‘New’ Joinder of Accused Infringers: Implications for NPEs?
Posted on | September 26, 2011 | By Hari Nair and Ayushi Goel | No Comments
Thursday, September 15, 2011, one day before the Leahy-Smith America Invents Act (H.R. 1249) became a law, was a historic date in its own right. At least 54 new patent cases were filed across the district courts – accusing over 800 corporate entities of patent infringement. These numbers represent an all-time-high for a single day filing and are directly linked to the new Joinder of Accused Infringers law. Here is the Section 299 of H.R. 1249 verbatim:
‘(a) Joinder of Accused Infringers- With respect to any civil action arising under any Act of Congress relating to patents, other than an action or trial in which an act of infringement under section 271(e)(2) has been pled, parties that are accused infringers may be joined in one action as defendants or counterclaim defendants, or have their actions consolidated for trial, or counterclaim defendants only if (1) any right to relief is asserted against the parties jointly, severally, or in the alternative with respect to or arising out of the same transaction, occurrence, or series of transactions or occurrences relating to the making, using, importing into the United States, offering for sale, or selling of the same accused product or process; and (2) questions of fact common to all defendants or counterclaim defendants will arise in the action.
(b) Allegations Insufficient for Joinder- For purposes of this subsection, accused infringers may not be joined in one action as defendants or counterclaim defendants, or have their actions consolidated for trial, based solely on allegations that they each have infringed the patent or patents in suit.
In effect, Section 299 categorically disallows plaintiffs to bring multiple defendants under a single lawsuit, solely because the defendants are alleged to infringe on the same patent claims.
Under the new law, joinder of multiple defendants is possible only if the right to relief against all the parties (a) arises out of the same transaction, occurrence, or series of transactions or occurrences relating to the making, using, importing into the United States, offering for sale, or selling of the same accused product or process, and (b) is based on common questions of fact.
In reality, the act essentially hits back on the increasing number of Non Practicing Entities (a.k.a. NPEs) which have been suing corporations right, left and center.
Lawsuit venues have traditionally been driven by the plaintiff’s choice and convenience.
Notably, the Eastern District of Virginia and the Eastern District of Texas are particularly plaintiff-friendly. These ‘rocket docket’ courts boast of a shorter-than-average time to trial and fewer dispositions through summary judgment, making them ideal for NPEs. In fact, a PricewaterhouseCoopers study indicates that in Virginia, non-practicing entities will succeed more than 64% of the time in lawsuits filed in that venue. In the Texas court, those patent holders will succeed 42% of the time overall.
Typically, NPEs sue a large number of defendants in a single lawsuit in such rocket docket courts. The court would allow the joinder provided it has jurisdiction over all the defendants, which in the case of large corporations it usually does. Cost constraints and convenience on the part of defendants is frequently overlooked, especially if the plaintiff can show that a majority of the defendants are based in and around that particular district.
Such atmosphere increasingly corners practicing corporations and puts an undue pressure on the market as well as the state of technology, and the act packs a good punch to deter such litigation. It will not only increase litigation cost but also put the patents-in-suit under greater and repetitive invalidity review. Unfortunately, though, the act creates the same kind of disadvantage for the good kind of NPE’s, namely individual inventors and research firms.
Another under-rated impact of the new joinder law has been the surprising jurisdictional diversity in the past 80 days; 33 district courts have seen five or more new patent complaints. The statistics highlight yet another important aspect of the act. H.R. 1249 will not only help defendants have greater control on the litigation venue but it will also act as a much-needed load balancer for courts neck deep in cases even though the sheer number of litigations across the country is expected to increase significantly.
In the end, the act is essentially a trade-off which levels the field for corporations against patent trolls; however, at the cost of individual inventors, small business owners and research firms. And it would be very interesting to see how each of these entities cope with the restrictions and how their solutions mold the legal landscape in the coming decades.
