PATNEWS: How much bad software patents will cost you !19960529 How much bad software patents will cost you As many of you know, the first of the "threaten/sue everyone on the Internet using a questionable software patent" lawsuits is making its way across the American software industry. With the 40,000+ software patents to be awarded in this decade providing countless opportunites for such actions, expect what follows to be the equivalent of the annual "hay fever" distraction of being forced to pay money to treat just the symptoms. The first case is the so-called Freeny/EData patent that has been talked about much in the press, mostly because its stock price seems to be rising each time it makes some announcement. In July of 1985, Charles Freeny was issued a patent, 4,528,643, "System for reproducing information in material objects at a point of sale location". A simplified view of the patent is that it claims secure electronic commerce, which given the endless talk about secure electronic commerce on the Internet today, makes it not surprising that the current patent holders are sending out infringement notification packets to 70,000 companies. I have expressed my skepticism for this patent at least a few times in print, because like many of the 40,000+ software patents to be issued in the 1990's, the Freeny patent cites no non-patent prior art, even though before the effective priority date of January 1982, there was much written about electronic commerce and/or encrypting business communications (providing grounds for an obviousness argument, if not a lack of novelty argument). Had those materials been in the hands of the examiner, I am sure a different set of claims would have issued. Interestingly, one of the early licensees (which EData touts all the time) was IBM, even though I think IBM could do some real damage to this patent with IBM's own prior art, since in the 1970's, IBM did a fair amount of work for industry and the government with regards to securing network business communications. The patent has been reassigned five times, and expired/reinstated once, and is currently owned by EData (formerly Interactive Gift Express). A few days ago, I received an infringement notification packet in the mail from EData, very pretty (almost as pretty as Lemelson's CDROM he sends out to notify people infringing his patents). EData is offering "amnesty" (they even include a dictionary definition of the word in their materials) to potential infringers before they start suing. They are going after three Internet groups: content providers, resellers and service providers (what's left?). In the words of Arnold Friedlich, president of EData, "Part of our marketing strategy was to sue everybody and get noticed," Freilich said. "Well, we went ahead and sued, and everyone now knows that we're very serious about defending our claims." In mid-April, the price of EData stock was about $1.50, though by mid May after a flurry of announcements, the stock was over $11.00. Good notice. The interesting part is a licensing agreement they include which has a table of payment schedules, a table that illustrates the "taxes" everyone is going to have to pay as questionable software patents continue to issue and provide a "license to sue". Here is the table, with dollar figures slightly rounded to fit on an ASCII screen: Initial and renewal limited license fees ($) Company Net sales($) 1996 1997 1998 1999 2000 2001 2002 < 25,000 500 550 600 650 700 750 800 < 50,000 1000 1100 1200 1300 1400 1500 1600 < 100,000 2500 2750 3000 3250 3500 3750 4000 < 200,000 4000 4400 4800 5200 5600 6000 6400 < 400,000 7500 8250 9000 9750 10500 11250 12000 < 750,000 10000 11000 12000 13000 14000 15000 16000 <1,500,000 15000 16500 18000 19500 21000 22500 24000 <3,000,000 25000 27500 30000 32500 35000 37500 40000 <5,000,000 40000 44000 48000 52000 56000 60000 64000 >5,000,000 subject to individual negotiation Interesting fee levels - enough to make some good money - but not enough to make it worth while for any one company to fight the patent on its own. A few small Internet companies I know are already paying a few thousands dollars a year to avoid dealing with EData's license to sue - one less ad they could place to promote their businesses. These fees are lots of money each year, when multiplied by the number of copycat actions as others with similar software patents from the late 1980's / early 1990's see EData succeed and decide to pursue similar license fees. It would be a lot cheaper for the industry to honestly and sincerely fund the development of a comprehensive prior art database and nip these potential lawsuits before they can sprout (couldn't resist - I just had another shouting match with a Software Patent Institute member who asked for help for free). At some point the cost of doing so will be cheaper than dealing with all of these lawsuits (and I have seen a good argument that the PTO's reexamination of the Compton's patent was wrong, which if Compton's lawyers