NAIP Patent Blog

By Heidi Yeh, NAIP Engineer; Translated by Jeffrey Chang
Original Article Available Here (Chinese)
For a corporation, applying for a patent is an act of protection, an attempt to protect thousands, even millions of dollars spent in R&D. Today, corporations have increasingly been known to focus on internal knowledge management and stress the importance of keeping track of technological assets. They do this in no small part because when applying for patents, these records of research and development—in the form of the Laboratory Notebook—are powerful evidence. Therefore, to protect intellectual property, researchers, inventors and corporations should not overlook the importance of properly maintaining Laboratory Notebooks.


The Importance of the Laboratory Notebook

Two compelling reasons exist for maintaining a Laboratory Notebook:

1. When patent examiners cite prior art to reject the novelty of an invention, if a Laboratory Notebook has recorded the date of the invention's development as earlier than the published date of the cited prior art, that notebook becomes one of the strongest arguments for granting of a patent.

2. A well-maintained Laboratory Notebook is a thorough record of the research and development process. It includes what has been done, what needs to be done, what methods have not succeeded, frequency of testing, practicality of the research and more. All this aids in managing the status and progress of R&D.

Laboratory Notebooks in Different Patent Systems

In the United States, one of the few countries with a First-to-Invent system, three factors are essential in assessing first-to-invent claims. As listed in the USPTO MPEP § 2138.04-2138.06, they are:

1. Conception Date

2. Reduction to Practice

3. Reasonable Diligence

Reasonable Diligence is only used during litigation as evidence in determining First-to-Invent when the two parties are in conflict for the first two factors. In a First-to-Invent system, a decision to grant may therefore hinge solely on a Laboratory Notebook.

For a First-to-File system, Laboratory Notebooks may not seem as important, but they in fact play decisive roles—particularly in patent infringement suits. These notebooks can serve as evidence to prove that research results were achieved and perhaps published before the other party even filed a application.

Water may support a boat, but water can also capsize it. Laboratory Notebooks are no different, and they may be used both for and against you. Additionally, although Laboratory Notebooks seem irrefutable evidence, if they have not been properly maintained, they may be disregarded by the courts. In these situations, inventors and corporations may only stand by and watch helplessly has their rights slip away.

In this article, we have assembled and listed the critical factors in making a Laboratory Notebook acceptable for filing and litigation, as well as what should and should not be done when writing a laboratory notebook. Keep these matters in mind to ensure that one simple mistake won't cause your rights to vanish into thin air.



Recommendations on Maintaining a Laboratory Notebook

First, when do you begin a new Laboratory Notebook? Must one be kept from the very start of work until the very end? Actually, Laboratory Notebooks may be distinguished by work subject. As soon as you begin a different experiment or test, you can switch to a different or new notebook. For those researchers who work on multiple projects with similar technologies, this method prevents judges or juries from losing focus on the relevant invention, and might even save an invention from being seen as "Obvious".

Sometimes the results of an experiment inspire a new idea, yet there is no time to commit to testing or verifying it. At this time, record these new thoughts in a concept journal kept specifically for this purpose. When ready to begin exploration of the idea, use a new notebook and clearly note the origins of the concept and where it was recorded in the concept journal (date, page and line).

In addition to the above, when maintaining Laboratory Notebooks, be sure to take special note of the following:

1. When choosing a Laboratory Notebooks, choose a pre-bound notebook with pre-numbered pages. Even if the notebook pages are not numbered, do so yourself from the day a project begins. Avoid using loose-leaf notebooks or those with pages that easily tear-off to prevent any suspicion that any material was later inserted.

2. Make sure to sign and date the bottom of every page that contains any entries or notes. Additionally, each page should be verified and signed by another person (e.g. a researcher working on a different project) who understands and can attest to the validity of the work recorded.

3. Be sure to use a non-bleeding, ink-based pen to record the actual results of any work in the notebook. Avoid using pencil. After pages have been signed, do not alter or make corrections to the content. To make changes before pages have been signed, use a single line (or at most two) to cross out the incorrect information while ensuring it remains legible. Then sign and date next to the correction. For larger scale corrections, keep the original entry and, on the back of the page, note what is to be corrected and why. On the original entry make note of the correction and reference the page of the corrected entry.

