Heartbreak Hotel: The IP Laundry List for Startups

This article originally appeared at blogs.vccircle.com

One of the more endearing aspects of my clients is their sheer belief. In the recent years, we have had the pleasure of working with a number of technology start-ups and I have come up with a laundry list of IP advice that should be applicable to companies of any size (but perhaps better implemented when the cycle from inception to execution is smaller).

Separate goals from dreams: Dream big but set tangible goals. Steve Jobs was recently reported to have 313 patents, which list him in the set of inventors. I would say that being the next Steve Jobs is not a bad dream but as the adage goes, Rome was not built in a day, and neither was Apple. Start by documenting your ideas in a notebook – it is really as simple as that! Building constructive practices and investing in training are one-time methods to ensure good turnover from your team. Always remember that ideas are better when peer-reviewed and more than one idea-generator within a team is always good. Continuously refine your idea over months and years, take notes when your developers are talking. Have weekly meetings with everyone involved. The best ideas come when people have different viewpoints, challenges and solutions to present.

Understand what you are not: Who you are will be a consequence of your actions. Identify clearly whether or not you believe in what an asset buys you – be it time, money, protection or just a plain defence mechanism against competitors. If your core beliefs are not for IP, then believe that end to end; don’t change your mind temporarily to please anyone. On the other hand, if you feel that competitive and strategic tools serve a different function than philosophical beliefs (which are also very important for personal satisfaction), separate the two out and go after protecting the one or two key ideas you have embodied in your work aggressively.

Budget: Figure out if you can have numbers associated with what the exercise might cost you and set that aside. Don’t overstep that budget and be happy with the end result. Remember the point about tangible goals.

Give credit where credit is due: Make IP filings an inclusive process in the company, but make it clear who the key stakeholders are. Employees are more likely to work harder on fine-tuning ideas if you motivated them with ownership in terms of having their names down on the patent application. Make it clear (contractually or otherwise) that the IP belongs to the company as they are the ones funding the exercise. Clarity and straight-talk are going to run miles longer than secret meetings and conspiracy theories. I attribute our culture of attrition to the culture that companies create – identify the creative talent that will not always run towards the highest bidder and do everything you can to retain that talent.

Don’t be a snob: It’s not that patents are much more snobbish and better than trademarks or copyrights or designs. Each IPR has its own place in the portfolio. With Mantri Developers recently changed its logo, they also went around and changed all the doors in their various housing projects. Brand recall, especially visual brand recall is very important. And goodwill is what you generate when customers identify visually with the brand first.

Go the last mile: Take time to put in the hard hours upfront, before you file a patent in specific. Spend the time it takes to identify close competitors (use the free resources of the USPTO and the EPO), but don’t get lost in the sea of information. The time it all stops making sense or looks pretty futile, ask your service provider for the best way forward, given your budget for the exercise. Full-blown subject matter searches should be something you do only if you are convinced that you have an amazing idea that is going to sell like hot-cakes, are worried about infringing a particular competitor in similar markets or if you have the budget and the R&D spending available to create and document this trajectory.

Time heals all: Even in the worst case, if your idea does not succeed or you have an unanticipated bottle neck that holds you back or makes you abandon the ship fully, use the provisions in the IP system (specifically the patent system) that buys you time. The PCT proposes a system of worldwide filing wherein a disclosure is made public, giving the inventor or company a global stage to showcase the invention and claim priority on their ideas. India being a signatory to the PCT implies that patents applied for in India, if converted to a PCT filing within the prescribed time period, will be afforded priority, based on the date on which the patent was filed in India. This, as opposed to filing a PCT application in the first shot, affords an inventor or a company a slightly lower expenditure while allowing them to fine-tune their ideas before applying for a PCT application. Don’t get swayed by ineffective practices when you don’t have the budget.

Ditch the Gucci Bag attitude: Go with a set of service providers who believe in your product, can talk in the same language and have efficient processes. Pay the premium for domain expertise (Tally, for example, is not hugely complex for someone who has hacked a boot loader, but I still hire auditors, just because they know what they are doing) and trust the service provider who takes pride in a job well done. Don’t pay premiums for size of the firm, their air-conditioning and most importantly, dress sense.

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Valuation of Intellectual Property

This article originally appeared on blogs.vccircle.com

Valuing Intellectual Property, which is intangible in many ways, is becoming a relevant area of study in the domain of initial public offerings (IPOs) or mergers and acquisitions (M&A). Valuation of Intellectual Property is similar to valuation of real (tangible) properties in that the outcome of both exercises is to establish the current worth of the asset. However, it is different from the valuation of real property in that it is a type of commodity whose value is derived from the information it contains or represents. Information goods are, by nature, non-excludable (in that people who have not paid for the goods can still use it) and non-rival (in that the commodity can be used by more than one person at the same time). Intellectual property assets are further different in that they are essentially either commercial or product-based assets. Under commercial assets are included IPRs including trademarks, trade names, brands, GIs and character names. Within product-based assets are included patents, copyright, design, etc. The most important difference of an Intellectual Property asset compared to a real property is that its life is governed by statute (patent rights only last 20 years and so on) and is regulated heavily by market demand.

Value is not a specific figure but rather an alignment of assumptions. Typically, we use three components for valuation – cost-based, market-based and revenue-based – also thought of as value past, present and future. Timing and context are critical components of the assessment. For example, the complexity and customisation needed to create an asset may cause a high level of cost variability and outcome uncertainty. Similarly, given sufficient time, multiple alternatives can be explored, but if deadlines are tight, the need to have a working solution requires a value premium. We will look at each of these elements to provide a reasonable approximation of the value boundaries.

Intellectual capital can incorporate both intellectual properties, such as patents, trademarks and licensing, as well as human capital such as employees. For acquisition purposes, the degree to which intellectual assets are formalised or codified increases the likelihood of retaining the value. If the employee experiences or methods are documented, those assets are more readily leveraged and potentially non-linear (highly scalable). If those experiences or methods are known only to the employees, leverage or reuse will be more restrictive and will require additional employment agreements to capture those assets. Note that this estimate range cannot include the potential options value for market timing, for example, if the underlying asset (let’s say software) is necessary to win a contract or deliver to a deadline within a 3-6 month timeframe. In such a situation, the time premium can easily double the estimated value, depending on the opportunity.

Cost-based valuation can take into consideration the contracts that the seller has in place with the rest of his clients, to estimate an upper bound on the development costs, based on budgets for management’s involvement in contractor’s time (and that would assume the project/product represented the majority portion of the firm’s time and effort during the year).

Market-based value focuses on alternative offerings that can provide the same functionality in the same or necessary timeframe. If the underlying functionality of what is being acquired is custom configured to the buyer’s offering, it is then outside the scope to find comparable acquisitions.

The only reasonable alternatives will be to consider redeveloping the code adaptations provided by the seller or to consider simply purchasing the rights to those licensing restrictions. But the difficulty here is timing. Given sufficient systems evaluation, it is likely that the seller’s adaptations to the buyer’s code can be recreated, but it is worth examining whether it can be done within a short enough timeframe and with the necessary reliability to meet the seller’s strategic needs.

A second alternative will be to purchase only the rights to the specific portfolio that the buyer is interested in. The first step in this case will be to estimate a baseline bid plus a necessary premium for the time value of strategic enablement. We estimate that such a premium is dependent on negotiations, which are influenced by both available alternatives, as well as income opportunity differentials (that is, the positive income associated with immediate sales versus the potential time delays for alternatives). Clearly, the availability of alternative development resources for a given timeframe can provide greater leverage in negotiations. However, as we noted up front, even with significant resources, it is often difficult to scale development in a linear fashion. Without enough time or adequate alternatives, the premium can be outside normal valuation bounds.

Revenue-based valuation is the third component, which alludes to what future value and asset can create. As mentioned in the introduction, there is a contingency or options value based on the ability to enter markets immediately with a working solution. The option can be parameterised by estimating the value of the contract, the decision timeframe, the portion of the offering dependent on the underlying software and approximating the estimate of success variability for the contract. In addition, although future revenue can be ascribed to a particular product, from a practical standpoint, the time horizon is necessarily limited because the product itself can undergo modification and within the same time horizon, other alternatives can be developed or acquired (think of these as an augmented discount rate). For example, if the buyer’s launch was delayed by a year (to acquire alternatives), assuming no other changes (unrealistic), the upper-bound difference (cost) will vary. Of course, the strategic impact of such a delay can be severe, especially if pursuing a first-mover advantage. So, the actual value to prevent the delay can be much higher. Obviously, not all revenue in a service offering is attributable to a single software component. So one can more accurately adjust the revenue estimation based on a percentage component, and with necessary adjustments for other costs.

