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Archive for October, 2009

Foreigners Receive More Patents than U.S.!

For the first time in U.S. history more patents were issued to foreigners than U.S. residents, by the U.S. Patent and Trademark Office (USPTO).  According to the USPTO, foreigners received 80,271 patents while U.S. inventors received 77,501 in 2008.[1] Six of the top ten patenting companies in 2008 were foreign.


David Kappos, Director of the USPTO,  stated at an AIPLA meeting, “We are blowing up the quality-measuring system.”  Kappos’ stated that the system is “dysfunctional and backwards.”  For more information see the article “No Quick End to Backlog in Sight”, at JSOnline.

This is great news for inventors, and the American economy.

Colorado Patent Statistics

The number of patents issued to Colorado inventors has been stagnant since 1998. 


The number of patents grew steadily from 1991 to 1998.  Since 2004 the number of patents issued to Colorado inventors has declined significantly.  This trend is fairly consistent with the national trends.  For More information on national trends click here.


Any government restriction on how the internet can operate will by definition limit innovation.  The FCC’s Net Neutrality proposal violates the “Rate Law of Innovation”, which states that rate of innovation is directly related to the number of elements that innovators have available to them.  The Net Neutrality rule limits how many variables or elements that innovators have to innovate.  See the Laws of Innovation  for more information.  All the major engineers who developed the internet are opposed to the FCC’s Net Neutrality rules.  According to Andrew Orlowski, “Engineers fear rash legislation would inhibit the ability of systems engineers to improve latency and jitter issues needed to move data at speed.”  See Mr. Orowski’s article for more information.


The book The Invisible Edge, in chapter 8, makes a compelling case that the recession of the 1970s was largely due to the Federal Trade Commission’s (FTC) antitrust policies that limited the value of patents owned by U.S. companies.  The book describes in detail the shameful abuse of government power by the FTC to force Xerox to license all its technology to all comers for a pittance.  Xerox spent millions of dollars and over a decade to perfect the plain paper copier.  They held numerous patents on the technology that made the plain paper copier possible.  In 1975 when Xerox agreed to the FTC consent decree to license their patents, they had almost a 100% market share in plain paper copiers.  Just four years later, their market share was down to 14% and most of the rest of the market was controlled by Japanese companies. 

Obviousness – Flow Chart

Novel2This is my second post on the nonobviousness standard for patents (35 USC 103).  The earlier post focused on the practical questions that an inventor and his attorney face when negotiating with the Patent Office (PTO).  This post attempts to provide a rational approach to the nonobviousness requirement.

Once it has been determined that a patent claim is novel, step 10 in the flow chart, there are only two things that can make the invention nonobvious.  One is a new result and the other is a new combination that has provides same result in the prior art.  At step 12, we determine if the invention has a new result.  For instance, Edison’s light bulb had a new result of a high resistance filament.  This result is important because it makes it possible to build an economically


This is an excellent book – up there with Niall Ferguson’s, Ascent of Money.  David G. Post, the author, ties the ideas of Thomas Jefferson to the ideas that made the Internet so successful.  Post also demonstrates an extensive knowledge of Jefferson, but not to the determent of the story.

Post shows how Jefferson’s mapping of the navigable rivers in Virginia helped him to understand the critical importance of New Orleans and the Mississippi river. The map of the navigable rivers is compared to the connections of the internet.  The non-hierarchical nature of the internet avoids a New Orleans type bottleneck.


I was posed the following interesting question, if the constitutional purpose of patent law is to promote science and the useful arts why shouldn’t mathematics be patentable?  Clearly, mathematics is useful and writings about mathematics are covered by copyrights.  However, “mathematical algorithms” have generally not been considered patentable subject matter.

A possible reasons why mathematics has not been considered to be patentable subject matter is that laws of nature and mathematics describe what is, they are not creations of man.  Laws of nature are per se prior art, they clearly existed before man discovered how they worked.  While this is a good explanation for why laws of nature are not patentable, is it a good explanation for why mathematics is not patentable?  Is Euclidean geometry a product nature or is it a human construct?  Euclidean geometry is very helpful in understanding physics, chemistry, and other natural phenomena.  However, Relativity shows us that our universe is not Euclidean, but curved.  Alternatively, if a Fourier transform is a description of nature, are the different methods of calculating a Fourier transform descriptions of nature?  I cannot see how the different methods of calculating Fourier transforms can be considered a description of nature.  In my opinion the “per se prior art” reasoning for why natural laws are not patentable does not cover all areas of mathematics.


According to AIPLA the Patent and Trademark Office announced October 8, 2009, that it will rescind the claiming and continuations rules package that have been the subject of litigation in Tafas v. Kappos.  GlaxoSmithKline and the USPTO, parties to the litigation, have agreed to request the Federal Circuit to dismiss the appeal in that case and to vacate the district court decision below.

This is excellent news and shows that Director Kappos is listening to the patent community.  These rules would have been disastrous for independent inventors and start-up companies.  They also would have increased the pendency time for patent applications.  Hopefully this is a further sign that Director Kappos intends to undue the reprehensible damage Director Dudas did the USPTO.


The Bilski case that the Supreme Court is suppose to rule on in this term is about a patent application for a method of hedging a commodity.  Specifically, Bilski describes a method of level billing for energy using a Monte Carlo simulation to estimate the future costs of the underlying commodity.  The legal question is whether the Bilski patent is directed to statutory matter.  For instance, patents cannot be directed to laws of nature, meaning that laws of nature are not directed to statutory matter.  There is concern that the Supreme Court may use this case to rule that patents directed to financial products are not statutory.


The goal of this post is to describe how to prepare an Intellectual Property (IP) strategy document that shows your company is an IP expert.  According to the book The Invisible Edge: Taking Your Strategy to the Next Level Using Intellectual Property, IP is the most important “sustainable competitive advantage.”  There are numerous types of intellectual property, but this post is going to focus mainly on patents and trade secrets, because these types of intellectual property protect a company’s innovation.  Innovation is the most important method of creating a sustainable competitive advantage.  Innovating without protecting the innovation with patents or trade secrets is charity according to the authors of The Invisible Edge.


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