The America Invents Act: A Drill-down
Posted on | September 22, 2011 | By Saurabh Sinha and Rahul Vijh | No Comments
The long awaited and the long debated Leahy-Smith America Invents Act is finally here and legal pundits are wasting no time in pointing out its merits and demerits. The act itself, passed by the U.S. Senate on September 8, 2011 with a landslide majority of 89-9 and more recently signed by President Obama, aims to initiate a long pending overhaul of the US patent law, which has oft come under criticism for inefficiency. At the same time, it is interesting to analyze the repercussions of the new law on the Intellectual property segment and the new waves it will create. Before we begin to dispel the subtleties of this new act, let us analyze the need for it and list down some notable changes that it proposes.
Why was it needed?
Statistics released by the USPTO showed that, as of fall of 2009, the PTO was reeling under a backlog of 1.2 million unexamined applications and that the average time for a patent has increased to three and a half years. Compelled by the growing backlog, the PTO had started to reject applications at an unprecedented rate, which puts inventors in a rather precarious risk of losing competitive edge. In addition, undeserved patent grants continually come back to haunt either the USPTO or the courts in the form of re-examinations and dead-end litigations. And we have time and again witnessed how such proceedings drain resources off organizations and judicial system alike while doing no good to propel the state of technology itself.
There was also felt a growing need for reform in the way USPTO managed its finances. For instance, the patent office needed an increased leverage in setting fees for patent applications, and independent decision making power on strategic investments. Congressional interference in various PTO matters had, in the past, resulted in driving out the surplus money to other federal sectors, which could instead have been used for major infrastructure upgrades and for creating patent office jobs.
There were also other supplementary issues of related to Business Method patents and Software patents that needed addressing. Such patents have particularly resulted in high frequencies of tussle caused among major corporations and as well as genesis of a considerable number of NPEs (Non-Practicing Entities).
What is the reform?
The America Invents Act contains a number of notable points, set to change the way we think of the US intellectual property framework:
1. First-to-File: Perhaps the most notable change in the United States patent law is the move towards a First-to-File (FTF) system. United States remained one of the very few countries which follow a First-to-Invent (FTI) system, where a person who invents a technology gets the right to the patent as opposed to the person who first applies for a patent. On the other hand, First-to-File system grants the patent to the person who files a patent application before any other application is filed using the same technology, provided the applicant invented the technology independently. This overhaul puts US in line with most other countries (who follow the FTF system), and greatly reduces confusion on the part of corporations.
As a direct consequence of the FTF system, a concept called Derivation proceeding has been introduced in case of a conflict where an early applicant derives the claimed invention from an inventor who filed for an application later. The act provides inventors with a certain time window for a derivation proceeding in which ownership of the IP rights can be corrected. Derivation proceedings will effectively replace the now-obsolete interference proceedings essential to the FTI system.
2. Priority Examination: The new act introduces a provision for expedited patent examination if the filing party wants to enforce the patent as soon as possible for an increased fee of $4,800. To be eligible for priority examination, a patent should not have more than 4 independent claims and or more than 30 claims in all. The provision also eliminates a requirement for submitting an extensive Prior Art Search Report along with the application. As before, small entities are entitled for a fee waiver of 50% but the new act further simplifies the process for establishing small entity status.
3. Post-Grant Review: According to this procedure, a person may file a petition to initiate a post-grant review of the granted patent within 9 months of grant. This option complements ex-parte and inter-parte re-examinations, and is expected to greatly enhance patent quality.
4. Pre-issuance Submissions: In an interesting but potent move, the new act allows any third party to submit prior art within six months of publication of the application, which would then be included in the prosecution process.
5. Fee Setting Authority: The act also provides fee setting authority to the USPTO to ensure that it is adequately funded and properly staffed.
What are the repercussions?
The America Invents Act is slated to have tremendous meaning not only for the patent office but also for the market. Not only does the law make things simpler for the USPTO and reduce its administrative burden, it also raises some very pertinent and discernable flags on its worth to start-ups and individual inventors.