4. Do not leave blank pages or large spaces. To distinguish between dates or work by pages, sign at the end of the last recorded entry and cross out any remaining blank spaces with a large X to prevent any new information from being recorded on the same page.

5. If the experiment results are computer-generated images, print out the results, date the print-out and affix it to the notebook page in a manner such that removing it will leave visible marks. Avoid large blank spaces around the edges of the print-out. If needed, mark the junction of the edges of the sheets of paper, then sign and date across the junction to increase the likelihood of it being acceptable as evidence.

6. All drawings, diagrams and graphs must be sequentially numbered and marked with an appropriately descriptive title. In order to assist in interpretation of the drawings, diagrams or graphs, use sequential numbers or letters of the alphabet to organize details and explanations.

7. Each day a witness must verify the recorded procedures and results, and sign to state that the entries are clearly understandable to another person who is skilled in the art. To be more cautious, have the witness also sign any corrections or amendments to ensure no other areas can be altered after the pages have been verified.

In addition to the suggestions above, any relevant or important information can be included in Laboratory Notebooks, such as machine model number, brands of materials, batch numbers and so on. The more detailed the entries, the more easily a non-researcher can effectively, efficiently understand the actual work and can repeat the results when necessary.

Don't Trip Over Your Own Feet

Laboratory Notebooks are effective tools for protecting IP rights. Therefore, there are a few things to watch out for when recording entries.

1. When commenting in entries, do not write "Not Patentable", "Obvious", "Unsuccessful" and similar comments that could be easy targets in a litigation case.

2. Avoid using words or phrases that may potentially limit interpretations, such as "the key to", "essential to", "invariably", etc….

In my time as a researcher, I learned the importance of properly maintaining a Laboratory Notebook. The nature of the work involved many complicated tables, graphs and drawings, yet after a year, during my assessment report, I was able to take out my notebook and quickly understand the details and main points. Therefore a Laboratory Notebook can not only provide an objective, organized system to record progress, it can also be a method to share experiences and discoveries.

• The US and China have agreed to agree. - At the US-China Joint Commission on Commerce and Trade (JCCT) forum, the US and China agreed to sign two "memoranda of understanding (MOUs) on strategic cooperation to improve the administration and effectiveness of copyright and trademark protection and enforcement, as soon as possible..." Download the official press release here.
  

• Microsoft saves 1.5 billion dollars. - A brief summary of the MP3 infringement suit brought by Alcatel-Lucent against Microsoft back in 2003 that has come to its likely close this week. (from Patent Hawk)

• Can wearing down an examiner get you a patent? - The debate over patent application continuation continues.... (from Just_n_examiner)
  

• A new legal standard for design patent infringement. - An en banc decision by the US Federal Circuit Court of Appeals has significantly strengthened design patents by essentially rejecting the need for the "point of novelty" test. A copy of the ruling can be downloaded here. (from Law.com)

Today marks day one of the 2008 Taipei International Invention Show and Technomart (INST) at Exhibition Hall 1 of the Taipei World Trade Center. Last year's exhibition was a rousing success with exhibitors from 16 countries and over 50,000 visitors around the globe, and this year's looks to be even bigger.

Highlights of the four-day exhibition will include 600 companies and individuals, over 900 booths, and demonstrations of over 2,000 of the latest patented technologies and innovations. Additionally, 11 forums/conferences will be held featuring industry-experts and scholars speaking about sector trends and other issues facing IP in Taiwan and Asia.

Attendance is free for all.

More information can be found on the Taipei Invent website Here.

by Charl Goussard
With the recent announcement of Lehman Brothers' bankruptcy petition, several questions arose about the fate of their patents: What happens to patents after a petition for bankruptcy has been filed? Who manages them? How are they managed?


Appointment of a Trustee

When Lehman Brothers filed their bankruptcy petition, an estate was created including all of Lehman's patents and patent applications (as well as all of their other assets and rights). The bankruptcy court then appointed a Trustee or a debtor-in-possession (DIP) to manage the estate, and this official will in return appoint counsel for the protection of Lehman’s patent portfolio.


Identifying and Protecting Assets

First, counsel has to find, catalogue and assess Lehman's patent portfolio. Lehman Brothers probably had an in-house patent counsel or patent manager who will be helpful in this regard. Vital information can also be gathered by talking to patent counsel involved in the prosecution of Lehman's various patents. Websites of the major patent offices can be screened for information on patents granted and assigned.

