Did you ever think the clever tax-saving strategy your financial advisor is offering up could be patented?
For the past six years that question has been vigorously debated in the courts, at Congressional hearings and at gatherings of estate planners and other tax wonks. Congress finally put it to rest with a new law that President Obama signed on Sept. 16.
Under a provision in the far-reaching patent reform bill, it’s no longer possible to get a patent on a strategy for reducing, avoiding or postponing taxes. (See Section 14 of the law, which downloads here as a pdf.) By the time the bill, known as the America Invents Act, was signed into law, the U.S. Patent and Trademark Office had issued more than 161 tax patents, and another 167 tax patent applications were pending.
My preferred bill would have made it more difficult for patent trolls to get injunctions, and banned all business method patents, as well as patents on genes and software, but this is an improvement.
A federal appeals court affirmed the right of Myriad Genetics to patent two genes linked to breast cancer, overturning a lower court ruling that threatened a key element of the biotech business.
The U.S. Court of Appeals for the Federal Circuit in a ruling on Friday backed Myriad’s right to patent two “isolated” human genes — BRCA1 and BRCA2 — that account for most inherited forms of breast and ovarian cancers.
………
The appeals court said the genes isolated by the company can be patented because Myriad is testing for distinctive chemical forms of the genes, and not as they appear naturally in the body.
One member of the three-judge appellate panel dissented, saying that despite Myriad’s process of isolating a human gene it still could not be patented.
………
The appeals court also said that Myriad’s method for screening potential therapies was patentable.
The judges did, however, agree with the district court that Myriad’s method of analyzing DNA sequences did not involve sufficient transformation, and thus could not be patented
I’m not surprised. This is the Court of Appeals for the Federal Circuit, a body that was created specifically to rule on patents, and they, under the “when all you have is a hammer, everything looks like a nail” theory, are insanely pro patent.
How insanely pro patent? They are assuming patently false facts to justify their ruling:
Bruce Wexler, a patent expert at the law firm Paul Hastings, said the ruling means the appeals court has recognized that DNA takes on a different molecular structure when it is isolated and removed from the body.
“That is a very significant result that is very important to the biotech industry,” Wexler said.
This is scientific bullsh%$. DNA is DNA is DNA is DNA, whether in vivo or in vitro.
Here’s hoping that the Supreme Court or the full appeals court (unlikely, see my hammer nail argument), and it gets slapped down.
SCOTUS has issued a number of “what are you smoking?” rebukes of the Court of Appeals for the Federal Circuit regarding patents over the past few years, so there is some hope, but such a ruling would be highly disruptive to the industry, and the Roberts court has been very pro-industry, so I think that it is a small one.
It shows how our patent system, where I sh%$ you not, someone has patented toast, rather than being a spur to innovation, or, as they conclude:
The big companies — Google, Apple, Microsoft — will probably survive. The likely casualties are the companies out there now that no one’s ever heard of that could one day take their place.
One of the more interesting bits is how they show that Myhrvold’s claim that they are a purely defensive company which does not sue people is a bald faced lie. They use a network of shell corporations to extract their tribute.
This system needs to be fixed, but the victims are largely invisible and poor, and the rentiers have lots of money, because they get paid for doing nothing, which means that it is tough to get Congress interested in this.
For years and much to their frustration, big banks have paid hundreds of millions of dollars to a tiny Texas company to use a patented system for processing digital copies of checks, making Claudio Ballard, the inventor of the system, a wealthy man and the bank industry’s biggest patent foe.
After years of fighting Mr. Ballard at the federal Patent Office, in court and across a negotiating table, the banks went to see one of their best friends in Congress, Senator Charles E. Schumer of New York, who inserted into a patent overhaul bill a provision that appears largely aimed at helping banks rid themselves of the Ballard problem. The Senate passed the bill easily in March.
The proposal would allow banks to get a federal re-examination of certain patents that they have been accused of infringing, specifically limited to “a financial product or service.” The language is now included in a bill that may come to a vote in the House of Representatives as early as Wednesday. While at least two House members have moved to strip the provision from the bill, bank lobbyists have worked hard to defeat previous attempts to remove it.
