Even though it doesn’t have any legs (yet), Robonaut 2 is making great strides on the International Space Station. After months of resting comfortably in the newly installed Permanent Multipurpose Module, Robonaut 2, or R2 as it is more affectionately known, has taken a giant leap for robot kind. On May 2nd, R2 began serving the ISS crew in its mission to perform tasks which are too dangerous or mundane for ISS astronauts to perform. The semi-autonomous robot’s first task is to monitor air velocity from station vents. This is perhaps a lowly beginning for space robots, but a necessary step for the currently legless anthropomorphic creation.
R2 is the product of a successful development partnership between automotive giant GM and space exploration behemoth NASA. In addition to flying the first humanoid robot to space, more than 40 patents and patent applications have blossomed from the R2 development program. Like many other private company/government agency relationships, the partnership between GM and NASA was heavily influenced by federal laws that govern the agency involved. GM and NASA entered into a Space Act Agreement (SAA). The structure of the SAA was chosen in part to ensure that GM could protect and retain an interest in the intellectual property they developed while working with NASA on next-generation robots.
For those of you unfamiliar with the R2, the robot was developed at Johnson Space Center in the Dexterous Robotic Laboratory. A principal goal of the project is developing humanoid robots which can autonomously or semi-autonomously operate alongside astronauts. A humanoid form factor was chosen so that the robots can use the same tools as their flesh and blood counterparts. This means that NASA only has to ship one set of tools to the ISS, instead of a human set and a set designed for robotic use. Currently, R2 is operating on the ISS. R2 will initially perform simple tasks like monitoring life support system airflow, freeing human astronauts to carry out more challenging tasks. R2 is equipped with stereoscopic cameras and the ability to be remotely controlled by astronauts on the ISS or from a ground station. This teleoperation has a haptic feedback component, enabling the human operator to “feel” the forces encountered by the robot during operation. Because R2 has a body, including hands, designed to mimic the abilities of a human, teleoperators may one day be able to perform EVAs using R2’s successors, or to perform remote surgeries on sick astronauts. Currently, R2 is not space rated. R2’s electronics would be fried by the radiation and extreme temperature shifts outside the ISS.
Robonaut 2 was jointly developed by NASA and General Motors. The General and NASA began their relationship in 2007 when the two groups signed a space act agreement (SAA). Over the next four years, a pair of R2 robots were developed and constructed under a Space Act Agreement. R2b actually ended up on the ISS, while R2a has been outfitted with a four-wheeled base, enhancing its mobility. NASA is a “title taking”organization which means that under many circumstances, intellectual property rights to technologies developed by large companies under NASA contracts like SAAs must be transferred to NASA. The Bayh-Dole Act insulates small companies working with NASA from this title taking and, depending on the circumstance,
SAAs can be structured to avoid it too. The SAA between NASA and GM was structured in this manner. The NASA/GM SAA is a reimbursable SAA. That is, NASA and GM are working together on the project, but NASA isn’t paying anything out of pocket for development. GM actually pays NASA for the use of facilities. This unfunded SAA gives GM the right to hold the patents on all the technologies they develop for Robonaut 2. To date, some 40 patents or patent applications have been filed on technologies developed for the Robonaut program, including teleoperation technologies and human grasp assist devices. GM hopes to implement many of the technologies developed under this program in its factories so that human and robot workers can produce cars more efficiently.
As we approach the April 17, 2012, tax filing deadline, it is only appropriate that I talk patents and taxes. I was recently asked by a client if it is possible to deduct patent-related costs for tax purposes? Hmm…well believe it or not, this is the first time I have been asked this question in over 15 years of practicing intellectual property (IP) law! So, with as much as 80% of the value of a U.S. publicly-traded company coming from intangible assets, whether an enterprise may write off expenses associated with creating or acquiring these intangible assets (especially patents) seems to me to be an important question to address.