Once all of Lehman's patents and patent applications have been listed, counsel should be able to catalog and manage the portfolio based on each patent's status. Counsel should particularly pay attention to meeting deadlines and paying all fees in order to keep applications alive.

Then, to assess the value of Lehman's patent portfolio, counsel can meet with incubators, consultants and venture capitalists. For patents pending, the difficulty lies in determining which of Lehman's patent applications should be prosecuted and which should be abandoned. Market-related factors, such as the value of similar patents in the field, marketplace competition, potential for licensing... etc., will give an indication as to the potential value of each patent.


Dealing with Licenses

In the meantime, counsel for Lehman's estate will be required to make sound business judgments on whether to reject or accept licenses of intellectual property (IP). According to US Bankruptcy code, IP-licenses are of an executory nature and may accordingly be assumed or rejected by the Trustee or DIP. Upon assumption of such licenses, the Trustee or DIP may also assign such contracts.

Should the Trustee or DIP decide to reject a patent license agreement, the bankruptcy court will defer to their reasonable business judgment. Usually, bankruptcy courts grant motions by Trustees to reject contracts, but some courts have ruled that rejections were not founded on sound business judgments and could therefore not be granted.

Once a license agreement has been rejected, Lehman Brothers, as licensees, would not be bound to the license agreement – bad news for licensors who were expecting royalties.

In the case of exclusive licenses, Lehman's licensees may elect to retain their rights under 11 U.S.C. § 365(n) despite the rejection of the license agreement. These exclusive licensees may thus continue to enforce their exclusivity rights; however, under a rejected license agreement, Lehman Brothers will be freed from their obligations with regards to Specific Performance. For example, Lehman would not be required to pay patent office maintenance fees for their licensed patents if those patent license agreements were rejected.


Winding-up the Bankruptcy

Ultimately Lehman's Trustee's objective is to liquidate all of Lehman Brothers' assets – which include their patents. One can only speculate as to the route Lehman's patent portfolio will eventually go. Possible solutions include: selling some patents or even the whole portfolio to insiders such as previous Lehman Bros. managers; selling the patent portfolio to interested outsiders such as companies in the financial sector; or auctioning off the portfolio – either online or live.

After transfer/assignment of all of Lehman's assets has taken place, Lehman Brothers will be deregistered as a company and the last chapter of 158 years of the once mighty investment giant will have been completed.

Resources & Links

• A List of Lehman Brothers' (500+) Patents (USPTO)
• United States Bankruptcy Code, Title 11, Chapter 3 Case Administration

• Is music copyright infringement driving Baidu's growth? – An in-depth report on how China's largest search engine enables surprisingly, blatantly easy mp3 downloads. (from the Register )
  

• Interested in Nanotechnology Patent Strategy? - This introduction to some basic strategies for inventors working in nanotechnology can easily be applied to any technology sector. (from Nanowerk )
  

• Taiwan jumps to the number 2 spot in IT Competitiveness - According to the latest report by the publishers of the Economist, the US remains the most competitive country for IT, but thanks to increased weight on IT-related patents, Taiwan jumps four spots up to number 2. Download the study here.
  

• What are some of the problems facing the global leader in innovation? - The US leads the world in R&D, innovation, patents and more. In face of an apparent plateau in growth, what new ideas and policies have been proposed or implemented? A report that touches on the politics, economics and business of innovation that we can all learn from. (from Businessweek)

By Rebecca Day
Many know Hedy Lamarr as a Hollywood legend – one of the most beautiful actresses to ever grace the silver screen. Yet all her beauty and glamor were only secondary to her brilliant mind. That is why Hedy Lamar is also known through another title: Inventor. In the 1940s she co-invented and patented an early form of frequency hopping technology that was revolutionary in its thought. This breakthrough concept would later forge the path for the development of modern wireless communication.


Born Hedwig Eva Maria Kiesler in Vienna in 1914, Hedy became an actress in the 1930s, appearing in a number of German and Czech films. Her husband, fellow Austrian Friedrich Mandl, was an arms manufacturer and – despite being part-Jewish – a Nazi sympathizer. In the Austria of the 1930s, with the rise of fascism and anti-Semitism, such choices often meant the difference between life and death. Hedy, a Jew herself, decided to leave her husband and her country. At a party one night, wearing all the expensive jewellery she possessed, she drugged her husband with the help of her maid, and fled Austria. She first went to Paris, then London, where she met Louis B. Mayer, co-founder of the famous MGM studios. Impressed by her beauty, Mayer offered her the chance to move to Hollywood, where she became a glamorous regular of films of the late '30s and '40s.

