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Practice of Patent Asserting Entities: Boon or Bane: Global Innovations

Introduction

Patent troll relates to a person or company that enforces its patents against one or more alleged infringers in an opportunistic and unduly aggressive manner, often with no intention to manufacture or market the patented invention. Various terms such as patent trolls, patent monetization companies, or patent assertion entities are used for such entities; however, irrespective of term used, it solely talks about companies that conduct very little research to create new ideas and produces no products. Instead, they hold patents in which they were not involved at any level: ranging from designing, manufacturing or process associated with that patent. Their main aim is to sue similar patent holder firms or to extract license payments under the threat of lawsuits or actual litigation to enforce their demands.

A more polite and neutral name used for them is “Non-Practicing Entities” (NPE’s). Non-practicing entities include legitimate institutions such as start-ups, technology transfer agencies, universities, research organizations inter alia.

Modus Operandi of patent trolls

Patent trolls usually gather together large portfolios of patents, which they purchase from companies that are going out of business, from firms that have developed technology that they don’t intend to pursue on a particular technology, or from individuals who are lacking funds to develop their inventions or ideas. Further, the trolls look for successful products that use the technology covered by their patents and demand a licensing fee. Because patent suits are expensive to defend, the target company is most often willing to settle out of court.

Trolls accumulate patents related to a target company. By purchasing many patents focused on one area, they are able to bring up so many occasions of possible infringement which further makes it harder and more expensive for the target company to defend the suit. They also sue multiple defendants so that the legal cost per defendant is reduced but makes for a large overall potential payback.

On the other hand, as a matter of practice, lawyers are paid on a contingency basis – they are only paid if they win the case. That reduces the cost further of the  trolls. On the other hand cost for the accused infringer is sky-high and if they try to fight the case, there is no quick way to end the litigation and achieve success in the litigation.

The patent trolls may also claim a share in total revenue from the product although patents may cover only a small aspect of the technology. The award can amount to millions for a successful product.

From various sources, it is believed that 97 percent of infringement suits in U.S. are settled before trial rather than risk judgement irrespective of the merits of the case and also the cost of patent litigation (bringing or defending a patent lawsuit is expensive, with legal costs and lawyers’ fees reaching into the millions of dollars) works to patent trolls advantage, too. Further adding to the list of advantages for trolls, if a defendant company loses a suit, it may be liable for treble damages in a case of wilful infringement.

The result is a situation where the accused infringer faces so much of a burden of fighting the court case that it becomes appealing to pay some lesser amount to make the litigation go away.

Patent Trolling in India

The practice of patent trolling was prevalent and practiced in India in the Information Technology and Communications sector till 2005 prior to passage and enactment of the Patents (Amendment) Act, 2005 after which there was steep decline in trolling activities.  The reason for this decline is nothing but the inclusion in the 2005 Act of a list of non-patentable subject matter which includes Software domain which is considered to be most significant domain involved in patent trolling among others, imposition of stringent deadlines for pre-grant opposition, introduction of post-grant opposition, as well as the introduction of a variety of other provisions such as compulsory licensing.

Pertinently patent law in India do not aims to prohibit the existence of patent trolls but threatens its existence.  For instance, Indian patent law makes it mandatory that a (granted) patent be worked or used in India. However otherwise, if a patent is not used in the territory of India within a period of 3 years from the grant of patent, compulsory licensing might be invoked.  Also, the Indian Patents Act makes it mandatory to file statement of working of a patent at the end of each financial year. And if the patent holders fail to file such a statement, he may be liable for a fine and/or imprisonment.  Hence in India, patent trolling does not pose any major threat to any entity seeking opportunity to enter the Indian market in view of the amendments to the laws which fairly controls the patent troll activity in India.

Conclusion:

While patent trolls are a major threat in many countries they are not a viable option to operate in India In view of provisions incorporated in Indian Patent Laws vide Patents (Amendment) Act, 2005.  It can be observed that while the other countries are plagued with patent troll activities, the Indian system strived fairly to control the problem of patent trolls.  May be US and other developed countries need to take a leaf out of Indian Patent Laws to curb the menace of patent trolls instead of criticising IPR regime.

About the Author: Mr Sitanshu Singh, Patent Associate, Khurana & Khurana, Advocates and IP Attorneys and can be reached at: sitanshu@khuranaandkhurana.com

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Indian Patent Office (IPO) publishes guidelines for Indian patent applications relating to plant (herbal) compositions

The Controller General of Patents has issued guidelines for processing of patent applications relating to Traditional Knowledge (TK) and biological materials on November 08, 2012 which can be accessed here.

