Source: http://ipbiz.blogspot.com/2006/04/
Timestamp: 2019-04-20 22:50:54+00:00

Document:
Two modern and promising industries - biotechnology and information technology - have wound up on opposite sides of the [patent] reform argument.
Biotechnology and pharmaceutical businesses, which take years to bring a product to market, are lobbying to keep the rights of patent holders strong. That is necessary, they argue, to encourage new inventors and bolster the economy.
Meanwhile, many large technology companies are calling for a weakening of patent-holder rights. That outcome would promote competing products and the marketplace by introducing more choice, they contend.
"There is a major split between the [information technology] community and the life sciences community as to how to move forward," said Mark Heesen, president of the National Venture Capital Association, a trade organization representing investors.
The debate has spilled beyond courtrooms and boardrooms into the public domain.
Over the past few years, authorities have cracked down on people downloading copyrighted music without paying, handing out stiff fines and leading some colleges to strike deals with music catalogs so students can download music without getting entangled in illegal activity.
Company trademarks have been hijacked and attached to bogus e-mail requesting account information. And of course, there's Research in Motion's wireless BlackBerry.
"There's really sort of a public outcry for this patent reform, because it's starting to affect people's cell phones," said Jeffers, the biotech executive. "Before, no one really cared."
The overall gist of the April 27 editorial, "Let the Science Begin," consistent with the title, is "we've had enough of this legal stuff; let's get going on the science." The problem with this is that the legal stuff is going to impact the science, whether or not the Los Angeles Times thinks that to be a reasonable result. The piece jumps from the Alameda County Superior Court decision upholding the constitutionality of Proposition 71 to then discuss and oppose Senate Bill 401 of Deborah Ortiz on the basis that CIRM should be given the chance to work out its rules and begin its important research before the Legislature starts micromanaging every aspect of its work. However, there are certain vexing issues, most particularly in the area of intellectual property, that are crying out for management of some kind.
It may have taken more protest and rancor than it should have to get the governing committee to make its dealings transparent, ensure that any future treatments are accessible to the state's poor and provide the public with a fair share of profits made from medical discoveries. But in recent months, the agency has addressed these concerns. It also has adopted top-notch standards for research ethics and the protection of potential egg donors.
One would think that the issue of patent royalties arising from patents generated through Proposition 71 was a done deal. It isn't. Furthermore, the issue of having to pay patent royalties to third parties, such as Wisconsin's WARF, in order to conduct stem cell research at all has not been addressed.
"What are we really attempting to do? Are we trying to drive therapies as rapidly as possible? Are we trying to stimulate business in California? Do we want to grow small companies? There (is) a whole set of potentially conflicting aims."
The Los Angeles Times recognizes that treatments are not around the corner: Even if research started tomorrow, any stem cell treatments are years away, which makes the legal delay that much more frustrating. A problem is that the Times has not connected the dots to appreciate how this delay impacts the concept of "a fair share of profits made from medical discoveries." The presence of profits may impact financing through tax-exempt bonds. Separately, there may not be any profits to collect, and the 3 billion may simply pave the way for others.
The Los Angeles Times has not recognized that California researchers, merely to get started in research, may have to infringe upon the patent rights of others. In the worst of all possible hypothetical worlds, wherein such activity is not excused by a research exemption, such patent holders might get an injunction against researchers in California. This is a real show-stopper. The potential impact of such a measure was seen in the RIM case concerning BlackBerries and is being investigated in the eBay case now before the U.S. Supreme Court.
To be helpful to Proposition 71, the Los Angeles Times needs to get a fuller grasp of "where" CIRM currently is and "what issues" it needs to resolve, especially in the intellectual property area.
One may question whether a limitation on the number of continuing applications an applicant may file, even in the context of a required evidentiary showing, is within the power of the USPTO in view of the wording of 35 USC 120. Although I won't pursue that, I suspect there could be a legal challenge to the proposal of January 2006.
The USPTO noted that the USPTO can never finally reject, or even allow, an application for patent.
For authority, the USPTO cited to a law review article: Commentators have noted that the current unrestricted continuing application and request for continued examination practices preclude the office from ever finally rejecting an examination or even from ever finally allowing an application. See Mark A. Lemley and Kimberly A. Moore, Ending Abuse … , 84 BULR 64, 65 (2004).
B. Continuations responsible for the backlog?
According to the USPTO, "had there been no continued examination filings, the Office could have issued an action for every new application received in 2005 and reduced the backlog by issuing actions in 35,000 older cases. Instead, the Office's backlog grew because of the large number of continued examination filings."
III. Will it really solve the perceived problem?
B. Aren't continuing applications easier to handle?
Although there is an implication that continuing applications are fungible with new applications, this is not the case.
From the just-n-examiner blog: Examiners have always told me they like continuations (or RCEs) because they receive the same amount of counts as a "new" application but without the requirements of conducting a search from scratch or learning new technology. I would think limiting continuations would hurt examiner productivity, as applicants will be unlikely to ever cancel claims to expedite issuance, thereby further increasing the number of appeals (which seems to be the intent of the USPTO lately).
From the POPA newsletter of March 2006: [Restriction of] second, and subsequent, continuation applications, which examiners usually process more quickly, would increase the number of tough cases per docket and decrease examiners' action counts. Would disproportionately affect senior and primary examiners. Junior examiners don't get cons till after about 18 months.
At footnote 40 of 84 B.U.L. Rev. 63, Lemley and Moore somewhat address the issue of cons being easier: Some commentators have suggested to us that examiners might actually prefer continuation applications, since they have already learned the technology and can get disposal credits without having to do as much work. The long delay associated with continuation applications belies that claim; it scarcely seems credible that an examiner will remember enough about a case nearly two years after she last dealt with it to result in a significant time savings.
Even in the time before RCEs, examiners typically had no trouble remembering issues in a continuation case, because a continuation, filed to keep a case going, focussed the issues. With RCEs, the "remember enough" argument seems silly at best. If the examiners say second and subsequent continuing applications can be processed more quickly, why look to indirect inferences of law professors?
Although the USPTO talked about a hypothetical world in which there were "no continued examination filings," the USPTO proposal is only to limit second and subsequent continuing application filings. There are not enough second and subsequent continuing application filings being made, which if limited in the future, would rollback the backlog problem.
In the November 2005 issue of Intellectual Property Today, I presented some data on continuing applications for FY 2004 from the PTO, and noted the USPTO is evaluating the possibility of limiting continuations, which crystallized in the Federal Register in January 2006 [71 Fed. Reg. 48 (Jan. 3, 2006)] Two readers from Chicago, Kevin Noonan and Paul Reinfelds, sent along data for FY 2005, and noted, with the small number of “second” continuing applications, that the PTO proposal limiting continuing applications, even if effected, would not likely solve the problem faced by the PTO.