Mr. Schumer and the Financial Services Roundtable, a business group that pushed the measure, say the provision is not focused on any one company but more broadly at “meritless litigation over patents of dubious quality,” as Steve Bartlett, the president of the Roundtable, said at a House hearing.
The depressing fact is that this is just a lobbying power play, rather than a realization that IP in all forms is about benefiting society, and not about determining who gets an undeserved payoff that they can use to make campaign donations.
Business patents, gene patents, and software patents, do not serve to encourage innovation, they simply create government sanctioned monopolies, and the profits generated has now seized the political process.
The Massachusetts Election Division has approved the Massachusetts Pirate Party as a political designation, allowing voters in the state to register as a “Pirate.”
The party strives to increase government transparency, promote personal privacy, reinforce the spread of knowledge through copyright reform, and abolish patents.
“We live in a country founded on the ideals of life, liberty, and the pursuit of happiness,” the Massachusetts Pirate Party said in a statement. “For many people, those ideals are not real. The Supreme Court and Congress have expanded the power of corporations and made them more powerful than people. Increasingly government officials ignore open meeting laws, make deals favorable to corporations behind closed doors and sell off our public information to private interests.”
I went to UMass with him.
Note, as the article does, that Jamie is not the criminal asshole who cooks up fraudulent videos.
Note that my inclinations on IP are very similar, though perhaps a bit more moderate, than those of the Pirate Party.
This is a big deal, and a case where a very bad actor forced their hand:
Reversing a longstanding policy, the federal government said on Friday that human and other genes should not be eligible for patents because they are part of nature. The new position could have a huge impact on medicine and on the biotechnology industry.
The new position was declared in a friend-of-the-court brief filed by the Department of Justice late Friday in a case involving two human genes linked to breast and ovarian cancer.
“We acknowledge that this conclusion is contrary to the longstanding practice of the Patent and Trademark Office, as well as the practice of the National Institutes of Health and other government agencies that have in the past sought and obtained patents for isolated genomic DNA,” the brief said.
Basically, a company, Myriad Genetics, got a patent on breast cancer genes, it licenses government funded research which found the BRCA1 and BRCA2 genes, and has used this patent to prevent the development of better and cheaper tests, and their behavior was so egregious that the government felt compelled to act.
It’s still up to the judge, but this is a good first step.
Genes have never been an invention, they have been a discovery, and discoveries are not supposed to be patentable.
Bilski v. Kappos, a business patent case that made it to the Supreme Court was decided 3 months ago. Basically, Bilski had patented a method of hedging energy based on the weather.
While all nine justices agreed that the “invention” at issue in the case—a method for hedging weather-related risk in energy trading developed by Bernard Bilski and Rand Warsaw—was too abstract to merit patent protection, only four signed on to Kennedy’s opinion.
That opinion held that the “machine-or-transformation” test for patentability–created by the U.S. Court of Appeals for the Federal Circuit in its Bilski decision–was a “useful clue” when gauging a subject’s patentability but shouldn’t be considered the only applicable test.
I think that this was generally a loss for patent sanity, though it does make getting a business patent more restrictive, though, unsurprisingly, SCOTUS didn’t say how much more restrictive the standards should be.
It appears that a French company has patented Plumpy’nut, a fortified peanut butter as a treatment for severe malnutrition:
Should a revolutionary humanitarian food product be protected by commercial patent, when lifting restrictions might save millions of starving children?
That is the moral conundrum at the heart of a bitter transatlantic legal dispute.
On one side are the French inventors of Plumpy’nut, a peanut paste which in the last five years has transformed treatment of acute malnutrition in Africa.
Nutriset, the Normandy-based company, says the patent is needed to safeguard production of Plumpy’nut in the developing world, and to stop the market being swamped by cheap US surpluses.
And on the other side are two American not-for-profit organisations that have filed a suit at a Washington DC federal court to have the patent overturned.
They say they are being stopped by Nutriset from manufacturing similar – and cheaper – peanut-based food products, despite the proven demand from aid agencies.
“By their actions, Nutriset are preventing malnourished children from getting what they need to survive. It is as simple as that,” said Mike Mellace, of the San Diego-based Mama Cares Foundation.
