WSJ Contrasts US/China Patent Policies

Today’s WSJ includes an op-ed by David Kline (author of “Rembrandts in the Attic”), entitled “Fear American Complacency, Not China.” A recognized patent expert Kline references China’s recent commitment to increased entrepreneurial innovation and Xi Jin Ping’s “emphasis” on IP protection. China’s massive internal market and external economic influence are attracting US policymaker attention. But as Kline points out, US policymakers who worry about China’s growing financial strength cannot do much about it. They should be more concerned about something they can affect:  the continuing diminution of US patent reliability. New jobs come from new firms. In 1980 startups were 12.5 % of US business. That number has shrunk to 8%. Kline correctly attributes this declination to our nation’s patent policy which is headed in the opposite direction from China’s.

Readers will readily recognize the relevant data but their prominent inclusion in the WSJ, (with a quote from pro-patent advocate Adam Mossoff), expands their relevance and importance to a broader audience. After referencing a litany of Chinese pro-patent initiatives Kline notes:

“In the U.S., by contrast, a series of legislative actions and Supreme Court rulings have weakened patent rights, especially for startups. A new way of challenging patents called “inter partes review” results in at least one patent claim being thrown out in roughly 80% of cases, according to an analysis by Adam Mossoff, a law professor at George Mason University. Unsurprisingly, many of these cases were brought by defendants facing patent infringement lawsuits in federal court. This does not bode well for America’s global competitiveness. The U.S. used to rank first among nations in the strength of its intellectual property rights. But the 2017 edition of the Global IP Index places the U.S. 10th—tied with Hungary.”

The citation above is pay walled. Since it is so suitable for distribution to Reader’s congressional delegations, it is posted in its entirety below.

Fear American Complacency, Not China - WSJ

Commercialization Methodology

Attached is a recent IPWatchdog post reiterating the importance of TTO flexibility when commercializing promising patented basic research emanating from federally-funded basic research. I have commented at the post site. The author wisely calls attention to a 2014 post by Joe Allen which in chapter and verse establishes the principle of commercialization flexibility in response to a previous “faculty lounge-sounding” white paper by Brookings suggesting that universities should not license such discoveries but should be allowed to commercialize them solely by establishing startups. One of Brookings’ underlying themes was that by choosing how to execute its Bayh-Dole prerogatives, universities are somehow unfairly advantaged by their capacity to choose among commercialization methodologies rather than assuming the risk of a startup. That’s nonsense. Continue reading Commercialization Methodology

Oil States Related News

According to Capitol lore, “Supreme Court Justices also read the papers.”

If they read the NYT today they saw the following Business Section headline:

“IF A WILDLY CREATIVE COMPANY  WITH AN APP USED BY 178 MILLION PEOPLE EVERY DAY CAN STILL BE CRUSHED BY FACEBOOK. HOW IS ANYONE ELSE SUPPOSED TO SUCCEED.”

Meanwhile, today’s WSJ featured the iconic efficient infringement PTAB saga of Josh Malone’s Bunch O’ Balloons – a struggle watched for years by readers. Here is its headline:

“BATTLE OVER BALLOON TOYS POPS OPEN. Patent dispute shows challenges of when a new product is followed by similar ones.”

Neither story plumbs the depth of the efficient infringement and PTAB issues underlying both but at last, the patent issue is gaining public attention. Justices noticing these stories as they sip their morning coffee may note that the approaching Oil States argument is more important than their dismissive past decisions involving patents.

More complicated than “Oil States for Dummies” might have been, Gene Quinn has recently provided us with a concise, clear explanation of the fundamental issues awaiting SCOTUS consideration in the Court’s approaching Oil States arguments. SCOTUS justices are unlikely to have seen Gene’s post over morning coffee but SCOTUS clerks who studied patent law may have consulted Gene for clarity (as they no doubt did in law school) while they prepared their bosses for next week’s hearing. It is an essential read for them and for readers, a must read.

There is no need for us to add anything except our sincere appreciation for Gene’s recent post and for his unrelenting dedication to a strong and viable US patent system … without which US economic global innovation leadership will collapse. Oil States is a big deal. Its outcome will either begin restoring US global financial leadership or enhance the success of Xi Jinping’s “Made in China 2025” plan for China’s to gain that leadership. For research universities commercialization’s future hangs in the balance. To knowledgeably follow the case read Gene’s post which we repeat in its entirety at ipstrategic.com (linked below) or at Gene’s Nov 14 IPWatchdog site. Continue reading Oil States Related News

Google’s Aura Dimming

The Brachmann/Quinn IPW post linked below documents some infringements in Google’s past and more recent pro-google PTAB shenanigans. Perhaps a bit too weedy for the general public its provides organized, useful data for pro-patent advocates. The firm’s inevitable dominance also is confirmed in a recent Axios entry also linked below) quoting Barry Diller.