Data for FY 2005: There were 63,000 continuing applications, which included 44,500 cons/cips and 18,500 divisionals. Of these, 11,800 were second, or subsequent, applications. Separately, there were 52,000 RCEs, of which 10,000 were second, or subsequent. Thus, 21,800 applications of 384,228, were second or subsequent, which is 5.7%. As for FY2004, RCEs were the single most abundant “continuing” form, 52,000 of 384,228 [13.5%]. All “continuing” forms combined constituted 115,000 of 384,228 [30%].
The article in the November 2005 issue of Intellectual Property Today ["You Only Look Twice" at page 18] had noted: About 7% of applications were "second" continuations. The article also stated: Although some of the re-work may arise from overreaching by patent applicants, some may be caused by the insufficiency of 19.7 hours, on average, to allow examiner and applicant to come to a meeting of the minds on proper claim scope.
IV. Will it create more problems?
Second, and subsequent, continuing applications are a small fraction of all applications. Eliminating all of them would not solve the problem of the backlog.
However, there has been no assertion that all second and subsequent applications are submitted for bad purposes. Furthermore, the USPTO discussion of January 2006 provides no clear-cut justifications that an applicant might use to support a second and subsequent application. The answer to "what's all right and what's not all right" is not provided. That uncertainty makes the proposal appear arbitrary and ultimately will create more problems at the USPTO. Moreover, to the extent applicants take a conservative approach, various by-pass alternatives will be chosen, and the burden will merely shift, rather than vanish.
Thus, the January 2006 proposal has a dimension of "rearranging deck chairs on the Titanic," both in the sense that it is only a slight change and in the reality that it is not solving the ultimate problem. To the extent that it burdens continuation applicants with legitimate positions, without greatly benefiting the class of all applicants, the proposal is not efficient.
The USPTO stated: "Commentators have noted that the current unrestricted continuing application and request for continued examination practices preclude the office from ever finally rejecting an examination or even from ever finally allowing an application. See Mark A. Lemley and Kimberly A. Moore, Ending Abuse …, 84 BULR 64, 65 (2004)."
We collected the data on the patent filing dates, issuance dates, whether the [page 65] patent claimed priority to an earlier filed application, the date of the earliest claim to priority, and whether any other patent in the priority chain was issued and when.
surprise a mature industry, a process known as "submarine patenting."
An entirely new defense of prosecution laches. While these changes have indeed mitigated some of the worst abuses of the continuation process, our data demonstrate that they are not likely to be effective in tackling the core of the problem.
potential downsides to abolishing continuations. We conclude from our empirical research that, while there are very real abuses of the system attributable to continuation practice, they may not be so widespread as to justify eliminating continuation practice entirely. Whether continuations should be abolished entirely depends on a judgment concerning the benefit continuations provide to applicants who are legitimately trying to draft effective patent claims.
The details relied upon by the USPTO are not on page 65.
B. Who are the abusers?
At pages 105-106 of 84 BULR 64, Lemley and Moore state: Individual inventors, who have proven surprisingly powerful in influencing Congress, are more likely than other [page 106] inventors to abuse the continuation process. At page 106, Lemley and Moore state: A compromise proposal might, therefore, limit each applicant to no more than one continuation application or CIP, but they also state: Limiting the number of continuations that can be filed may require an act of Congress.
Lemley and Moore did not mention the Axel patents in their "ending abuse" paper. However, in "Patenting Nanotechnology," published in the Stanford Law Review in November 2005 [58 Stan. L. Rev. 601], Lemley spoke favorably of the Axel patents of Columbia University. Lemley wrote: Axel received one on his roughly contemporaneous methods of inserting genes into a cell, and both licensed their patents for significant revenue. But largely because they were funded by the [page 611] federal government before the passage of the Bayh-Dole Act, they granted nonexclusive licenses to all comers, meaning that their patents raised the cost of practicing biotechnology but did not prevent anyone from entering the downstream market.
Separately, in the case of the Harvard/MIT patent on "nuclear factor-kappa B" (or NF-kB), Lilly asserts that the patent application(s) were at the U.S. Patent and Trademark Office for 16 years before the USPTO decided the discovery warranted a patent.
Separately, an op-ed in the Los Angeles Times on April 12, 2006 and an article in Science on March 24, 2006 (311 Science 1716) criticized the continuation practices of James A. Thomson of Wisconsin in obtaining US 5,843,780 and 6,200,806 in the area of embryonic stem cells, although it is far from clear that this criticism is justified.
The issue of "how much" abuse there is and "who the abusers are" remains to be clarified.
One notes that Robert A. Clarke, an employee of the USPTO, never assumed "every continuation resulted in a patent." Separately, the 95% (or 97%) number of Quillen and Webster was not purported to be "the grant rate" but was rather an upper bound on what the grant rate might be.
The USPTO's reliance on a law review with known, uncorrected, factual errors might be questioned.
The answer just might be found on the copyright page of "How Opal Mehta Got Kissed, Got Wild, and Got a Life." There it says: "Copyright 2006 by Alloy Entertainment and Kaavya Viswanathan."
Viswanathan received much attention for her novel even before the allegations of plagiarism arose, not only because of her age but because of the unusually large advance she got -- reported to be $500,000 for two books -- and because of the relationship with Alloy. In addition, the high-powered William Morris talent and literary agency represented both the author and the book packager in the deal with Little, Brown. Normally a literary agent represents the author, period. But in this case the Morris agency also represented Alloy, which it has worked with on other "teen-lit" books." "We represent both parties, because their interests are aligned," Jennifer Rudolph Walsh, a fiction agent with the Morris agency, said in a telephone interview. "It's collaborative. We represent the project."
In the real world, as opposed to Crichton's imaginary one, authors such as Viswanathan or Laurence Tribe borrow freely from previously-written works, and there is little if any penalty. In the case of Viswanathan, plagiarism was caught not by sophisticated anti-plagiarism software, frequently advertised on the internet, or by the copyright "police," but rather by customers (ie, book buyers) who noticed the similarities.
Fox has on its website a story titled: Newspaper: U. of Pittsburgh Enabled Hwang's Stem-Cell Fraud, based on the story by the Pittsburgh Tribune-Review. The summary: Lax policies and disregard for federal guidelines at the University of Pittsburgh allowed a stem-cell scientist to participate in an international scientific hoax last year, according to an investigation by the Pittsburgh Tribune-Review.
The Fox website has a link to an [AP] article about the Loring/Campbell article in Science. Fox elevated the opinion piece to the status of a "study:" Study: Wisconsin Stem-Cell Patents Hinder Research. Of course, the article/study never once mentioned the research safe harbor of 35 USC 271(e)(1), as interpreted by the US Supreme Court in Merck v. Integra.
MADISON, Wis. — Stem cell patents held by a University of Wisconsin organization are so restrictive that they create an impediment to research, according to a science journal published Friday.
The authors, California stem-cell researcher Jeanne F. Loring and patent attorney Cathryn Campbell, said the Wisconsin Alumni Research Foundation patented stem cells so broadly that other researchers can do little without infringing on the foundation's patents.
