February 2009

Worthless Patents

February 25, 2009

Once you get a patent, it costs a lot to maintain it. For most categories of patentees, the maintenance fees after issuance are $980, $2,480 and $4,110 at 3.5 years, 7.5 and 11.5 years, respectively. If the fee is not paid, the patent is forfeited. Top patent blogger Dennis Crouch has an interesting set of statistics on his site, discussing the “fall-off” rate of maintenance fees paid at the end of each of these periods, beginning in July 1998. The non-renewal rate is significant. As Mr. Crouch observes, the non-renewals shorten the life of the median patent from 17 years to 12 years. Click here for a more detailed explanation of the study, and a scatter plot graphic. It’s no great surprise that many patents fail to survive, but it’s interesting to see just how many are abandoned because their owners don’t deem it to be worth the expense to keep them alive.

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The Short and Simple Story of the Credit Crisis

February 25, 2009

As I showed in an earlier post, you don’t need some Ivy League economics professor or former Federal Reserve member to explain the credit crisis. A cartoon will do. The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.

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Patent Case Management Judicial Guide

February 18, 2009

A number of private-practice lawyers, along with an extensive Judicial Advisory Board, have published a Patent Case Management Judicial Guide. The document is labeled “draft,” but it appears final in most respects, and is freely available for use. Perhaps the authors are using the term “draft” in the same way that Google uses the term “beta” – even when the product is mature and in widespread use, the beta label remains. Although this 500-plus page document has not been formally adopted by the federal courts, it is likely to serve as an important procedural and substantive guide to federal judges, and therefore is well worth including in any patent litigation library, particularly if a party is before one of the advisory judges. The judges involved in the Advisory Board (a “who’s who” of patent judges) includes Judge Patti B. Saris in the District of Massachusetts. Link to the SSRN page here.

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The Face of Evil May Be Behind The Judge’s Bench

February 13, 2009

Judge: Miss West, are you trying to show contempt for this court?’ Mae West: On the contrary, your Honor, I was doin’ my best to conceal it.’ (During a trial in which she was accused of indecency on stage) “The thing to fear is not the law, but the judge” Russian Proverb “One bad apple ruins the barrel” —————– History is replete with judges who are open to bribery, who serve special interests or who are otherwise corrupt.  We often read of judges who are sanctioned or prosecuted for misconduct. When a person dons a judge’s robe her character and values don’t change. Despite the long history of judicial misconduct, I still was surprised to read about this kickback scheme in the February 13, 2009 New York Times. Quoting excerpts from the article: [O]n Thursday . . . judge Mark A. Ciavarella Jr., and a colleague, [judge] Michael T. Conahan, appeared in federal court in Scranton, Pa., to plead guilty to wire fraud and income tax fraud for taking more than $2.6 million in kickbacks to send teenagers to two privately run youth detention centers run by PA Child Care and a sister company, Western PA Child Care. . . . While prosecutors say that Judge Conahan, 56, secured contracts for the two centers to house juvenile offenders, Judge Ciavarella, 58, was the one who carried out the sentencing to…

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For the Want of a Nail the Kingdom was Lost – Failure to Get Clear Title to IP, Redux

February 11, 2009

In June 2007 I wrote a post discussing two cases in which clients of our firm had, before they became clients, failed to get written assignments of copyright ownership from independent contractors who wrote software for them. Without a written assignment the contractors were able to claim ownership of the works, and make life very unpleasant for their customers, who may have assumed that since they paid for this work the code belonged to them. A case decided last Fall shows what happens when this problem is taken to an extreme. In this case the programmer-contractor claimed ownership, and the value he assigned was in the millions of dollars. The customer was forced to go through a federal court lawsuit that involved discovery (expensive), summary judgment (quite expensive), and finally appeal to the Ninth Circuit Court of Appeals (very expensive), only to finally have a court declare that it owned an “unlimited, non-exclusive, implied license to use, modify and retain” the source code written by the contractor. While this case had a happy ending for the customer, the entire expense, as well as the risk of a loss, could have been avoided if the customer had a piece of paper with only one sentence, signed by the contractor: “I hereby assign to [customer] all right, title and interest to all intellectual property developed by [contractor] during the course of any…

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How To Protect a Trade Secret (or, calling Ocean's Eleven)

February 11, 2009

Clients often ask what measures they need to take to protect their trade secrets, should it be necessary to enforce them in court and prove that they were treated as secrets. Here’s how Kentucky Fried Chicken does it, according to an AP story published today: The recipe lays out a mix of 11 herbs and spices that coat the chain’s Original Recipe chicken, including exact amounts for each ingredient. It is written in pencil and signed by Harland Sanders. The iconic recipe is now protected by an array of high-tech security gadgets, including motion detectors and cameras that allow guards to monitor the vault around the clock. Thick concrete blocks encapsulate the vault, situated near office cubicles, that is connected to a backup generator to keep the security system operating in times of power outages. The recipe is such a tightly held secret that not even Eaton knows its full contents. Only two company executives at any time have access to the recipe. KFC won’t release their names or titles, and it uses multiple suppliers who produce and blend the ingredients but know only a part of the entire contents. “We’ve very comfortable with the security,” [KFC President Roger Eaton ]said. “I don’t think anyone can break into it.” Hmmmm …. perhaps a real-life George Clooney will be interested. Of course, we don’t really know what’s in that vault, do…

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Dispatches From an Innovation Tour of India

February 5, 2009

If you’re fascinated with India, as I am, there’s an interesting series of articles described as an “innovation tour,” of India by Vinit Nijhawan, Executive-in-Residence in the Boston University School of Management. In a series of “dispatches” Nijhawan “takes readers on a journey, from New Delhi’s teeming cell phone (and cell phone unlocking) marketplace to Chandigarh, home to a great engineering college and a nascent life sciences industry forming . . . around agricultural products”, to quote from Xconomy. An introduction and links to the installments (five so far), can be accessed here.

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An Oral Agreement is Only as Good as the Paper It's Written On

February 2, 2009

You’ve got to wonder what Steelcraft was thinking when it decided to file a lawsuit against its former employee, James Hensel. It’s hard enough to enforce a written noncompete agreement, much less an oral agreement, but that’s what Steelcraft tried to do in this case. The absence of a written agreement didn’t deter Steelcraft, which sought a preliminary injunction against Hensel. Steelcraft was able to allege nothing more than an “oral” noncompete agreement. One of several requirements for enforceability of a noncompete agreement is that it be reasonable in duration and geographic scope, and even though Steelcraft alleged an oral agreement, it said nothing about that element, rendering the agreement unenforceable in the eyes of Worcester County Superior Court Judge Richard T. Tucker. Steelcraft also alleged that Hensel had taken Steelcraft trade secrets (the decision doesn’t discuss precisely what these were), but once again its argument was rejected on the grounds that it had failed to establish that it had properly protected the alleged secrets.  For good measure, the judge noted that Steelcraft had failed to enter into a confidentiality agreement with the former employee. There’s a bit more to this case (favorable to Hensel, harmful to Steelcraft), but the point is made: if you fail even to get a written noncompete agreement from your employee, don’t expect that you’ll be able to stop him from competing based on an…

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