- PRESIDENTIAL PATENTS
Updated: 22 hours 4 min ago
Mon, 02/27/2017 - 12:32
On Tuesday evening, I went to a “shark tank” event at TechNexus in Chicago. Thanks to my friend and colleague Nancy Fallon-Houle, the startup business lawyer, for inviting me. Here’s what I’ve learned about inventions and Shark Tank. If you’d like to know more about how to profit from your inventions, this article is for you.
Before I go further in reporting on Tuesday’s event, let me hasten to say that neither the host Caerus Investments nor the startup business incubator TechNexus used the ABC-TV trademark “Shark Tank.” Instead, they used the mark “NotaPitch” (with hashtag) (“the sequel”).I. Social apps are cool
At the shark event, there were about seven pitches, each followed by one minute of comments from each of five venture capitalists. Done in 60 minutes. The crowd—there was not a seat to be found in the 120-person room—was young, energetic, diverse, bright, and engaged.
The pitches were good. But they missed the mark.
These seven, like most startups, are trying to dream up “ideas” in a vacuum. Most of the ideas are for apps, usually social apps. Everybody wants to be the next LinkedIn. The odds are strongly against them. That train has left the station and it has a big head start.
One of the seven presenters was an engineer. He has an idea—probably pretty well developed, because that’s the way engineers work—for indoor use of drones. At least that idea could lead to a physical-and-software embodiment. But next to social apps, drones are probably among the obvious fields for would-be inventors. Good luck! Again, others have a head start.II. Beware of Shark Tank and Kickstarter
By the way—and this is an important point—when you have an invention, don’t show it in public until you’ve filed a patent application. See my article, When to Patent. Shark Tank and Kickstarter are not your friends.
Returning to my report on the shark event, none of the seven presenters was trying to solve a real world problem; none was trying to fill an actual need. Which means that they’re almost certainly on the wrong track—one that will lead nowhere.III. Real inventions solve real world problem
At the shark event, there was one kernel of wisdom displayed in a slide show: A software coder once said that if you want to succeed, find a backward industry and write a program that will help bring the industry into the modern age.
I’ve worked with many companies in many industries in my decades of experience as an engineer and patent lawyer. One of the things that continually surprises me is that many people are working on products that I’ve never taken time to think about.
Real inventions are not on Shark Tank.IV. Plastic ketchup bottles—not cool but profitable
Some of the most useful and profitable inventions are in technologies like disposable plastic ketchup bottles, vehicle restraints, or sintered powder metals, to name three disparate fields.
Most people have no idea how difficult it is to make a Heinz plastic ketchup bottle, for example. The bottles are engineering marvels. If people knew how hard they are to make, they’d keep them and display them on their fireplace mantels as works of art. As stated in the closing scene of the classic movie The Graduate (1967), there is a great future in plastics.
Yes, there are people who devote their lives and careers to such technologies. They invent things. Useful things. They solve real world problems and fill actual needs. They’re the ones who should apply for patents. Sometimes they do file for patents, but paradoxically, highly skilled people often fail to recognize the novelty of their own inventions. They miss out on the opportunity for the exclusive, profitable rights afforded by the patent laws. They and their bosses think they’re Not Smart Enough.V. Low-tech inventor of the year
A few years ago I nominated a successful product designer for the “Inventor of the Year” Award conferred by the Intellectual Property Law Association of Chicago. My nominee won the award.
While we were waiting for the award ceremony, the inventor, who designed a dozen patented products that each sold $10 billion or more, confessed to me that his inventions were “low tech.”
The award winner related a story of how he was once on a flight seated next to a man who asked, “What business are you in?”
My inventor friend replied that he designs nuts and bolts, and he returned the question, “What business are you in?”
The seatmate sniffed, “I’m in technology,” and he turned away, ending the conversation.
My friend told me (but refrained from telling his arrogant seatmate) that he cries all the way to the bank with his “low tech” inventions.VI. Find fertile ground for inventions
If you have the urge to found a start-up, try starting this way. Go find a real problem to solve for a customer. Or find a latent need, like Steve Jobs did, and create a product like the iPhone that people didn’t even know they wanted.
(For more on the Who, What, Why and When of inventions, see my series on the 4 W’s of Patent.)
If you’re an engineer, or a coder, or a wannabe designer, try working for a real company—one that makes something, whether it’s a physical product or software or both. You’ll be assigned to a boring project to solve an intractable problem. Figure it out, and you’ll light up a small corner of the world.
Solve a problem and light up a corner of the world
When you’re that person—or if you’re that person now—patent your inventions. They might appear to be minor improvements. You and your company can ride those new products into profitable new territory.
Mon, 02/20/2017 - 12:41
On Presidents Day, it is my pleasure to share with you the Beem Presidential Patent Collection. The collection comprises historic original patents and an original copyright, dated between 1800 and 1843, signed by U.S. presidents (also British monarchs), U.S. secretaries of state, and U.S. attorneys general. Also in the collection are original letters signed by famous inventors between 1776 and 1907. Last but not least, the collection includes a historic patent model of a brick-making machine. The collection—all originals—is displayed in the offices of Beem Patent Law Firm, in the Monadnock Building (circa 1893), in Chicago, Illinois, USA.
To view the Beem Presidential items, select Patent Collection for a list of exhibits in the collection and to display images and information about each exhibit. Or, enter the Virtual Viewing Room for a 3-D tour of the exhibits and related information.
My colleagues and I hope you will enjoy viewing these historic exhibits, and that you will find the text helpful as a guide and a narrative of the exhibits and their historical context, including biographies of key signers such as John Adams, organized by their roles as U.S. Presidents (signers of exhibited patents include seven of the first eight persons who were or would become U.S. Presidents) or British Monarchs (King George III, at whose order one exhibited patent was printed, and Queen Victoria, who signed another), U.S. Secretaries of State (signers of exhibited patents include seven of the first thirteen persons who served as Secretaries), U.S. Attorneys General (signers of exhibited patents include eight of the first twelve Attorneys General), and famous inventors (signers of exhibited letters include James Watt, Samuel F.B. Morse, and Thomas Edison).
Consistent with the official practices of former times, but surprising to the modern eye, the exhibited patents are not numbered, i.e., with patent numbers. Insofar as I know, none of the exhibited patents reflect any revolutionary advances in technology. But together they are of historic interest, because they reflect the kinds of technologies that were of value to real-world inventors during the years between 1776 and 1907, and they show the great importance of inventions in the minds of the foremost leaders in government, beginning in England, traversing the ocean to the earliest foundations of the United States, and continuing in both these and other countries with sustained interest for decades and centuries.
It is an honor, which comes with a duty, to be the keeper for a time of historical manuscripts and things. The present ownership of the patent manuscripts and the patent model came about unexpectedly. Over a forty-year career, Arthur Seidel, one of Philadelphia’s leading patent attorneys, worked diligently, intelligently and selectively to find and assemble the items in the collection. On June 2, 2006, an Intellectual Property Owners (IPO) newsletter announced Mr. Seidel’s auction of the collection through Christie’s, the famous auctioneer of museum-quality art and manuscripts. I saw the IPO notice, looked into the presidential patent collection, participated by long distance telephone in the live auction at Rockefeller Center in New York City, and won the rights and responsibilities of ownership of the valuable and interesting collection.
Or better yet, become a part of history yourself by entering the patent system. Let us know whenever we can be of service.
Wed, 02/08/2017 - 10:24
In this third and final part of my current series on East Texas patent litigation, I will discuss essentials for victory in Texas intellectual property (IP) trials, again, based on my exclusive interview with noted blogger and Texas lawyer Michael C. Smith. Contrary to popular impression, the U.S. District Court for the Eastern District of Texas is not a backwoods court but a sophisticated trier of patent cases. Credibility, collegiality, advocacy, time limits, and predictability are essential characteristics of the venue. Local rules and standing orders must be observed. That all sounds easy, right? But read further for the essentials as applied in victory.
First, a recap. In Part 1, we discussed whether the “speed trap” image of East Texas is unfair, and we went beyond the popular image of the Court to consider the realities that corporate defendants usually prevail, and even when plaintiffs win, the damages are usually smaller than they might have wished.
In Part 2, we showed how to win patent cases in East Texas, starting with respect for the Court, and proceeding to addressing the jury at trial. Respect and courtesy are the hallmarks for success. Diversity of the trial team can be a big help, so long as it is real, just like every other aspect of the lawyer’s dealings with the Court.
Now, let’s get down to the business of winning patent cases in East Texas, focusing, as in Friday Night Lights, on the basics.Essentials for East Texas
I asked Michael C. Smith what lawyers need to know about litigating in the Eastern District.
“There is very little in your case that the judge has not seen many times before, including every issue of patent law,” Smith replied. “That is different from other places, where judges’ dockets haven’t given them the opportunity to do deep dives into patent law.”
Smith also emphasized the Court and the bar are very collegial with one another. Judges and lawyers get along. “It’s expected,” said Smith.
Smith recalled the wisdom of Franklin Jones, a lawyer from Marshall, who said that “a trial is a race for credibility.” As an example, he related a story of a lawyer who wanted to file a motion that Smith thought would lose. The lawyer asked, “So what?”
“Why present a loser?” Smith responded. “We want to be the ones that the Court can trust when we say what the law is and what the outcome of an issue should be.”
Local judges expect local counsel to make sure that local standards are observed. If the Court sees unsportsmanlike conduct, it may think local counsel isn’t doing his or her job—or it may assume they’ve been “sidelined” and hold it against the trial team.
But that doesn’t mean the judges have a problem with lawyers raising legitimate issues. “Some lawyers don’t want to fight. They’re too eager to avoid taking an issue to the Court. If it’s a genuine dispute over an issue that matters, judges think that’s their job to decide. I never have a problem presenting a dispute that matters.”Time Limits Help
Michael C. Smith has “never had a case in the Eastern District that didn’t have a timer on it.” And he likes it that way. “The side that uses less time usually wins,” he says.
In one case, the Court allowed 15 hours per side. “That’s actually a lot.” Smith’s team used less than 9 hours and won. “The other side used almost the whole time, and just floundered,” recalled Smith.
He remembers early in his career being surprised that a case that took two years to prepare was presented to a jury in three or four days. “We were just shoveling it in,” he remembers thinking. But the experience left an impression.
After the first case Smith tried alone, he remembered thinking that most of the things he’d worried about preparing ended up not mattering. “It all came down to three things that mattered to the jury.”
Since then, he just asks himself, “How are we going to use this at trial? If we aren’t going to use it, why are we fighting for it in discovery? If it won’t help the other side, why are we fighting to avoid producing it?”
“Old bulls who have tried a lot of cases know this stuff,” he observed. “Patent lawyers often don’t have the same experience, so they have a harder time knowing what’s important in discovery, and they also have trouble cutting it down for trial.”Big Companies Defend in East Texas
I asked Michael C. Smith why house counsel for big companies attend the Eastern District Bench Bar Conference.
Smith said big defendants with house counsel know they’ll be sued in the Eastern District.
“And many big companies know not to be afraid.” He opined that the Eastern District offers a “high degree of predictability,” and even the trial outcomes regularly tilt towards defendants these days.
“If you have a good case and the other side doesn’t, nine times out of ten you’ll win. Just like anyplace else,” said Smith. That has manifested itself in a massive drop in the number of motions to transfer. The patent pilot program in most courts means you’ll get to trial relatively expeditiously anyway, and you will get an experienced judge in the patent pool.
So why not stay and defend in East Texas?Venue and Reform
I asked Michael C. Smith about venue reform.
