NPEs + Patent Trolls (Part 3)

In this last post on NPEs or patent trolls, I wanted to shine a light on the positive efforts done and in process by the US government to regulate patent trolls. 

In June 2013, President Obama suggested that the USPTO make their rules on patent-infringement lawsuits more specific, requiring the suing companies to specifically state what their patent covers and how it is being infringed. 

In the same year, Senator Orrin Hatch sponsored a bill called the Patent Litigation Integrity Act, would help judges force the NPEs trying to enforce their patents actually pay for the lawsuits.

Last November, the U.S. Federal Trade Commission settled its first consumer-protection lawsuit against a company for using “deceptive sales claims and phony legal threats” to try to get unsuspecting companies to license patents. It was against MPHJ Technology Investments, which had warned more than 16,000 small to midsize companies for violating their patents involving the use of common document scanners hooked up to a computer network. 

So we know that the U.S. government and its officials are noticing the problem of patent trolls and NPEs abusing their patent rights, and we know that actions are being taken specifically by the legislative to prevent people form abusing their patent rights. 
We need to be careful though, of which patent holders are actually maliciously using patent litigations to pull money from other people and who are actually rightfully trying to protect their patents. I think it's great that President Obama has asked patent rights enforcement lawsuits to be more specific so that our judicial system can more effectively uphold the righteous standard of patents in the US. 

So although I've been discussing in my previous posts the various problems associated with NPEs, we know that our government is trying its best to protect product developers against patent trolls. 

NPEs + Patent Trolls (Part 2)

In this post, I'll be focusing on why patents trolls can be a problem and why they're actually called trolls in the first place.  

Patent Lawsuits Involving NPEs Over Time

(Graph from PatentFreedom, 2014)

From this graph, we can see that the number of patent lawsuits with NPEs have drastically increased in the last few years, revealing why this is such a highly debated topic of late. 

To more clearly define patent trolls, I'll provide the definition given by TJ Chiang, a professor at George Mason Law School. 
He says a troll patent is one that:
1. Is owned by someone that does not practice the invention.
2. Is infringed by, and asserted against, non-copiers exclusively or almost exclusively. By copying I mean any kind of derivation, not just slavish replication.
3. Has no licensees practicing the particular patented invention except for defendants in (number 2) who took licenses as settlement.
4. Is asserted against a large industry that is, based on (number 2), composed of non-copiers.

So he's basically saying that a patent troll is a NPE that exists for the sole purpose of receiving licencing settlements or patent enforcement lawsuit settlements.

This sort of bahavior can lead to inflated prices because of the way the production of these patented technologies is withheld and made more expensive for those who actually want to produce them. 

Besides this, patent trolls often use their patents to threaten those who produce their patented technology, even though they themselves are not competitors in the market. Also, one key method used to settle patent disputes is counter-assertion, but NPEs generally don't produce products themselves, so the companies/people being sued for producing the NPE's patented products practically have no way to fight back against this kind of patent trolling.

NPEs + Patent Trolls (Part 1)

Some people or companies that hold a patent for a certain invention or technology do not actually produce these products. This becomes an issue when they try to gain money through enforcement of their patent rights against the people who actually try to produce these technologies.

Such people are categorized as non-practicing entities (NPEs), or sometimes patent trolls. And I can't introduce a topic without providing a more formal definition first, so that's what I'll be starting off with. 

From my research, I've found a variety of definitions for NPEs. One source defines NPEs as "an entity that earns or plans to earn the majority of its revenue from the licensing or enforcement of its patents." Another source defines an NPE as "a patent owner who does not manufacture or use the patented invention, but rather than abandoning the right to exclude, an NPE seeks to enforce its right through the negotiation of licenses and litigation." So in summary, NPEs are those who hold a patent and do not produce the patented technology. 

However, we can't say that all people who are of this category are necessarily "trolls" or intentionally bad. This could just be a result of the NPEs inability to produce or manufacture the patented technology, such as a lack of the funds or the resources to do so. 
Sometimes the inventors of a patented technology can choose to sell their patents or give licenses to manufacturers to allow their technology to be produced without infringing on their patent rights, which I believe is the right thing to do in such a situation. 

However, NPEs become a problem when they intentionally file and collect patents just for the goal of using these patents to gain payment for merely owning these patents, and this is where the term patent troll comes in. I'll talk more about patent trolls and the negative consequences of their patent litigations in the next post. 

Review of Video on Obviousness

For this blog post, I'll be discussing this video:

What I liked the most about this video is the fact that it shows a visual model of how to understand obviousness in patents, so this really helped me gain insight into what obviousness is and the simple basics of what I need to know in order to avoid getting my future patents labeled as obvious. 

This first diagram shows the intersection between a new set of ideas and a set of known things, and how to define what is in common. The obviousness problem lies in how much of your patent or invention intersects with prior art. If what you claim to be a new set of ideas intersects too much with a set of already known things, then what you claim to be a new set of things can be obvious, since some of it was already known. 

The second diagram shows how a prior art search for obviousness is performed on an invention. 