The article appears in Friday's issue of the journal Science.
Researchers value human embryonic stem cells because the generic cells hold promise for curing diseases such as diabetes, Alzheimer's and Parkinson's diseases.
The University of Wisconsin has owned patents on the cells ever since UW-Madison researcher James Thomson first figured out how to grow them in his lab in 1998.
The patents cover not only the cells but also the technique Thomson used to derive and grow them. That means most stem cell research across the country falls under the foundation's restrictions.
Carl Gulbrandsen, the foundation's executive director, said other universities would have also protected its rights to such a breakthrough.
"I'm not embarrassed at all to say that I hope the University of Wisconsin will make a whole lot of money from these patents," he said.
Initially, the foundation charged universities $5,000 to use the cells. Later, an agreement with the National Institutes of Health brought the price down to $500.
The foundation charges private labs up to $125,000 for the cells, plus an annual maintenance fee of up to $40,000. The fees vary depending on the size of the firms.
The fees also cover training to teach licensees how to maintain the finicky cells, Gulbrandsen added.
Loring and Campbell are not the first researchers to claim the dollar amounts impede research.
Doug Melton, who chairs Harvard University's department of molecular and cellular biology, agreed that the foundation's patents are too restrictive.
Harvard has its own stem-cell program and distributes its lines for free, but recipients are still bound by the foundation's restrictions.
NJBiz reports: Stem Cell Innovations has filed a patent application that seeks to protect the company’s method for turning its proprietary stem cells into certain types of brain cells. The stem cells, culled from aborted fetuses, will be used in the company’s drug discovery and toxicology platform.
Based in Houston, Texas, with an office in Scotch Plains, Stem Cell Innovations is also using the cells in therapeutic research of multiple diseases and debilitating conditions. In addition, the company plans to make the cells available to universities and not-for-profit organizations.
“These cells have significant potential in both drug discovery and cell therapies to treat diseases such as ALS, Parkinson's, Huntington's, multiple sclerosis, and spinal cord injury,” said James Kelly, CEO of Stem Cell Innovations. “We are already in discussions with companies that have expressed interest in these cells." Stem Cell Innovations shares rose 5 cents to $0.61 this morning.
In January, 2006, federal judge David F. Hamilton ruled after a trial that Lilly breached its contract with Emisphere by setting up a secret research team to study its partner's technology on the sly. In a decision released April 26, the judge ruled Lilly should hand over the international patent application [PCT] to Emisphere Technologies by May 5, 2006. The technology relates to an injectible bone-strengthening drug.
Nobuo Omae, a 59-year-old professor of the engineering faculty at Kobe University, withdrew a patent application Monday [April 24] as recommended by the university. On April 27, 2006, the university announced that Omae fabricated experimental data when applying for a patent for a high-precision steel-cutting tool that uses diamonds.
An unusual revelation in the latest Harvard plagiarism scandal is that Claudia Gabel worked on both McCafferty’s books (plagiarism victim) and Viswanathan’s book (accused of having plagiarized text). Also, the "book packager" Alloy Entertainment holds copyright jointly with Viswanathan. There's potentially a very interesting intellectual property issue here.
That wouldn’t be easy for the Indian-American [Viswanathan]. The scandal would not only be a devastating blow to her personal reputation and career, but bring under the scanner success stories scripted by young Indians who are often pressured by their families to excel.
The episode also raises the question whether the publishing industry can turn literary wannabes into successful authors through marketing hype and packaging.
Viswanathan worked not only with her publisher but also with Alloy Entertainment -- known as a “book packager” -- in developing the concept for the novel and its first four chapters. She has said Alloy was not responsible for any of the copying.
In many instances, editors at Alloy craft proposals for publishers and create plots and characters before handing them over to a writer (or a string of them). Alloy owns or shares the copyright with the authors and then divides the advances and any royalties with them.
Alloy then worked with her on the book’s first four chapters, making what Viswanathan described as very minor suggestions.
But the publishing contract Little, Brown signed is actually with Alloy, which holds the copyright to Opal together with Viswanathan.
The relationships between Alloy and the publishers are so intertwined that the same editor, Claudia Gabel, is thanked on the acknowledgments pages of both McCafferty’s books and Viswanathan’s Opal.
Gabel had been an editorial assistant at Crown Publishing Group, then moved to Alloy, where she helped develop the idea for Viswanathan’s book. She recently left Alloy.
A spokesman for Random House, the publishing company that owns Crown, said Gabel had left the company “before the editorial work was completed” on Viswanathan’s book.
“Claudia told us she did not touch a single line of Kaavya’s writing at any point in any drafts,” he said, adding that Gabel was one of several people who worked on the project in its conceptual stage.
The plagiarism row broke out last Sunday when Harvard Crimson reported that Viswanathan had plagiarised nearly 40 passages from McCafferty’s books.
Little, Brown and Viswanathan had earlier said she would revise the book to remove the copied passages and that they would reissue it. Viswanathan, reached last night, declined to comment.
"Authorized generics benefit consumers by putting a downward pressure on drug prices," said Lori Reilly, the vice president of policy and research at Pharmaceutical Research and Manufacturers of America. But opponents, led by the Generic Pharmaceutical Association, say authorized generics are anti-competitive and will hurt consumers over time by eroding profits for generic drug makers, which kills their incentive to try to speed cheaper copycat drugs to market.
While several court decisions have upheld the legality of authorized generics and the FDA has denied petitions to address the matter, many maintain that such drugs should be restricted. And Congress is listening.
At the urging of Sens. Charles Grassley, R-Iowa, Patrick Leahy, D-Vt., and John Rockefeller, D-W.Va., the Federal Trade Commission recently agreed to do a yearlong study on the short- and long-term effects of authorized generics.
The study will examine, among other things, the business reasons for launching the drugs and their effect on overall drug pricing.
Drug companies are again paying generic companies to drop patent challenges that could make copycat drugs available before the patents on the original drugs expire. The practice has increased because several federal court decisions reversed earlier determinations that such deals were an illegal restraint of trade, Jon Leibowitz of the Federal Trade Commission said this week.
Just like at the USPTO, the FDA is developing a backlog. A Food and Drug Administration backlog of 800 applications for generic drug approvals will likely slow access to cheaper drugs.
Dr. Scott Gottlieb, the FDA's deputy commissioner for medical and scientific affairs, told generic-drug executives in February that some applications aren't reviewed until the statutory review time of 180 days is nearly reached.
Staff shortages are part of the problem, but the FDA also blames generic firms for submitting faulty applications.
Also, although GlaxoSmithKline's patent for the allergy medicine Flonase expired in May 2004, the cheaper generic version didn't hit the market until March 2006.
The delay was the result of a series of aggressive administrative and legal maneuvers by GlaxoSmithKline that thwarted the speedy entrance of the generic. After a federal judge in Baltimore rebuffed Glaxo's final legal challenge on March 6, 2006, the generic version by Roxane Laboratories hit store shelves.
atents are set to expire on 75 brand-name drugs over the next two years and on an unprecedented 252 by 2014. A study by the Pharmaceutical Care Management Association released on April 18 found consumers and health plans could save more than $26.4 billion over the next five years by using cheaper generic versions of just 14 brand-name drugs scheduled to lose their patent protection between now and 2009.
The generic sells for $61.99 at Walgreens.com, while Flonase costs $81.99. At CVS.com, the generic is $68.59 vs. $85.29 for Flonase.
Patent Trolls, 6 N.C. J.L. & Tech. 367.
In 1933, the Wright Brothers' key patent had been long expired, and Wilbur had been dead even longer.
Of the PIT in the title: Patterned after the existing REIT legislation, a Patent Investment Trust, ("PIT "), would be a corporation that trades and licenses patents rather than real estate.
In addition to Smith's article, one has Randy P. Boyer, Schering Corporation v. Geneva Pharmaceuticals, Inc.: Requiem for the Recognition Requirement in the Law of Inherent Anticipation, 14 Fed. Cir. B.J. 677 (2004/2005).
Boyer also wrote: In Schering [339 F.3d 1373], the court held that, contrary to what had become the common understanding in the Continental Can Company USA, Inc. v. Monsanto Co. line of precedent, prior recognition by persons skilled in the art was not required to establish inherency.
indicate that the court is now undeniably committed to this view.
Boyer did not cite any of my articles.
The CORRECT formulation is "when" is recognition required.
conceit, directing the choice of fiction that will benefit the public most.
occurring in the prior art.
Footnote 69 was: n69. See, e.g., Lawrence B. Ebert, Inherent Difficulties, Intell.
note 10, at 21 (concluding that the "EMI decision appears to agree with Ebert.").
In "Inherent Difficulties" in 1999, I was discussing the (then) recent case of Atlas Powder Co. v. IRECO Inc., 51 USPQ2d 1943, 1946-1947 (CAFC 1999).
inherent property of the prior art, not the addition of a novel element.
does not defeat a finding of anticipation.
The bolded sentence is important. One did not have to know, at the prior time, of the inherent property. The important point is that the property is inherent. An inherent property is inherent for all time. To illustrate that important point, I followed with an example using buckyballs. Smith did not quote it in 2006, but I have returned to that buckyball example several times.
method were subsequently developed which made that small amount detectable?
Contemplate text from L. B. Ebert, "Inherent difficulties," Int. Prop. Today, Nov.
known to be correct until after the work of Huffman and Kratschmer in 1990.
dipped below 50% in 1978 and currently is 30.2%.
Ties," Wall St Jour., B1 (Feb. 2, 1999).
Engineering News n10 (at the invitation of Madeleine Jacobs), Professor Allen J.
being canceled when practical systems aren't immediately forthcoming."
Geron's new patent, US 7,033,831, is generally about production of insulin secreting cells from human embryonic stem cells (hESCs), and is directed to methods developed by Geron scientists working towards the scalable production of pancreatic islet cells from hESCs for use in new cell-based treatments for diabetes. Earlier this year, Geron presented data showing the differentiation of hESCs to produce cells that secrete insulin and glucagon and express genetic markers consistent with human islet cells. Working in collaboration with researchers at the University of Alberta, Edmonton, Canada, Geron scientists have also shown that these cells generate detectable human insulin upon glucose challenge when transplanted into animals and that such transplants can extend the lifespan of diabetic animals.
One recalls that Geron is the exclusive licensee (in certain areas) of the WARF/Thomson patents, which are of relevance in the current discussion between WARF and CIRM about whether or not CIRM will need to pay patent royalties to CIRM in the context of California's effort in Proposition 71.
For background, see IPBiz post of March 17, 2006, and Ebert, Lawrence. (2006, April 13). Will Wisconsin's Patents Block Embryonic Stem Cell Research?. EzineArticles.
According to Reuters, eBay Inc. said it expected a U.S. Supreme Court decision on the patent infringement suit filed by MercExchange to be rendered in the second quarter this year, according to a regulatory filing with the SEC on Tuesday, April 25, 2006.
"Even if successful, our litigation of these matters will continue to be costly," eBay said in the filing. But it added that it had taken "appropriate" legal reserves for the suit.
"If we are not successful in appealing or modifying the court's ruling ... we would likely be forced to pay significant damages," the company said.
The Reuters report did NOT mention that the U.S. government (Office of the Solicitor) had taken a position AGAINST eBay, making it less likely that eBay would prevail at the Supreme Court. Current wisdom has suggested that eBay will lose by a vote of at least 7-2 at the Court.
A teen novel containing admittedly borrowed material has been pulled from the market. Author Kaavya Viswanathan, a Harvard University sophomore, had acknowledged that numerous passages in "How Opal Mehta Got Kissed, Got Wild and Got a Life" were lifted from another writer.
Publisher Little, Brown and Company, which had signed Viswanathan to a reported six-figure deal, said in a statement Thursday that it had notified retail and wholesale outlets to stop selling copies of the book, and to return unsold copies to the publisher.
Viswanathan has apologized repeatedly for lifting material from Megan McCafferty, whose books include "Sloppy Firsts" and "Second Helpings," saying she had read McCafferty's books voraciously in high school and unintentionally mimicked them.
But McCafferty's publisher, the Crown Publishing Group, labeled Viswanathan's actions "literary identity theft" and had urged Little, Brown, which initially said her novel would remain on sale, to withdraw the book.
In a statement issued soon after Little, Brown's announcement, Crown said it was "pleased that this matter has been resolved in an appropriate and timely fashion" and also praised McCafferty for "her grace under pressure throughout this ordeal." McCafferty, in a statement released by Crown, said she was "not seeking restitution in any form" and hoped to put the affair behind her.
Similarities to McCafferty's books, which include "Sloppy Firsts" and "Second Helpings," were first spotted by readers. They alerted McCafferty, who in turn notified her publisher. Crown alleges that at least 40 passages "contain identical language and/or common scene or dialogue structure."
The article mentions another plagiarism event at Harvard: Other books over the years have been withdrawn because of plagiarism allegations, notably Doris Kearns Goodwin's "The Fitzgeralds and the Kennedys," which was pulled in 2002. However, the article does NOT mention plagiarism events at the Harvard Law School, including that involving Laurence Tribe. No word on whether Dershowitz has mentioned a culture of plagiarism that pervades novels about teenage girls.
Jeanne Loring, a scientist at the Burnham Institute for Medical Research in La Jolla, CA, started a short-lived embryonic stem cell company several years ago. "I learned from venture capital investors that these patents existed and that it would be impossible to obtain funding from them," she says.