As of December 1, 2016 (well before the Supreme Court granted certiorari in TC Heartland on the issue of venue), Smith expected substantial resistance to patent reform. He thought that after the 2016 election, it had become a lower priority. After the first 100 days, he thought Congress might take it up, but given the drop in filings in the Eastern District—mostly by so-called “patent trolls”—there might be less appetite for venue reform than a year ago.
I asked Smith why, within the Eastern District, are so many patent cases filed in Marshall and Tyler.
Smith explained that cases are filed on a divisional basis. The judges in the Marshall and Texarkana Divisions, who jointly handle the Tyler patent docket as well, have opted to hear patent cases, and other divisions are swamped with criminal cases that can delay trial settings. Thus most cases are filed in those three divisions. “That may change when the three judicial vacancies are filled,” he noted, “but for the past fifteen years the docket has migrated between those three divisions.”Local Rules and Standing Orders
Local rules, local patent rules, and judge-specific procedures, discovery orders and standing orders, are all posted on the Eastern District website, and are among the first things attorneys need to become familiar with.
On that note, Michael C. Smith excused himself for a conference call with the Court. “The other party didn’t read the Judge’s standing rules.”
A previous version of this three-part series was published as one article, R. Beem, An Interview with Michael C. Smith on Patent Litigation in East Texas by the State Bar of Texas, Intellectual Property Law Section, in its Tipsheet, Vol 11, No. 4 (Jan. 24, 2017).
Mon, 02/06/2017 - 15:01
It takes skill to win a patent case. You must marshal the evidence so judge and jury will follow you to the right conclusion. See Abraham Lincoln School of Patent Litigation. Lincoln, born in Kentucky and called to the bar in Springfield, Illinois, knew how to try a case quickly. Juries could relate to him. He was real. Abraham Lincoln’s wisdom applies with equal force in East Texas, as the reader will see from my interview of modern day Texas jury trial lawyer Michael C. Smith.How to win patent cases in East Texas
In Part 1, Why Patent Defendants Hate East Texas, I contrasted the “speed trap” reputation of the Eastern District of Texas with the reality that defendants win most cases. When plaintiffs win, damages are usually smaller than they hoped, proving the truth that “pigs get fat, but hogs get slaughtered.”
Here, in Part 2, I’ll share Michael C. Smith’s advice on how to win patent cases in East Texas and elsewhere. Here’s what you need to know in a nutshell: (1) It’s a fast ride, (2) talk to your jury, (3) be a good Yankee, (4) practice real diversity, and (5) don’t fake it.
Now, let’s unpack these truths of East Texas patent litigation.It’s a fast ride!
Most East Texas patent cases go to trial on a fairly predictable and relatively fast schedule, according to East Texas lawyer Michael C. Smith. In large part this is because there are few criminal cases to derail the scheduling of civil cases in the patent-heavy divisions of the District.
Michael C. Smith cites Parkinson’s law—the idea that the work expands to fill the time available—in observing that shorter schedules save parties money in preparing cases for trial. “If the lawyers have four years to prepare for trial, they’ll bill for four; if they have two years, they’ll only bill for two. Clients like that,” said Smith.
So why do some defendants try to avoid East Texas? Smith does not believe defendants are seeking a “better product” elsewhere. Rather, Smith believes they simply, in some cases, have “a tactical preference for delay,” either in the form of longer waits for trial or stays pending resolution of initial motions or proceedings at the Patent Office.
In contrast, Smith noted a “huge benefit for a plaintiff to simply get to trial on a reliable schedule.”Talk to your jury
I asked Michael C. Smith about jury selection. “Voir dire is very important in the Eastern District,” he said. “Jury selection by lawyers is a tradition in federal court here. [Judges] view it as the lawyers’ case.” Voir dire gives the lawyers the opportunity to find out what the jury knows, what jurors think, and their backgrounds. “We don’t get much time,” he conceded, “but we generally have enough time to identify jurors who maybe shouldn’t sit on this particular jury, and to decide how to use our peremptory strikes.”It’s better to be a Yankee than a jerk
I cross-examined Michael C. Smith, “Is it safe to be a Yankee in the Eastern District?”