I will spare you the picture of the severely malnourished child in the article, but it appears to me that this patent is not only morally indefensible, but also a very real expansion of IP law to an area where it had not previously applied, recipes, which are rather famously not covered by copyright (see here), and the patent appears to be rather broad, covering pretty much every nut based food with milk in it, which would include the Nutella from which Plumpy’nut was originally derived.
The problem here is that the other potential players in this market (EVIL term, that) are all small not for profits who would be driven to extinction with a loss in a patent court.
One solution here is to make patents like civil rights law, and allow people to file suit before infringing, for the same reason that they do with civil rights suits: because the chilling effect occurs even if no one breaks the law.
I thought that I did a good job of following patent law, but I was unaware that it is illegal, or more accurately a civil tort, for a company to claim a patent after it has expired.
So, if I were to get patent number 867-5309, someone could sue me for anticompetitive behavior if I were to continue to claim that my product were still protected.
Well, recent court cases have vastly expanded the law, taking this from a $500.00 award to a $500.00 award per offense, which means that it applies to each product shipped:
Marking a tube of toothpaste or paper cup with a patent that is out of date or doesn’t exist has been against the law for years. It is considered anticompetitive. Until late last year, the most a violator had to worry about was paying a $500 penalty for misleading the public.
But in December, the Court of Appeals for the Federal Circuit in Washington ruled that defendants could be held responsible for up to $500 per offense. Document
Lawyers for product manufacturers now fear clients are liable for up to $500 for every tube of mascara or box of garbage bags marked with an expired patent—an error that turns out to be quite common.
Now, I’m sure that the holders of patents will be lobbying Congress to fix this.
Call your Representative, and tell him, that absent meaningful change, which rolling back the expansion of patents (discovered genes, species, software, business plans, tax deductions, etc.) that have perverted the purpose of Patents in the past few decades.
Stricter rules on what is, and is not, “obvious”, as well as changes to make it harder for patent trolls would help too.
It appears that there is a company that carts around decommissioned missiles and jet cockpits to hospitals and the like, in order to amuse the children.
Of course, that’s just one bad patent out of hundreds that are granted every month by the over worked USPTO, which would ordinarily not merit much comment.
What does merit comment is the fact that they are donating dummy missiles for demonstrations that the bigots opposing the 51 Park Islamic center are holding.
It is generally true that bad people push the law until it breaks, and the folks at Myriad Genetics are a truly nasty bit of work.
Basically, they discovered the genes BRCA1 and BRCA2, which predispose one to breast cancer, and had received a patent on the genes, and offered a not particularly good and very expensive test for the genes, and using their government granted monopoly, they were prohibiting any and all competing tests or research on better tests for these genes.
The VC’s are wringing their hands, because patent protection helps with their pump and dump schemes, but development has been continuing apace on genes that are not covered by these patents:
Some biotechnology investors and executives say that lack of patent protection for DNA could diminish investment and remove incentives to develop tests. That could slow the move toward so-called personalized medicine, in which genetic tests are used to determine which drugs are best for which patients.
James P. Evans, a professor of genetics at the University of North Carolina, said that would not necessarily be the case. There is thriving competition in areas like testing for mutations that cause cystic fibrosis or Huntington’s disease, even though no company has exclusivity.
“It’s quite demonstrable that in the diagnostic area, one does not need gene patents in order to see robust development of these tests,” he said.
Note that this does not prohibit patenting the tests, it just prohibits patenting the genes.
This is a good ruling: the patenting of genes, or for that matter the patents of hedging techniques, as is the case in Bilski, which the Supreme Court will heard arguments for in November.
IP law is, at its core, public interest law (it’s in the constitution), and patents on business methods, species, and genes, do not serve the public interest
*This is what got us that Mercedes ad where they say that they have a patent on crumple zones, but “Never enforced the Patent”. They never enforced the patent, because it is not recognized anywhere else in the world.† †I believe Germany changed their patent laws at some point in the 1970s.‡ ‡I offer the caveat that these comments in the footnotes regarding the Mercedes patent are recollections of a conversation over a decade ago vague 20+ year old memories though, so YMMV, though a Google search does have people who recall the ad.
Startup company American Dynamics Flight Systems has been developing a UAV to address the needs of the various services for high speed cargo UAVS most notably the Marine Corps VTOL Group IV Program and Medium Programs, the USAF Unmanned Cargo VTOL UAV Program, and the US Coast Guard’s VTOL UAV Program.
All of these programs are requiring fairly high speeds, a cruise at least 250 kts, which pretty much rules out a conventional helicopters which tend to cruise at less than 175 kts.
The solution that was adopted on the V-22 is a tilt rotor, where the propellers are pivoted from horizontal to vertical in the transition from horizontal flight to vertical takeoffs and landings.
The issue with a tilt rotor system is that, even more than in a conventional helicopter, managing the transition from horizontal to vertical flight can become difficult and complex.
In the V-22, this is handled with a cyclic type control system that mirrors the swash plate type setups that exist on helicopters.
While this is obviously a known quantity in vertical lift mode, issues in transition to wing-borne flight had to be resolved before the tilt-rotor could become viable, there is a cost in complexity, cost, and reliability in using a complex prop assembly for such a system.
ADF Concept
Moves in pitch and yaw
The solution for the AD-1 is different. A ducted fan which is controllable in pitch and yaw, but where the pitch of the fan is fixed is used, the High Torque Aerial Lift (HTAL).
Pitch is obviously a given in any tilt rotor, which theoretically makes the addition of yaw actuators for the propulsors less complex, and hence lighter, cheaper, and more reliable than going with a full up cyclic control system.
Fixed Aluminum Prop
This sort of control system has been used in the past, at the dawn of the development of helicopters, where the use of tilting rotor hub, rather than a swash plate style cyclic was, for example, used by Raúl Pateras Pescara used this on his early helicopters in the 1920s, where he pitched the hub forward to allow for forward flight without the need for a separate propeller to provide lateral thrust.
The application to a tilt-rotor aircraft, and the use of rotor hub in yaw, appear to be unique, and a patent is pending.
Propulsor shroud panel
Additionally, the use of a shrouded propulsor provides for greater thrust/lift for a given disk area, by acting as a nozzle to accelerate flow.
The shrouds themselves have composite skins. The panel shown is well under 10 pounds.
The use of a shrouded prop should also simplify deck handling, since it mitigates against the possibility of someone walking into a moving prop, and there are added efficiencies because the down wash in vertical lift mode does not impinge on the wing.
All moving ruddervators
It should be noted that the aircraft has been designed from the outset to be low cost, and so notwithstanding its appearance, it is not designed to be a low-observable (“stealth”) airframe.
The top mounted inlet is intended to minimize the possibility of FOD damage to the engine, the all moving ruddervators were developed after it was determined that a rear moving flap on a conventional rudder fin would not provide sufficient control authority, and the wing configuration is designed to minimize pitch changes during transition from vertical to horizontal flight.
Wind tunnel model
AD1 Development
ADF is relying heavily on computational fluid dynamics (CFD) to determine the characteristics of the, and according to Paul Vasilescu, VP of Engineering, their experiences at the Paul Vasilescu Glen L. Martin wind tunnel at the University of Maryland have been closer to the calculated predictions than any prior systems tested at the facility.
The simulations are run on 64 bit Linux rack mount systems, with some of the more complex simulations, which are being modeled in 6 degrees of freedom.
Instrumented Test Rig
The propulsors have been modeled, both in full size, and at the reduced size in which they will be tested in the wind tunnel, which should serve to further validate the mathematical modeling.
It is anticipated that the propulsors will be tested in full scale on an “iron bird” instrumented test rig at Aberdeen Proving Ground, where ADFS hopes to, “Confirm CFD performance data for hover in ground effect (HIGE) and hover out of ground effect (HOGE),” later this year, using a T53 turboshaft, used on the original UH-1 models, but flight models will use the T700, which is currently in use on the AH-64 and UH-60.
The mechanical design is done in SolidWorks®, which I’ve used extensively, and should be more than capable of generated the required geometries, though it’s associated FEA package, Cosmos®, is intended for less intensive analysis.
AD-1 Manufacturing Capabilities
Applied Dynamics Flight Systems has a 14,700 square foot manufacturing facility at the Jessup headquarters with 3 & 4 axis CNC mills, and anticipates being able to assemble 12 units a year upon receipt of a contract.