So the basic idea of how a prior art search is performed:

• Given a set of inventions X, Y, A, and B
• Let's say a portion of your invention has already been invented in invention B, then the breadth of your invention has been reduced. 
• After the prior art search is complete, your entire invention is found in the set of prior art inventions
• If your entire invention is found within the prior art and lies within two or more inventions, then the prior art search is found as obviousness.

Video summary:

Obviousness

I'll start off with the formal definition of obviousness as stated by U.S. law:

The Patent Act of 1952 states that a patent claim is obvious if "the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art."

This statement was really unclear to me, and I had a lot of questions. How do you decide who has ordinary skill in the art, and how do you determine whether or not they would have thought the invention was obvious at the time of the invention?

To answer these questions, we must look at supreme court rulings on obviousness. This is generally how the U.S patent office determines whether or not a patent is obvious. In the 1966 ruling on Graham v. John Deere, the supreme court provided more explicit guidelines for determining obviousness. 

The USPTO cites this court case in order to delineate the factual inquiries that are to be used to question obviousness. They are also known as Graham factors. 

They are as follows:

1. Determining the scope and content of the prior art
2. Ascertaining the differences between the claimed invention and the prior art
3. Resolving the level of ordinary skill in the pertinent art.

There are also secondary considerations that can be used:

• commercial success
• long-felt but unsolved needs
• failure of others
• unexpected results

The USPTO stresses the idea that the inquiries used to question obviousness must be factual. 

Another Supreme Court ruling, KSR vs. Teleflex in 2006, further specified how to determine a patent's obviousness. 

The court stated that "In determining whether the subject matter of a patent claim is obvious, neither the particular motivation nor the avowed purpose of the patentee controls. What matters is the objective reach of the claim. If the claim extends to what is obvious, it is invalid under §103. One of the ways in which a patent's subject matter can be proved obvious is by noting that there existed at the time of invention a known problem for which there was an obvious solution encompassed by the patent's claims."

So the USPTO states that when considering obviousness of a combination of known elements, the operative question is thus “whether the improvement is more than the predictable use of prior art elements according to their established functions.”

In conclusion the focus has shifted to the functionality of the inventions, rather than technical details or physical factors. 

Patents on Insulating Beverage Containers - Personal Views

US 2661889 A: Thermal coffee cup
(July 1948)
In my opinion, this is the most original and unique invention. It could appear to be so because it is the oldest, but I think in terms of necessity and practicality, this invention trumps the others. I personally really appreciate cup lids that can remain on while I drink from it, since it keeps the drink warm and prevents spills. 

US 6152363: Sleeve construction for improved paperboard cup insulation
(May 1999)
I think this is a very original method of creating air gaps between the cup and the user's hand with hot-melt glue dots. A lot of other beverage cup sleeves have already been created that use air gaps, however, so the originality and prior art of this patent can be questionable. Just the method of how the air gaps are created is different, so I think it's arguable, but in my opinion, it is sufficiently original. 

US 6343735 B1: Insulating sleeve 
(May 2000)
Unique points: wings for air gaps, place to hang lid

US 7922031 B1: Insulator sleeve for a beverage container
(March 2006)
This reusable sleeve, in my opinion, is not as plausible as the other sleeves since most people like to get their drinks in disposable cups. And although this sleeve is generally designed to be used with reusable cups, people won't be willing to go out of their way to separate the sleeve from the cup and reuse the sleeve. It's more convenient to throw the cup and sleeve away together. However, this patent is certainly valid with little prior art and has good inventions, especially for environmental concerns. 

US 8251277 B1: Thermal sleeve, method for manufacturing a thermal sleeve, and combination cup and thermal sleeve
(October 2006)I find it unclear how this patent claims unique way of manufacturing/using a thermal sleeve, even if it claims the combination of the cup and sleeve. I think out of all the patents/applications discussed here, this is the least original patent. 

US 8118189 B1: Temperature-indicating sleeve and related container
(June 2008)I think this idea is sufficiently original and without any significant prior art, but this is an improvement/change on the existing cup sleeves that I do not think is necessary. Most people can get a good idea of the temperature of the cup by briefly touching the non-insulated portions of the cup, and a brief contact with the cup will not be enough exposure for the user to get burned. The patent states that previous similarly patented inventions were not meant for hot beverages or are too difficult/expensive to produce. So even with such an original patent, I don't think the invention was necessary. 


US 20080078824 A1: Beverage cup sleeving system and method 
(August 2006)The only new change this patent offers is a slight change in design to reduce material use and costs. However, a slight improvement like this should certainly not be significant enough to actually be granted a patent for, in my opinion.
US 20100019023 A1:  Protective sleeve
(July 2008)
The only significant change I see proposed by this patent is a change in material to elastomer, and I don't think the extra benefits it provides is a change great enough for it to get a patent on its own. There aren't any significant changes in design or function.
US 20140151385 A1: Hot and Cold Cup Sleeve 
(February 2014)I personally don't believe it's completely necessary to have a sleeve that can handle both hot and cold drinks. It's sufficient for there to be separate sleeves that work with their respectively intended temperature of drinks. However, I do think this is an original application that doesn't have prior art with the exact specifications that this invention uses. No previously made sleeve can actually handle both hot and cold drinks simultaneously, but again, I don't see a need for such sleeves. 