Significantly while it may be too late for US users to change their search horses mid-stream, in Missouri Google’s overpowering political aura may be dimming. EU antitrust regulators have just been joined by Missouri Attorney General Josh Hawley who is conducting a state-level review of its dominance behavior. The FTC trod this path a few years ago but predictably dropped its study just as the Google-friendly Obama Administration was leaving town.

What is most interesting about the Missouri investigation is that AG Hawley is running for Senator McCaskill’s seat in 2018. He must have taken the investigation into political account. It may not immediately affect US antitrust regulation but Hawley’s timing undoubtedly reflects a political calculation (and likely polling). In short Hawley’s campaign believes that even though his potential voters are Google users, the search firm no longer gets a free pass from the public. If such is the case, congressional attitudes toward Google and its Capitol Hill lobbyist swarm also may be changing. And that clears a path for passage of The STRONGER Patents Act. Continue reading Google’s Aura Dimming

University Startups On The Hill

Below are two excellent initiatives emphasizing the importance of our nation’s startup economy.

APLU and AAU are presenting a startups conference on the Hill this week. (Nov 14). …Congratulations to both Associations for bringing startup job providers to the Hill. This activity visibly connects jobs and economic development to their home state research universities (participants listed below).

Sessions like this attract delegation attention alerting Congress and staff to the direct connection between their congressional R&D funding and the home state economic development created by its commercialization. Congress favors its R&D but strangely fails to connect its execution with patent strength needed to attract private investment. Once this connection is made, the political importance of patent reliability is visibly demonstrated.

University Innovation & Entrepreneurship Showcase

Hosted by the Association of Public and Land-grant Universities and the Association of American Universities in partnership with the National Academy of Inventors and VentureWellPlease join us for the inaugural exhibition and reception featuring startups from across the country that grew out of federally-funded university research and are fueling the innovation economy. This event will highlight the important role federally-funded university research plays in fueling entrepreneurship, innovation and impact across the nation.

Tuesday, November 14, 2017, Rayburn Foyer, Rayburn House Office Building

Arizona State University: Gemneo Bioscience (NIH) Cornell University: Combplex (NIH) Indiana University: Graspable (ED IES)Iowa State University: Gross-Wen Technologies (NSF EPSCOR, SBIR)North Carolina State University: Tethis (DOE, USDA) New York University: Geopipe (NSF, NSF SBIR I) Pennsylvania State University: Phospholutions (USDA) Rice University: SNOWater (NSF)Stony Brook University: Traverse Biosciences (NIH STTR)Texas A&M University: Stand2Learn (CDC SBIR) Texas Tech University: Flow Raider (NSF)University of California, Davis: Cognivive (NIH) University of California, San Diego: Tri-D Dynamics (NASA, NSF, NSF I-Corps)University of Cincinnati: Eccrine Systems (DoD) University of Colorado, Boulder: ReForm(NSF, USAID, NIH SBIR I)University of Kansas: Digital Nanogenetics (NSF, NIH) University of Maryland: IonQ (DNI IARPA, NSF) University of Michigan: FlexDex (NSF)University of South Florida: Hemolix (NSF)Virginia Tech: Acomhal Research (NIH)Washington State University: 915 Labs (NASA, DoD)

AND on another start up front.

ElliptiGO’s Brian Pate has written an excellent Op-Ed about his startup. It appeared in widely read Morning Consult. Nov 6th and is linked below.

Here is an excerpt encouraging passage of the Coons Cotton STRONGER Patents’Act.