succeed with the appeal, brings the Compton's patent back into the picture). Certainly it is going to cost members of the Software Publishers Association more than the $300,000 the SPA donated to the SPI without getting anything of value for SPA members (who might want to ask the SPA why they gave their dues money away so cavalierly). The future? A lot of people are going to be looking at how well EData succeeds, because what EData is doing isn't that expensive (say a few million dollars for the direct mail campaign, etc.) for a potential substantial reward (how about getting $1,000 a year from 50,000 companies). It is the type of risk/reward ratio that is common on Wall Street, and could lead to a investment pools being formed to invest in software patent lawsuits (as well as growing number of insurance agencies offering software patent infringement insurance at a more reasonable price, since current premiums are about $50,000 a year). It is as risky as investing in commodities, and tens of billions are being invested there every year. I estimate that every month for the last three years at least one software patent has issued that I would class in the same category as the Freeny patent - potentially infringed by everyone on the Internet / overly broad independent claims / little-to-no non-patent prior art submitted. As people start making money on the Internet, expect these patents to start being asserted. Consider that for interactive television, another potentially lucrative area, there are over 60 issued patents and 180 pending patents, most for putting menus on your television screen. So multiply the potential number of such patents, by the potential licensee annual fees that will be sought plus annual insurance fees, and you have a pretty good idea of what funds you might want to consider to set aside in an escrow account to be prepared for what is inevitable. Maybe the SPA should write a spreadsheet to help its members calculate the escrow amount. By the way, anyone using 3D pie charts on their computers, you are probably next to be sued (but don't pay more than $3000, my fee to help you kill the recently issued patent :-). Either that, or Oracle's recent but questionable parallel processing of electronic mail patent. What's the Blondie song? Right, "One way or another, we're going to get out ......" :-) Greg Aharonian Internet Patent News Service PATNEWS: E-Data ordered to clarify what is being infringed !19960704 E-Data ordered to clarify what is being infringed Compuserve is sending out a press release, bringing attention to the recent ruling that E-data has to explain to the court the specifics of how companies are infringing its patent. ==================== E-Data Required to Clarify Electronic Commerce Patent Infringement Claims COLUMBUS, Ohio, July 3 -- U.S. District Court Judge Barbara Jones recently took the first step toward ruling on the true coverage of the controversial Freeny electronic commerce patent. The judge ordered patent owner Interactive Gift Express (IGE) to justify its actions and clarify its infringement claims in the case of Interactive Gift Express v. CompuServe, et al. filed in the U.S. District Court for the Southern District of New York. The order was applauded by online service/Internet giant CompuServe. "Thanks to this ruling in the IGE v. CompuServe case, companies threatened with the 'carrot or stick' amnesty program now could expect that the confusion surrounding the Freeny patent could be significantly clarified within a few months," Stephen Heaton, CompuServe general counsel, said. The court order requires IGE, within 60 days, to identify each product or service offered by the 18 defendants it contends infringe and explain the meaning of unique technical terms used in the Freeny patent. A copy of the order may be viewed or downloaded at the following at World Wide Web site -- http://www.patents.com/ige/june25.sht. According to IGE's literature, the patent covers on-demand electronic distribution of products downloaded online or delivered on disk or CD-ROM. In May, E-data announced an aggressive "carrot or stick" amnesty program offer reported to be going to 75,000 companies. The program offers to license the E-data System on a sliding scale fee, and provides amnesty for past patent infringement. Otherwise, the company threatens litigation. Subject: PATNEWS: Archive of my patent stories available for sale !19960219 Archive of my patent news stories available for sale Interestingly or boringly, in the last two years that I have been sending out my patent news service, I have sent out over 400 articles. I either offer my apologies or accept your thank yous. In any event, for those who for the most part enjoy what I send out, I am offering an archive of all of my past stories. You get two diskettes, one with the AskSam hypertext viewer runtime engine, and the other with my past stories in that format. The AskSam viewer is quite flexible in terms of the how you can search and sort the data