Software can present a particular timing estimation problem. Although software development methodologies can improve delivery consistencies, the rapid change of technology frequently creates faster and more efficient implementation tools, compared to the original development. Moreover, having an existing solution provides a working template for implementation, which can also accelerate the ability to provide an alternative. On the downside, however, most software development has limited scalability. Even with an extensive budget, doubling the number of developers will rarely reduce the development time significantly. A properly scoped original project is unlikely to be done significantly faster, even if more resources are made available. Therefore, for a time-critical application, having working software in hand, can command a significant time premium to the value, as has been discussed above.

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Legal Issues in Cloud Computing

One of the latest intellectual property debates, amplified by Hollywood’s attempt at glorifying geeks with the movie The Social Network, concerned Facebook. The Winklevoss twins are now challenging a decision at the San Francisco Federal Court of Appeals upholding a $65 million settlement from Facebook, claiming to have co-invented it and, therefore, wanting ownership, rather than settlements. Facebook, by itself, has more than 200 patents filed in various jurisdictions including India. Compared to the 500 million subscribers that Facebook has, mobile telephony – boasting nearly 4.5 billion handsets – is another mammoth in the intellectual property disputes. The latest patent infringement dispute between Apple and HTC has led HTC to make a symbolic payment of $5 per mobile phone to Microsoft for their android devices (perhaps just a move to show that it was cognizant of licensing procedures). Microsoft is reported to be making $150 million out of its android licences (while making a paltry $30 million from Windows phone revenues).

Speaking of a third industry (besides social networking applications and mobile telephony), Cloud computing, which is only five or six-year old in terms of widespread usage of the term that is still trying to establish a big market case, past the success of Amazon Web Services (whose latest outage caused major players like Reditt and Foursquare to crash), deserves some close attention to the legal issues which are likely to crop up from an IP perspective. In this article, I will discuss software patents, policy debates around data protection and indemnity, as it applies to cloud computing.

Software Patents are commonly a hot topic of debate. Having been a developer, I believe that software patents are a burden on innovation, as are copyrights which are eventually enforced. While there are efforts to control the quality of patents being granted in Europe and the USA, and the debate (specifically against business method patents) is now amplified, one cannot say the same for the Indian context. Being a practitioner of intellectual property, I have come to realise that software patents are a fact of life and they are here to stay. Additionally, given that most of the labour-intensive areas are in India (for software development), the only incentive for real innovation – in terms of fostering product-based companies rather than another services company – would be to really demystify what software patents are being to the table, in terms of a defence card. While there are tonnes of arguments against software patents, even the ‘open source community’ did not totally escape without a little taste of it, as evidenced by Red Hat versus DataTern where Red Hat ended up settling with DataTern, in order to allow their customers proceed with using their products without problems. Firestar Inc. (which later became DataTern) sued Red Hat, claiming that Red Hat had infringed one of its patents, which relates to a method for interfacing an object-oriented software application with a relational database, facilitating access to the database. DataTern contended that Hibernate, a JBoss product, infringed their patent.

In the case of Cloud computing, Microsoft filed a law suit against Salesforce.com in 2010, claiming that several of its granted patents had been infringed. One of the patents had to do with software updates. The bigger players (in terms of legal budgets) are always prone to trying to scare any reasonably successful company by dragging it through court, especially in new areas of technology. If Salesforce.com had been a PC manufacturer, this lawsuit (or any lawsuit) would have been less likely, as it wouldn’t have threatened a bigger player’s presence in the same market.

Policy Debates are imperative in this context to identify any problem that might arise with user privacy and evolving the law to keep pace with technological innovations. The European Union’s Data Protection directive 95/46/EC has pre-dated the Internet. Till date, one does not find an enormous amount of jurisprudence around this directive, which is strange, given that almost all aspects of an individual’s data is now online. When we introduce Cloud computing, there is an added problem of the user not having control over how the data will be handled by the Cloud services providers. But last week, the USA has put into motion two new bills – the Location Privacy Protection Act and the Data Security and Breach Notification Act. The Location Privacy Protection Act requires that location-based service providers (such as Apple or Google) must obtain users’ consent before sharing information about their locations with other parties. The Breach Notification Act requires that businesses and non-profits take measures to ensure security of sensitive data.

Richard Stallman came out and rubbished Cloud computing some time ago, stating that Google was more likely to hand over a consumer’s personal record to the State than the consumer would by themselves, in case of contention. While this is an extreme view of the situation, it can be argued that by concentrating user data and services onto Cloud, it also becomes easier to regulate the use and dissemination of such data, as exemplified by the attempt with the Location Privacy Protection Act.

Indemnity becomes a very interesting consideration, especially when considering concepts such as multi-tenancy in the Cloud computing domain. Virtualisation, when first introduced for the enterprise, saw the advent of special licences for this environment. As early as 2005, Microsoft changed its licences for users who wanted to use its products (or many instances of one product) in a virtual environment. For example, the Windows Server licence, which was typically charged per processor, was modified – enabling customers to create as many instances as they required while only paying for the number of virtual servers. This new model made further provisions for customers to migrate active instances across machines, without violating the licences in place. New products and services within Cloud computing should pay close attention to aligning themselves with what is provided in the licence(s) which are in place within their infrastructure, in order to steer clear of any implied indemnity.

Cloud computing is a relatively new sector in business and the discussions on policy in and around it are only beginning. While several established bodies such as the National Institute of Standards (NIST), the Open Cloud Consortium (OCCI) and the ISO Study Group for Standardization of Cloud Computing (SGCC) are actively trying to frame the debate around standards, a closer look at the legal issues surrounding Cloud computing is required to avoid a repeat of the problems within the mobile telephony sector, with a number of patent lawsuits.

This article appeared on VCCircle originally on July 19th, 2011.

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Bio Piracy

This article appeared at Trak.in and was prepared with the help of our diligent Biosciences staff @ PatNMarks

Biopiracy refers to illegal exploitation of biological resources and the indigenous knowledge associated with it, for commercial gain. The traditional knowledge, processes and resources widely known in the indigenous population is misappropriated for commercial benefits without any proper compensation awarded to the rightful owners. Biopiracy operates through unfair application of patents to genetic resources and traditional knowledge.

On broad terms; bio-prospecting – which involves quest for prospective useful biological resources with their indigenous knowledge, can be attributed as the primary cause of biopiracy. Though not directly responsible, it invariably leads to biopiracy.

The natives possessing knowledge of the biodiversity of the region seldom are involved in commercialization of such resources. But imposing IPR over such knowledge leads to privatization of life. This confers rights only to a specific set of people and acts as a threat for the community at large in access to 3 major aspects – food, water and health care.

The patent holder will unfairly benefit from sole rights being granted. This doesn’t hold good; especially when it involves more of an obvious result of nature rather than a product of human efforts or skill.

It widely affects the countries which are highly relying on agriculture. Farmers worldwide are outraged that plants they developed are being hijacked by companies. A number of environmentalists, political leaders and eco friendly organizations are voicing hard against the unethical act of corporate patenting of living things.

Among many such cases Texas, a USA based company patented a strain of Basmati rice crossed with a semi-dwarf variety has been quite an issue in recent times. Rice Tec claimed that the variety (named Texmati) was a type of the framed fragrant type. But for the farmers in the northern sub-Himalayas Basmati is the communal property that they are unfairly affected by the patent ownership.

The knowledge and efforts developed for centuries by the third world communities mostly comprising of smaller group of agricultural people are not being acknowledged and indeed are discarded, while the unknown owners are being benefited by leaps and bounds by the authorization of patents for genetic and biological materials and on living organisms by the legally approved IPR firms. These are Patent monopolies with a show of magnanimity they concede very little to few lucky indigenous people.

Patent monopolies on plants, animal varieties, genes and on new medicines threaten to harm developing nations in three ways. First by raising prices that most citizens have no access to these new developments; second by blocking the local production when the patent owner intended; third by forbidding farmers to continue breeding them as it has been done for several hundred years. Even the rightful owners who cultivate them are restrained from using it, because of the high prices of it.

Hence the developing nations need to protect their citizen’s interest by shielding them from such illegal patents. But developing countries needs support from the world opinion in order to do this. Because this is a war against the corporate which are backed up by heavy financial support that they could easily implicate threats of economic warfare on most of the under-developed or developing countries. These companies strongly advocate that the company investors are entitled to monopolies, no matter how they affect others.

The idea of bio-piracy offers the multi-nationals and the governments that work for them an easy way to cement forever the regime of monopolies. Very few fortunate indigenous people get tiny benefits from these companies who are profited in millions. But most of the indigenous people and farmers were heavily affected.

For the past few years NGO’s like RAFI, GRAIN and the third world network have been networking to raise awareness over the phenomenon of ‘biopiracy’. And with lots of hope on the Biodiversity convention which is presently more friendly in recognizing farmers rights to their knowledge over the issue, it is believed that the IP rights are finely balanced between recognizing the need to implement IPRs and the need to ensure that IPRs do not block the sustainable use of biodiversity.