Video Summary:

Patents on Insulating Beverage Containers - The Story Behind Them

US 6343735 B1: Insulating sleeve 

• Priority date: May 4, 2000
• Background: In the past, hot beverages were served in foamed plastic cups, which have found disfavor due to environmental reasons. Inexpensive, biodegradable cups generally don't have enough insulation for hot beverages, so restaurants often "double-cup" them, which uses more material and doesn't do enough to insulate. Another previously used solution is using a cup sleeve, which uses air spaces than can be crushed by the user, so it often doesn't provide enough protection. 
• The invention/claims: It's a cup sleeve that uses a thin, inexpensive material like paperboard "that includes at least one portion spaced apart from the side wall of the beverage container to create an air gap." It can be used for most types of cups, especially the types commonly used in restaurants and coffee shops as well as for both hot and cold beverages. The sleeve has two wings or ridges that extends outwards so that the user can hold the cup without directly touching the hot portions. Also, the lid can be hung on these wings while adding sugar or cream.

US 2661889 A: Thermal coffee cup

• Priority date: July 20, 1948
• The invention/claims: The claim is for a cup and lid assembly, where a small portion on the edge the cap can be removed so that the user can drink from the cup without removing the whole lid while still keeping the drink covered and heated. The claim also encompasses an insulating jacket that prevents the hands of the user from being overheated.

US 8251277 B1: Thermal sleeve, method for manufacturing a thermal sleeve, and combination cup and thermal sleeve

• Priority date: October 19, 2006
• Background: Cup sleeves have previously commonly been used for insulating disposable coffee cups, intended to prevent burns for the person holding the cup. These reduce the use of material compared to double cupping. 
• The invention/claims: This patent claims a cup sleeve with creped paper attached to smooth paper, with very specific measurements related to the design of the sleeve. 

US 7922031 B1: Insulator sleeve for a beverage container

• Priority date: March 1, 2006
• Background: Although disposable sleeves use much less paper/cardboard than double cupping, they are still disposed after one use, which does still pose an environmental harm through the repeated disposing. Previously used non-disposable devices were generally opaque, so customization details cannot be shown. 
• The invention/claims: The invention is an insulating sleeve that has an inner opaque sleeve and an outer sleeve with at least a portion that is transparent, made of material like silicon rubber that can insulate a person's hand from the hot beverage. The claim includes this invention as well as the combination of this sleeve and the cup. 

US 8118189 B1: Temperature-indicating sleeve and related container

• Priority date: June 19, 2008
• Background: Beverages in insulated cups make it difficult for the user to tell whether or not the beverage is too hot to drink, and this often leads to the drinkers to burn themselves. Previous inventions are not meant for hot beverages or are too expensive/too difficult to produce. 
• The invention/claims: This patent claims and invention that both insulates the beverage and indicates how hot the beverage is. 

US 6152363: Sleeve construction for improved paperboard cup insulation

• Priority date: May 3, 1999 
• Background: Against the superior insulation properties of the less environmentally-friendly styrofoam foam cups, previously used cup sleeves do not effectively use air gaps so that the insulation properties are maximized. 
• The invention/claims: The invention uses hot-melt glue dots and/or pieces of syntactic foam on the cup sleeve, which is said to have the same level insulation as common polystyrene cups. The patent claims both methods of creating air gaps between the cup and the user's hand. 

US 20080078824 A1: Beverage cup sleeving system and method 

• Priority date: August 23, 2006
• Background: Previously used cups are not environmentally friendly. Previously used cup sleeves are not sufficiently effective in insulating against heat or functioning when wet. The patent says it is "desirable to provide an insulating cup sleeve that is effective when wetted, effective against extremely high and low temperatures, is reusable and easily manufactured"
• The invention/claims: A sup sleeve that is comprising of a layer of elastomer. It claims any conical sleeve comprised of one of: silicon, rubber, and Butyl.

US 20100019023 A1:  Protective sleeve

• Priority date: July 25, 2008
• Background: Drinking cups on their own do not provide enough protection against the head of hot beverages. 
• The invention/claims: This patent claims a cup sleeve with peaks on one or more edges. This peak allows for the same amount of insulation as other cup sleeves with less material use in manufacturing. 

US 20140151385 A1: Hot and Cold Cup Sleeve 

• Priority date: February 6, 2014
• Background: There are not previously produced cup sleeves that single-handedly and efficiently work on both hot and cold beverages. 
• The invention/claims: The patents claims an invention for a disposable cup sleeve with a water-absorbent lining, a water-repellent outer layer, and a polyethylene coating laminate film layer as an adhesive to bind said lining to said outer layer. It also claims such an invention with different materials as well as other specifications. 

Video Summary: