Archive for October, 2012

Guest Post: Kathryn Paisner on IP Checkups’ Investigation of Intellectual Ventures

October 31st, 2012

Last October, Popular Mechanics reported that non-practicing entities (NPEs) may have “bled companies for half a trillion dollars” between 1990 and 2010. Sometimes called “patent trolls” by their detractors, NPEs are generally defined as companies that obtain most of their revenue from the licensing and/or enforcement of their intellectual property.

Not all NPEs are created equal. Some, such as the Wisconsin Alumni Research Foundation (WARF) and the Commonwealth Scientific and Industrial  Research Organization (CSIRO) are public institutions (or the licensing arms thereof), focused primarily on research and education (NPE Type 1).

Others, such as Tessera Technologies (NASDAQ: TSRA) and Intellectual Ventures, combine legitimate research enterprises with patent licensing/enforcement units, where the latter form the basis of the companies’ revenue streams (NPE Type 2). The third type of NPE exists solely as a patent enforcement/licensing organization, and is far less common than the aforementioned research-and-licensing outlets (NPE Type 3).

If most NPEs perform legitimate research, why are they called “patent trolls”? Shouldn’t companies (and individual inventors) be encouraged to profit from their innovative efforts?

The answer to this is simple, at least on the surface. It takes a lot of hard work, and substantial financial resources, to develop a prototype into a marketable product. NPEs reap the benefit of successful products without investing heavily in development, marketing, and logistics.

Companies that have transformed an idea from lab bench prototype to marketable product are naturally irked by the notion that someone who had a similar idea — yet never developed it into anything useful — could be entitled to a substantial portion of their profits. Much of this irritation is likely tied to the magnitude of the financial awards that NPEs have enjoyed in recent years, as much as it is to any quibbles over innovators’ intellectual rights.

According to IPEG Consultancy, the median damages awarded to NPEs in patent infringement lawsuits was more than three times the median damages awarded to product-producing companies. The source(s) of this imbalance are likely multitudinous; however, one key factor could be that NPEs wait to ensure that a product is successful before pursuing infringement suits.

Also, unlike product-producing companies, who generally enforce patents early, NPEs “frequently continue to litigate to the verge of [patent] expiration.”

As patent assertions continue to skyrocket, costly litigation–with both NPEs and industry competitors–has become more commonplace, and more public. Despite numerous public outcries, there is no indication that this trend will abate anytime soon. Therefore, innovative companies would be wise to remain current on patented technologies that are relevant to their product offerings.

A quick perusal of IP Checkups’ CleanTech PatentEdge indicates that NPEs own over 1200 cleantech patents, in a variety of different industry sectors. The table below documents patent ownership NPEs with a strong presence in the cleantech space.

 

NPEs’ patent holdings in cleantech. This list of NPEs was accessed from Patent Freedom.

*Refers to the type of NPE, as previously described, where 1 is primarily a research organization; 2 is a licensing/enforcement organization that also performs research; and 3 is a company that enforces and/or licenses its IP holdings, but does not appear to perform any independent research.

 

Interestingly, this table indicates that Intellectual Ventures — perhaps the world’s most infamous NPE and one of the top five patent owners in the U.S. — has a relatively small cleantech portfolio.

Before breathing a collective sigh of relief, however, the cleantech community should definitely consider the fact that Intellectual Ventures houses its patent assets in an estimated 1200+ shell companies, the names of which are not currently available to the public. For example, Searete, LLC, a company purportedly owned by Intellectual Ventures, owns over 200 cleantech patents, in a variety of industry sectors. 

The true scope of Intellectual Ventures’ presence in the cleantech space will be elucidated by IP Checkups‘ current Indiegogo project, Case I.V. Thicket: Unveiling Intellectual Ventures’ Hidden Web of Patents. First released on October 15th, 2012, this project will bring transparency to Intellectual Ventures’ operations by revealing to the public all patents owned by all of Intellectual Ventures’ shell companies.