What is righteous is that the third world communities and the indigenous people are given their freedom to manufacture medicines without giving royalties to multinationals and the freedom to cultivate and breed all sort of plants and animals for agriculture and if they need to use genetic engineering, they should be free to commission the genetic modifications that suit their needs. After all stealing one’s hard work and gaining from it is not very ethical or complimentary.

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Proactive Crowdsourcing

The Use of Technology for Emergency Response – This article originally appeared in the March 7th 2011 edition of The Hindu BusinessLine:

On 22 February 2011, a magnitude 6.3 earthquake hit Christchurch, New Zealand. It propagated from the Lyttleton harbour, which is the main port in the city and the epicentre was closer to the Central Business District than its predecessor on September 4th, 2010, which was a magnitude 7.1. Minutes after the earthquake, our power lines and water supply stopped working. For those that had a battery operated radio, news of the unfolding disaster was still available, minus images on television. For others like me, with an MP3 player that could also get on radio, we were limited by the battery-life of the player itself. Most emergency lines were jammed for first few hours following the disaster as people came to terms with what had happened, the news spread and calls poured in to establish the safety of loved ones. In the week following February 22nd, we were stranded in Christchurch with dying cell phones and no access to basic human necessities including water and sewage. Information about the location of hot food, portable chemical toilets, drinking water, first-aid services and medical supplies were not propagating quickly enough to reach us, as we were living in one of the worst-hit suburbs in the city. Calling emergency services, the power company, the Red Cross and other groups with toll-free lines lead to massive confusion on when they expected the services to be up. The law and order situation was one of concern to us, being foreigners, trapped in a dark house, with cumulative loss of sleep when most neighbours had left to be with friends in safer places.

Through the whole time, what struck me as most odd was not one mass-SMS was sent to inform citizens about where they could access resources. The use of technology in times of disaster can be very crucial, especially when considering human density in places like India where the loss of life in natural disasters is huge. I had been through one other emergency such as this one, when I was a graduate student in September 2001. I was in college in Raleigh, NC which was a good ten hour drive from New York, however, the memories of that night with parents of many friends calling me from India, when they couldn’t reach their children will never leave me. In terms of co-location, for the parents of my friends in India, I was the closest to the emergency. Both natural disasters and emergencies, especially ones that lead to massive loss of lives bear inspection in terms of how to utilize technology to mitigate some portions of the anxiety and uncertainty that follow such an occurrence. In this article, I explore an idea from my dissertation titled Proactive Crowd Sourcing which proposes Location Based Services in non-commercial spheres such as Emergency Response.

Most proposals for managing emergencies, except in the areas of surveillance, are reactive in nature. This curbs their effectiveness by several orders of magnitude. Crowd Sourcing is a term used to describe de-centralizing operations and trusting the work to the co-ordinated actions of a crowd. In the case of emergency management, a need of the hour is to enable more proactive solutions. Instead of an Emergency Services provider waiting until the emergency has occurred, assessing the nature of the problem and then deploying resources, if they could instead rely on citizens co-located with the emergency, the management of the emergency would become more agile and effective. Users co-located with the emergency are, arguably the best sources of information on what might be needed to mitigate the effects. Sometimes, the requirements are not intuitive and no amount of surveillance or pre and post-op training can predict the needs of the people affected by the disaster. For example, in the case of Hurricane Katrina, one of the biggest requirements that the responders fell short of was ice! <>Both E-911 and Reverse 911 fall in the category of reactive systems or approaches to the problem. In the case of Reverse 911, the biggest barrier to effectiveness is that in case of a fire in San Diego, locating all households in San Diego en masse may not be the most efficient plan of action. There might potentially be several people that have travelled to San Diego from surrounding areas or from afar and locating them is best achieved via a cell phone, rather than fixed geographical and list-based approaches.

In the February 22nd, 2011 earthquake, on day two, some of our neighbours opened up well-water from their private wells for people to fill up and use for drinking (after boiling) or doing their washing. This was a very localized service and there was no way to intimate people. Word-of-mouth did the job in this case and although wells had been declared illegal in New Zealand by the housing commission, they proved to be invaluable in the emergency especially from the perspective of elderly citizens and people with children, who couldn’t go very far to fetch water and had no information on when the trucks would reach their neighbourhoods. In this case, Proactive Crowd Sourcing might have involved Civil Defense deploying a small team of information specialists in conjunction with the Telecom companies to accept news from locals who were offering up well-water and re-sending the same as a mass SMS to citizens in the area who wanted to avail the service. This is just one of many examples for as the days went on (we stayed in Christchurch for six days after the emergency) it was pretty much down to neighbour helping neighbour with everything from well water to cooking gas to barbeque ranges to short-term generators or rides for free food that was being offered by local churches. Two websites came into play on days 5 and 6 following the earthquake, which monitored the location of twitter messages within Christchurch and tracked the locations of the aftershocks. The internet, while friendly to use and a great source of information, is limited to people with powerful/smart phones that are browser enabled, which are often not the most ubiquitous models to program for.

One of the most obvious problems that arise from allowing citizens to send messages are the unruly elements, who impersonate or send wrong information out. There were many cases reported of people impersonating earthquake victims and Urban Search and Rescue officials amongst many others. With SMS-es that citizens send to disseminate information about local services, one intuitive way to verify authenticity would be to match the location from which the SMS is sent to the location that the registered phone user (provided they consent to this) might have in the provider’s address database. The other method would be build a reputation vector around the person that is sending the message, either by checking their immediate social network (to establish cranks with brand new phones) or by polling for more information for identification and verification by Civil Defense to establish the authenticity of the sender and then send mass SMS-es to other people in the vicinity.

The notion of crowd sourcing can also extend to other aspects of emergency management. Consider a situation where two adjoining counties (or administrative domains) are involved in an emergency. In order to best handle the situation, it might be beneficial for the two counties to work in tandem to share their pool of resources and allocate resources based on the shortest path the site rather than dealing with bureaucratic limitations. This is particularly important when local citizen groups (such as neighbourhood watch patrols) have to communicate to pool resources. In the time we had to understand the magnitude of what happened on February 22nd, 2011 and grasp how the situation might unfold and make decisions about our own personal safety, the most helpful thing in the first 36 hours would have probably been an SMS, as all other modes of communication were down. Proper laws and regulations to seek cell-phone subscribers’ consent to contacting them at the time of an emergency and ensuring that any state or private organization does not compromise a citizen’s long-term safety would also be paramount to enabling such ideas.

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Business Method Patents

Business method patents cover a class of technology or processes used on a regular basis either within any commercial or non-commercial organization, or being offered by the same to external users. In the simplest terms, something as simple as presenting one’s business in a certain way, for example, combining an in-store coffee shop within a bookstore, might constitute a business method. One level up might be an organizations method to handle its employee records. Older ways of achieving this might have included maintaining a physical ledger or some form of written record. With the introduction of technology, the same method might be implemented using computerized records. Migrating to a networked environment that integrates different physical spaces might encourage the organization to combine employee records with payment, inter-departmental communication systems including e-mail and instant messaging, etc., which are integral to the day-to-day function of the organization. Another step might be offering the suite of products developed to external users or third-parties, as a service or for profit

The ubiquity of computing as spawned several communication and collaboration tools and applications. Given the proliferation of the internet, these tools and applications are proving to be viable commercial opportunities. For example, Lotus Notes was first developed as a program internal to IBM’s inter-employee communication system and only later found its application as commercial software.

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Claim to Fame: Alternative Language Claims in Patents


Patent documents, when submitted finally to various patent offices, often contain a claims section, which is effectively the heart of the document. The claims in a patent application are the protection sought by the applicant, by means of the patent application. Several styles of claim drafting have been explored and some of these styles are accepted as classic drafting styles, defining best practices in drafting claims. Examples of these styles include means plus function claims, for systemic patent applications, Swiss style claims, product-by-process claims and Markush claims for the life-sciences applications, In the case of patents relating to chemical structures, Markush claims are used frequently and are the focus of this article. We present our discussions, keeping in mind case-law from the United States, where a lot of precedents have been set, when prosecuting a variety of patents. We contend that this is important for Indian companies, filing abroad, simply because our own patent system is gaining critical mass when it comes to setting legal precedents, evidenced by the recent news with respect to Novartis, TVS, etc.

The USPTO has recently put forth an amendment in its treatment of claims, which utilize alternative language. The vast majority of such claims include the ones specified by the Markush drafting style, approved in 1925 [1]. Using Markush language, an applicant can specify a group of entities, which are incorporated in one single claim, using the phrase selected from the group consisting of, followed by the listing of specific group members. Such claims can be used to include a variety of chemical groups, biological species etc. The debate on increased pendency, caused by the use of Markush claims is an ongoing one, worldwide. Alternative language claims are a superset of Markush claims however, and are used in a variety of inventions, for example, with the use of means-plus-function formats, where the scope of the claim is broadened implicitly [2]. In its most recent communication, the USPTO has proposed a set of rules for the general class of alternative language claims, which can be summarized as follows:

Unless the unity of invention can be established, claims cannot refer to one another.