In 1939 Europe exploded into full-out war. By the summer of 1940, most of Europe was occupied by German troops, leaving only Britain and the Commonwealth, with economic support from the United States, to repel the Axis advance. Deeply troubled by the threat Nazi Germany posed to the world, Lamarr shared her concerns with her neighbor, German immigrant and avant-garde composer and pianist George Antheil. In their conversations the biggest problem they saw was that Germany's naval power was vastly superior to the Allies'. At the time, the most reliable way of attacking ships was to use radio-controlled torpedoes. The problem, however, was that the radio control left the torpedoes vulnerable to tracing and jamming.

Fortunately, Hedy had gained considerable knowledge of weaponry during her marriage to Friedrich Mandl. Mandl's position as the chairman of a prominent armaments firm required him to hold many defense meetings which Hedy had often sat in on. Dinner table conversations revolved around defense technology and munitions. Putting this invaluable background knowledge to use, she realized that if the frequency of the radio controlling technology could be constantly changed (a technique now known as frequency hopping) the torpedo would be virtually untraceable.

Antheil's musical background provided the missing piece to the solution. During his composing career he had written a piece for sixteen synchronized player pianos. A player piano, often called a pianola, is a piano that uses a device called a piano roll, which is a perforated piece of paper moved over a tracking bar, to create music mechanically. The position and length of the holes determines which note is played. With such a device inserted into both the torpedo and the torpedo transmitter, the frequency at which the torpedo is controlled could constantly be changed, while ensuring the torpedo and transmitter remained in synchronization. On June 10th, 1941, Hedy and George submitted their invention, titled "Secret Communications System", to the USPTO.

Unfortunately, both the US government and the military expressed considerable doubt about the technology's practicality. George Antheil felt that this suspicion largely stemmed from their seemingly incongruous merging of the unrelated areas of musical technology and weaponry. In an attempt to render the invention more accessible, Antheil and Lamarr had drawn analogies to the concept of the player piano, a technique Antheil feared the USPTO (and the United States Navy) viewed as unscientific. Nevertheless, in August 11th, 1942, their "Secret Communications System" was granted a patent, and published as Patent No. 2,292,387.

Antheil's reasons for the Navy hesitance towards his and Lamarr's invention were largely misplaced. The electronics available in the 1940s were simply not sophisticated enough to put the technique into practice. In truth, Lamarr and Antheil's frequency hopping technique was so far ahead of its time that it would not be used until 1957, when it was rediscovered by Sylvania Electronic Systems and named "spread spectrum". Furthermore, the technique would not be perfected until the 1960s, with the development of the now ubiquitous transistor. Only in 1962 was patent No. 2,292,387 finally used for its intended purpose by the United States Government during the Cuban Missile Crisis. By this time, however, the patent had already expired. Neither George Antheil nor Hedy Lamarr made any money from their invention.


Lamarr and Antheil's work is widely considered to be the basis of the field of frequency changing. The frequency hopping idea developed by Lamarr and Antheil forms the ideas behind much of modern wireless communication technology, and even the anti-jamming techniques currently employed by the US government's Milstar defense communication satellite system.

Hedy Lamarr largely retired from films in the 1950s. During the Second World War, she had wanted to become a member of the National Inventors Council, but was told she would be more use to the war effort by using her Hollywood celebrity status to sell war bonds. In 1997, she was finally credited for her astonishing achievement by the Electronic Frontier Foundation, where she was reported to remark "It's about time". George Antheil was credited posthumously, having died in the 1960s. Perhaps 2008 will be the year when people truly realize the impact of their innovative concept. In July, Elyse Singer brought her play "Frequency Hopping", detailing the story behind George Antheil and Hedy Lamarr's secret communications system, to the stage. It has been hailed by the New York Times as "inventive" – something Hedy Lamarr would surely understand.

US Patent# 2,292,387 can be found here.

