent is akin to knowledge.

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