“That’s why I’m concerned about the spate of Supreme Court cases and legislation that have weakened U.S. patent rights over the past decade. These efforts have caused the U.S. to fall from first to 10th place on the U.S. Chamber of Commerce’s global index of patent system strength. We’re now tied with Hungary. Not surprisingly, venture capital is fleeing to Europe and China, with our share of global venture capital investment falling from 83 percent in 1996 to near 50 percent today. If we don’t stop this trend, our economy and global competitiveness will be severely harmed. Fortunately, there is bipartisan legislation currently on the table that would be a good first step towards strengthening our patent system. The “STRONGER Patents Act,” introduced by U.S. Sens. Chris Coons and Tom Cotton in June, would make it easier for patent holders to obtain injunctions so they can stop infringers from profiting off their theft while cases play out in court. It would also treat patents like any other property, as our nation’s founders intended when they included patent rights in the U.S. Constitution. Reinstating those rights would lower the risks for potential startup founders and encourage more people to bet on themselves and their innovations. It is the kind of trajectory we need to put our patent system on if we want to re-invigorate our startup culture.” STRONGER #Patents Act.

ICYMI – Holiday Miscellany

  1. Universities are understandably focusing their congressional effort on the tax reform’s financial impact, as well they should. A disturbing WSJ/NBC poll last summer showed an altered public view of college education that may explain why Congress favors financially whacking universities especially certain elite universities. Vital demographic segments, including much of the Republican base and self-defined as “white working class” believe college isn’t worth the cost. University spokespeople notice a new antipathy to higher education that also may reflect $1.3 trillion in student debt’s connection to tripling colleges’ tuition. Add in a proposed excise tax on specific university endowments (whose assets in 2014 totaled $ 516 billion), and you have a recipe for more research university financial stress. This alarming trend must now be factored into home state lobbying on patent issues. For example, delegations can be effectively reminded that strong patents play an essential role private commercialization of their congressionally-funded basic research.
  2. Readers may recall the “ding dong” tune chirped by OZ residents after learning of the passing of Oz’s resident witch. It was quietly “hummed” by Hill pro-patent warriors when Rep Lamar Smith’s recent retirement announcement was re-echoed by Rep. Robert Goodlatte’s. Both have avidly promoted big tech’s patent agenda. But with committee colleagues Darrell Issa and Democrats Nadler and Lofgren still ruling the roost in the Judiciary Committee, pro-patent rejoicing was strategically subdued. Looking ahead, next term with both congressional strongmen gone, former Chair Sensenbrenner and Rep. Chabot who are following in seniority will be more patent friendly. But if he manages to be reelected, anti-patent Rep. Issa will likely seek the gavel. BTW if Republicans lose their House majority pro-patent advocates will have a friend in Chairman Conyers.
  3. Meanwhile, the bromance of Presidents Trump and XI was briefly disrupted last week when Mr. Trump challenged his China counterpart to put a stop to China’s IP infringement and mandatory US tech transfer as the price of entry into China’s market. Xi simply smiled. As China’s absolute ruler he is confident that his plan for “global leadership in innovation” in 2035 will be realized even earlier when Mr. Trump’s Solicitor General is arguing in Oil States that patents are a “public right.”
  4. Facebook has acquired tbh, an app enabling teenagers to complement each other, adding a new source of addictive dopamine to its platform’s market retention. https://www.theverge.com/2017/10/16/16485428/facebook-tbh-to-be-honest-acquisition-ios-app
  5. And last but certainly not least, we send an Ipstrategic shout-out to Qualcomm whose recent turmoil involving Broadcom and Apple we hope does not result in its withdrawal from its unmatched pro-patent advocacy. For more than 12 years Qualcomm’s unremitting efforts have provided invaluable support to the pro-patent cause. Whatever happens, Qualcomm deserves our endless gratitude.

Addiction Has Its Merits

100 years ago, there was a popular song entitled, “I work 8 hours, I sleep 8 hours, that leaves 8 hours for love.” In 1916, it cheerfully described a plausible formula for spending a 24-hour day. However, times have changed. Work is virtually 24/7. Sleeping 8 hours is for teens. And depending on who or what one “loves,” the other 8 hours are jammed with competing content. Newscasts, podcasts, binge-watching, sports, blogs, traffic, and dining in or out guides only scratch the surface of the time-sinks clamoring for our attention. Today’s reality is that even after we master multitasking, our available time is limited to 24 hours. The same is true if work time is spent in Congress. Breaking through to busy lawmakers is not easy. Because our attention spans are under assault, DC political wonks now enjoy an excellent DC service called axios.com (linked below). Axios concisely tells what is happening in DC and why it matters.

Content providers know about folks’ physical time constraints on their market penetration. Their most effective growth strategy, therefore, is to engender addiction to their sites’ content format. Like opioids, they first attract us to their platform then do all they can to keep us there by counting on our becoming addicted and then selling our time to advertisers.