• IP Attorneys are taking matters—and patents—into their own hands – This article looks at the trend of patent attorneys filing for their own patents and then suing companies for infringement—many often while still employed at IP firms. (from Law.com)
  

• China reviews third amendment to Patent Law - SIPO has announced that the NPC Standing Committee has begun reviewing only the third proposed amendment to Patent Law in over 25 years.
  

• The IP System is Broken - According to The Innovation Partnership, a not-for-profit consultancy, the world IP system is severely hindering the potentially life-saving and advancing efforts of human innovation. The results of the seven-year study can be found here.
  

• In Shanghai, Real will mean Real - A government sponsored plan will provide special signboards with the Chinese character for "authentic" (真) to stores that prove the authenticity of their wares. (from IP Dragon)

By Jeffrey Chang
China's top legislative agency, the National People's Congress Standing Committee, has begun reading for a substantial set of amendments to Chinese Patent Law. These amendments, according to an official statement, are intended "to bring the law and processes up to international standards and best practices." Should the amendments pass, it would be only the third revision to Chinese Patent law in the past 25 years.

Among the key amendments in the proposal are:

1. Adoption of the "Absolute Novelty" Standard
   The current "relative novelty standard", in which a technology may still be considered novel so long as it is not being publicly used or sold in China, will be abandoned for the "absolute novelty standard", in which inventions should not have been known to the public at home or abroad prior to filing.
   
   
2. Elimination of Requirement to First File Domestically
   Business and individuals may directly apply for foreign patents without first applying for a Chinese patent. However, inventions may be required to first undergo a secret examination to ensure state security.
   
   
3. No Patents for Genetic Resource Acquirement & Utilization
   Inventions based on genetic resources that have been acquired or utilized illegally will not be granted patents. The relevant laws were not listed. This purpose of this amendment was stated as "to protect [China's] genetic resources."
   
   
4. Compulsory Licensing
   Primarily targeted at patented medicines, the amendment would allow the Chinese State Council to grant license to manufacture and export medicines with Chinese Patents to specific countries and regions. A further section allows compulsory licensing if illegal anti-competitive practices by the patent holders are found.
   
   
5. Increased Infringement Penalties
   Compensation for patent infringement now includes the rights holder's cost of deterring infringement. Fines have increased from three-fold to four-fold and in case that damages cannot be determined, the courts may still impose fines of up to 200,000 RMB.

Discussions about these changes have been held since 2005, and although no formal schedule is set, the State Council intends to have the amendments in effect by 2009. Draft law requires three readings by the Standing Committee before adoption.

The official news release can be found here.

• Microsoft faces an antimonopoly investigation in China - Claims that Microsoft uses its 70% market share to set prices have cause the Chinese National Development and Reform Commission to open an investigation. Microsoft China's preliminary argument? Most of that 70% is counterfeit software. (from Chinese Law Prof Blog)
  

• The Brand Battle spills over into the Internet - And you thought Patents were tough. This article details the growing importance and complications of trademarks in the Internet era. (from the New York Times)
  

• Celebrate/Decry World Day Against Software Patents - Depending on your stance, September 24th will be day to remember or ignore. (from ITWire)
  

• The Wangfang lawsuit shows why Class Action is truly something to be afraid of in China - An infringement suit against an online information content provider for unauthorized use of copyrighted material demands damages of an acceptable RMB 7,000 (US$1,000) per person. Yet the number of plaintiffs brings the total figure up to RMB 3.5 million. (China Hearsay)

by Jeffrey Chang
Last weekend in Berlin, shortly after the doors opened on IFA, over 200 armed German customs agents stormed in and confiscated hundreds of display electronics from participating exhibitors' booths, claiming illegality due to patent infringement or non-royalty payments. This event marks the second high profile exhibition "raid" this year in Germany (Cebit in March), and the second time at an IFA event. This time 69 exhibitors were left with bare booths and empty tables, including, surprisingly, big shots like Hyundai and MSI. Perhaps least surprising to many, was that the action came at the request of Italian patent group, Sisvel.

Who is Sisvel? And what exactly is the issue at hand?

Sisvel is an Italian patent licensing group that holds, among many others, exclusive licensing rights for MPEG audio patents developed by major corporations such as Philips, France Télécom, Matsushita, and JVC.