The guidelines have been issued in lieu of the fact that a number of the Indian Patent Applications relating to herbal (plant) compositions/extracts/alkaloids (and other biological resources from India) are being granted in India even though their corresponding Foreign applications in the jurisdictions (US/EP/JPO etc.) where the TKDL access have been provided are being rejected. Due to lack of any standard procedures, different Examiners/Controllers have been analysing the inventions from the patentability criteria differently.

Among the various points discussed in the guidelines, the assessment of novelty and inventive step are the most useful ones especially the inventive step determination, which even though the patent agents/attorneys know well sometimes that the composition is obvious, the Applicants still want to go ahead in filing. Thus these guidelines would provide great clarity not only to the Examiners/Controllers but also to inventors/Applicants.

The novelty determination for example is straight.  The claims on extracts/alkaloids/”isolation of active ingredients” will not be considered novel for a treatment of a disease when such extracts/alkaloids are already known in the art to be used in the treatment of said disease. There are some examples cited in the guidelines throwing clarity which can be read from there.

The inventive step determination is also described therein with various examples. One clear principle described is that a herbal composition comprising more than one plant parts/extracts with known-therapeutic effect for the treatment of disease wherein all these plants are known for treating the same disease would be considered obvious, even though such combinations of medicinal plants would be more effective than each of the medicinal plants when applied separately (additive effect).

Another principle described is that when a plant ingredient/extract/alkaloid is already known for the treatment of a disease, then it creates a presumption of obviousness that a combination product comprising this known active ingredient (with other plant extracts) would be effective for the treatment of same disease.

Another important guiding principle is on the claimed concentration ranges of the ingredients of the composition. The guidelines make this clear that discovering the optimum or workable ranges of plant ingredients by routine experimentation is not inventive. It is emphasised that although cited art may not specifically teach the claimed percentage ranges, however the amount of specific ingredient in a composition is clearly a result effective parameter that a person of ordinary skill in the art would routinely optimize. Therefore all the claims claiming,

“A pharmaceutical formulation comprising an extract of Pongamia pinnata in the range of 2 to 20%, an extract of Lawsonia alba in the range of 5 to 15%, an extract of Dhatura alba in the range of 2 to 20% and an extract of Cocos nucifera in the range of 20 to 60% for the treatment of chronic ulcer, diabetes ulcer and wounds” would be obvious if the plant parts are known in the art for treating the same diseases.

The guidelines however do not discuss certain other scenarios, such as, what if different plant part of the same plant is used in a composition as opposed to the plant part known in the prior art. For example, let’s say the claim is follows:

“A pharmaceutical formulation comprising an extract of root of X; an extract of  leaf of Y, and an extract of  stem of Z for treating a disease A”. Suppose it has been discussed in the literature that the different plant parts of same plant, say X, has different biological activities (due to different biological components). In that case is it obvious if the Applicant claims a composition comprising an extract of a different part of the plant from the plant part as disclosed in the prior art?

Another scenario not clarified in the guidelines is on the obviousness criterion of claiming a composition with different species of same genus. For example, a genus Phyllanthus has many species including P. acidus, P, emblica, P. Niruri and so on. Will it be obvious for a skilled person to arrive at a composition comprising one species of the same genus plant wherein the prior art discloses a different species of the same genus plant for the same disease further when the scientific literature proves that different species have different biological activities. There had been a prosecution case with us for example wherein we got a couple of scientific literature articles. Amongst them, some proved different biological activities of different plant parts of the same plant X and some others proved different biological activities of different species of the same genus plant Y. We argued in one of the office actions that since different plant part of X is used in the prior art and different species of Y is used in the prior art for treating the same disease, it would not be obvious to use different plant part and species and yet achieve better efficacy as the skilled person would not to motivated to use such different plant part and species. The patent was granted, of course, in addition of the number of other technical arguments including unexpected results and so on. Well, that’s a different story to tell.

Coming back to the guidelines, the same also discuss the formalities requirements in filing Form 1. The permission of National Biodiversity Authority (NBS) would be sought in a form of declaration in paragraph 9 (in) in the form of “the invention as disclosed in the specification uses the biological material from India and the necessary permission from the competent authority shall be submitted by me/us before the grant of patent to me/us”.