From this increased transparency, cleantech companies and cleantech investors will gain greater leverage in their ability to negotiate license agreements and avoid litigation, enhancing their position in this increasingly competitive space.

*Kathryn Paisner is Director of Research and Business Development at IP Checkups.

Wilkins Wins Wind Patents as Court Tentatively Finds GE SOL

October 28th, 2012

In previous posts here and here I discussed a companion lawsuit to the major GE-Mitsubishi wind patent litigation in which GE and a former employee are fighting over the rights to certain wind turbine technology.

In that suit, filed in the Eastern District of California, GE accused Thomas Wilkins, an electrical engineer who worked at Enron Wind and GE after it acquired Enron, of breaching his employment agreements with both companies by asserting an ownership interest and trying to license U.S. Patents Nos. 6,924,565 (’565 Patent) and 6,921,985.

Although the court granted GE’s motion for a preliminary injunction last year and ordered Wilkins to temporarily cease his licensing activities, the case has seen some twists and turns resulting in an apparent victory for Wilkins.

In an Order decided earlier this month, the court “tentatively” granted partial summary judgment for Wilkins, holding that he owns the ’565 Patent and therefore has the right to license it.  The court also granted Wilkins’ request that the preliminary injunction be dissolved with respect to the ’565 Patent.

Over the course of this case, GE had put forth two arguments as to why it, and not Wilkins, owned the rights to the ’565 Patent.  The first was that Wilkins was hired by Enron and GE to invent, and as such, he was obligated to assign the rights to the ’565 Patent to GE. 

However, in a prior order the court held the statute of limitations had passed for GE to enforce this obligation:

the Court concluded in its summary judgment order that even if Mr. Wilkins was hired to invent, GE’s ability to enforce Mr. Wilkins’ obligation to assign his rights to the ’565 patent is time-barred.  The statute of limitations period on that claim expired in 2007 at the latest.  Accordingly, GE cannot establish sole legal title to the ’565 patent under a “hired to invent” theory and cannot preclude Mr. Wilkins from licensing the patent on that basis.

In the most recent decision, the court rejected GE’s alternative legal theory that under California law an employee hired to invent not only has a duty to assign his rights, but also has an independent duty not to use the invention to the detriment of his employer. 

The court found nothing in the case law to support the application of this principle to patents or to licensing.  Accordingly, the court held that Wilkins owns the ’565 Patent and has the right to license it:

Absent assignment, Mr. Wilkins retained his ownership interest in the ’565 patent and enjoys an unfettered right to license the patent.

The court did, however, make the grant of summary judgment for Wilkins “tentative” and gave GE the opportunity to raise other issues before it enters judgment:

Because GE’s legal basis for precluding Mr. Wilkins from licensing the ’565 patent appears to lack merit, the Court will tentatively grant Mr. Wilkins summary judgment on this matter.  GE will be given a final opportunity to raise any other issues not already addressed by the Court before summary judgment is entered.

The court also granted summary judgment for Wilkins with respect to his duty to assign the ’985 Patent after GE conceded that the statute of limitations period on that claim expired in 2004.  This was because GE was aware back in 2002 that Wilkins breached his duty to assign the rights to the patent, and there is a two-year statute of limitations on the claim.

Not only is this a win for Wilkins, but it’s also a victory for Mitsubishi, who had intervened in the case.  The suit aroused Mitsubishi’s interest because the ’985 Patent is one of several asserted by GE against Mitsubishi in at least two lawsuits, including a patent infringement case in Texas and an investigation in the U.S. International Trade Commission (ITC).  Among other things, Wilkins’ inventive contributions to the ’985 Patent were at issue in the ITC case.

The ’985 Patent is also one of the patents-at-issue in Mitsubishi’s antitrust suit against GE, in which it has accused its rival of engaging in an anticompetitive scheme to monopolize the U.S. market for variable speed wind turbines.  The antitrust suit was stayed pending resolution of the patent infringement suits.

British Consumer Watchdog Shuts Down Trump’s Category-Defying Anti-Wind Ad

October 25th, 2012

The UK’s Advertising Standards Authority (ASA) recently shut down an anti-wind power ad run by the Trump Organization and Communities Against Turbines Scotland on the grounds that the picture and text of the ad were misleading (see the Treehugger piece here).

The ad (reproduced above) said “Welcome to Scotland” in its headline, showed a picture of several old and dilapidated wind turbines, and included the text “Alex Salmond wants to build 8,750 of these monstrosities – think about it.”

The ASA upheld three challenges to the ad brought by Scottish Renewables, a green energy trade association.  First, the agency found the photograph misleading because it was not taken in Scotland but was instead a picture of a decommissioned wind farm in Hawaii. 

Trump argued the picture was used to make a satirical point, but the ASA was not convinced and noted that Scottish regulations would prevent the wind turbines from deteriorating to the condition shown in the photograph.  Accordingly, the ASA held that the picture gave “a misleading impression of the possible consequences of the Scottish Government’s plans to use wind turbines.”

In the second part of the ruling the ASA found the ad’s claim that the Scottish government wants to build 8,750 of “these monstrosities” to be misleading because it suggested that the wind turbines shown were the type of turbine likely to be used in Scotland.  That was not the case, the agency said, because the picture was of a very old wind farm and the disclaimer language was not enough to dispel the impression that those particular turbines would be used in Scotland:

We understood that the picture was of a wind farm built in 1987 and decommissioned in 2006 and therefore the model of turbine was unlikely to still be used in new wind farm projects.  Although the small print stated that the photo had not been taken in Scotland, we considered that it was not sufficient to remove the overall impression that the turbines shown were the type that had been used, or would be used, in Scotland.

Finally, the ASA found use of the number 8,750 was misleading and unsubstantiated because it implied that the number of turbines was based on an official Scottish government figure, which was not the case, and exaggerated the number of turbines.  In particular, a Scottish government policy document had estimated a total of 5,645 turbines would be required to meet the government’s  renewable energy goals.

Although it is a misleading attempt to trash wind power, the Trump ad doesn’t really qualify as greenwashing.  That term typically means making false or misleading statements about the purported environmental benefits of one’s own products, services or business practices. 

It isn’t reverse greenwashing either because that’s making false or misleading statements about the purported negative environmental impact of a competitor’s products, such as the allegations of plastic bag makers against ChicoBag.

I really don’t know how to classify this ad.  I suppose The Donald has found yet another way to defy categorization.

Clean Tech in Court: Green Patent Complaint Update

October 18th, 2012

Several green patent complaints have been filed in the last several weeks in the areas of biofuels and LEDs.

 

Biofuels

The big story in biofuels patent litigation is the rapidly expanding patent war between advanced biofuels companies Gevo and BP-DuPont joint venture Butamax.  Since our last update, these biobutanol rivals have added five more actions to the mix, all in the District of Delaware.

On September 25, 2012, Gevo filed a complaint accusing Butamax of infringing U.S. Patent No. 8,273,565 (’565 Patent).  The suit was filed the day the ’565 Patent issued. 

The ’565 Patent is entitled “Methods of increasing dihydroxy acid dehydratase activity to improve production of fuels, chemicals, and amino acids” and directed to a recombinant yeast microorganism comprising a recombinantly overexpressed polynucleotide encoding a dihydroxy acid dehydratase (DHAD) and methods of using the microorganism to produce beneficial metabolites derived from DHAD-requiring biosynthetic pathways.

The same day Butamax fired back with a declaratory judgment action for non-infringement and invalidity of the ’565 Patent and a new patent infringement suit of its own.  The Butamax infringement complaint accused Gevo of infringing U.S. Patent No. 8,273,558, entitled “Fermentive production of four carbon alcohols” (’558 Patent).