One notes that the significance, and potential impact on research, of the WARF/Thomson patents was known in the embryonic stem cell before Proposition 71 was passed. However, it is apparent that the PRESENCE of patents in the area may not have been known to all academic workers, even though the significance of the work should have been, because a paper by Thomson was submitted to PNAS just a few days after the basic patent application was filed.
Universities generally allow other institutions to use patented technologies without special permission. WARF, however, requires universities to get a license to do embryonic stem cell research. "None of us understand why we need a license...Why is this technology any different?" says one technology-transfer official.
WARF officials emphasize that they have made licenses broadly available. "We have given 54 different research groups in California royalty-free licenses," says WARF's Cohn. "Those academic researchers can patent anything they find and publish anything they find without any oversight from us." WARF does not disclose specific details of licenses.
But license requirements could still impact early research and development. "A number of institutions have not been able to reach terms with WARF for licenses," says Kenneth Taymor, an attorney with the Stanford Program on Stem Cells in Society. "That suggests that in this research area, it's making impediments."
Licensing costs could also hinder scientists who want to start their own biotech companies. "I think there has been a lot of concern from investors about funding startup companies because of uncertainty over WARF patent coverage," says Warren.
The Technology Review article does not mention the Supreme Court cases of Merck v. Integra (scope of research safe harbor under 35 USC 271(e)(1)) or Florida Prepaid Postsecondary (issues concerning litigation against STATES who are accused patent infringers).
The article obliquely refers to the Cohen/Boyer patents: "This is not unlike in the heyday of DNA, when Stanford had seminal foundational patents [on recombinant DNA] that interested parties needed to access to further the science," says Todd Lorenz, chair of Life Sciences and Health Care, at the law firm Dorsey & Whitney LLP. Stanford allowed other universities to use the technology without special permission, but charged private companies a licensing fee. The article fails to mention these patents antedated the Bayh-Dole Act. Further, the Bayh-Dole Act preceded the Hatch-Waxman Act, which introduced 35 USC 271(e)(1). Thus, the legal landscape mentioned in the article has been long passed by.
It's unclear how the California situation will unfold. Nicole Pagano, a spokeswoman for the California Institute for Regenerative Medicine [CIRM], the agency overseeing Prop 71 funds, said talks are underway. Yet Andy Cohn, a spokesman for WARF, says it is not formally negotiating with California and does not have plans to in the near future.
The text --These patents, which are now owned by the Wisconsin Alumni Research Foundation (WARF), apply to all current lines of embryonic stem cells -- scientists who wish to do research on such cells, even if they derive their own lines, must acquire a license from the Wisconsin foundation.-- might be reconsidered.
Given that state agencies, such as California's CIRM, are doing research for the purpose of obtaining a treatment for which FDA approval will be required, the activities of such agencies are likely to be insulated from infringement by the safe harbor of 35 USC 271(e)(1), as broadly interpreted in the recent Supreme court case of Merck v. Integra.
This point has been published in the academic literature, 88 JPTOS 239 (March 2006).
Separately, for the particular situation wherein a state agency is an accused infringer, the case will likely be heard in state court, not federal court, per Florida Prepaid Postsecondary.
It's Monday, April 24, 2006, and the most recent post on WN is for April 14.
If all goes well, Americans could be landing on the Moon in 2018, just 49 years after the Apollo 11 moon landing. Aside from a spacecraft to get us there, all we need is a reason, and NASA is working on that. In 2009, an SUV-sized spacecraft will smash into the Moon's south pole, making a big hole and sending up a plume of debris. The last time they tried this was the 1999 Lunar Prospector. It didn't kick up squat, so they're gonna hit it harder. What they hope to see in the plume is water. Water would allow astronauts to "live off the land," and "could be used to make fuel," Michael Griffin, the NASA Administrator explained. They are free to use my faucet if it would solve the fuel crisis here on Earth.
Bob, you could discuss the Alameda Superior Court holding that Proposition 71 is constitutional, and that just because potential recipients of state money sit on the various boards there isn't evidence of a conflict of interest. And, Snuppy's birthday is today.
According to Jennifer Bails: The University of Pittsburgh's lax policies and disregard for federal guidelines allowed biologist Gerald Schatten to participate in one of the biggest scientific frauds in history.
--> Pitt allows its scientists to determine if their work constitutes human-subject research, a policy that disregards federal recommendations designed to safeguard people.
--> A Pitt oversight board skipped a full review of Schatten's research after he assured them it did not involve identifiable people. Documents show the opposite is true. One of those people, an egg donor, later worked in Schatten's Oakland lab.
--> Pitt's inaction permitted Schatten to proceed with publishing his research. He sought the university's clearance only after his work was completed.
--> Pitt opts to withhold privately funded research, such as Schatten's, from federal oversight, a choice that makes the university unaccountable when it comes to protecting human volunteers in studies.
--> Newly proposed stem cell rules at Pitt likely would have prompted the university to take a closer look at Schatten's research. A closer look might have uncovered irregularities before the work was published.
"A stem cell trial like this without full review should just never, ever happen," said Glenn McGee, editor-in-chief of the American Journal of Bioethics and founder of the nation's largest research program on the ethical implications of stem cell science. "The University of Pittsburgh should take the lead in the nation to ensure that this option is never provided, since they are the ones that did it wrong."
Although the Tribune-Review reported: Six months later (after June 05), a Korean investigation revealed that Hwang and possibly others deliberately fabricated data for the paper, which Science later retracted. the Tribune-Review did not focus on the investigation by Korea's PD Notebook, which stated in May 2005.
Scientists are supposed to seek formal written clearance from an IRB before beginning their research when there is any question about whether a project might involve human subjects, Caplan said.
"Basically, you shouldn't be sending out anything until you have that letter in hand," Caplan said.
Duffield said Schatten first approached Pitt's IRB about his collaboration with the Korean scientists in February 2005, at least a month after the project had begun.
He informed the board that his collaboration with Hwang did not involve identifiable people, she said. This declaration prompted the board to determine it had no jurisdiction over the work, she said.
"Based on the information provided to the IRB, this project includes no involvement of human subjects, according to federal regulations," states a letter sent to Schatten on March 16, 2005, signed by Christopher M. Ryan, a Pitt neuropsychologist who is vice chair for the board's exempt and expedited reviews.
The day before, Schatten and Hwang submitted a first draft of their paper to Science.
Ryan, who did not return phone calls or e-mails, wrote to Schatten that the review board made its decision because "the investigator conducting research ... will not obtain identifiable private information."
The board used as a reference federal guidelines issued in March 2002 that say the study of human cell lines, where the donors cannot be identified by the investigator, is not human-subject research, Ryan's letter said.
But an online supplement that Schatten and his Korean co-authors published with their Science 2005 paper indicates otherwise.
The supplement says that when patients donated their cells for the research, their identities were "encoded by the responsible clinician and donor identity was unknown to the investigators and others."
Under Korean law, as explained in that supplement, the families of these donors must receive priority for any future treatments that result from the research to which they contributed.