The local attitude is not one of “knee jerk reaction” against Yankees or other big city lawyers, Smith said quickly. “It’s okay to have a funny accent.”
“The deadly mistake,” said Smith, “is to be discourteous. Don’t be a jerk to support staff or other lawyers. Just pretend your mother is sitting next to you. What would she think of your behavior?”
Smith also added that, given the size of the docket, it’s very helpful to have someone local. “We handle so many of these cases. We know the judge has seen a particular issue hundreds of times, and we can warn: Don’t file this or that motion. File this other motion instead. This is the way to make that issue or fact a winner for you.”
In addition, what local counsel in East Texas can provide is trial experience. “I had a case a while back with six lawyers on one side, and four or five on the other side. But I was the only one who had ever been to trial. I knew what was going to happen and when, what the court and the jury were expecting and would think, and I realized that there just wasn’t the knowledge of common mistakes that there was ten or twenty years ago. I felt like I was able to help my client get that win because of that.”Practice real diversity
Sometimes trial teams “hire a woman or other member of a minority to sit there and do nothing. That’s very offensive to jurors,” Michael C. Smith says. “They have to play a role.”
But that’s an opportunity, he says. Smith recalled a trial team bringing in a minority lawyer shortly before trial, and he was concerned about what might happen. The lawyer wasn’t a placeholder and quickly showed a rapport with the jury that other members of the trial team couldn’t match. The trial team switched assignments during the trial and let the lawyer present closing, which jurors later confirmed was a key tactical decision.
“If that trial team had treated that lawyer as window dressing, they’d have lost that case,” Smith observed.
“If they’re at the table, the jury has to see them contribute to the team. And that doesn’t mean taking notes and handing up documents.”Don’t be a fake
Sometimes parties pretend to be local. They put up a front in Tyler or Marshall. Nothing is surer to generate contempt.
“It’s okay to say ‘we’re a holding company,’” Michael C. Smith says. “Say ‘we own a patent and we’re here to enforce our property rights.’ But don’t pretend to be something you’re not. It’s the worst thing you can do.”
Smith recalled a trial early in his career when an expert for his client unintentionally testified to something that simply wasn’t true. “He had just gotten mixed up on some facts, and admitted as much later, but by then he was a dead man walking. The other side told the jury repeatedly that ‘if he’ll lie to you about that, he’ll lie to you about anything,’ and the jury apparently agreed. They had seen him appear just as sincere and truthful about something he later admitted was false as he was about his opinions in the case, and you just can’t survive that.”
In another case, a company president was on the stand. The company had rented office space in Marshall that looked like a research facility on their website. The company even had furniture delivered in boxes and crates. But on cross the president admitted that, not only had the company never unpacked the furniture, he’d never even been in the office. “The look on the jurors’ faces was something
I’ll never forget,” Smith said. “The case settled during trial.”
In yet another case, a plaintiff that shared a local address with a number of other entities and had been trying to portray itself as a local company put up a company logo during jury selection that Smith had never seen before. On cross, the plaintiff’s president cheerfully confirmed the first time he’d seen the logo was two days earlier and that it was prepared for trial. Smith was only halfway through his cross, but he closed his notes, told the judge he had no more questions, and sat down.
“I’d always wanted to do that,” Michel C. Smith confessed, “and this looked like the best opportunity I’d ever get.”
Three days later the Marshall jury found for Smith’s client, the defendant.
In the third and final part of this series on East Texas patent litigation, I’ll cover essentials for victory. (Subscribe to Beem on Patents so you don’t miss any of our practical patent blog posts.)
Tue, 01/31/2017 - 16:28
Why do patent defendants say such bad things about the U.S. District Court for the Eastern District of Texas?
I asked this question of Michael C. Smith, the noted lawyer and blogger from Marshall, Texas.
To prime the pump, I noted Texas Monthly calls his hometown “the intellectual property equivalent of a speed trap, a place where juries smack big companies with huge judgments.” See Patently Unfair (Oct. 2014).