A shift from FTI to FTF system creates uniformity among countries with respect to intellectual property. It also lends a textbook lesson to inventors about how important their intellectual property is and how carefully they should protect it. But at the same time, it puts an increased financial and strategic pressure on individual inventors and small entities. An FTF system provides a huge advantage to bigger firms with enough resources to file a patent for any idea as soon as they conceive it, whereas smaller entities (even if they conceive the idea first) might not possess the resources to do so. Critics of the act argue that the FTF system trades the philosophy of human creativity off for capital-intensive investment to convert ideas into practice.
Moreover, the US is certainly not the first country to make such a transition. Canada changed its patent laws from FTI to FTF in 1989 and serves as a valid yardstick on the effectiveness of the transition. One such study notably pointed out that “reforms had a small adverse effect on domestic-oriented industries and skewed the ownership structure of patented inventions towards large corporations, away from independent inventors and small businesses.” While these studies give a perspective, one cannot overlook various other factors that might have propelled the shift. For instance, change in foreign policies, popular public sentiments, comparison of industry trends, etc.
Interestingly, this pressure to be the first to file a patent may in the end lead to a flurry of applications based on a mere whim of an idea and increase the load on the PTO (fortunately, however, along with the increase in the USPTO fee collections). Critics have gone as far as to allege that big players have conspired and lobbied to get the act passed.
The FTI system has, arguably (for the loss of empirical evidences), in no small measure, contributed to the great entrepreneurial atmosphere which incubates a record number of start-ups and small businesses in the US. The FTF system on the other hand can go either way. As opposed to large corporations, start-ups apply for a patent only after they have finalized their roadmap map and weighed the usability of their intellectual property. In an FTF system, this may just be too late. Consequently, funding such startups becomes riskier.
At the same time, once the economy fully rebounds and venture capitalists resume investing huge amounts into startups, the FTF system may even prove beneficial to the small entities. A new kind of micro-investment model can be imagined where venture capitalists would readily fund patent applications and perhaps at a later stage the venture itself, as opposed to funding the venture up front.
Other welcome provisions include post-grant opposition and pre-issuance submissions which while increasing the PTO’s burden, will ensure the quality of patents that get granted. Moreover, pre-issuance submissions in particular will invite a greater participation from competing market entities even before the applicant obtains its patent.
In the end, we should realize that we are, in effect, dealing with a trade-off. Streamlining the patent office procedures so that it acts as a proponent to the progress of the technology and not as a deterrent was absolutely essential and greatly welcome. This reform will achieve that significant goal, perhaps at the cost of increased competition for individual inventors and startups. But we also expect to witness some game-changing business models which not only counter this disadvantage for small entities but in turn add on to the entrepreneurial atmosphere characteristic to corporate America.
3D Stacked ICs – The Next Dimension to Computing?
Posted on | September 22, 2011 | By Hari Nair | No Comments
Consumer demand for high performance and low power microchips have been a major driving force behind the continued need for scaling of semiconductor devices. Today’s semiconductor chips face extreme pressure to achieve increased performance, while reducing their size and accommodating new functionalities. When the size of the transistors shrink, interconnect delay and power consumption affects performance adversely. In SoCs (System on a Chip), longer interconnects translate into reduced speed and increased power consumption. Thus continued scaling necessarily requires the introduction of both new materials and new device integration schemes.
Emerging 3D Integration Technology
Three-dimensional (3D) integration is an emerging technology that can form highly integrated systems by vertically stacking and connecting together various materials, technologies and functional components. 3D integration consists of stacking integrated circuits and connecting them vertically so that they behave as a single device. A 3D chip is therefore just a stack of multiple device layers with direct vertical interconnects tunneling through them
Not only does 3D integration reduce the length of interconnects it also provides higher transistor density, faster interconnects and heterogeneous technology integration, with potentially lower power, cost and faster time-to-market.