A chronology of events surrounding University of Pittsburgh scientist Gerald Schatten's role in fraudulent Korean human embryonic stem cell research.
March 15, 2005: Schatten and Korean researcher Dr. Hwang Woo-Suk submit a paper to the journal Science, claiming creation of patient-matched stem cells by cloning of human embryos.
March 16, 2005: Pitt's Institutional Review Board overseeing human subjects research sends Schatten a letter saying his project does not involve human subjects, which means it will not review his work further.
Nov. 14, 2005: Schatten publicly severs ties with Hwang over ethical concerns about human egg procurement.
Dec. 4, 2005: Hwang contacts Science to report some cell images submitted as part of the paper unintentionally showed the same thing.
Dec. 6, 2005: Pitt's research integrity officer, Jerome L. Rosenberg, learns of a Korean news report questioning the validity of the research.
Dec. 14, 2005: Pitt notifies Schatten that it has opened an investigation two days after he asks Science to remove his name from the paper.
Dec. 15, 2005: Seoul National University (SNU) opens an investigation.
Dec. 23 and 30, 2005; Jan. 10, 2006: SNU announces in three stages that the supposed cloned cell lines did not exist.
Jan. 12, 2006: Science editors retract paper.
Feb. 8, 2006: Pitt panel appointed by Dr. Arthur Levine finds Schatten did not commit research misconduct, but said he shirked his responsibilities as co-author of the paper. It recommends the university take corrective or disciplinary action.
engadget: Sony seems to have decided that the traditional one-size-fits-all bathtub is ripe for a rethink, so the company has filed a patent application for a tub that can be reshaped based on an owner's needs. Basically, it works like the detention-level trash compactor; press a button and the walls of the tub close in or slide out, resulting in a wide and shallow tub, or a narrow and deep one.
Researchers at Binghamton University in New York have filed an application for a patent on a method of extracting unique identifying information from digital photos, based on pixel noise. According to the researchers, each camera generates its own digital "fingerprint" based on random variables that occur in the manufacturing process. By comparing multiple images from a single camera, the researchers say they can trace the images back to the specific camera that took the photos. The developers see potential for the method in law enforcement activities, such as tracking down child pornographers and forgers. We hope they're right; certainly, any tools they can use are worth exploring. However, we can't help but wonder whether clever criminals will just be able to run a few Photoshop filters and be able to wipe out any trace of their cam's fingerprint before uploading their pics.
jpeg has become the standard image compression method used on the net, and by definition, it's a lossy compression method. Forget about resizing. Just compress the image to "normal" jpeg settings, and that noise info will be lost rendering the image virtually untracable. In fact, that info is already lost when you download those images from your camera, as it would have already compressed the images before saving them on the flash memory loosing all that noise information.
This method may work on raw/uncompressed images, but how many people will post huge, multi megabyte raw images online???
Some of the challengers to Proposition 71 (which challenge was unsuccessful in Superior Court in Alameda last week) had argued that the very ballot measure that put the issue to voters was flawed and illegally violated the "single-subject" rule. Challengers said ballot language about rules to prevent conflicts of interest, regulate research standards and maintain privacy rights for women who sell their eggs for research illegally added new subjects for voters to consider.
But Judge Sabraw declared otherwise, saying challengers "have not demonstrated that any of the above is not functionally related or germane to stem cell research and funding, thus violating the single-subject rule."
If the challengers' theory were successful on appeal, all the self-implementing features of Proposition 71 would not matter, because what was on the ballot before voters wasn't proper.
Nevertheless, it remains true as Finley Peter Dunne's fictional bartender, Martin T. Dooley suggested, that the Supreme Court follows the election returns. The voters of California likely will get Proposition 71, but in ten years it will be apparent that it was not what they thought they were voting for.
A slashdot for prior art?
"The Patent and Trademark Office should make increased use of the Internet in seeking to document 'prior art,' particularly in the area of information technology, where the Internet provides new capabilities to reach the most knowledgeable commentators. A 'Slashdot for prior art' should be the goal," the report of the Committee for Economic Development [CED] said, referring to the online technology-discussing community.
IPBiz will be returning to the idea of internet capabilities and knowledgeable commentators later.
[The Congress review link is to a discussion of HR 2795: Rep. Lamar Smith, who heads the House of Representatives committee responsible for drafting patent law, said his proposal would improve the overall quality of patents and target some of the legal practices that have irked high-tech companies.
The evidence at trial establishes that the application of the Act has been in compliance with its statutory framework, and that CIRM and the ICOC are operating in the same fashion as other state agencies. Each ICOC member, and each alternate, has taken the oath of office and publicly filed Form 700, the standard form California public officials file to disclose financial holdings. The ICOC developed and adopted incompatible activities statements, the conflict of interest code required by the Political Reform Act, and conflict of interest policies for ICOC members, CIRM staff, and members of each of the ICOC advisory groups. Between January 2005 and the date of the trial, the ICOC, its subcommittees, and its working groups held over 40 noticed, public meetings, in cities across the state, held pursuant to the Bagley-Keene Open Meeting Act. CIRM has responded to numerous Public Records Act requests. The selection of the site for the CIRM’s facilities was run by the Department of General Services, as required of state agencies, which department also executed the lease. The required independent audit is in process and is to be reviewed by the Citizen’s Financial Oversight Committee. In addition, testimony was presented that CIRM is subject to audit by the Controller and the Department of Finance, and that the Controller has met with the ICOC to discuss the type of practices he expected the ICOC to follow.
The makeup of the governing body of the agency includes representatives of research centers that are likely to apply for the stem cell grants. But, Sabraw said, the plaintiffs presented no evidence that the institute serves the private interests of those universities and research organizations. [Hmmm, res ipsa loquitor?] It serves the public purpose endorsed by the voters -- fighting disease and stimulating the state's biotech economy, the judge held.
David Llewellyn, an attorney for one of the plaintiffs' groups, the California Family Bioethics Council, said an appeal is likely. Llewellyn said Sabraw erred by concluding that the stem cell institute's final decisions are under state control. "While there are plenty of reporting and monitoring elements (by other state offices), there is no state oversight entity -- the governor, the Legislature -- that can prevent this,'' Llewellyn said.
Sabraw's ruling initiates a series of appellate court steps that could take a year or more to complete. Because the suits involve a challenge to state bonds, they take priority on the state appeals court calendar, Klein said. The stem cell institute has not yet decided whether to ask the state Supreme Court to bypass the Court of Appeal and review the cases directly.
[See also coverage by Terri Somers of the San Diego Union-Tirbune.
The CIRM posting did not present the actual money arising from the BANs, but did state that the first 16 stem cell grants for 169 research fellows. A press release on April 10 had identified the amount as $12,112,252, which is less than 1/3 of the federal amount of $40 million, and hardly equals 1/2, as reported in the CIRM release of April 21.