Before addressing this important question, one caveat: I would never recommend getting IP advice from a tax lawyer. Thus, I surely am not suggesting that you take tax advice from an IP lawyer. With this in mind, here are some knowledge tidbits that you can use to burden your tax advisor.
First, you need to determine what category of patent you are dealing with when you are determining whether expenses in acquiring the patent are deductible (i.e., whether these costs may be “written off”). The categories include newly-created patents and acquired patents:
Newly-Created Patents: The costs of obtaining patents (i.e., perfecting a patent application into an issued patent) may typically be deducted as research or experimental expenditures under IRC 174. These costs include attorneys’ fees (yeah!). Such newly-created patent costs are typically deducted as current business expenses.
Acquired Patents: The costs of obtaining (i.e., purchasing) patents may typically be written off only by amortizing these costs over a 15-year period. (This period is fixed, and therefore the life of the patent has no effect on the amortization time line.)
See IRS Publication 535, and when that’s totally confused you, seek professional tax advice!
On March 20, 2012, in an opinion written by Justice Breyer, the United States Supreme Court issued a unanimous decision in Mayo v. Prometheusholding the claimed medical diagnostic methods were ineligible for patent protection under Section 101 of the Patent Act.
First, some quick legal background. U.S. Patent Law recognizes four broad categories of inventions eligible for patent protection: processes; machines; article of manufacture; and compositions of matter. The U.S. Supreme Court, however, has long recognized that there are three exceptions to these four broad patent-eligibility categories: laws of nature; physical phenomena; and abstract ideas.
The popular press (and a lot of the legal press) reporting this latest Supreme Court case has used sensational headlines announcing the death of medical diagnostic and personalized medicine patents. This reminds me of the press frenzy following the Supreme Court’s June 2010 decision in Bilski, where the press prematurely announced the demise of software and business method patents. To all this, I say “stay calm folks!”
Novelty and obviousness aside for a minute, consider the following hypothetical:
A method for treating the hair of a human subject, comprising the steps of:
(a) applying water to the subject hair until it is completely saturated;
(b) applying a shampoo solution to the subject hair in a vigorous manner until said shampoo solution completely covers the subject hair;
(c) rinsing the subject hair with water until said shampoo solution is no longer visibly present in the subject hair; and
(d) repeating steps (a)-(c) until the subject hair is clean.
Does this claim recite patentable subject matter? Well, the answer is an obvious “no!” (Pun intended.) As the Europeans would say, this claim has no “technical effect!” Similarly, the patent involved in the Mayo v. Prometheus case – U.S. Patent No. 6,355,623, entitled “Method of Treating IBD/Crohn’s Disease and Related Conditions Wherein Drug Metabolite Levels in Host Blood Cells Determine Subsequent Dosage,” issued in March of 2002 – had no technical effect. Representative Claim 1 of that patent is as (un)remarkable as my hypothetical claim above:
A method of optimizing therapeutic efficacy for treatment of an immune-mediated gastrointestinal disorder, comprising:
(a) administering a drug providing 6-thioguanine to a subject having said immune-mediated gastrointestinal disorder; and
(b)determining the level of 6-thioguanine in said subject having said immune-mediated gastrointestinal disorder,
wherein the level of 6-thioguanine less than about 230 pmol per 8108 red blood cells indicates a need to increase the amount of said drug subsequently administered to said subject and
wherein the level of 6-thioguanine greater than about 400 pmol per 8108 red blood cells indicates a need to decrease the amount of said drug subsequently administered to said subject.
I don’t think I would have been so bold as to submit such a claim to the USPTO in an application – these steps, to me, are pure mental steps capable of being performed by a doctor, with not even any software, computer or other system components recited!
The Supreme Court’s defined its task in the Mayo case as follows: “[T]he question before us is whether the claims do significantly more than simply describe these natural relations. To put the matter more precisely, do the patent claims add enough to their statements of correlations to allow the processes they describe to qualify as patent eligible processes that apply natural laws?” In answering this question negatively, Justice Breyer stated: “If a law of nature is not patentable, then neither is a process reciting a law of nature, unless that process has additional features that provide practical assurance that the process is more than a [patent attorney’s claims] drafting effort designed to monopolize the law of nature itself.”