  • All alternatives specified in the claims must be substitutable.
  • The alternatives thus specified may not allude to other alternatives or be a set of other alternatives.
  • The USPTO also put forth recently a rule for Claims and Continuations wherein rule changes were proposed to restrict the number of continuations and independent claims allowed, per patent application.

    This article seeks to deconstruct the merits of the restrictions posed by the USPTO on the general class of alternative language claims and the specific class of Markush claims. We argue that the Claims and Continuations amendment (which faced severe objection and subsequent opposition stalling its taking effect), combined with the proposed restrictions on alternative language claims, will: (a) prove to be an expensive proposition for the applicants, (b) shift a large burden of search and establishing all alternatives surrounding a single inventive concept, onto the applicants and (c) create unnecessary overheads in areas of technology, utilizing alternative language claims, without the breadth or complexity of Markush language. The time taken to file patent applications will also be put on hold, for a lot longer, proving to be counter-productive for both the public and the applicants.

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    Bajaj v TVS – Is there anything to (DT)sigh about?

    Sivaraman Vaidyanathan, Barrister-At-Law

    Well there is not really much to sigh about so long as you’re not associated with Bajaj or TVS. The looming Bajbaj v TVS battle is probably the biggest domestic dispute in the history of the Indian patent system. It is significant for two reasons one being the enormous success and appeal of the technology being fought over and the other being the fact that for the first time, two companies with track records of finding technology partners, are about to embark on a fight essentially based on technical independence. Indeed, the nature, scope and functioning of the entire R & D capacities of both parties will be minutely scrutinized with each side looking for minor to fatal flaws in the R & D structure of the other. This will incite the interest of all players big or small; present or future.

    Twin spark technology, which Bajaj claims to hold the solitary and definitive patent on, dates back to the early 1900s, finding its first use in a race-car manufactured by Alfa Romeo. AR holds several expired patents on double ignition technology and several hundreds of patents, overall. Fiat picked up this technology in the mid 1900s for mass production, utilizing the creative genius of Lampredi, whose track record spanned both automobile and aircraft design at Piaggio, Vespa, Reggiane etc. Although TVS contends that Bajaj’s original patent should be revoked because Honda has a corresponding US Application, the number of applications that Bajaj potentially has to contend with, in terms of differentiating itself from prior-art, are easily a few dozen, with the other players being Honda, Harley Davidson, Fiat, Ford Motor and General Motor, to name a few. The ubiquity of twin spark technology makes it akin to the automatic transmission technology, for which Honda faced a bit of fear on the patent litigation front in 1966, when it released its Hondamatic technology in the N360AT model. The history and pending case-list in the automobile sector is long and drawn out. Several issues have formed the foci of patent litigation in this sector, not limited to, core-technologies (such as automatic transmission – Honda, eco-friendly cars-Toyota), manufacturing locations and external design (design (Harley Davidson). Though the Bajaj-TVS battle is the first of its kind in India, it remains to be seen how much of this will yield further scrutiny of existing and revocation of existing patents, specially when technology becomes ubiquitous and still has valid patents covering it, exemplified popularly by the infringement action brought by Honeywell, to protect its Liquid Crystal Display patent.

    Of course both parties will be well advised to resort to an amicable solution which is easier said than done especially considering the fundamental nature of the dispute. An Intellectual property dispute, unlike other big corporate battles involving failed deals and family feuds is an objective trial of a subjective state of affairs. Each party will think they are in the right and indeed they will have strong and justifiable grounds for thinking so. Unfortunately however, right or wrong doesn’t always equate to a victory or a loss. The fact remains that regardless of who is right or wrong the competing entitlements in the current scenario will remain unresolved for a very long time.

    TVS has made the smart move of applying for the cancellation of Bajaj’s patent. The chances of success in such an application are automatically reduced by the fact that the patent application and subsequent grant thereof would have already undergone a thorough examination and evaluation by the Patent Office. Of course, the grant of a patent only means that the procedural formalities have been complied with, and does not validate the substantive scope of the patent. This however, does not strengthen TVS’s case but rather only gives them the basis for making the present application.

    Notwithstanding the fact that success in the cancellation application may be hard to come by, the fact that such an application has been filed will definitely stall and delay any legal action based on Bajaj’s widely reported allegations of infringement. Also, the fact of the application combined with the publicity generated definitely rules out any scope of either party applying for and receiving any interim relief which often provides a head-start and sufficient incentive to find a quick solution.