“Those of us who have been involved with the CIRM and on the ICOC believe we will fulfill the mandate of Proposition 71 and our scientists will conduct the business of finding the next generation of therapies and cures for a variety of diseases. We look forward to the future with great optimism,” Gerald S. Levey, M.D., dean of the David Geffen School of Medicine at the UCLA.
Lemley confused on Columbia's Axel patents?
In "Patenting Nanotechnology," published in the Stanford Law Review in November 2005, Mark Lemley stated "for one reason or another, the basic building blocks of what might be called the enabling technologies of the twentieth century - including the computer, software, the Internet, and biotechnology - all ended up in the public domain."
In the late 1970s three Columbia researchers, Richard Axel, Michael Wigler, and Saul Silverstein, all working with funding from the NIH, figured out a way to vastly improve the efficiency of a technique used in genetic engineering. They filed for patents in February 1980—prior to Bayh-Dole. But the NIH assigned the title to Columbia once the university promised to "use all reasonable effort to bring the [Axel patents ] to the commercial market through licensing on a non-exclusive, royalty-free, or reasonable royalty basis." The federal agency even admonished Columbia not to engage in "repressive" licensing practices.
But when the patent life ran out, Columbia announced that—surprise—it had secured a new patent, issued in 2002, that won't expire until 2019. (The patent application was filed in secret in 1995.) And the invention, as it turns out, comes out of the original taxpayer-funded work done by Axel, Wigler, and Silverstein long ago (and somehow not included in the three patents Columbia had already received). University lawyers had pulled off the trick by filing a secret "continuation" application (which keeps an original patent disclosure alive for possible new claims to be added) and then abandoning it—repeating this procedure again and again until the clock was about to run out. So the patent granted in 2002, noted federal district court Judge Mark Wolf, "relates back to its great-great-great-great-great-great-grandparent application" in 1980.
See IPBiz and also IPBiz.
**Separately, Lemley in "Patenting Nanotechnology" asserted that Gary Boone was the inventor of the integrated circuit. Lemley wrote: The integrated circuit was itself an improvement in the field of computing, a way of building transistors (an invention discussed above)[page 612] directly into a computer chip by using charged silicon, a semiconductor. (...) Gary Boone was ultimately declared the winner, but not until 1999, twenty-eight years after the first patent application was filed.
In reality, Noyce and Kilby were the inventors of the integrated circuit. Before the resolution of the patent interference between Noyce and Kilby, the companies (Texas Instruments and Fairchild) agreed to cross-license. All third parties had to pay patent royalties to BOTH TI and Fairchild, thus not supporting Lemley's contention in any way, shape, or form.
Microsoft was ordered to pay $115m, and Autodesk was required to pay $18m to David Colvin, the founder of z4 Technologies, who sued the two software companies in federal court in Texas, claiming they appropriated two of his anti-piracy software patents with Autodesk's AutoCad programs and Microsoft's Office and Windows XP.
In March 2006, Microsoft was forced to modify its Internet Explorer browser to reduce any liability it may have as a result of a patent dispute with University of California-backed company Eolas Technologies.
Don't forget Kansas in the stem cell race?
an offshoot of its California medical-research campus.
to the state. Today, the company is out of business.
other companies. "I don't know what advice I'd give Kansas."
"VC are like cloned sheep ... they will follow."
Noting that only $120 million of $5.9 billion in biotech venture capital went to stem cell research in 2005, Terri Somers suggested reasons including scientific uncertainties, intellectual property issues and the lack of any clear path to make a return on investments in stem cell-based companies. I think the bigger reason is that no venture capitalist sees a payout in the seven year or less timescale.
An interesting question from IPBiz: will state funding of stem cell research fill the void left by the absence of large scale federal funding AND VC funding, or will it create a monstrous patent thicket of academic "basic science" patents that set back progress in the field back for years? Recall what the Supreme Court justices said about the Metabolite patent. Rather than filling a void, balkanized state funding might create an obstacle course of molehills.
My article on Washburn's LA Times piece on patent royalties demanded by WARF of CIRM appears here.
The issue of the breadth given to the claims of Thomson's U.S. 5,843,780 and U.S. 6,200,806 will loom large on the stem cell research horizon.
The Cooper Heart Institute at Cooper University Hospital and the Coriell Institute for Medical Research are working together on the project funded through a $300,000 grant Coriell received from the New Jersey Commission on Science and Technology which in turn was awarded under New Jersey's $5 million stem cell research grant program established in 2004. It is this $5 million program that may entitle the state of New Jersey to lay claim to be the first state to fund stem cell research.
"This is how this kind of research is going to be done," said Dr. Steven Hollenberg, director of the coronary care unit at the Cooper Heart Institute. "It isn't going to be one person in one lab figuring it all out. It's going to be collaborations among researchers from different departments and different institutions."
Biagio Saitta, a molecular biologist at Coriell, is principal investigator of the study. Saitta is also an associate professor of medicine at University of Medicine and Dentistry of New Jersey's-Robert Wood Johnson Medical School at Camden. He is working with Cooper co-investigators Dr. Joseph E. Parrillo, director of Cooper Heart, and Hollenberg. Both Parrillo and Hollenberg are professors of medicine at UMDNJ.
"We have isolated certain stem cells found in umbilical cord blood, and our research will mimic how these cells could repair ischemic cardiac cells (cells without oxygen) isolated from laboratory animals," Saitta said. "This research will enable us to study how tissue responds to damage from scarring, fibrosis and hypertrophy (enlarged heart). Our proposal has great potential for patient care."
Parrillo, the former head of the critical-care medicine department for the National Institutes of Health, described the study of stem cells and heart disease as a potential "first step" toward treating and potentially curing heart disease without the need for complex surgery or heart transplantation.
Hollenberg said research has already shown stem cells from umbilical cord blood decrease remodeling, a process by which the heart enlarges after an attack.
"Interestingly enough, [the stem cells] don't make heart cells," he said. "That would be the expectation -- that they would turn into heart cells, but that doesn't happen."
* Neuronyx Inc. of Malvern, Pa., is studying the use of adult stem cells derived from bone marrow to treat heart ailments.
* Last May, scientists at the University of Pittsburgh Medical Center began a stem cell study in up to 10 heart-failure patients awaiting transplants. Tens of millions of stem cells were isolated from each of the patients' bone marrow and injected into their diseased hearts. The researchers are studying the effect the injected stem cells had on the patients' damaged hearts by studying the organ after it is removed prior to the transplant.
* Last October, doctors in London launched a study testing three different types of stem cell therapy in 700 heart patients.
* Researchers at both the University of Texas and Johns Hopkins University in Baltimore have reported positive results in animal studies testing the ability of stem cells to repair damage to the heart caused by attacks.
* Last month, Baxter Healthcare Corp. of Deerfield, Ill., initiated what it described as the first human phase-II adult stem cell therapy trial testing the ability of blood-derived stem cells to improve the symptoms and clinical outcomes in patients with chronic myocardial ischemia, a severe form of coronary artery disease.