IMHO, I don’t see much new law here … just some common sense application of well-established patent law. Stay calm.
Many of my small- and medium-sized enterprise (SME) clients who have filed U.S. trademark applications have been contacting me lately about “invoices” they have received in the mail. All of these official-looking “invoices,” however, have turned about to be scams.
Trademark-related solicitation (“trademark spam,” if you will) has become an increasing concern of the US Patent and Trademark Office (USPTO). In fact, the USPTO added a warning notice last month to its trademarks homepage. Why is this happening? Well, the USPTO’s databases are public. Thus, solicitors have been using trademark registration and application data to send letters and emails to applicants offering phony legal and registration services. In order to fool even the most spam-conscious applicants, such solicitors adopt corporate names that include “United States” or “U.S.” in an attempt to fool their targets. Unlike the spam we are all accustomed to, however, trademark spammers format their misleading messages to resemble official government notices. With an emphasis on application data and filing dates instead of a smiling monkey and congratulatory balloons, many trademark applicants are paying the requested fees before realizing they are being scammed.
What do you do? Read all your mail and emails carefully. Be especially wary of those that ask for money. All official USPTO mail will be sent from Alexandria, Virginia, and emails will be sent from the “uspto.gov” domain. If you do mistakenly fall victim to trademark spam, file a report with the Federal Trade Commission at www.FTC.gov. The USPTO would also like to hear about such trickery. Thus, also send an email to TMfeedback@uspto.gov detailing the spammer and whether the requested fees were paid for the phony, offered legal and registration services.
A global museum of such scam notices (both patent and trademark) can be found here. Stay vigilant!
If an employee misappropriates their current or former employer’s proprietary information, and discloses such information to its new employer and/or any other unauthorized person(s), that is enough to establish a violation under the Virginia Uniform Trade Secrets Act (“VUTSA”) so says the Virginia Supreme Court. There is no requirement under the Act that the employee or new employer actually use the misappropriated information to compete with the former employer.
In the case of Geographic Services, Inc. v. Collelo, et al. (2012), the Virginia Supreme Court held that once an employer establishes the existence of a trade secret, all that they are then required to show is that the trade secret was misappropriated as that term is defined under the Trade Secrets Act. The entity from which the trade secret was misappropriated does not have to show that defendants used the trade secret in order to establish a claim under the VUTSA and recover damages. Disclosure of the trade secret is sufficient where it can be shown that the new employer and/or person to whom the trade secret was disclosed knew, or had reason to know, that the trade secret was acquired by improper means. In such cases, where the plaintiff cannot readily prove measurable damages, then the VUTSA provides that the court can impose a reasonable royalty upon the wrongdoers for the unauthorized disclosure of the trade secret.
This decision by Virginia’s highest court provides a cautionary note for Virginia employers: if you know, or should have known, that an employee has obtained proprietary information from its prior employer without its knowledge, you could be on the hook for damages if the employee discloses the information to your company – even if your company never uses the information. The disclosure, in and of itself, will be enough to expose companies to monetary damages. Conversely, companies in which an employee has taken proprietary information can seek legal redress and possibly obtain damages even if the employee and its new company did not use the information.
Wednesday, December 21, 2011 by Team PCT Law Group
As I have often pointed out on this Blog, small- and medium-sized enterprises (SMEs) that overlook their intellectual property assets (i.e.,“IP” or patents, copyrights, trademarks and trade secrets) do so at their own peril. As IP accounts for a vast majority of SMEs’ value, the key to their exit strategy – be it an IPO or sale – is the IP that they control or potentially control.