Also issued on September 25, 2012, the ’558 Patent is directed to a recombinant yeast host cell comprising genes encoding an engineered isobutanol biosynthetic pathway that increases the production of isobutanol.  The recombinantly expressed enzymes used in the pathway are expressed in the cytosol, and the recombinant yeast host cell is capable of producing isobutanol through certain substrate to product conversions.

Two weeks later, on October 9, 2012, Butamax filed another infringement complaint, by which it asserted another new patent - U.S. Patent No. 8,283,144 - which is related to the ’558 Patent and also entitled “Fermentive production of four carbon alcohols.” 

The same day, Butamax launched another preemptive strike with a declaratory declaratory judgment action relating to Gevo’s brand new U.S. Patent No. 8,283,505 (’505 Patent). 

According to the complaint, the ’505 Patent is related to U.S. Patent No. 8,101,808, which Gevo has accused Butamax of infringing.  Both patents are entitled “Recovery of higher alcohols from dilute aqueous solutions” and relate to methods of recovering C3-C6 alcohols from dilute aqueous solutions such as fermentation broths.

This mega-litigation now involves 17 different actions and 14 patents.

 

LEDs

Bluestone Innovations, LLC v. E&S International Enterprises, Inc. et al.

Bluestone Innovations, LLC v. Acer, Inc. et al.

In two complaints filed September 13, 2012 in the Eastern District of Virginia (Bluestone-E&S ComplaintBluestone-Acer Complaint), Florida-based patent licensing company Bluestone Innovations has accused E&S International (ESI) and Acer of infringing U.S. Patent No. 6,163,557

The ’557 Patent is entitled “Fabrication of group III-V nitrides on mesas” and directed to group III-V nitride films fabricated on mesas patterned either on substrates such as sapphire substrates or on group III-V nitride layers grown on substrates. The mesas provide reduced area surfaces for epitaxially growing group III-V nitride films to reduce thermal film stresses in the films to minimize cracking.

The accused devices are ESI’s Viore and iSymphony LED backlit televisions and Acer’s S231HL LED backlit monitors.

 

LED Tech Development, LLC v. The Coleman Company

LED Tech Development, LLC v. Home Depot U.S.A., Inc.

On October 3, 2012, LED Tech sued the Coleman Company and Home Depot alleging infringement of two patents relating to LED lighting. 

The Coleman complaint asserts U.S. Patent No. 6,808,287, entitled “Method and apparatus for a pulsed L.E.D. illumination source” (287 Patent) and directed to a hand held portable LED device that maintains a predetermined light output level by selectively applying pulsed power from a DC voltage source to the LED units.  The accused device is Coleman’s Exponent 2 CR123A Lithium flashlight.

The Home Depot Complaint alleges infringement of the ’287 Patent as well as U.S. Patent No. 6,095,661, a parent of the ’287 Patent entitled “Method and Apparatus for an L.E.D. Flashlight.”  The accused product is the Fenix 72 Lumens Max Performance Cree XP-G R4 LED flashlight.

BNSF Patents and Demos Hybrid Fuel Cell Locomotive

October 15th, 2012

BNSF Railway, a Fort Worth, Texas company, is one of North America’s leading freight transportation companies.  The company has a rail network of 32,000 route miles in 28 U.S. states and two Canadian provinces.

Traditional rail transportation is highly efficient and uses significantly less fuel than highway alternatives.  BNSF intends to improve upon that efficiency and has been experimenting with a hydrogen fueled fuel cell locomotive for the past several years. 

Recently the U.S. Patent and Trademark Office granted BNSF’s patent covering fuel cell locomotives.

U.S. Patent Number 8,117,969, entitled “Hydrogen Fuel Cell Hybrid Locomotives” describes a locomotive including a set of batteries for driving a plurality of electric traction motors for moving the locomotive and a fuel cell power plant for charging the batteries and driving the electric traction motors.