The revealing Axios piece below is relevant to pro-patent advocates whose past decade of speaking truth to power may, at last, be heard by our congressional delegations. The Axios interview below authoritatively describes Facebook’s reliance on the addictive instincts of its 2 billion users. Sean Parker was a Facebook founder.

Sean Parker: Facebook was designed to exploit human “vulnerability”

“Sean Parker, the founder of Napster and former president of Facebook, says the thought process behind building the social media giant was: “How do we consume as much of your time and conscious attention as possible?”

“Buzz: My colleague Mike Allen interviewed Parker yesterday at an Axios event and writes how Parker gave him a candid insider’s look at how social networks purposely hook and potentially hurt our brains.

“That means that we needed to sort of give you a little dopamine hit every once in a while because someone liked or commented on a photo or a post or whatever…It’s a social validation feedback loop…You’re exploiting a vulnerability in human psychology…[The inventors] understood this, consciously, and we did it anyway,” Parker told Mike.” Continue reading Addiction Has Its Merits

China’s 2025 Innovation Plan Unlike Ours

Presidents Trump and Xi met this week. With lots to discuss, including conflicting national interests in North Korea, the South China Sea and trade competing IP policies was not likely on their agenda. Nevertheless, IP and especially conflicting views on patents bear substantially on these shared areas of concern. China is strengthening its patent system while we are weakening ours. Xi Jinping has said, “IP infringers will pay a heavy price.” In Xi’s China “heavy price” may mean imprisonment or worse. USA IP infringers also pay a “heavy price” but here the hefty price is paid to lobbyists and policymakers’ campaign war chests, a small price to pay to reach 900-billion-dollar market cap.

If world sanity prevails, nuclear war with North Korea is out of the question. But war itself is not. China and the US are now at war over global economic leadership; a war that will be won or lost on today’s battlefields of AI development, robotics progress and digital/quantum cyber encryption and communication. This war’s outcome will depend on each nation’s commitment to innovation. Xi’s elevate investment in technological progress is a known fact.  He also knows that his investment will be wasted if it is not protected by a reliable patent system. For more on this see the Quinn/ Brachmann IPW post last June detailing his elevated Chinese patent policy.

Xi’s “Made in China 2025 plan” outlined in a New York Times article (linked below) combines substantial financial backing of domestic development and recruiting research talent with mandatory tech transfer partnerships required before entry is granted to China’s market. Meanwhile focused firmly on the past, President Trump plans to fight this next war with the last war’s weaponry.  Cutting funding for research, blocking US entry to research talent and increasing taxes to university research centers like MIT, Harvard and Stanford, our representative at this week’s China summit is bulking-up on planes, ships, and ordinance.

Unlike China’s fiat-based state-supported innovation program, our market-based investor supported innovation ecosystem requires a robust, reliable patent system. This system has won the today’s war for global technological leadership but will win tomorrow’s only if it is allowed to do so by our Congress and Administration. China has learned what US policymakers have forgotten. A book by two Chinese Air Force colonels called “Unrestricted Warfare” and read no doubt by Xi Jinping outlines the Chinese strategy. Trump who claims he never reads will be relying for US planning on his “Generals.” We presume they are familiar with “Unrestricted Warfare.” Continue reading China’s 2025 Innovation Plan Unlike Ours

Facebook’s Efficient Infringement

I am often asked why I believe our US innovation ecosystem is so badly damaged when US companies like Apple, Facebook, Apple and Alphabet (Google) are doing so well. My answer is: there is no doubt that they are doing well, the problem is why they are doing well. A recent and typically well-researched IPW post by Steve Brachmann describes Facebook’s prototypical pursuit and efficient infringement of Snapchat. He narrates what happened between incumbent Facebook and its potentially disruptive infringement victim. Snapchat may or may not survive Facebook’s final abuse and the inevitable enforcement proceedings.

Commenting on the predatory nature of our present patent landscape Steve concisely states:

“And in today’s IP climate in the United States, you don’t need to be original to be successful. You just need to have a dominant market position and the willingness to be unscrupulous in taking the original ideas of others. Simple, really. And it will likely stay that way in the years to come, much to the chagrin of smaller, more nimble entities in the tech world who want a fair chance to compete in the marketplace. ” 

This is my comment at his post’s conclusion:

In this short excerpt, Steve says it all. Big IT tech uses their users to sell ads. They use PTAB petitions as buy-out bargaining chips. And if all else fails, they use efficient infringement. They use our patient system abusively because THEY CAN. If SCOTUS doesn’t rescue US innovation by its Oil States decision, it is destined to continued domination by big tech incumbents.