“Man bites dog,” Smith replied. “It makes better news.”
Smith has nothing against Texas Monthly or other reporters covering the local patent docket. They frequently call him after reading about the docket on his blog.
He recalls being interviewed by Texas Lawyer after winning a defense verdict in a Marshall patent case the day before a patent plaintiff won a different case in the courtroom upstairs. But he noticed the same tendency to value the unusual over the usual. “Upstairs, the plaintiff won,” Smith explained, “and Texas Lawyer named the lawyer upstairs as their ‘Lawyer of the Week.’”
But defense verdicts? Texas Lawyer was uninterested, even though Smith’s defense verdict was the sixth in a row. “The news doesn’t report the 55,000 cars that went through the intersection without a wreck,” Smith observed. “The regular story is uninteresting.”Patent Litigation in East Texas
Patent owners certainly like filing in the Eastern District, and the perception is that defendants are trapped there. But the reality, says Smith, is that motions to transfer out of East Texas are granted more often than not. “Defendants still just don’t like being here,” Smith admits.
Cases in East Texas are subject to judicial management. “Judges hold the parties’ feet to the fire, and East Texas judges are not intimidated by complex intellectual property cases,” says Smith. Generally the parties have to go forward.
And the Eastern District is less likely than most courts to grant summary judgment. According to Smith, the Court has a “well developed sense” of what a jury should decide. “Eastern District of Texas judges have a great deal of respect for the jury’s role under the Seventh Amendment, and if there’s a genuine factual dispute, they send it to the jury.” As a result, cases tend to go to trial.Big Numbers or Small?
Contrary to popular belief, “awards tend to be on the low side,” says Smith. In patent cases, damages are usually not high “unless the sales numbers are high,” Smith explains. He recalls being in multiple cases in which “the plaintiff got 10% of what it asked for,” which isn’t an uncommon outcome.
Smith compared awards in typical patent cases with personal injury verdicts, in which even death or permanent disability still tends to result in a low number from local juries. “That’s not the conventional wisdom or what a lot of lawyers tell their clients,” he admitted, “but that’s what I’ve seen, over and over.”
Large damages awards might be seen in cases against Apple or Microsoft, or if the case involves a medical device. Such cases can generate big damages numbers simply because of the size of the damages “base,” meaning the dollar value of the products sold.
According to Smith, it is actually worth something to a defendant to have the plaintiff put a big number up. “As the saying goes, ‘pigs get fat, but hogs get slaughtered,’” he says. “Plaintiffs lose a lot of credibility when they ask for a number that’s easy to portray as excessive. If the defendant is reasonable, the jury will often be much closer to the defendant’s numbers.
While it is hard to generalize, Michael C. Smith referenced trials where the jury might come in at two to four times the defendant’s number, which might be 10% of the plaintiff’s number. But there are fewer data points on damages than there used to be, he noted, because these days most defendants win on non-infringement and/or invalidity. Therefore, there are fewer damages awards to examine.Hold On For a Fast Ride!
Most cases go to trial on a fairly…
Now that we’ve named and eased your fears of East Texas patent litigation, turn to Part 2, How to Win. Don’t miss my next blog post: Subscribe to Beem on Patents.
About Michael C. Smith: The partner in charge of the Marshall office of Siebman, Burg, Phillips & Smith, a former Eastern District law clerk, Smith has appeared as counsel of record in over 800 cases in the Eastern District of Texas. He authors EDTexweblog.com, a blog devoted to federal court practice in the Eastern District of Texas.
Author’s Note: This article was finalized before the Supreme Court’s recent grant of certiorari in TC Heartland v. Kraft Foods on the issue of venue in patent cases. That case will bear watching in the coming months.
The author thanks Michael C. Smith, the State Bar of Texas IP Section, and Section leaders George W. Jordan III and Michael D. Paul for their helpful input and edits. The author is responsible for any errors or omissions. Comments are invited.