In this particular instance, Sisvel filed complaints to German authorities that certain products being displayed at IFA contained Sisvel-managed patent technologies that had not been licensed. Since in Germany marketing products with unlicensed technologies is illegal, German customs confiscated the products (reports claim Sisvel provided a list of exhibitors and products).

These events have incited much discussion (and derision), about Sisvel, German law, and the affected exhibitors. Did they deserve such embarrassment? Why such aggressive behavior by Sisvel? What purpose did this action serve?


First, however, a brief history lesson:
The major technologies in question are the much-contested, financially-lucrative MPEG audio patents. Audio compression technology traces back to the mid-1980s where it was developed by researchers from several companies/organizations including the Fraunhofer Society of Germany, Bell Labs, Royal Philips Electronics and France Télécom. Most people know these technologies today through the ubiquitous MP3.

When digital audio and digital audio players exploded in popularity, these companies saw valuable licensing opportunities. The three key patent holders, the Fraunhofer Society, Philips, and Bell Labs (whose patents are now owned by Alcatel-Lucent) worked out agreements with licensing companies: the Fraunhofer Society with Thomson, Phillips with Sisvel, and Alcatel-Lucent handling licensing “in-house”.

Over the years, as each group tried to claim ownership of MPEG audio licensing rights, their bickering has resulted in manufacturer/market confusion, multiple licensing fees and lawsuits galore. Sisvel, licensor of key (but not all) MPEG audio-patents, has systematically and aggressively gone on to demand licensing fees from nearly a thousand businesses and manufacturers, many who have been caught unawares. (Some have fought back, but unsuccessfully. A simplified explanation of Sisvel’s argument can be found here).


So to return to our earlier questions, did these exhibitors deserve such embarrassment?
Unfortunately with the muddled state of ownership in MP3 licensing rights, coupled with differing laws in different countries, many businesses simply can not know all the proper licenses that may be required for a product. The embarrassment faced by the IFA exhibitors seems equal part the fault of the companies, for not thoroughly researching the situation (or attempting to avoid royalty fees), and equal part fault of Sisvel, for not properly educating the market (or making the situation more complicated by claiming ownership of still-contested technologies).

But why such aggressive behavior by Sisvel? And what purpose did this action serve?
More than a few people have complained that Sisvel is simply exploiting German law to scare vendors and put them under public pressure to purchase licenses. Sisvel could have easily notified the companies before or even after IFA. For these companies, a successful booth showing at IFA would have only increased sales and consequently, in the long-term, increased the number of license fees Sisvel could demand.

However, for Sisvel, a high-profile, media-attracting debacle does much to help spread news at a relatively low (monetary) cost. More conservative, business-friendly ways do exist to extract royalty payments, but big splashes seem more effective (Reference Alcatel-Lucent’s strategy to first target the “big guys”, then watch the little guys fall in line). Interestingly enough, as these MPEG audio patents near expiration within the next few years, Sisvel’s incentive is to act for the “short-term”. These extreme actions could be construed as a calculated attempt maximize the reach of its “pay-up (now), or else” message.


Ultimately, like all patent licensing companies, Sisvel’s motivation and purpose is collecting royalty fees, which is perhaps why terms like “Patent Troll” are being thrown around. However, as a licensing company working on behalf of the patent owners, Sisvel’s actions have managed to bring in revenues that are rightfully owed to the owners and ostensibly will be used to finance further innovation. Controversy exists because Sisvel is just one of a slew of MPEG audio technology patent holders who have been claiming a cut of the digital media revolution’s profits. Legal and technical reasons aside, Sisvel’s “shoot first, ask later” approach have succeeded brilliantly in setting Sisvel in the precedent of who must be paid.

Despite drawing the ire of manufacturers, businesses, and bloggers worldwide, Sisvel has proven that it is fully within its right to demand licensing fees, and it has shown a willingness to enforce and maximize these rights. This has also brought further dividends, as several corporations, impressed with Sisvel’s ability to collect royalty fees, have licensed out their patents to Sisvel (re. DVB-T, and MPEG LA). In Germany, this news prompted many companies to publicly questions the necessity of participating in these exhibitions, lest they dare suffer again the embarrassment, and then the consequences.



Patent References:
European Patent 0402973 / App.#90201356
European Patent 0599824 / App.#94200239
European Patent 0599825 / App.#94200240
European Patent 0660540 / App.#95200565