and print out the results. The cost for the archive is $40 (payable by check). If you order before April 1st, I will throw in a hypertext version of the Index to the US Patent Classification System, plus mail you an update of the archive at the end of the year. There are also news stories I never sent out, plus abstracts to some technical reports dealing with patent issues. Attached is a list of titles to many of the news stories, for those of you new to my news service. Group discounts are available for companies and law firms and schools. I will be selling a few other things this week, all similarly priced. Need to pay a few bills, plus start figuring out how to put all of the US patent claims onto the Internet, which is looking like a $50K project, mostly to buy the data from the PTO. Greg Aharonian Internet Patent News Service P.O. Box 404 Belmont, MA, 02178 617-489-3727 ==================== News from the British Patent Office GAO testimony to USPTO on harmonization VHDL/Verilog/Ada and hardware/software patent equivalence Microsoft is hiring a software patent lawyer - OH NO PTO seeking comments on experimental use patent rights Oracle Corporation's position paper on software patents Software patent protection in New Zealand New stories about patent infringement lawsuits PTO backs off from first-to-file harmonization Comments from PTO Commissioner on software patenting Position statement on software patents from Autodesk Bill filed to pre-publish patent applications after 18 months Court of Appeals reconsidering jury trials for patents Patent Office to reject most of Compton's patent ?? Microsoft owes Stac $120 million over patent infringement More problems for Compton's multimedia patent Comments from the USPTO Commissioner made at recent hearings Justice Department attacking patent monopoly practices Two interesting IBM software patents that include source code Nuisance lawsuits over bad software animation patent 100+ software patents from 1971 Compton's patent rejected during reexamination First technical patent ever - from 1421 Former Soviet Republics form Eurasian Patent organization Another bad software patent (Bunny Rabbit) causing lawsuits Software patenting "crisis" worsening Interesting patent ancedotes Another bad software patent (the BUNNY) causing trouble The PTO's computer systems and networks DOE/NIST will evaluate your energy inventions for free News from the European patenting scene International patenting news items: India, Argentina, Germany PTO sponsoring National Inventors EXPO in July PTO reexamining second software patent PTO revokes another patent, this time in electronics Two electronics patent deals: Motorola, and ATT/Interdigital Prosecuting biotech patents - interesting ancedotes New ruling from PTO on "means plus function" claims Wall Street Investments and Patent Data Analysis A book on the invention of zippers Are federal dual-use tech funding economically meaningless? Billings seeking $220 million from Novell Nintendo infringes patent - may owe $300 million+ Novell petitions Patent Office to reexamine Billings' patent 10,235,904 combinations claimed in a set of Markush groups Two GE diamond film patents are challenged Wang suing Microsoft? Comments from the PTO commissioner on global patenting Announcement of new Japanese Patent regulation Compton's files over 30 pages of modifications Microsoft and STAC settle for less than $120 million jury award Calgene and Rhone-Poulenc sue Monsanto and Upjohn Hughes gets $144 million, wanted a billion Patent injunction requests can be tricky Want to work for the PTO? Here's your chance. A guide to software patent court decisions Three new PTO Depositories plus APS/Internet rumor CAFC rules that software is patentable Patents plaguing medical procedures field The strange patent turns out to be PTO booboo British Patent Office unions fighting privatization Two interesting patents with source code Lotus and Borland back in appeals court Company awarded $2.6 million over optics infringement PKP cryptography members suing each other US & Japan sign patent agreement Another Circuit Court decision on software - in re Warmerdam Cryptography patents and cartel under challenge An observation on changing patent reexamination Japanese Patent Infringement Insurance First woman solicitor at the PTO PTO to reexamine Billings/Novell software patent PTO not to appeal Alappat decision favoring software patents EC to standarize design patent laws French spies & patents & copyrights Wanna be a patent spy for the Justice Department? PTO having trouble with "Internet" trademarks List of tobacco related patents A company seeks profitable IP to exploit big tax loss Justice Department investigating CDROM "cartel" Two government actions involving patent royalties Electronic records as patent evidence: CFR 37, et.al. Patent protest letter sent to Clinton Lawsuit war breaking out over fax technology Help sought in filing a patent reexamination against ATT Two reexaminations filed