    The bottom line remains that the present battle will be a long drawn one if it follows its entire logical course. The biggest damage will be in terms of uncertainty rather than any real monetary losses. Success or failure in litigation is dependant on so many irrelevant and unreasonable factors that it would be impossible to comment on who will eventually come out riding stronger. The only certainty emerging from the present situation is that Indian companies, even in traditionally copycat sectors, are working and striving towards an unforeseen level of technical independence and superiority. The fact is that like all battles, both parties will be losers and the bigger world of the Indian motorbike consumer will be the eventual winner.

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    Traditional Knowledge [Ayurveda]

    Ayurveda means the “science of life”. The word, ayurveda is composed of two words of Sanskrit, ayur (meaning life) and veda (meaning knowledge). Thus Ayurveda is a medical science of Ancient India. This ancient healing system has three foci:

    1) Healing illness

    2) Prevention of disease

    3) Longevity or age reversal.

    It is a traditional system of medicine and medication, based on experience and observation. In Ayurveda, every plant on earth is a medicinal plant. Ayurveda seeks to develop a method to identify and extract that medicinal power for appropriate use. This system of medicine and medication is more than 3000 years old. Ayurveda is extensively used in modern India and is fast proliferating in its International appeal. In the recent years Ayurveda has become a victim of Biopiracy, therefore its protection and preservation has become a matter of concern for India.

    This foray is into the increasing trend of claiming patents on inventions that are familiar remedies in Indian homes.

    Biopiracy or the stealing of indigenous knowledge from the biodiversity-rich developing countries is an exploding issue in Asia. Often plants developed over the centuries by the methods of traditional agriculture in the third world are used by first-world corporations as the basis of inventions. This is worrisome for India since patents, which were supposed to prevent piracy, have now become legitimized process for thievery of their traditional knowledge making it an exclusive property of multinationals.

    The patents granted for instance on wound healing properties of Turmeric or a fungicide from Neem are some such examples of blatant Biopiracy of Indian traditional knowledge. Nevertheless, the patents on Turmeric, Neem has been successfully overturned and this just a first step in stopping Biopiracy.

    However, the problem of Biopiracy may not be resolved with patent revocation and domestic biodiversity legislation alone. There is a need to provide appropriate legal and institutional means for recognizing the rights of the indigenous communities on their traditional knowledge, based on biological resources at the international level.

    It is important that ownership of traditional knowledge be rejected. Such resources should remain accessible to all people. They are not commodities to be exploited by the corporate sector. Patenting indigenous knowledge is not acceptable. It is theft from generations past, present and future.

    This article has case-studies on patents utilizing Ginger, Bitter Gourd and Ashwagandha and their uses.

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    Intellectual Branding

    I just wanted to write a quick note on Intellectual Branding, a subject we will develop as the year goes on. I get asked this question a lot about how to gain mileage if innovation is the heart-beat of a company. Granted, the term innovation in itself if an abused term. Specially when used to simply recruit or plaster on a billboard, without following through with core research, patent filings, academic presence etc. However, intellectual branding in itself is not a misnomer and there are definite ways to achieve this. Case in point, PatNMarks, easiest for me to talk about since in this company, we believe in more than providing lip-service to an IP portfolio.

    Our trademarks (Vaniham, Noutpam and Abha) are registered marks for our search services. Our company’s logo is also a registered mark, though arguably, it reads like Schlotsky’s. I’m thinking up a tag line, Schlotsky’s is Funny name, serious business. I’m playing with Small is fast and one other line, which I am obviously more serious about registering.

    We recently filed a couple of patents having to do with ideas that David and I have been playing with for a while. We are geeks that are true to our form, so, these ideas are just based on brainwaves we had en-route reading too much Feynman and not wanting to incorporate the bottom of the pile.

    We are not a manufacturing concern, so our design portfolio will always be pretty slim.

    Copyrights are another domain where we have made substantial progress and have a presence in.

    The point I am trying to make is that our intellectual branding is on its way, by means of the patents we file, the IP portfolio we maintain and definitely the thought process that goes into tagging each of our services. One might argue whats in a name? but, with all due respect, thinking through your products in terms of entities that you spend a bit of time adding your personal signature to, adds to the value of the brand, in itself.

    An upcoming poll is whether people know what Vanihamand Noutpam stand for.

    Think Big and watch for the updates in this section!



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