Manufacturing workshare
Paths not taken
At this point, the company does not believe that there is a reasonable market for civilian applications for UAVS, the FAA has not yet come up with a coherent regulatory environment, and the technology to allow UAVs to operate in civilian airspace, so called “sense and avoid” technology, is immature.
They believe the situation to be rather similar in terms of ambulance applications on the battle field, an area where the Israeli firm Urban Aeronautics’ similarly sized Air Mule is attempting to carve out a niche, there are serious issues with landing aircraft into unprepared areas, as many of the cues that a pilot has in a cockpit are lost on a remote display, and so additional technology needs to be developed in terms of automated imaging and auto-landing systems before one can expect a UAV
I originally wrote about this in May, and my position then is what it is now, that you patent inventions, not discoveries, and that the counter argument, “discovering is hard work,” is a load of crap.
The case law is clear that, “a product of nature is unpatentable unless it is sufficiently different to become a patentable ‘composition of matter.'”
Federal court hearings continued Tuesday on a lawsuit that could transform biotechnology in the United States by eliminating gene patents.
The case hinges around the claims of Utah-based Myriad Genetics on BRCA1 and BRCA2, a pair of genes closely linked to breast and ovarian cancer. Myriad “owns” the genes, and says its patents make it possible to profit on diagnostic tests. The company argues that if you remove the patents, the tests — indeed, commercial biotechnology as we know it — will vanish.
Myriad is, from the perspective of an engineer, not a patent attorney, dammit,* full of crap.
Their tests for the gene are still protected, it’s just that alternative, and better test methods for the gene that they discovered will be able to compete.
Fundamentally, IP law is about the public good, as it says in the Constitution, “To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries,” [where “discoveries” means “invention”, hence the reference to “inventors”, it gets complex],
My guess is that if Myriad had been a bit less hard assed about their patents, they have absolutely refused to license to anyone for any purpose, this case would probably have never come up.
As it stands now, they are literally killing people, and this makes them a thoroughly unsympathetic defendant.
I can’t imagine this not ending up at the Supreme Court though.
This is big. Basically, the Supreme Court is reviewing a patent on a business method, specifically a way to hedge against inclement weather (I sh$# you not, someone patented betting on a cloudy day), and it could effect the future of much genetic and software algorithm patents, which, after all, are more discoveries than inventions.
I am with the anti-patent side, whose basic argument is here:
Eben Moglen, director of the Software Freedom Law Centre is emphatic that business process patents should never have been allowed in the first place. Patent law, he says, cannot award ownership of facts of nature, or mere mental activities, or algorithms because the Supreme Court has been unambiguous on that point for more than 150 years. However, for the last 20 years, the USPTO and its supervising appellate court have been liberal with patents for inventions consisting of software or business methods enabled by software.
But I would actually go further: While I understand the need to update patent law to apply to new technologies, I believe that the standard should be a clear showing that a lack of significant innovation is resulting from the lack of protection.
After all, the basic reason for IP, Patent and Copyright specifically is to encourage innovation by limiting the rights of other people to use that expression or invention*, as it says in Article 1, Section 8 of the Constitution of the United States:
The Congress shall have power to …..
To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries;
(emphasis mine)
It’s about public benefit, not property rights: a temporary exclusive license is granted to an individual in order to help society as a whole.
While some solutions have been offered to deal with this problem, most notably crowd sourcing patent review, the real solution is to go back to where we were in 1985, when neither genes, species, nor software algorithms were patentable. We got innovations in those areas without those protections.
It should be noted that the Supreme Court only takes the cases that it wants to, and lately when it takes up patent cases, it does so to slap down the USPTO and/or the Federal Patent Court, both of whom tend to be like a man with only a hammer, and see everything like a nail.
Huge legal expenses and 13 years later, the two men behind the case, Bernard Bilski and Rand Warsaw, had their day in the U.S. Supreme Court on Nov. 9. Most legal experts though, agreed that the duo had no chance of victory. “I don’t think anyone other than Bilski thinks that Bilski deserves a patent,” says Mark Lemley, a professor of law at Stanford University. (See the 50 best inventions of 2009.)