 

The hydrogen hybrid locomotive is based on a commercially available diesel-hybrid donor platform.  The locomotive design uses a cab section (101), which houses the control systems used by the controller, a center section (102), which contains the batteries and hydrogen storage tanks, a rear section (103) containing the hydrogen fuel cell power plant, and an adjustable ballast section (104) located under the chassis. 

Ballast is needed because the locomotive does not carry heavy diesel fuel, which means the weight is significantly under the weight needed to maximize the traction of the wheels on the rails.

 

In the embodiment disclosed in the patent and shown in Figure 2 above, hydrogen is provided to two fuel cell power plants based on two power stack modules (201a – 201b).  The fuel cells are proton exchange membrane cells and (in the preferred embodiment) are Ballard Power Systems, Inc Mk903 PEM fuel cell stacks. 

Hydrogen is provided to the power modules from 14 carbon-fiber composite tanks (204).  Power from the fuel cell is delivered to a DC converter (203) and to the locomotive systems including the traction motors (209a – 209d).  The power output of the fuel cell stacks can be varied depending on demand by adjusting the flow of air through the system.

BNSF has an operational fuel cell locomotive prototype serving in a demonstration project in Los Angeles.  Funding for the locomotive came from BNSF and the Department of Defense.  The prototype is a switch locomotive, which moves freight cars within rail yards and rail stations during train assembly and disassembly. 

The prototype was unveiled in Topeka, Kansas in January 2009.  It then traveled to Colorado for additional testing and was sent to California in 2010.  It was tested in the Los Angeles rail yards in Commerce and Hobart through 2010 and 2011.

Use of hydrogen fuel cells in locomotives can reduce the amount of particulate pollution around rail lines and reduce the amount of greenhouse gases expelled into the atmosphere.  Hydrogen fuel cell locomotives can also reduce railroad dependency on fossil fuels.  Additionally, fuel cell locomotives can also act as mobile electricity sources, for example in disaster recovery scenarios.

You can read more about BNSF’s demonstration locomotive here, here, and here.

*David Gibbs is a contributor to Green Patent Blog.  David is a graduate of Thomas Jefferson School of Law in San Diego.  He received his undergraduate degree in Geology from the University of California, Berkeley.

 

Class Action Charges Nissan with LEAF Greenwash

October 10th, 2012

Hybrid electric vehicles have frequently been targeted in court, taking flak for alleged greenwashing (see, e.g., here and here) and alleged patent infringement (see, e.g., here and here).

That trend continued and extended to electric plug-in vehicles with a recent class action complaint accusing Nissan of making misleading representations and omissions regarding the LEAF’s battery capacity and driving range. 

Filed in federal court in Los Angeles by representative Plaintiffs Humberto Daniel Klee and David Wallak, the complaint alleges that the 100 miles per charge advertised driving range of the LEAF is based on a fully charged battery when the automaker recommends charging the battery only up to 80% to avoid damage:

Unbeknownst to purchasers, the advertised driving range is based on the vehicle’s performance only after fully charging the battery to 100% capacity.  In fact, however, charging the battery to 100% causes battery damage, and Nissan expressly recommends that owners not charge their vehicles to 100% in order to maximize battery life and that the battery be charged to only 80% capacity.

The class action also alleges that the LEAF’s battery system has a design defect in that it lacks an active thermal management system to circulate cooling fluid through the battery array, a system that comparable vehicles such as the Chevy Volt, Toyota RAV4 EV and the Ford Focus use.  According to Plaintiffs, this defect leads to battery damage and loss of capacity:

The lack of an adequate active cooling system is a design defect that fails to adequately cool the batteries, causing the batteries to suffer heat-related damage and causing premature battery capacity loss, well in excess of Nissan’s own guidelines.

More particularly, the complaint says the LEAF owner’s manual indicates the vehicle may lose 20% of battery capacity over five years of operation while class members’ vehicles are losing over 27.5% battery capacity within the first 1-2 years of operation.  This problem is especially pronounced in warm climates.  The class action also alleges that Nissan expressly excluded loss of battery capacity under its 8-year / 100,00 mile battery warranty.