In the concluding statement, I believe that these guidelines will indeed be proven a useful means for the Examiners/Controllers and the Applicants alike for clarifying the obviousness criterion which at the moment is not being met properly at the Indian Patent Office due to lack of uniformity in examiners/controllers decisions as is evident from certain Indian granted patents. Protecting our therapeutic biological resources from monopolistic rights is indeed a duty of each and every one of us and we should contribute in any way we can, whether we are examiners, inventors or agents.

About the Author: Meenakshi Khurana, Patent Attorney, available at meenakshi@khuranaandkhurana.com

INDIAN GRANTED PATENTS…ENFORCEABLE?

The Indian Patent Act, 2005, like for most other geographies, does accord to and follow the disclosure guidelines put forth by the TRIPS and has similar Patentability grounds, especially for non-Pharmaceutical subject matters, in which the contention over 3(d) leads to a different interpretation over efficacy grounds. Furthermore, special provisions such as those provided under Section 8 of the Patent Act, enable the Indian Patent Office to retrieve additional and more relevant information about the prosecution that happens with the family foreign Patent Applications of the Indian national phase patent application. Moreover, additional prior art available by means of results cited by ISR, literature/patents cited by the Applicant, earlier Patent/Prosecution History of the Applicant, gives way for searching more relevant and anticipating applications.  Furthermore, with the Indian Patent Office being accorded as an ISR, is it now time that the Indian Granted Patents have certain extent of serious patent prosecution done, not from a formality compliance perspective, but more importantly from novelty/obviousness standards.

For the present discussion, let’s take an exemplary and recently Indian granted Patent 245829 (‘829), having a publication of grant on 11/02/2011, the Application No. for which is 4445/CHENP/2006 and the Applicant being Utstarcom, Inc. In summary, the invention relates to address-based network communications and more specifically to determination of a prefix portion of an address. Abstract of the granted Patent states:

A network element (10) can retain a plurality of prefix identifiers as are used to formulate an address to be used by individual network users. Pursuant to a preferred approach, one or more of these prefix identifiers are pre-correlated to a given domain name while at least one other prefix identifier is pre-correlated to the absence of a domain name. So configured, a specific prefix identifier can be allocated for use by a given network user as a function, at least in part, of the domain name (or lack of a domain name) as may be presented by that network user when seeking to establish a network connection.

The first independent claim as granted as per the Indian Patent Office is:

1. A method comprising:

receiving a communication from a network user seeking to establish a network connection;

when the communication presents a domain name as corresponds to the network user:

identifying a first prefix identifier as having been pre-correlated to the domain name;

providing to the network user the first prefix identifier;

when the communication does not present a domain name as corresponds to the network user

providing to the network user a second prefix identifier, which second prefix identifier is reserved for use with network users that do not present a domain name.

As it is evident from the first claim itself, the invention relates to two scenarios of mapping between “Domain name” and “Prefix Identifier” or “IP Address” or “Network Address”. In case the domain name is given by a network user, an IP Address corresponding to the same is returned back and in case the domain name is not provided by the network user, a new/second prefix identifier is generated and provided to the user. This is typically a well known function of a DNS system, wherein the claimed novelty seems to relate to generating a second prefix identifier in case domain name is not presented by a user.

As at the time of writing this article the Application Status search of the Indian Patent was not working, I am assuming that as the patent was granted in Feb 2011, the FER was issued somewhere around Jan-Feb 2010. From a strategic perspective, it would not have made sense to see the prosecution status of the corresponding applications in geographies such as EP or US, more so given the fact that Section 8 of the Indian Patent Act asks the Applicant’s to submit detailed updates on filing/publication/prosecution/abandonment/grant activities related to the corresponding foreign applications. It is to be noted that for the Corresponding application EP 1759300, the application was withdrawn by the Applicant on 28.08.2009, before the Indian Patent Office issued the FER. The same was the case in the corresponding US Application, wherein the Applicant itself failed to respond to the Final Office Action.

A close look at the cited portions of the Prior arts cited in the ISR, specially US 6324585, could also have given help in identifying anticipating documents, specially with the claimed subject matter being broad and relating to the overall functionality of a standard DNS system. Furthermore, prior arts discussed in US prosecution including ‘585 and US 2004/0258005 and US 2002/0172206 give clear pointers to claimed subject matter.

Furthermore, even if the above due-diligence was not considered worth, a very brief and quick search with the most basic keyword string (Dynamic AND “domain name” AND “network address”) would have revealed so many below mentioned and relevant patents, based on which the patentability of the subject matter involved could have been evaluated. Based on our quick due-diligence, we found following relevant patents that covers ‘829 subject mater partly or wholly.