Last month, the World Intellectual Property Organization (WIPO) released its annual report of IP statistics from around the world. While there is most certainly a dizzying amount of data, I’ve taken the liberty to provide a snapshot of such data to help SMEs (and those who counsel them) understand what is happening in the world around them. This should help in making long-term, non-myopic IP management decisions.
With over 3 million worldwide applications in 2009, trademark protection is the most sought after form of IP protection in the world. That is, trademark applications represent the highest percentage of overall IP protection applications, apart from a few exceptions such as the IP offices of Japan, the Republic of Korea, and U.S. where patent applications make up the largest share.
Globally, residents file the majority of their IP applications at their respective IP offices. This reflects a preference for seeking protection within respective domestic markets. For example, 42.7% of global patent applications were filed abroad. This shows that patent applicants have a greater appetite for seeking international protection for this form of IP than for any other form of IP rights. By contrast, only 25% of total trademark applications are filed by applicants outside their country.
With respect to patent filings abroad in 2009, applicants choose the Patent Cooperation Treaty National Phase Entry route 53.4% of the time, versus directly filing in a foreign jurisdiction.
The world’s top 10 IP offices accounted for approximately 87% of total patent applications filed globally, with the top 3 – the U.S., Japan and China – filing about 60% of the total. Together, the top 20 offices filed 94% of all patent applications.
Between 2008 and 2009, of the top 3 offices, there was a 10.8% decrease in the number of patent applications filed in Japan, while the U.S. remained practically unchanged and China saw an 8.5% increase in the number of applications.
In 2009, one quarter of all trademark applications were filed at the Chinese Trademark Office. When combined with the shares held by India, Korea and Japan, these four Asian offices accounted for 37% of world’s total number of trademark applications.
An Eastern District of Virginia Court has permanently enjoined Verizon from infringing upon patents of a California-based Company, ActiveVideo Networks, Inc. (“ActiveVideo”), including two patents which will have a direct impact upon Verizon’s ability to offer its popular Video on Demand (“VOD”) services. In the case, ActiveVideo Networks, Inc. v. Verizon Communications, Inc., et al., ActiveVideo sued Verizon for allegedly infringing upon several of its patents. After a three-week jury trial, the jury found in favor of ActiveVideo and awarded it $115,000,000 in damages for Verizon’s infringement. ActiveVideo then sought a permanent injunction from the Court enjoining Verizon from continuing to infringe upon the patents.
In analyzing the injunction standard under the Patent Act, Judge Raymond A. Jackson of the Eastern District of Virginia relied heavily upon the four-part test set forth by the United States Supreme Court in the case of ebay, Inc. v. MercExchange, L.L.C. The District Court found in favor of ActiveVideo regarding all four prongs finding that: 1) ActiveVideo had been, and would continue to be, irreparably harmed by Verizon’s unauthorized use of its technology; 2) ActiveVideo did not have an adequate monetary remedy at law because the continuing harm associated with loss of market share and brand recognition of the VOD service were difficult to quantify; 3) the balance of hardships favored ActiveVideo because, as a small company, it relied heavily upon the patents infringed upon by Verizon, while Verizon offered numerous services and would be less affected by having to cease use and/or find alternatives to offering the VOD service; and 4) public interests and public policy were served by protecting patent rights. Regarding this last prong, the Court specifically noted that, “[t]hough Verizon does add other components to be able to offer the completed product, Verizon’s FiOS system, and more specifically the VOD aspect of the FiOS system, could not function without the use of ActiveVideo’s technology.” Mem. Op. at 17.
Nevertheless, have no fear Verizon VOD users. The Court granted Verizon a six-month “sunset” window of time to come up with a non-infringing alternative to its current VOD system, and Verizon claims it has already been diligently working to come up with an alternative system. Therefore, before the time is up, it is likely Verizon will have embarked upon an alternative method to provide the popular VOD service to its customers – thus, enabling it to keep sending out those monthly Verizon bills to its subscribers at a brisk and healthy pace.
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