The concept of 3D stacking or integration technology is certainly not new. In fact, 3D stacking of dies has been successfully demonstrated and is currently being commercially employed in some embedded domains (for instance, stacking DRAM memory on CPU cores). A recent 3D IC report from Yole Development suggests that by 2012, the number of 3D IC-processed wafers could surpass 10 million units, driven in part by handset, wireless and computing applications.
Other notable applications include DRAM, SRAM and Flash EPROM stacks for mobile devices. Other applications will soon be revealed as the key semiconductor companies make their individual breakthroughs towards commercially viable 3D stacked chips.
Source: Yole Development
Given the intense interest and effort into developing 3D integration technology, the 10 million units prediction seems just about right—assuming, of course, that a few challenges are met. The most important challenge being dissipation of heat built up within the stack. This is an inevitable issue as electrical proximity co-relates with thermal proximity.
Recent Breakthroughs by IBM
IBM has emerged as one of the major player in research in the field of 3d integration of chips.
In 2010 IBM declared that its research on 3D chip stacking will take Moore’s Law past 2020. By integrating a very large (SoC) in multiple tiers, the average distance between system components is reduced, which improved both efficiency and performance. However, the challenge to remove the heat generated ,as chip volumes became smaller and smaller, was still a key issue.
IBM’s solution to overheating came in the form of a product named “Aquasar”, a first of a kind, water-cooled supercomputer. In Aquasar, chip-level cooling with a water temperature of approximately 60⁰C was sufficient to keep the chip at operating temperatures well below the maximally allowed 85⁰C. The high input temperature of the coolant results in an even higher-grade heat as an output, which in this case was translated to 65 ⁰C. The entire cooling system was a closed circuit: the cooling water was heated constantly by the chips and consequently cooled to the required temperature as it passed through a passive heat exchanger, thus delivering the removed heat directly to the heating system.
While the Aquasar approach remains yet to be commercially viable and seems unlikely to ever revolutionize consumer electronics, its implications on development of supercomputers are noteworthy. IBM currently holds the pioneer intellectual property in novel methods of 3d-stacking and cooling the system.
Refer: US7990711B1, US7893529B2, US20090290282A1 and US20090251862A1
In 2011 IBM went a step further and collaborated with 3M to jointly develop a special adhesive which can be used to package semiconductors into densely stacked silicon “towers.”Such stacking would allow for dramatically higher levels of integration for information technology and consumer electronics applications.
A collaboration between IBM and 3M has can easily leapfrog today’s attempts at stacking chips vertically – known as 3D packaging. IBM will draw on its expertise in creating unique semiconductor packaging processes, and 3M will provide its expertise in developing and manufacturing adhesive materials, particularly a new kind of adhesive which densely stack the chips one over the other and at the same time efficiently conduct heat through the densely packed stack of chips, away from heat sensitive components such as logic circuits. This new adhesive is currently being used on 3M’s 46 core technology platforms.
IBM in their press release has claimed that this technology will allow it to push microprocessor speeds to 1000 times the current standards.
Conclusion:
Moore’s law states that the number of transistors that can be placed inexpensively on an integrated circuit will double every 18 months. More than 50 years old, this law is still in effect, but to extend it as long as 2020 will require a change from mere transistor scaling to novel packaging architectures such as 3D integration, the vertical integration of chips.
In the coming years we expect integration of 3d chips to be an extremely profitable industry. Any breakthrough in this domain would allow rapid advancement in the mobile phone, tablet, Ultra-mobile PC (processor, memory, ASIC, RF), Digital camera (ASIC, memory), Digital video products (GPU, memory), Imaging sensor module (image sensor, DSP, SRAM) domains.
A recent study by Yole Développement shows that by 2012 the 3d-SiP industry will have an annual growth rate of 251% overtaking other technologies like CIS, Flash, DRAM, MEMS etc which indicates that 3D-Sip will aggressively take up majority of the packaging market share.