See Steve’s informative post at IP Watchdog linked below

Facebook’s Efficient Infringement of Social Media Platforms Continues to Impact Snap Shareholders,” by Steve Brachmann.

“Snap has attempted to remain competitive with new features, such as increasing the allotted time for video capture and introducing new drawing tools this May. But it hasn’t been able to gain a foothold against Facebook, a company which reportedly offered to buy Snap for $3 billion prior to Snap’s IPO… “If we are unable to protect our intellectual property, the value of our brand and other intangible assets may be diminished, and our business may be seriously harmed,” one of the section titles in Snap’s S-1 filing reads. Of course, in the current IP landscape, there is no real ability to protect that property, especially where it pertains to patents. And Facebook’s copying of features which are valuable on the Snapchat platform has been blatant.”

Congressional Wake Up Call

In his street-talky, brilliant bestseller “The Four,” NYU Stern professor and entrepreneur Scott Galloway takes us behind our tech giant’s warm and fuzzy PR created curtain. There he convincingly explains how each dominator protects its zone of concentration; Amazon, (everything retail ), Facebook and Google (targeted advertising), and Apple, (selling luxury). Omitting the political relevance of their resource realities, Galloway’s typically impertinent description of Congress’ self-consciously submissive Silicon Valley enthrallment is ominously accurate:

“Who wants to be the insurance salesman elected to Congress (the most prevalent career in the House of Representatives) who raises his hand and says I’m the guy who does NOT get it. ….everyone wants to be friends with the cool kid” (The Four: The Hidden DNA of Amazon, Apple, Facebook, and Google, p.193).

Patent reform seems sidelined for now but that did not stop the House “tax reform” proposal from adding IP tax insult to injury. (see “Another Blow to Early Stage Innovation“). The tax bill’s hit on early-stage innovation again hammers hope for Capital Hill discovery of their R&D  innovation ecosystem’s dependence on private sector investment. But wait: Member awareness of tech business realities may still be on the rise. Tech’s whiney testimony last week re congressional concern about their role in US elections may have opened tech’s kimono sufficiently wide enough to open fresh eyes on the Hill. Patent holders and pro-patent advocates are hopeful.

In her recent analysis of peoples’ relationship with their tech devices, FT’s Roula Kalaph describes feeling “like a child waiting for Santa” anticipating a demonstration ride in a driverless vehicle. During her trip, early anxiety eased into relaxation which eventually led to boredom. She later learned that user “boredom” is the driverless automakers’ number one objective. (“Both robots and Big Tech have to earn our trust.” See below.)

Galloway’s new book describes users’ routine sharing of their most intimate and secret queries with Google, their feelings, friends and family with Facebook, their email communications with Apple and their buying behavior with Amazon. Such voluntary intimacy has become routine not just because close relationships with these giants “give” users a maximum degree of choice at minimal cost with time-saving convenience. Such sharing is routine because most users have no idea how their intimate information is being used. Galloway and Khalaf each ascribe this drift into boredom to user trust. Users entrust big tech with everything necessary in their lives because they want to trust big tech. Like the old personal God of world religions, users hold dominant big tech in trustful awe because their knowing devices address their need for safe omnipotence beyond their ken. Both authors warn us to appreciate but also to be wary of such close intimacy. Maybe Congress learned last week that there is more to worry about with tech than being cool and campaign contributions. Perhaps Members are beginning to understand the economic danger of their blind acceptance of friendly tech’s overblown troll narrative.

Big tech’s predatory potential has mostly side-stepped public concern about the danger of blind entrustment. Consider growing reluctance to urge shoppers’ children to sit on Santa’s lap. Note that rising fear of clowns has benched formerly ubiquitous Ronald McDonald. Recall how SNL’s campaign skit lampooned the line between close and creepy when during their debate Trump hovered over Hillary. Despite declining trust once routinely given other costumed characters in our midst, dominant tech’s price, convenience and choice are giving user intimacy with tech a pass. Congressional wariness of routine user entrustment of their most intimate thoughts and feelings has been successfully suppressed by big tech’s PR-curtained operations and Member awe. It’s time to reconsider patent apathy and Member awe. Looking the other way while efficient infringement and patent degradation are destroying our innovation ecosystem is not cool. Our sinking competitive advantage is more than an excuse to lower corporate taxes. Our competitive advantage is on the firing line. Continue reading Congressional Wake Up Call