The complaint quotes a Wired Magazine article in which a Nissan product planner says the automaker elected to forgo active thermal management of the battery pack because it would have required a central tunnel on top of the pack, which would have intruded on cabin space and split the rear bench into two seats with a hump in the middle.

Elon Musk, CEO of Tesla Motors, is also cited for his critique of the LEAF prior to its launch.  According to the complaint, in 2009 Musk called the car’s thermal management system “primitive” and predicted the battery would suffer “huge degradation” in cold environments and “shut off” in hot ones.

To my knowledge, this is the first greenwashing lawsuit targeting an all electric plug-in vehicle.   It’s unlikely to be the last.

Patent Analytics Firm Launches First Online Green Patent Database

October 7th, 2012

For over a year now I’ve had the pleasure of using a beta version of CleanTech PatentEdge, a powerful database of green technology patents and published applications.  Now you can use it too!

IP Checkups, the Berkeley patent analytics firm that created CleanTech PatentEdge, recently announced the official launch of the database.  The only comprehensive online database focused on the clean tech industry, CleanTech PatentEdge contains more than 1.5 million worldwide patents categorized by different market sectors.

Through its user-friendly interface and analytics portal, CleanTech PatentEdge allows easy access to information on green patent data and trends, including the ability to track real-time progress of patent publications and grants and create custom charts and tables to organize the data.

Matt Rappaport, founder and CEO of IP Checkups, said the database allows its users to keep on the fast-moving developments in green technologies:

CleanTech PatentEdge addresses an unmet need in burgeoning green industries, such as renewable energy, which are growing at breakneck rates.  There are daily innovations in solar, wind, and water technologies, to name just a few.  CleanTech PatentEdge provides an otherwise unattainable view of an entire industry’s patent developments and competitive landscape in real-time, as patents are filed.

Annual subscriptions to CleanTech PatentEdge begin at $180 a month for individual users and $450 a month for 3-5 users, with other rates and plans available.

More information on CleanTech PatentEdge can be found here and an introductory video about the database can be viewed here.

 

 

Enzyme Distributor Admits Infringement As Novozymes Wins Injunction

October 3rd, 2012

  

In a previous post, I discussed Novozymes’ patent infringement complaint against CTE Global in which the Danish biopharmaceutical company accused the Illinois enzyme distributor of infringing U.S. Patent Nos. 6,255,084 (’084 Patent) and 7,060,468 (’468 Patent).

The ’084 and ’468 Patents are entitled “Thermostable glucoamylase” and are directed to an isolated glucoamylase enzyme which has higher thermal stability than prior glucoamylases.  The patents also claim starch conversion processes using the enzyme.  Glucoamylases are used to convert hydrolyzed corn starch to glucose, particularly in production of ethanol.

The parties recently settled the case and the court entered a Consent Judgment and Permanent Injunction ending the lawsuit.

Per the Settlement Agreement and as reflected in the court’s order, CTE acknowledged distributing and selling the accused products and infringing the patents-in-suit:

4.     CTE acknowledges that it has distributed and sold in the United States glucoamylase products designated GLUCOAMYL L 706+ and GLUCOAMYL LG20 (hereinafter referred to as the “Glucoamylase Products”), and that at least some of the Glucoamylase Products distributed and sold in the United States by CTE contained a glucoamylase enzyme having the amino acid sequence attached to this Consent Judgment as Exhibit A (hereinafter referred to as the “Accused Products”).

*     *     *

7.     CTE acknowledges that it has infringed the Patents-In-Suit by importing the Accused Products into the United States and by using, offering to sell and selling the Accused Products within the United States.

The court order imposes a permanent injunction prohibiting CTE from making, using, selling, offering to sell and importing into the U.S. the Accused Products.

Novozymes has had previous success in major green patent litigation, winning an $18 million infringement verdict against rival Danisco.