Intellectual Property Directions

Would you be more likely to buy a package of sports cards - you know, like you used to get with Fleer bubble gum - if there was a chance it included a splinter of Ted “Splendid Splinter” Williams’ baseball bat and a certification that it was authentic? Well, would you?

How about a trading card with a piece of someone’s uniform? More importantly, would you grant a patent to the first person to attached a piece of an article of authenticated memorabilia to a trading card? The USPTO did.

Although I don’t understand the business model, there appears to be a big business in sports cards these days - sans bubble gum. Manufacturers insert a limited number of special items into the card packages as an enticement to sell more cards. These special items include “signature cards” “rookie redemption cards” and now “memorabilia cards”.

At the end of 1994, Adrian Gluck filed for and ultimately was issued a patent for a “memorabilia card” comprising:

a substrate in the form of a card and having an image surface,

the image surface including a background image and a foreground image, and wherein the foregoing image is of a famous figure,

a piece of a memorabilia item being adhered to the card adjacent to where an image of the actual item normally would appear, and

the card including a certificate attesting to the authenticity of the item.

Further, the patent claims defined one example of a memorabilia item as being:

a first member, and

a portion, but not the entirety, of an authentic memorabilia item used by a popular sport or entertainment personality or during a memorable event, said portion attached to said first member wherein the authentic item is a baseball bat, and said portion comprises a tiny piece of wood taken from that bat.

A typical memorabilia card is shown in this link.

Mr. Gluck sold his rights to Media Technologies Licensing, LLC who, in 2001, sued Upper Deck Co., a major producer of sports cards, for infringement. The District Court granted summary judgment to Upper Deck, but the Court of Appeals for the Federal Circuit (CAFC) reversed on procedural grounds. Upper Deck then asked the PTO to re-examine the patent, which it did, affirming Gluck’s patent’s validity. The District Court then performed claim construction and issued a summary judgment that the patent was not anticipated but was obvious. Media Tech appealed to the CAFC. The CAFC, in a 2-1 split, upheld the obviousness decision.

The whole discussion in the CAFC’s opinion is bothersome to me. The courts, when discussing obviousness, are forced to put a glossy coat of objective argument on the inherently subjective question. They are forced to work from the prior art in evidence rather than their innate knowledge of what an average person knows.

It should be clear to everyone involved that it did not take any “aha” moment, any inspired inventive spark, to “invent” the trading-card-with-bat-splinter. In creating a trading card with a piece of a memorabilia object, Mr. Gluck perhaps realized that P.T. Barnum was right but he sure didn’t come up with anything that “promote[s] the Progress of Science and useful Arts“; at best he came up with a method of promoting the sale of sports trading cards; a business method, perhaps.

And in fact his strongest defense against obviousness was that all the experts in the field didn’t expect it to “work”, meaning they didn’t expect commercial success. But commercial success is, at best, a secondary indication of non-obviousness and cannot overcome the weight of many primary indicators.

So the courts have now, twice, given an obviousness dope slap to the PTO which twice said this was a valid patent. Perhaps Mr. Gluck and Media Technologies will realize that this patent wasn’t ready for the big leagues.

The key sentence in this article is

“Medical imaging company Hologic Inc. has settled patent disputes with a subsidiary of Johnson & Johnson Co. in a deal that will see Bedford-based Hologic pay out $12.5 million for one product [and pay ongoing royalties] and get ongoing royalties coming in from another.”

That is, Hologic reached into its patent portfolio [a year and a half] after it was sued by J&J in order to find a bargaining chip. Would J&J have let Hologic keep selling the product in suit if it did not have its own product in patent problems?

Hologic settles J&J subsidiary patent dispute - Mass High Tech Business News

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While admittedly a very special case, funded on both sides by very deep pockets, 1.7 BILLION dollars isn’t chump change to anyone. See http://www.bizjournals.com/boston/stories/2010/02/01/daily1.html.

One thing this settlement reinforces is the advice I always give clients: you only know you have a valuable patent when someone wants to copy your invention - either by licensing or infringing your patent. So the key to getting “the right patents, at the right time, for the right cost” is to ask yourself the question “If so, so what?” In other words, if you do get a patent issued on your invention (3 or 4 years from now), will anyone care?

• Will your competitors simply find another way to build a competing product, having seen your patent application 18 months from now?
• Will the cost of their R&D make your solution look attractive?
• Will they already have a competing, non-infringing product on the market by the time your patent issues?
• Will your approach represent a big cost savings?
• Will the state of the art already passed by this technology?
• Will you have the resources to defend your patent rights (or at least find an attorney to take your case on contingency)

Think carefully about these questions before investing in a patent. Remember that your patent can only stop someone from making, using, selling, etc starting on the day your patent issues. All of the sales the competition has made during your patent’s pendancy are not considered infringement.

Before committing to filing a patent application you should evaluate (with professional help) how broad your patent is likely to be, in light of the prior art and what your competitors are likely to do if they are blocked by your patent.

Like a vampire rising again from the grave, “business method” patents don’t want to go away without a fight.  It was just a year ago that the Court of Appeals [CAFC] ruled that Bilski’s “business method” for hedging commodities was not patentable subject matter. As much as I wished that the matter was dead, there are too many business method zombies, sucking the blood out of the patent system with their “inventions”, to let it go.

Last week the Supreme Court heard arguments in the matter of “Bilski” and it seemed to observers of the Court that Bilski may finally be dead but that the contorted CAFC reasoning may be thrown out as well. As I wrote last November (IP Directions 11/2/08), the very basis of the US patent system is the Constitutional phrase: “Congress shall have power … to promote the progress of science and useful arts…” Frankly, I doubt the founders would consider hedging risk in commodity trading part of science and the useful arts.

But the CAFC didn’t want to use such a subjective criterion in their decisions, so what is the test of process patentability? According to the Bilski decision, there is a two-part “machine-or-transformation test” for eligibility of process claims. First, eligibility may be demonstrated if a claim “is tied to a particular machine or apparatus.” Second, and alternatively, eligibility may be shown if a claim “transforms a particular article into a different state or thing.” Also note that the “tie” to a machine or apparatus must be a meaningful limitation in the claim.

I would have preferred to see methods of performing business/financial operations per se be declared unpatentable as not being part of science or the “useful arts” and damn the subjectivity torpedoes. As with “obviousness”, the courts will never produce a objective definition of an inherently subjective issue, so why try. If a patent applicant feels the patent office has inappropriately reject his or her application over a subjective issue, well, that’s why we pay the justices the big bucks - to apply their “wisdom”.

How about you - any blood-sucking business methods in your patent plans?