IIPRD – Search Results

Search Result 1: US 6338082 – (Cited Portion for the first element of the independent claim which claims mapping between a domain name and a prefix identifier (IP Address)): A client of the DNS is called a resolver 114 . Resolvers 114 are typically located in the application layer of the networking software of each TCP/IP capable machine. Users typically do not interact directly with the resolver 114 . Resolvers 114 query the DNS by directing queries at name servers, which contain parts of the distributed database that is accessed by using the DNS protocols to translate domain names into IP addresses needed for transmission of information across the network. DNS is commonly employed by other application-layer protocols—including HTTP, SMTP and FTP—to translate user-supplied domain names to IP addresses. When a browser program 112 (e.g., an HTTP client), running on a user’s machine, requests a URL having a resolvable domain name, in order for the user’s machine to be able to send an HTTP request message to a server 120 , the user’s machine must obtain the IP address of the domain name. The user machine then runs the resolver 114 (DNS client) on the client-side of the DNS application. The browser 112 extracts the domain name from the URL and passes the domain name to the resolver 114 on the client-side of the DNS application. As part of a DNS query message, the DNS client 114 sends the domain name to a DNS server system 120 ′ connected to the Internet. The DNS client 114 eventually receives a reply, which includes the IP address for the domain name. The browser then opens a TCP connection 116 to the HTTP server process 120 located at the IP address.

Search Result 2: US 6425003 – (Relevant Cited Portion for the second element of the first independent claim which claims mapping between “no domain name” and a “second (new) prefix identifier”):  A method and apparatus for resolving where to forward DNS (domain name service) requests for a user simultaneously logged into more than one service existing on a data communications network utilizes an active service list (ASL) to keep track of the services that the user is currently logged into. The active service list includes a list of services sorted in a particular order based on information about the service and sometimes the order in which the user logged into the services. Each service has a profile that defines, among other things, the IP Address space for the service and a Domain attribute. To determine the appropriate service and, therefore, the appropriate DNS server for a DNS request, the QName from the DNS request is compared to the configured Domain attribute(s) for each service in the order of the ASL. If a match is found, then the DNS request packet is modified to re-direct the DNS request to the DNS server configured for the matched service. If no domain match is found and the user is logged into an Internet Service, then the DNS request packet is modified to re-direct the DNS request to the DNS server configured for the first Internet Service found in the user’s ASL. If no domain match is found and the user is not logged into an active Internet Service, then the DNS request is not re-directed, but rather forwarded unmodified.

 Search Result 3: US 6,944,167 – In one embodiment of the present invention, a domain name server receives a request for the public address of a private network host, using a public Internet Protocol (IP) address. The domain name server then determines if a valid public address for the private network host exists in an address data structure maintained by the domain name server. If a valid public address is found, the domain name server returns it to the requesting host. If a valid public address is not found, then the domain name server requests a public address from a network address translator identified with the private network. The network address translator then determines whether a public network address is currently assigned to the private network host. If not, and one is available from a pool of public network addresses available to the network address translator for the private network, then the network address translator allocates a public network address for the private network host. The network address translator then sends the domain name server the public network address or an indication that such address or the host was unavailable. An appropriate public network address might not be assigned for many reasons, including all public numbers are currently used or reserved; the private network host is not running; or security considerations preclude public access to the private network host.

It would be appreciated that the above prior arts have only been given for exemplary purposes after a very brief search merely to draw relevancy to the concern and no comprehensive evaluation of patentability has not been done based on these.

It further needs to be considered of how the first independent claim passes the bar for Section 3(k). The claimed method merely aims at providing a new IP address to a user request which does not have a domain name. The method clearly does not involve any change in structure of the mechanism of data/packet communication, or packet format, or increases the efficiency of transmission, or produces a tangible output in any manner whatever to qualify the concerned test and merely gives an IP address from a pool of prefix identifiers, a step that DNS is already is configured to do.

There are many more allied issues that might crop up for discussion when many more of such patents are evaluated for actual merit but the two I would last put across are: What worth would be such patents, both from enforceability and commercial perspective, if they would be invalidated the day they are litigated? Secondly, what credibility would such Indian Granted Patents have if the Patentees themselves are not even confident that they would be able to enforce their rights when the need arises?

References:

1. Indian Patent office database

About the Author: Mr. Tarun Khurana, Partner and Patent Attorney in Institute of Intellectual Property Research & Development (IIPRD) and can be reached: Tarun@iiprd.com.