on one biotech patents DOE in middle of squabble over solar cell patents PTO wants to regulate Invention Marketing companies Monsanto offers inventing prize Burroughs Wellcome sues SmithKline Beecham More rumors on the PTO automation project US Department of Justice investigating CD-ROM industry and patents PTO will be charging PTDLs to access APS CAFC decision differentiating between "one-piece" and "integral" CAFC decision overturns case dealing with "best mode" disclosure Did the Alappat case involve software or hardware? Worst software patent of the month - zipcode database Average pendency time for software patent applications Another non-novel software patent for a CASE tool Appeals court affirms that HP and Microsoft didn't infringe on Apple News from the European Patent Office Two clean examples of Markush groups in claims Australia to adopt 20 year patent term New book from Canada on plants, patents and GATT Patent consumer news from the FTC and Germany PTO cancels PAMS procurement Another Lemelson "submarine" software patent A criteria list for assessing new inventions Mexico amends its patent laws Former PTO Commissioner Ladd dies Proceedings on patent arbitrations available from WIPO Mexico joins the PCT Japan's MITI examining patent rights for new technologies PTO propose amendments to make CFR compatible with GATT Software patent statistics - January to September 1994 Worldwide losses of revenue resulting from intellectual property theft Chemical patenting comments from PTO 1200 Director Terapane Commentary on biotech and pharmaceutical patenting New book on intellectual property rights for government contractors PTO outsourcing some of its searching work to the EPO Compton's multimedia, and bunny rabbit software patents rejected DOE sponsoring a program to promote energy efficiency Questionable educational device patent awarded Really long first claim - a questionable practice Data General files patent infringement suit against IBM More on the rejection of the Compton's multimedia patent claims PTO examiners disappointed about PTO outsourcing search work to EPO Titles to recent patent news stories in the general press Patent news from Australia and Taiwan Patenting still tough in Japan - Genentech loses TPA case Two different courts handle infringement in Japan Commentary on my commentary on pure math software patents European Patent Office issues pure math software patent 17 or 20 years for patents: Data shows it doesn't matter Settling patent infringement cases in Japan Shortest, strangest chemical patent claim just issued More on weird, short chemical patent claims Compaq sues Packard Bell over notebook/desktop design patents Readers in Australia is seeking comments on the concept of petty patents The largest source code patent? Patent Office revokes third patent More bad news for Agracetus - More good news for Burroughs Wellcome Gossip on patent law firms around the country A badly drafted claim A humongous chemical Markush group NY Bar's Clipper debate; BF Goodrich's Inventor Contest Mexico patent application fees Uganda in PCT; Palestine PTO; Israeli software patents; UK PTO woes Fast track biotech patent processing changes being proposed Commissioner blasts Republicans; 17/20 hearing; PTO source code rules CAFC Travato clarifies Allapat; Question from IPNS reader Fascinating account of the laser patent wars $25 million judgment over software trade secret theft PTO accepting USENET FAQs as formal prior art Compuserve and Unisys squabbling over GIF and LZW PTO did NOT shut down an Internet search site, but ........ A great critique of Unisys' LZW patent enforcement Patent news from Japan, China, Vietnam and India New PTO biotech utility examination guidelines Wilson, Sonsini, Goodrich & Rosati files brief against Microsoft Official PTO comments on GATT and NAFTA How to get the Wilson, Sonsini vs. Microsoft brief Re-examination filed for ATT's True Voice patent Should Seer Technology's client/server patent be invalidated? Two law firm commentaries on the impact of GATT ATT Videoconferencing patent with C++ source code Singapore joins Paris Convention and PCT; squabbles in Argentina Comments from Commissioner Lehman; PTDL APS use isn't there Including a technical report verbatim in a patent specification More controversy on 17/20 year patent term - a new House bill Random patent news: Genentech, Intuit, Honeywell, BNA CDROM 1994 US SOFTWARE PATENT STATISTICS Inadequacy of PCT/PTO/EPO/JPO software prior art searches Silicon Valley/Hollywood IP law firms joint venture Really non-novel recently issued software patents Commerce Secretary Brown mentions Greg Aharonian - my 15 minutes How Group 1200/1500 does its prior art searches Workplace complaints from PTO examiners Is the PTO being spun-off? 3 neat software patent drafting styles European Patent Office rules DNA is not life ATT "True Voice" patent up for reexamination Lemelson milks an Apple, wings a Wang NIH and U.Utah settle breast patent gene squabble A bad