The Year of the Patent Troll

by Winthrop & Weinstine, P.A.

2013 was another milestone year for patents.  Here are some highlights:

  • The most significant change in U.S. Patent Law from the America Invents Act (AIA) was implemented on March 16, 2013, changing the system from a “first to invent” system to a “first inventor to file” system
  • Despite the many significant changes to patent law as a result of the AIA, the AIA did relatively little to correct the growing problem of “patent trolls,” which made big news with states like Vermont addressing the issue by passing state legislation and significant discussion of various bills on Capitol Hill.  The Electronic Frontier Foundation does a nice job of summarizing many of those proposals.
  • Several patent exhaustion cases, such as Bowman v. Monsantoand Keurig, Inc. v. Sturm Foods, Inc., further defined this doctrine.  In Bowman, the Supreme Court held that “patent exhaustion does not permit a farmer to reproduce planted seeds through planting and harvesting without the patent holder’s permission.”  Bowman had planted seeds that he purchased from a grain elevator, and then saved some of the harvested seeds to use the following season.  In Keurig, the Federal Circuit found that the unrestricted sale of the patented brewing system that practiced its claimed method exhausted the patentee’s rights to claiming that competing cartridges induced infringement of the patent’s method.
  • In the face of increased scrutiny of gun control laws in the wake of the Newtown tragedy, a record number of patents issued to gun makers in 2013.
  • It was estimated that 1/4 of all U.S. patents issued in 2013 will be in the mobile device industry.
  • The World Intellectual Property Organization (WIPO) this month released its 2013 World Intellectual Property Indicators report, which stated that “global patent filings [saw] fastest growth in 18 years.”  China topped the report for the first time as the largest filer and the most applications received in all four categories of intellectual property (patents, trademarks, utility models and industrial designs).

So what do we expect to see in 2014?

  • I will start with an easy one…there surely will be more patents granted in 2014.
  • The Supreme Court takes on another case that will likely further define the patentability of software, when it hears Alice Corp. v. CLS Bank.  In a fractured decision that may have done more to confuse the issues than it did to clarify them, the Federal Circuit’s en banc decision affirmed that Alice Corp’s patent claims to a computerized method for reducing risk in financial trades, computer-readable medium with computer instructions, and computer system that implements those instructions were all ineligible subject matter and thus unpatentable.
  • Congress will likely pass legislation to pass that limits the ability of “patent trolls” to file frivolous lawsuits.  Hopefully this legislation strictly defines “patent trolls,” which in some cases have also loosely included non-practicing entities.  Under 35 U.S.C. § 154, a patent does not grant the owner a right to practice the claimed invention, rather the patent right is a right to exclude others from making, using or selling the claimed invention for a limited period of time.  Here at DuetsBlog, we are also curious to see how patent troll legislation affects potential legislation against trademark bullies.

What were your patent highlights of 2013?  What are your predictions for 2014?

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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