* Also last month, however, German researchers at Technische Universitat in Munich released the results of a study that found an experimental therapy using stem cells derived from bone marrow was ineffective in treating cardiac tissue and blood vessels damaged by heart attacks.
Ultimately it should be possible to use stem cells to replace any other cells in the body that have been damaged or harmed by accident and disease.
Adult stem cells have been used in therapy for a long time. The implementing ingredient in bone marrow transplantations, which have been used to treat certain blood cancers for more than 40 years is the small proportion of stem cells present.
Unfortunately, adults don't have a lot of stem cells available. And there's a difference between stem cells in adults and those in embryos just days old.
Alan Colman CEO of E.S. Cell International in Singapore explains that both embryonic and adult stem cells are important. "I think that we will find that each type of stem cell is good for some purposes and bad for others. Embryonic stem cells have the benefit that they can grow indefinitely in culture. Adult stem cells generally cannot do that."
"But on the other hand, adult stem cells," Colman says, "are nearer, if you like, to the end product than the embryonic stem cell. I think researchers should be backing both areas of research at the moment and the public also should support both types of research."
Colman says identifying the right stem cells and converting them properly to the cells you need are the first task. "Then we have to ensure that once transplanted the cell behaves properly and integrates with the neighboring cells and tissues and that it doesn't run amuck." At question is whether stem cells grown in a laboratory will "respond to the cues in the body that say enough is enough. Stop growing now, you are at the right number."
Another controversy involving stem cell research erupted last year when it was learned that South Korean researcher Hwang Woo-suk faked results in nine of the 11 stem cell lines he claimed to have created.
That news stunned scientists and those who follow stem cell research. Colman says the incident in South Korea "gives the impression that all scientists, working in what is already a controversial area, are similarly, if you like, scurrilous and prone to fraud."
Actually, I think it is more correct to say that Hwang did not create any of the eleven embryonic stem cell lines asserted in the 2005 paper in Science.
In January,2006, a university committee of SNU reported claims of Hwang and his team that they had cloned the first human embryonic stem cell line were fraudulent. The panel also confirmed an assertion by the team that it had created 11 stem cell lines was faked.
BusinessWeek asks: is burst.com a troll, or not?
BusinessWeek presents the current Burst v. Apple litigation in a "is Burst a troll or not?" format. A previous case against Microsoft had resulted in a settlement. Although there is mention of business models, BusinessWeek does not fully crystallize the issues. We see in the burst.com saga, more clearly than in NTP/RIM or eBay/MercExchange, that an action by an infringer (Microsoft) disrupted the business model of burst, and thus disconnected the invention/business model link necessary for commercialization. So, there is no product of burst. Is burst, therefore, a troll?
Well, that depends on whether the invention disclosed and claimed in burst's patents is valid and infringed. The text in BusinessWeek suggests patent validity, although some later comments to the article suggests it is not. Whether burst (or anyone else) is gaming the system through trolling depends on the validity of the patent claims, not on the success of the business model, which (as this case illustrates) can in turn be gamed by the accused infringer.
A previous litigation by Burst against Microsoft had presented some interesting "destruction of email evidence" issues (see earlier IPBiz post.
Richard Lang of Burst has brought suit against Apple Computer Inc., which he says infringes on Burst's patents covering superfast transmission of content, such as songs and video, over networks.
So, BusinessWeek asks if Lang is, or is not, a patent troll?
That makes Burst, in many people's eyes, a "patent troll." In recent months tech giants such as Microsoft, Intel, and Yahoo! have vilified the trolls -- tiny companies that don't make anything but simply hold a portfolio of patents. Their business plan consists of cashing in on this intellectual property by suing traditional corporations, the types that produce real products. That infuriates the targets of these suits, who claim that the legal risk forces them into exorbitant settlements, and that the ensuing payoffs increase costs for consumers. For many, the poster child for trolls is NTP Inc., the tiny company that extracted $612 million from Research In Motion Ltd., the maker of the BlackBerry wireless e-mail device.
But it was never Lang's plan to be in the litigation business. A legitimate visionary, he patented a method for transmitting data over digital networks that turned out to be years ahead of its time. His company once seemed poised to become a major tech player in its own right. But the hardball tactics of Microsoft blew apart Burst's original business model, Lang claims, and gave him no choice but to turn to the courts.
While big companies have been complaining that the patent system is tilted against them, Lang believes his tale demonstrates that the opposite is often true. "There's a million ways for a plaintiff to lose a patent case but only one way to win," he says. "So if you're a big rich company, why not go ahead and go through the [legal] process? Maybe the little guy will run out of money, or run out of courage."
Did Lang really invent something new?
While Lang is controversial, his record as a tech clairvoyant is impressive. When the rest of the world was focused on stuffing 500 channels onto cable TV, he was devising ways to use digital networks to deliver content more efficiently and reliably. Lang recognized that shows could be sent faster than they could be viewed -- in "bursts" that took full advantage of momentary increases in network capacity, rather than in constant "streams." Indeed, at the 1991 Consumer Electronics Show, Lang drew a crowd with a demo in which 15-minute segments of a PBS documentary were zipped to a TV across the booth in seconds. "They were demonstrating things that other people couldn't do," says tech pundit Robert X. Cringeley.
After spending the 1990s trying to perfect "real-time streaming" of content -- often in low resolution with tiny images -- titans including Apple, Microsoft, and Real Media have since embraced Lang's general approach. "We were so outside the box that even in the late 1990s, people didn't get it," says Lang.
By the late '90s his company had grown to 110 employees and was selling a software package called Burstware. Then, Microsoft got in the way. When the software giant upgraded its Media Player software in 2000, suddenly Burst's key product stopped working. Lang is certain it was on purpose, a charge Microsoft denies. Regardless, Burst nearly went bust. Customers backed away, as did bankers who had been arranging a $70 million secondary offering for the company. Within months, he'd laid off all but four staffers and was begging Microsoft for a licensing deal. "Microsoft, like many big companies, wants to wear out their opponents," says Lang. In one e-mail, Burst's contact at Microsoft reported that the company was "going, going..."
Burst survived, though. Convinced that a 2001 release of Windows Media Player infringed on Burst's technology, Lang got an investor to put up $1.5 million to keep the company afloat as it pursued a lawsuit, filed in June, 2002. Without admitting liability, Microsoft agreed to the $60 million settlement a day before a hearing on whether it had destroyed evidence. Although the myth is that trolls get fabulously wealthy, Lang personally ended up with just a fraction of the settlement proceeds, $2.5 million.
Believing the victory validated his patent claims, Lang has expanded his search for licensees. Apple was his first stop, and not only because of its deep pockets. Apple reps had approached him at a trade show back in 1991, and Burst met with Apple in 1999, 2000, and 2002. "The attitude is exactly like it is at Microsoft and everywhere else. If you won't take next to nothing [for Burst's technology], we'll fight you for the next 10 years," he says.

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