software patent from EPO UK examiner insults US examiners, & suggests I should be paranoid Ashlar sues SRDC over CAD software interface Two interesting patents: saving lives and surfing in a box Comments from a PTO mechanical examiner MPEGII patent squabbles; Fenwick & West helps MIT help RSA Hear Gary Reback, the lawyer fighting Microsoft Jerome Lemelson's Secret Agenda???????? Hey Seer: PTO reexam rejects 51 claims in Teknekron's DP patent A message from a Congressional aide about 17/20 term battle A really loooooooooooooooooong first claim A humongous, hierarchical, chemical Markush group Tips on dealing with patent law firms Congressional bill introduced to prohibit surgical patents Worst software patents of the decade awarded to HP and IBM US corporate intellectual property losses Lotus loses big copyright case - Borland dodges $100 million Dr. Robert Rines against 20 year term & 18 month publication A complaint about the PTO patent bar exam grading process PCT Statistics for 1994 Deputy PTO Commissioner Kirk to resign Unusual patent claim drafting style Hong Kong Intellectual Property Office has a Web site Another "submarine" patent, 500K of text, to Gil Hyatt Annual statistics from the Chinese Patent Office PTO announces new plans for software patenting CAFC restricts the role of juries in deciding infringement Inventor's show in May in Connecticut India Parliament fails to amend patent legislation Microsoft buys 10% of Wang to settle patent infringement Statistics on preliminary injunctive relief in patent litigation Oil companies suing each other over gas fuel patent Justice Department relaxes intellectual property antitrust rules US pharmaceutical companies complain about Brazil Pharmaceutical patent reform bogs down in Argentina First Baltic conference on Industrial Property Turkmenistan joins PCT - Derwent extends patent coverage An odd electrical and odd chemical patent claim Profits at drug companies to decline as patents expire? Software patenting chaos continues Wayne State University has to surrender patents to a company PTO Commissioner to release new software guidelines May 25 Kudos to Dr. Manuel Patarroyo and the Colombian government Former PTO commissioner accuses current PTO commissioner of inaccuracy Congress on Knowledge Intellectual Property Rights - Vienna 8/95 Pharmaceutial companies and generics battle over GATT Internet: Highway or Sueway? Weekly list of unethical software patents Access offered to East German patents Comments from an ex-examiner on PTO searching policy Tips for filing patent applications in Japan Texas Instruments wins $51.8 million in damages Even the CAFC is split over corporate patent ethics CAFC dismisses IBM's In re Beauregard appeal. German Patent Office criticizes German academic inventors TRW patents outer space TRW space patent released today - posted to USENET Extremely long and very short exemplary chemical claim Weekly list of unethical software patents PTO withdraws it's "In re Baird" notice Netherland abandons National patent route First biotech researcher was Pope Innocent VIII Are inventors Benedictines? FDA allows drug companies to extend patent protection Patenting strategies of top telecommunications companies Will the PTO choke to death by June 8th? Intellectual Property in the Arab World PTO releases proposed guidelines for examining software patents Costs of applying for European patents People rushing to file patent applications by June 8th Trademark lawyers also have no clue BOOK REVIEW: Int. Prop. International Treaties GE ordered to pay Fonar $100 million over MRI patents ABB sues FMC over oil drilling equipment EPO patent now extendable to Latvia Justice Department checking Microsoft patent practices Who's suing who in the patent world Who's suing in the NIH bio world EPO policy statement on software patents Wonderful welcome to WTO Software piracy estimates by country Interesting chemical patent claim Three rumors out of the Patent Office More rumors from the Patent Office Weekly list of unethical software patents The effect of GATT Amendments on using the ITC Middle East software piracy / Microsoft sued for programmer theft Excellent CAD program for inventors Filing statistics for the South Korean patent office Two "How come?" patents from Compaq and GE Argentinian patent politics NEC looking to hire a patent attorney Lawsuit over patented tuition plan ? IBM's trivially short buckytube patent claim Trivial signal processing software patent claim Means+function and patents+taxes UK Patent Office to speed up patent processing Here comes the next nonsense software patent lawsuit Full text to the son of Compton's software patent Microsoft and IBM wrangle over Windows and patenting Invest in British patents EPO blinks at software patenting Patent Office releases utility requirement guidelines In re Travato vacated PTO looking for search tools FTC's activities with antitrust and patents Juries can play a role in deciding infringement DNA, proteins as software - software as genetic biocycles FTP sites for biocomputers Michigan State Univ. sues Research Corporation Albania joins the PCT; Eurasian Patent Office almost opens TRW versus Inmarsat - patent wars in outer space Eolas claiming rights to embedded apps over the Web PTO changing the Disclosure Document program PTO hearings on 18-month publication in September Taligent's blanket of object oriented software patents Nice article on patents for motion picture industry Yet another software patent lawsuit First half 1995 software patent statistics Leading chemical and drug patenting companies Interesting chemical/drug patent claim The Senate wants to merge the PTO and NIST Is Commissioner Lehman a spy for Japan????? Dates for Congressional and PTO hearings Eastman Kodak loses patent case in Japan White House to make PTO performance driven Lesotho is the 81st member of the PCT EPO to offer accelerated regional prosecution A IPNS reader argues against pre-publication. Congress planning to steal more PTO registration fees Orville Redenbacher - the inventor PTO putting patent abstracts on Internet Intellectual property in Taiwan nad Korea TRW: should the PTO allow orbits to be patented? The answer is "champerty" - what's the question? More really trivial software patents Analysis of Doctrine of Equivalents re Hilton-Davis Information on inventing in Denmark 300 PTO examiners oppose PTO corporatization; Hollywood patenting An obvious spectroscopy software patent claim? Senate aide gets tour of PTO - meets nice examiners UK patents in one year; Derwent hiring; UKPO statistics PATNEWS: Quick patents in the UK and Germany FTC investigates a patent pool, though too late for German company Patenting software in Japan 4th Edition of "Patent It Yourself" now available University patents add more than $20 billion and 150,000 jobs Aboriginal person is claimed in a US patent DNA/RNA sequence submissions overwhelming the PTO Foreign inventive activity to count in U.S. priority proceedings PCT filings, membership on the rise Comments from universities on dealing with industry and IP A question from a PTO patent examiner (class 60) A couple more trivial broad software patent claims Is the US patent system a registration system???? Is the PTO suspending processing of software patents??? Followup: Is the EPO ignoring US provisional patents? AIPLA lobbys Congress to crack down on shady invention marketers Apparently some software patenting is being suspended December 15 PTO "open meeting" on connecting APS to the Internet Be paranoid, very paranoid, in England if you are inventing More bad software patenting woes Two more PCT countries; Eurasian PO open; PCT lowers some fees New Windows program for estimating patenting costs An Internet "notary" for electronic document verification Action sues Novell over email software patents Provisional Patents: EC/PTO exchange of letters FTC investigates Dell for patent duplicity Derwent releases two new chemical databases Software for filing gene sequences in patents Courts strike a blow for those fighting patent invention fraudsters Pizza Hut is sued for patent infringement Rohrabacher to take 17-year term measure to House floor PTO blocking examiner's Internet official access WTO names appeal judges A patent claim totally rewritten on reexamination Molex forces Berg to stop selling SIMM connectors Bay Networks and 3Com cross-license Lenzing unable to overcome Courtaulds Wallace Computer Services loses to Roll Systems Sharplan Lasers sues Reliant Technologies over laser patents Coherent and Uniphase make a patent deal Bristol-Myers Squibb and Rhone-Poulenc-Rorer disputing taxol patents Varian and Lam still unsettled RSA loses encryption patent rights to Cylink Big Blue no longer Big Blue Provisional analysis from WIPO; send email for the hearing Will EPO be ignoring US provisional patents? Patent law changes in Pakistan Is Dialog going to sue the PTO's OEIP ????? Apple and Microsoft stop talking about relicensing Windows News and products from WIPO and EPO Congratulations to ABC and the PTO How to buy a tape of ABC's Invention special Proposed revisions to Canada's Patent Act Patent news stories - a 1995 bibliography of sorts More patent news stories - a 1995 bibliography of sorts Want to live forever? Number of Japanese patents and applications Finland to join the European Patent Convention Did peer reviewers steal a company's invention? Lotus strikes out at Supreme Court 1995 US software patent statistics - 6142 patents in 1995 Does Sun's Java infringe Prodigy's patent? NOT A Heroic Inventor dies FTC gets Dell to drop patent claims British company zapped by 50 year old patent Who will be the next CAFC judge? New CAFC judge probably won't be an IPer A model of how biotech companies patent and sue A programmer's analysis of Prodigy's patent claims re Sun's Java UK Patent Office accepts priority of US provisionals Japan biotech patent zapped by Chinese prior art? Yet another "Comptons" bogus software patent lawsuit scare