The bench seemed to reflect this view, and several Justices suggested somewhat humorously that if the Bilski argument were to proceed, a number of other ludicrous patents could be issued. Justice Antonin Scalia asked if under Bilski’s argument, methods of horse-training could be patented, while the court’s newest member, Justice Sonia Sotomayor, asked if a “method of speed-dating” was patentable.
The interesting thing here is that most of the business community, excluding patent trolls and their close relatives, realize that the current system is completely out of control, which is obvious when the Wall Street Journal has an OP/ED that describes the case as, “The Supreme Court v. Patent Absurdity“.
*Trademark protection is really about protecting the consumer by ensuring that what they buy is what they thought that they were buying.
I got some training in engineering schools on patents, and it was always made clear to us, by our non-lawyer professors, that a patent was for an invention, not a discovery, and it seems to me that these genes are the latter, not the former, but I’m an engineer, not a lawyer, dammit!*
Among other things, they are arguing not just that the patent should not have been granted, and I agree with that, because at its core IP is an infringement on every one’s rights in order to, “To promote the Progress of Science and useful Arts,” as it says int he constitution, and it is clear that by patenting a gene, they are not doing this.
Additionally, the ACLU is saying that the way that Myriad is violating the first amendment:
As the A.C.L.U. explored the restrictions on competition that companies like Myriad had put in place — blocking alternatives to the patented tests, and even the practice of interpreting or comparing gene sequences that involved those genes — the restrictions started to look like not just a question of patent law, Mr. Hansen said, but of the First Amendment’s guarantee of free speech as well.
I’m not sure if that would fly, since, after all, IP has at its core the restrictions of the rights of everyone for a perceived public benefit.
As to the reason as to why the patent examiners approved it?
The decision to allow gene patents was controversial from the start; patents are normally not granted for products of nature or laws of nature. The companies successfully argued that they had done something that made the genes more than nature’s work: they had isolated and purified the DNA, and thus had patented something they had created — even though it corresponded to the sequence of an actual gene.
This is bullsh%$. They are arguing that they can patent a discovery, because it’s hard work.
Here’s hoping that they win, because the current patent regime in the US is hamstringing economic development and innovation in our society, which is the exact opposite of its intended purpose.
It looks to me like the Patent Reform Act of 2009, is an improvement, the patent troll crowd are generally negative on it, and Senator Feingold’s statement in opposition suggests that it weakens patents too much, which is a good thing.
The real question is what happens in conference.
In my dream scenario, the patenting of software algorithms, tax deductions, business plans, genes, and species would be invalidated, and a litigant could file a suit against a patent as a plaintiff without having to infringe, as is done with civil rights suits.
I think that we will see a lot more of this from companies with deep pockets, because paying people to make them go away has resulted in an explosion of law firms whose business model is to find dodgy undeveloped patents, and then use those to extract nuisance money.
It’s a protection racket.
It’s a good development, but the real solution is to change the law:
Eliminate the patent court, because when you create a body that just handles patents, patents handle everything.
Eliminate software, business plan, species, gene, and tax deduction patents (yes, you can patent a tax deduction).
Note that genetic technology can and should remain patentable, it’s the genes and the species that were not patentable until about a decade ago.
Treat patents like civil rights laws, allow the person who is restricted by the to file suit against the holder of the patent.
Patents are not about property, they are about encouraging innovation,* and our current regime is discouraging innovation.
*The Copyright Clause of the Constitution, “To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” (emphasis mine)
The decision reversing the 1998 case which allowed things like risk hedging strategies, the “U.S. Court of Appeals for the Federal Circuit, in Washington, voted 9-3 that patents should be limited to ‘physical objects or substances’ and not be awarded to ‘abstractions’ like a bank’s risk-hedging strategy.”
Thiw will doubtless go to the Supreme Court, but this is fundamentally a good decision:
In its 132-page decision, the court said a patent can cover a “process that transforms a particular article to a specified different state or thing by applying a fundamental principle” but cannot cover the principle itself.
This is, I think, a response to the fact that the Supreme Court consistently reversing the court, and an understanding that they can no longer subscribe to the theory that everything should be patentable.
